FINANCE AND INVESTMENT
THESE are stirring times in the City when we are told two months in advance (without any leakage) at least the main outlines of the Budget, and the Chancellor of the Exchequer shows himself a convert to the brave new economics of a spendthrift world. Confronted by a 1939-40 Defence bill of £58o,0oo,00cl all of us expected that a pretty drastic Budget was in prospect. On the most hopeful estimates of revenue on the present rates and the most niggardly allow- ances for agriculture and shipping in the Civil Estimates one could scarcely envisage a gap of less than £32o,000,000 to £340,000,000 to bridge. That seemed to imply borrow- ing up to, say, £300,000,000 and a scrape round for the odd £20,000,000 to £40,000,000 from aditional taxation. But no, the Chancellor will have none of this, and tells us in the most unequivocal terms that he will actually raise L44,000,000 less for Defence purposes out of revenue and will borrow £350,000,000 in the next financial year.
While it is still true that there may be some increases in taxation in April, the City is obviously right in drawing the conclusion that it is now heavy odds against any rise in the standard rate of income tax, or an addition to such indirect taxes as those on beer and tobacco. The Chancellor's intention in breaking with Treasury precedent and fore- stalling his Budget speech can only have been to dispel the cramping fears which would doubtless have become more acute as Budget date drew near. He has thus taken a bold course, which is fully justified in the exceptional circumstances. * * * *
Previous page
