We have dealt at length elsewhere with the Budget—intro- duced
by Mr. McKenna in the House of Commons on Tuesday —but must record here its chief facts and figures. Mr. McKenna estimates that the net revenue next year will be £502,000,000. The estimated expenditure for that year is £1,825,000,000. Therefore the deficit will be £1,323,000,000. This deficit can, of course, only be met by a loan. But the moment a loan takes place interest on it has to be paid, and the interest on such a sum at 6 per cent. (5 per cent. for current interest and 1 per cent, for Sinking Fund) means a charge of £79,000,000. This, therefore, is the sum which must be raised by new taxation this year if we are not to fall into the fatal error, in reality an act of bankruptcy, of paying interest on a loan with borrowed money. Mr. McKenna adheres strongly to the principle that for every fresh £100 borrowed £6 must be provided out of fresh annual taxation to pay for interest and Sinking Fund.
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