The Press SATURDAY, JULY 25, 1942. Stabilisation

Press, Volume LXXVIII, Issue 23699, 25 July 1942, Page 4

The Press SATURDAY, JULY 25, 1942. Stabilisation

In a brief statement this v/eek the Hon, D. G. Sullivan, as DeputyPrime Minister, announced that the War Administration had reached “ complete identity of views ” on economic stabilisation, and the unanimous report of the Stabilisation Conference of 1940 would govern, in principle, the policy to be followed. Accordingly, the Economic Stabilisation Committee would “forthwith resume its activ- “ ities,” assisting the War Cabinet in an advisory capacity. This statement is in several respects remarkable. In the first place, it is a reminder that nearly two years have passed since the conference, by achieving unanimity in its recommendations, gave the Government an opportunity which it was not wise enough to seize promptly and use boldly. Ever since, the Government has temporised. Although the Hon. W. Nash told the Labour Party Conference in April, 1941, that “ any “ movement to increase wages “ generally ” must have “ harmful “ effects upon the wage-earners “ themselves,” the Government had not resolution enough to accept full responsibility for the control of the wage-prices structure. It empowered the Arbitration Court to make general wage orders, lost effective command of an inherently inflationary situation in doing so, and has never corrected this disastrous mistake. The War Administration, Mr Sullivan says, has reached complete agreement; but his reference to the “ governing principle ” of the policy it has agreed upon is not sufficient. The agreement will be important if its result is that the Government assumes full control of wages, as an instrument indispensable to the control of prices and to the working out of a stabilisation policy realistically conceived. If the agreement is only a compromise, falling short of this essential object, it will not be likely to oppose very effectively the pressure of inflationary forces. The Prime Minister’s financial statement at the end of April should be read again as a warning against half measures and compromises. Second, the Government’s reluctance to move with the impetus given to it by the Stabilisation Conference was well illustrated in its long delay in appointing the committee to which Mr Sullivan has now, in a significant phrase, made the Government’s first reference in many months. Nearly a year after the conference reported, Mr Nash laboriously apologised for the Government’s slow progress; he would appoint an advisory committee to speed it, if he could “ determine the “ personnel.” A few weeks later the Prime Minister announced the appointment of the committee. But nothing more was heard of it till the Leader of the Opposition, during a by-election campaign at the end of January, declared that the committee was no longer at work and plainly enough suggested the explanation of this breakdown. The Government ignored Mr Holland’s statement. When Mr Sullivan says that the committee will at once “ re- “ sume ” its work, he admits that 'it ceased to work, He does not explain, however, why it ceased, or offer the public any sort of assurance that it will not encounter the same obstacles again. It is of course a disturbing fact that the Government chose to leave the public totally uninformed on what was, in effect, a serious check to its economic policy. The Government has still to justify this silence, and will not easily do so. But it has more to do than that. It can only restore confidence by showing that the fundamental cause of this check to its own policy has been removed. The Labour Party, so recently as April of this year, declared itself in favour of the full operation of the stabilisation plan, but exposed, at the same time, quite hopelessly inadequate ideas on the subject. If the Government can neither correct them nor overrule them, the identity of views of the War Administration will not help very much.