Blue Paper Budget

Just the least bit paunchy because of a bandage drawn tightly across his little abdomen, Rt. Hon. Philip Snowden hobbled gallantly into the House of Commons on his two rubber-tipped canes last week, leaned for support against the dark oak despatch box table and made in 62 minutes flat his Budget Speech, normally an affair of two hours or more.

In the gallery sat the doctor who had tried to dissuade Mr. Snowden from speaking, the surgeon who recently tapped his infected bladder (TIME, March 16) and Montagu Collet Norman, Governor of the Bank of England (see col. i) with other bigwigs. For British businessmen the Budget is an abrupt life and death matter. New taxes decreed by the Chancellor of the Exchequer on Budget afternoon become effective on the morrow morn. One must look sharp.

Figured Sheets. To help sick Mr. Snowden cut his speech to 62 minutes, blue papers were handed to all M. P.'s before he entered the House, a surprising innovation. On these blue sheets appeared most of the stuffy, statistical figures, so tiresome (and occasionally embarrassing) to read aloud.

Item: Deficit for the 1930-31 budget year, -L-22,576,000 or $112,880,000.

Item: Based on estimated revenue of -L-803,500,000 and estimated expenditures of -L-803,366,000, the 1931-32 Budget will balance with a surplus of -L-134,000 at roughly $4,000,000,000 (corresponding U. S. figure $4,100,000,000; French $625,620,000).

Item: The British Unemployment Insurance fund (see below) will gobble up -L-45,108,000 this year, nearly twice its last year's gobble of -L-26,470,000.

Mrs. Snowden had helped the Chancellor to write down his blue sheets of bad news before their cheery hearth in Surrey (see cut). Last week, alert as a mother robin, she perched in the gallery, saw her Philip pop a private word in the Prime Minister's ear, pick up a glass of water,* tilt it against his thin lips, set it down, and begin to speak.

Keynote: "I hope that the trade depression which upset our calculations last year will have reached its limit and better times are in store, but it will take some time after the tide has definitely turned, before revenue will meet expenditure."

Nobility & Gentry Beware. While the tide is turning, Chancellor Snowden announced, he will have recourse to two most drastic measures:

First, he will raid the -L-33,000,000 "dollar exchange" credit maintained by the Exchequer in Manhattan. Twenty million pounds will go to balance the Budget, the remaining -L-13,000,000 will be transferred into Great Britain's account with the Bank for International Settlements at Basle, Switzerland.

Second, the Chancellor proposed a direct blow at the landed Nobility & Gentry, a tax of one penny on each pound of the capital value of their broad acres-- i. e., a Socialist "capital levy" on land of slightly less than 1/2%-Legislation to this end will require at least two years to become effective, since nationwide assessments must be made.

Alternative to these measures would be a tariff for revenue, anathema to Mr. Snowden but tempting to Mr. MacDonald. "I reiterate my opposition to such proposals," cried the Chancellor, white-lipped. "They would mean relieving the well-to-do at the expense of the poor!"

Chancellor Cheered. Mr. Snowden drew cheers with a promise not to increase the British "standard income tax rate" of four shillings six pence in the pound, "highest in the world."

He drew ironic cheers by saying with a wry face: "The fall in the consumption of alcoholic liquors seems to be a permanent tendency and from the point of view of national well-being it is to be heartily welcomed, however inconvenient it may be to the Exchequer."

The gasoline tax, said Mr. Snowden, would be upped from four pence a gallon to six pence, "effective tomorrow."

Proudly the Chancellor boasted that in the past year he managed to put -L-66,830,431 into the sinking fund. "It says much for the soundness of our national financial position," he cried, "that after a year of unparalleled financial depression we have not only been able to pay our way but to make such a substantial reduction in our debt!"

Up jumped Ramsay, assisted Philip to his seat, patted him on the back. "I feel better," glowed the Chancellor, "than before I began to speak." Up jumped the newly appointed Conservative fiscal spokesman, Rt. Hon. Neville Chamberlain (TIME, April 13). Amid Laborite roars of "Where's Churchill?" Conservative Chamberlain congratulated Mr. Snowden warmly, said stiffly that he would reply to the Chancellor's speech at a later date. Grinning, beaming, "Winnie" Churchill (ousted in favor of Mr. Chamberlain) shouldered his way out of the House, pursed his lips at shouts of "Speech, speech!"

The City (London's Wall Street) sighed with relief that the Snowden Budget is not more radical, dropped a pious tear for the landed Nobility & Gentry.

"There Is No Dole." Officials of the Ministry of Labor insist, despite the charge on little Philip Snowden's budget, that there is no British Dole.

Drop in at the Ministry, pop several questions and some bored but confident young Laborite will drawl, "America is on the Dole, not England. . . .

"Every penny your Red Cross spends is Dole, that is 'charity.' Over here we've absolutely nothing of that kind. You ought to study our Unemployment Insurance Acts."

These acts the British Parliament passed in the decade after the War. They compel the toiling proletarian to buy insurance. If male and between the ages of 21 and 65, he pays for it at the rate of seven pence per week, this being deducted from his wage. His employer is forced to pay in eight pence and the state adds seven and ha'pence more, making a total of 22 1/2 pence per week, or 45-c-.

This cash is pooled with the national Unemployment Fund. The worker, as his pennies clink merrily in, comes to have a pleasant, capitalistic sense of "money in the bank."

One day he sees another man lose his job. He works on, keeps paying in his pence. The other man, after a short "waiting period," takes his unemployment book around to the proper authorities, has it stamped and draws (if between 21 and 65 and with no dependents) 17 shillings per week.

The steadily employed worker can see no charity in these 17 shillings. He himself is the cause of 22-3-pence being added to the fund every week. The other fellow for a few weeks will get, if anything, less than is fair. He should have a dependent wife or mistress, could then draw an extra nine shillings per week for her, plus two more shillings for each dependent child, legitimate or illegitimate.

Is this a Dole? Is it chanty? Is it reprehensible, degrading, shameful, or is it insurance?

Act of God? Up to 1928 the Unemployment Insurance Acts did not belie their name. The revolving fund revolved and remained solvent. The workless drew out less than the workers, employers and the State paid in. No unemployed man could draw a single shilling unless he had paid his pence for 30 weeks or more. He then received only what he properly called his "covenanted benefit."

The British General Strike, the Coal-Strike and finally World Depression threw out of work tens of thousands, hundreds of thousands, finally more than two millions of His Majesty's subjects.

To meet the situation Parliament passed supplementary acts. Workers who have not made the statutory 30 payments entitling them to "covenanted benefits" may now obtain "transitional benefits" of similar amount by proving they have made only eight payments, and these any time within the past two years. Payments of such emergency benefits were to end April 19 this year, but the "transitional period" has now been extended indefinitely.

Mounting Deficits. To meet the steadily mounting deficits, Parliament has voted larger and larger sums, and the Exchequer now pays "transitional benefits" directly, these constituting no charge upon the unemployment insurance fund, which nevertheless is insolvent.

The Fund's fiscal picture 1928-31 may be sketched thus:

In the fiscal year ending March 1928, benefits paid totaled -L-36,470,000, but this was more than made up by the regular contributions of the employed (-L-14,410,000), and their employers (-L-16,750,000) and the State (-L-12,030,000) totaling -L-43,190,000.

In the fiscal year ending March 1931, however, benefits of -L-92,200,000 were paid, and these were by no means covered by the contributions of the employed (-L-13,690,000), their employers (-L-16,020,000) and the State (-L-35,600,000) totaling only -L-65,310,000.

To keep going in its present insolvent condition the Fund has been permitted to borrow from the Exchequer. Its borrowings are expected to exceed -L-100,000,000 before the end of 1931.

Theoretically, when Prosperity returns, the surplus of "regular contributions" over "covenanted benefits" will gradually pay off the loan, but even Laborite optimists think that at least a quarter-century of "normal times" will be required to do it. No repayment of sums paid out by the Exchequer as "transitional benefits" is even contemplated. This direct, irrecoverable loss to the British taxpayer will exceed -L-50,000,000 before the end of 1931.

Conclusions. The "transitional benefit" is sheer dole or state-charity. The borrowings of the Unemployment Fund smell of "dole" (repayment being most doubtful). But that part of the "covenanted benefit" (about two-thirds) which is paid out of "ordinary contributions" is still properly designated as insurance.

Flagrant Abuses. To some minds it may seem a flagrant abuse that "dependent unmarried mothers" should batten on the Dole when their men are out of work, but such is the law, this battening is no abuse.

Consider a small British button manufacturer. One hundred men work for him each week, though his factory will only hold 50. Half the men work Monday through Wednesday, draw their dole the rest of the week. Meanwhile the other half have drawn their dole for three days, work Thursday through Saturday. So well does this half-loaf, half-work system please the proletarian that when he does work he is willing to accept a slightly lower daily wage than if forced to work regularly, and this pleases the manufacturer. There are also cases of deliberate collusion: a man works on the sly and wages are "slipped" to him, but he draws the dole as "unemployed." An adept has even been found who under seven aliases drew seven dole payments per week.

Dole Types currently visible in England include the following:

1) The sweet young English rose who would never think of working, except for a few weeks, so as to get on the Dole, marry, and apply her benefit to instalment payments on the furniture.

2) The wench already on the Dole who reports (as she must) at a State Employment Exchange, is told that a lady wants a cook, says to the lady, "I'm a good cook m'am, but you won't mind if I break dishes? I'm that clumsy!" She stays on the Dole.

3) The man or woman who has kept a job for the past ten years, who has worked, contributed to the Unemployment Insurance Fund, and still keeps on, vaguely troubled and disgusted by the sharp tricks of Dole-perverting neighbors, but never aping them.

4) The British Labor M. P.--such as famed Miss "Wee Ellen" Wilkinson--who visits the U. S., recoils in horror at the sight of unemployed apple-sellers, denounces the heartless degradation and the public shame, thanks God that the British proletarian can hold up his head and proudly take his "benefits," instead of cringing and smirking like a beggar at some sour-faced old lady who may buy an apple or two tangerines.

*Teetotalers but musical, the Snowdens recently entertained Feodor Chaliapin who, they had heard, insists upon champagne. They gave him sparkling soft cider in champagne glasses. Many British Budget speeches, including those of Rt. Hon. Winston Churchill, have been made on whiskey & soda.

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