§ 51. Mr. Boothby
asked the Chancellor of the Exchequer whether, with a view to allaying anxiety amongst those engaged in industry and trade and without anticipating the Budget statement, he can give the House some indication of the methods by which he proposes to finance the rearmament programme during the forthcoming year; and will he state, in particular, whether he proposes to ask for increased borrowing powers?
§ 52. Mr. Lipson
asked the Chancellor of the Exchequer whether he is aware that the present uncertainty as to how the expense of the increased Defence programme is to be met is having a very disturbing effect on trade; and whether he is able to make a statement which will lessen the prevalent anxiety?
§ Sir J. Simon
It would be neither desirable nor practicable to depart from the 243 rule which prohibits anticipation of the estimates or provisions to be contained in the forthcoming Budget. But I recognise that the considerable increases in Defence expenditure which have already been announced bring to the forefront the question how they should be met. The Defence Loans Act, 1936, authorised borrowing in connection with our rearmament programme to a total of £400,000,000. Up to the end of the present financial year, we shall have met the cost of rearmament out of borrowed money to the extent of about £180,000,000; some £220,000,000 will, therefore, still remain available for use after the end of this financial year, so that the problem of authority to borrow is not one of immediate urgency. But I think that at a time when new commitments are being incurred we should prepare our plans well in advance. At the time of introduction of the Defence Loans Bill it was stated that the limit of £400,000,000 was by no means final, as it might be modified by subsequent Parliamentary action if conditions so required. In view of the further expediture on Defence preparations now contemplated, I have come to the conclusion that some further borrowing powers will be needed and it is my intention, at the appropriate time next year, to ask Parliament to pass legislation for this purpose. It would be impossible to mention figures in this connection in anticipation of the new Bill, but I make the present statement in order to remove uncertainty as far as I can.