Churchill's Budget

A crowded House of Commons gave fascinated attention, last week, to plump, ruddy-cheeked Rt. Hon. Winston Leonard Spencer Churchill, shrewdly audacious Chancellor of Great Britain's Exchequer.

Ostensibly his pungent speech of three hours' duration served merely to "open" (present) the Empire Budget for 1928. Actually he was trumpeting abroad a new political program, on the basis of which his party (Conservative) plans to appeal to the electorate in 1929.

So fervent was Mr. Churchill's mood that, when Laborites attempted to heckle him, he fairly roared: "What! you mock us, do you? Then we will advance upon you with invincible power!" Paying but small regard to modesty, Chancellor Churchill added that "possibly" his new budget program is "the most important measure to be introduced in Parliament . . . since the great Reform Bill of 1832."*

Program. As a prelude to his project, Chancellor Churchill drew attention to the undoubted fact that Great Britain's productive industries & farmlands are now crushingly burdened by "the rates," that is by taxes locally imposed. These local burdens upon production, said Mr. Churchill, must hereafter be borne by the country as a whole, and especially by firms engaged in distribution, such as the oil companies.

Thus is envisioned a shifting of the whole burden of British taxation so drastic as to seem epochal. Chancellor Churchill, beaming with confidence, announced that his program has the unanimous support of all members of Prime Minister Stanley Baldwin's Cabinet (Conservative). It is scheduled to come into effect as of Oct. i, 1929, with the passage of a series of bills, which the Cabinet expects to carry through Parliament before Christmas, 1928.

The mechanism of the projected tax shift will be for the Treasury to remit three quarters of the "rates" (taxes) now levied locally upon "productive industry employing manual labor." In the case of "actively producing farmlands" the Treasury will remit the whole of the local taxes, "They will be wiped clean off the slate!" exulted Mr. Churchill. Then he stated soberly that the "wiping" would cost the Treasury -L-29,000,000 per year ($140,940,000).

Fund. Though this huge sum will not have to be budgeted until 1929, a fund from which it may be drawn was proposed, last week, by Chancellor Churchill as a feature of his new Budget. He destined for this fiscal nest egg the budgetary surplus for the year just past, amounting to -L-4,250,000. Further to swell the fund, Mr. Churchill established last week, to take effect at once, an increased tax of four pence per gallon on automotive gasoline and oils--a tax which he declared will bring in -L-14,404,000 ($70,000,000) this year "and more later." The immediate result was that last week the price of a gallon of gasoline jumped four pence and a farthing (8^c-c-) throughout Great Britain. Motorists cursed. Bus companies warned of increased fares.

Budget. Apart from the daring program just set forth, the new Budget may be summarized thus: 1) Expenditures are estimated at -L-806,195,000, and receipts at -L-812.497,000, thus leaving an expected surplus of -L-6,302,000; 2) Drastic economies will be effected by discharging 11,000 civil officials during the coming year; 3) The exemptions from the income tax already extended to parents, in proportion to the number of their children, are now sharply increased. Thus a single child, which brought an exemption of -L-36 ($175), last year, is at present worth -L-60 ($292) in exemptions. Additional children are worth -L-50 ($243); 4) Trifling alterations in the British tariff schedules will result, for example, in a fall of one farthing -c-c) per pound in the retail price of sugar; 5) Finally Chancellor Churchill budgeted with satisfaction that, although Great Britain must pay upon her debt to the U. S. this year the sum of -L-32,845,000, she will receive the nearly equivalent sum of -L-32,000,000 from German reparations and the debt payments of her Allies.

Although Great Britain's National Debt (internal and external) now amounts to the stupendous total of -L-7,527,000,000 ($36,581,220,000), Chancellor Churchill declared stoutly: "We need only to go on paying the same sort of sums as we are now paying steadily and punctually and our national debt will be extinguished within the lifetime of some of us now living."

Significance. The immediate and specific features of the new Budget were all but ignored, last week, as Liberals and Laborites leaped up to attack Conservative Chancellor Churchill's program of shifting the local tax burdens of producers to distributors (and of course eventually to consumers).

Cried David Lloyd George (Liberal) bristling wittily at Chancellor Churchill: "Talk about robbing Peter to pay Paul! . . . He [Churchill] is robbing the whole twelve Apostles in order to endow Paul. . . . Any such program would constitute an indirect subsidy for the property owning classes [i.e. for the owners of farmlands and producer goods]. . . . The whole proposal is thoroughly vicious!"

Snapped crippled Philip Snowden, onetime Laborite Chancellor of the Exchequer: ''This plan to abolish all taxes on hundreds of thousands of acres of land ... is perfectly outrageous. ... A monstrosity! . . . The landlords are to be put still further on the dole. . . . Scandalous ! . . ." And Cripple Snowden thumped the floor with his two rubber-tipped canes.

Impartial observers thought that the Conservative Cabinet has hit upon a shrewd program, well calculated to catch votes, and probably destined to further the extremely basic interests of British industry and agriculture. The burden of the "rates" has not seldom been recklessly imposed by local authorities, and should properly become a matter of national concern. Finally the 1,000,000 workpeople who continue unemployed in Great Britain should be able to find many a job in the producing industries which Chancellor Churchill proposes to assist or partially subsidize. Therefore the votes of the unemployed and the votes of most laboring working people will tend to be drawn to the Conservative Program of foxy Chancellor Churchill.

* Famed because it largely increased the representation of the middle classes in Parliament, and abolished many of the "rotten boroughs" in which the election of candidates was corruptly controlled by the aristocracy.