FINANCE-PUBLIC & _ PRIVATE.
[By OUR CITY EDITOR.]
THE NEXT BUDGET—INEED FOR ECONOMY.
[To the Editor of the SPECTATOR.] SIR,—Seeing that at the earliest the next Budget state- ment will not be delivered before April, 1925, I shall doubtless be regarded as a little previous in calling atten- tion at this early date to its possibilities. It might, perhaps, fairly be said that there are quite enough political crises at the moment in the shape of Irish Boundaries and Russian Treaties, to say nothing of the storm occasioned by the withdrawal of the prosecution of the Workers' Weekly, without attempting to raise, at this early stage, any newspaper stunt concerning extravagance in national expenditure. Experience has shown, however, that there is no subject more difficult to bring home to any Government—irrespective of party —than the necessity for economy in the national outlays. Therefore, I have no hesitation in inviting from your readers, even at this juncture, the consideration of a few plain facts. During the past week there have been issued the Returns of Public Income and Expenditure for the first half of the current fiscal year. On the whole, • the figures are not discouraging, especially as regards Revenue. It is true that the total receipts show a decline of about £17,000,000 as compared with the corresponding period of last year, and that there is an Exchequer deficit on the six months' working of about /12,000,000 as com- pared with a surplus of over /2,000,000 a year ago. Not only, however, does the present deficit of 112,000,000 compare with £39,000,000 for the first quarter of the year, but an examination of the Revenue figures gives ground for encouragement. In the first place, it must be remem- bered that Mr. Snowden budgeted for a shrinkage in the Revenue for the entire year of /43,000,000, and on that basis the actual decline for the first six months is rather less than might have been expected. Moreover, while the falling off in Customs and Excise Revenue is pretty much in accordance with expectations, Property and Super-Tax are so far exceeding anticipations, while it is particularly satisfactory to note that, as compared with the Chancellor's estimate of an increase for the entire year in Postal Revenue of /700,000, there is already a gain for the first six months of 11,300,000. Nor at first sight is there much the matter with the expenditure side of the balance-sheet. Including Supplementary Esti- mates, an increase had been anticipated for the year of nearly /4,000,400, whereas at present there is a decline of 12,300,000.
In the matter of expenditure, however, it must be noted that the year's accounts have still to feel the weight of the payment of the interest on the 5 per cent. War Loan in December, and also further payments on account of our debt to America, while, owing to the moderate rise in the value of money, debt charges generally promise to be slightly increased. In addition, it must be remembered that Mr. Snowden has already encroached upon his budgeted surplus of 14,000,000 to the extent of over /3,000,000 in Supplementary Estimates, while there have been strong hints of further outlays. Unless, therefore, Revenue is greatly to exceed expectations, or there are to be some big savings in Expenditure, there may be some cause for anxiety even with regard to the final outcome of the balance-sheet for the present. fiscal year. Assuming, however, that an equilibrium and even a moderate surplus results, the position in the new Budget will, nevertheless, be a difficult one to handle. There must almost inevitably be a large reduction in Income and Super-Tax Revenue, owing to the collection covering a period characterized by great trade depression. Another direction in -which a loss of Revenue is to be expected is in special Miscellaneous Receipts, which in the last Budget figured for /30,000,000. These receipts, which come largely from the sales of War Stores, are a rapidly disappearing quantity,. and a shrinkage to about /15,000,000 seems probable next year. Finally, it has to be remembered that Mr. Snowden estimated that the remissions in taxation in the last Budget would involve a further loss to the Exchequer for the year 1925-6 ol /14,000,000. Roughly, therefore, it looks as though when compared with the current year's estimates of Revenue the estimates in the next Budget would suffer a loss of at least 130,000,000, and this will have to be made good by a reduction in Expenditure. A moderate reduction in outlays might ensure an equilibrium, but if the much- needed further reduction in taxation is to be achieved, then drastic cuts would seem to be called for.
Nor can it be doubted that there is an ample margin for far-reaching economies in our Civil Service outlays. The extravagance has been a prolonged and an accumu- lative one ; it goes back beyond the immediate pre-War period, and while I am far from asserting that there may not have been extravagance before the days of Mr. Lloyd George, I think it would be found that it was at the time when that forerunner of the Labour and Communist element was at the Exchequer that prodigality in the Civil Service outlays commenced. Previous to the Lloyd George regime, the total of Civil Service expenditure amounted to something like 132,000,000, whereas to-day it stands at about /230,000,000, or, if Pensions are deducted, at about /163,000,000, of which /86,000,000 comes under the head of Ministry of Health and of Labour, and 147,000,000 under the head of Education. During this same period the price of commodities has certainly not risen by more than, if as much as, 140 per cent., and yet we have a growth in Civil Service expenditure, which to some extent must, of course, be affected by a rise in the cost of living, advancing in prodigal fashion. Without going into the question of whether we are or are not getting a return on these huge outlays on Ministries of Labour and Education, it is impossible, I think, to note the expansion in Civil Service expenditure without forming the very definite conclusion not only that economies are possible, but that they are urgently required.-1 am, Sir, yours The City, October 8th,
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