HC Deb 04 May 1915 vol 71 cc1011-2

Let us look at the problem on the assumption that the War is a twelve months' War. If the War is a six months' war, the difficulties would be much more readily overcome; but if it is a twelve months' war, it will involve our raising £1,132,000,000 in this country in the course of this financial year one way or another, and that represents the really great difficulty with which anyone framing a Finance Bill would be confronted. £270,000,000 of that money would be raised by taxes, but these would be taxes raised out of the income of the people of this country, and there is still a balance of £862,000,000 to be provided for. Of that sum, I think about £200,000,000 would be money which we would be advancing to other countries. That does not lessen the difficulty in the least degree. The difficulty is, not the indebtedness, but to raise the money for the purpose of meeting liabilities. We are raising it not merely for ourselves, but for other countries which are not as fortunately placed as we are. That means that we have to raise £862,000,000; that is one part of the problem. Take another difficulty, and I think a greater one, for it is full of complications. Britain in time of peace has the greatest international trade in the world. I think that Germany comes second. In both countries the imports exceed the exports, and both countries pay for their imports in exactly the same way, though not to the same extent. Take the year 1913. Our imports exceeded our exports by £134,000,000. How was that paid for? As everyone knows, you do not pay in gold; you pay first of all by freights and other services which you render, because most of the shipping is done in our own ships and a very considerable part of the payment for this difference is in the freights which come in that way to our shippers, and payments for other services, such as insurance, banking, and commissions, and things of that kind. That would probably account, perhaps, for from £120,000,000 to £150,000,000. There are also other sources of payment to this country. We have interest on £4,000,000,000 which we have invested abroad. The two together come to £350,000,000. That is our side of the account, and that is as against an adverse balance of, say, £130,000,000. That means that there are £220,000,000 due to us and that represents our investments abroad for the year. You invest large sums of money, as everyone knows here, in foreign countries, but you do not send it over in cash. It is that difference which practically represents our investments abroad. That is the position during time of peace.

Now comes the period of war, and the Committee will realise the difficulty of financing gigantic operations of this kind. It affects the two rival countries differently. Our imports have increased. We are not merely buying for the purposes of war munitions. Four millions of our men, of our best men, have been taken away from industries. Two millions or more are engaged either in the Army or the Navy; they are at the front or training to go there. You have another two millions who are engaged in doing nothing but turn out munitions and the equipments of war. You have four millions of our best workmen, the whole of whose skill and energy are absorbed in the War. What is the result? We have not merely to provide munitions of war and the material of munitions of war abroad, and food, but our manufacturing energy being directed to something else, we have to buy goods which in the ordinary course we should have bought at home. We can only get them from abroad.