DEFICIT IN BRITAIN

Ashburton Guardian, Volume 70, Issue 69, 3 January 1950, Page 5

DEFICIT IN BRITAIN

FIGURES FOR NINE MONTHS LONDON, Dec. 31. Britain liad a deficit of £22,170,767 when the first nine months of the present financial year ended to-day. In that period, ordinary revenue totalled £2,388,421,363, and expenditure £2,410,592,130. A big influx of revenue alaways comes in the last quarter of the financial year, but some financial circles question whether the Chancellor of the Exchequer (Sir Stafford Crippsj will obtain all the surplus or £448,000,000 for which he has budgeted. The Chancellor estimated that revenue would reach £3,777, <50,000 by March 31, ,1i950, and expenditure was estimated at £3,329,107,000. The “Financial Times” described the present deficit of Britain s ordinary revenue against expenditure as “a setback to disinflation.” .. n The “Financial Times’ saul: Piesent indications are that the figures for the year as a whole will be less satisfactory, and therefore less _ disinflationary than Sir Stafford Cripps intended.”

Trends in Last Nine Months

The three most striking features of the last nine months of the financial year were: (1) a tendency for the decline in ordinary revenue to be less marked than expected: (2) a tendency for ordinary expenditure to rise at a rate materially in excess of expectations at the time of the last Budget: and (3) a tendency for the Government’s net capital expenditures to run ahead of the estimates. The “Financial Times” continued. “The year 1950 is critical both for the success of the devaluation of the £ as an act of policy, and for the postwar recovery of the United Kingdom. Failure to solve the dollar problem has so far been concealed from the people by American aid and by drafts on the gold aiid dollar reserves of. the sterling area, which have maintained the essential flow of food and raw materials. “Full employment lias been sustained only because inflation both in the United Kingdom and the steilmg areas as a whole has not been checked. Now that American aid is about to he reduced, there can be no further reduction in the gold and dollar reserves Devaluation, which is designed’ to meet this' situation, can be successful only if appropriate action is taken both in the United Kingdom and the sterling area with the least possible delay.”