§ It is clear that in the situation in which we now find ourselves considerably increased taxation is essential from both the financial and the economic standpoint. From the ordinary financial standpoint it would be highly imprudent to watch the Budget deficit grow at the rate at which it is now growing without attempting to secure additional revenue, and from the economic standpoint it is no longer a question of the avoidance of extravagance in personal expenditure. If we are to keep consumption within the bounds of our available production, we must secure widespread and drastic retrenchment in forms of personal expenditure which axe not in the least extravagant but which are not absolutely essential.
§ The time has long gone, if there ever was a time, when the finance of a world war could be found merely by the well-to-do, and to-day varying contributions are being made by all sections of the community, subject to such safeguards as are necessary for the poorest members, and the increased taxation which is necessary must fall on all sections of the community if, as we must, we are to continue to make our greatest effort. Nor, in fact, can the needs of the economic situation be met without savings and retrenchment by all.
§ I am not unmindful of the contribution which vigilance and care can make in relation to our war expenditure, for which 642 the Treasury has special responsibilities. It is vital, I agree, that there should be no holding-up or delays in our war effort, and for my part I have done my best to see that these shall always be avoided, and I shall continue to do so. But the fact that the House has appointed a Select Committee on War Expenditure, and that much time and labour have been expended and that valuable advice has been given to the Government in this important connection, is a tangible recognition that here lies an important field in which economies should continually be sought to be effected and money, wherever possible, saved. I would suggest, though I have noticed some impatience in certain quarters, that even in the stress of war we must do all we can in this way to augment our financial resources, as well as to give confidence to our people that the sacrifices they are making are not being wasted or frittered away.
§ It is evident that further taxation on the largest scale possible, and covering as wide a field as possible, is imperative, but it is equally plain that we cannot expect, nor would it be possible or expedient or just, to raise by way of taxation, at one time and in one Budget so quickly following another, all the sums which will have to come still further from this source. We must regard this Budget, as it is, as an interim Budget both as regards direct and indirect taxation.