100 Mr. David Adamsasked the Chancellor of the Exchequer whether he will consider the advisability of establishing a central reserve fund with headquarters in London for the purpose of ensuring that in periods of economic depression to which the budgets of many Colonial possessions are very sensitive, it will not be necessary for such possessions to curtail expenditure upon health and social services, thus in many cases breaking continuity of essential work and throwing away the results of work already done?
§ The Chancellor of the Exchequer (Sir John Simon)It is already the policy of Colonial Administrations to set aside financial reserves to meet contingencies such as a fall in revenue due to economic depression. The centralisation of these reserves could serve no useful purpose unless funds derived from the revenues of one dependency could be used for the purposes of another, but such an arrangement would clearly be open to grave objections on grounds of equity. If owing to prolonged depression the reserves of a dependency become exhausted and current revenue is insufficient to meet necessary expenditure, the question of assistance from the Exchequer arises. When such assistance is given, the necessary funds are provided by annual Votes of Parliament, and I see no reason to alter this procedure.
§ Sir J. SimonYes, Sir.