Finance--Public & Private The Budget and the City I wisu
that I could comment favourably upon Mr. Snowden's Budget. It is so desirable that public con- fidence which has been gravely impaired should be re-established as quickly as possible that mere factious criticism of the Chancellor of the Exchequer's statement would be out of place. Nevertheless, since readers of these columns will expect from me an honest statement of how I view the Budget, I am obliged to say that I fear its ultimate effects may be very serious. Before, however, stating my reasons for this view let me hasten to say two things. In the first place the Stock Exchange has at the outset at all events given a favourable reception to the Budget. Relief that there is to be no immediate increase in direct taxation caused British Funds and kindred securities to open very firm on the morning following the Budget, while a number of securities, such as those concerned with the Brewing and Tobacco industries, rallied sharply when it was found that there was to be no increased taxation in these directions. In the second place it is only fair to credit the Chancellor of the Exchequer with a genuine desire that his Budget should have the least possible disturbing effect upon industry in its present depressed condition. He was perfectly jus- tified in feeling that the small extra tax on Oil would inflict no serious injury upon that particular industry, and that is really the only additional taxation imposed, though, of course, the proposal to exact three-fourths of the Income Tax in January will cause quite serious inconvenience to many taxpayers. By framing his Estimates of Revenue for the current year on what I must confess appears to me to be an over-sanguine basis, the Chancellor budgeted for a pro- spective Deficit of about £37,366,000. This he proposes to obtain in the following manner :— From Dollar Exchange Fund £20,000,000 From Income Tax Alteration of Instalments 10,000,000
From Oil Duty • . 7,500,000 37,500,000
It should be noted, however, that even after ultra-san- guine Estimates of Revenue, Mr. Snowden was only able to make his Deficit no worse than £37,366,000 by taking the remaining £4,000,000 from the Rating Relief Fund, and by no longer continuing the extra £5,000,000 for the Sinking Fund on account of the realized Deficits from the two preceding years. But for obtaining relief from these two directions, the Deficit would have been over £46,000,000. The Chancellor, therefore, was• ill- advised to twit those who had spoken of the possibility of a higher Deficit as Jeremiahs.