British Empire Proves Easier to Celebrate and Fight for than to Finance
Neville Chamberlain presented his sixth (and last) consecutive Budget as Chancellor of the Exchequer. Whilst he still fell well short of Lloyd George’s record of eight Budgets, he had superintended Britain’s slow and painful recovery from the worst of the world slump. His task had not, though, got any easier. Above all the cost of rearming Britain had pushed government spending up to the unheard of level of £855m, £57m more than in the previous year. Military spending accounted for almost one quarter of the total. Chamberlain made an uncharacteristic error in determining how to finance this. Assuming that financial and business circles would share his loathing of deficit finance, he proposed the introduction of an extra level of corporate taxation under the name “National Defence Contribution”. It was modelled on the old Excess Profits Duty, designed to capture business profiteering during the First World War. The details had been poorly thought out: taxing increases in profits would fall heavily on Britain’s classic staple industries, whose profits were only just recovering from the ravages of the Great Slump. The more modern industries such as car making would also suffer to some degree. The Stock Market fell heavily amidst a widespread outcry.
The inhabitants of London showed greater public spirit by turning out in their tens of thousands to witness the dress rehearsal for the Coronation procession even though it began at 6.30am on the first day of summer time. The spectacle fell well short of the real thing. No member of the Royal family was there although copious salutes were delivered to their imaginary presence. The troops wore normal khaki dress and not their grand ceremonial uniforms. Civilian officials were even detected wearing bowler hats. The state coaches were real enough.