The Press MONDAY, OCTOBER 30, 1944. Bankrupt Britain?

Press, Volume LXXX, Issue 24401, 30 October 1944, Page 4

The Press MONDAY, OCTOBER 30, 1944. Bankrupt Britain?

Lord Teviot’s fear that “the new “ Britain will be a bankrupt “ Britain ”, expressed in a House of Lords debate reported on Saturday, recalls General Smuts’ vision of a country exhausted by the efforts of the war and crushed by its burden of debt. Lord Teviot and General Smuts will be right if—and only if —international and national statesmanship fails utterly. But while there are reasons for anxiety about its success, there is no reason at all to believe that it must fail; that the tasks before it are impossibly large and impossibly difficult. Nor does it seem that Lord Teviot now or General Smuts before committed himself to this defeatist belief. Both, rather, appear to have reached their dark conclusions by considering some of material facts and tendencies and overlooking others. For example, it is quite true that Britain is at present spending prodigiously, piling up debt at the rate of perhaps £7,000,000 a day, liquidating her oversea investments, 4 and facing huge post-war expenditures, while her export trade struggles to reestablish itself. But it is an error to regard the cost of the war merely as a drain upon resources, and one so enfeebling as to leave reserves too small for the tasks of reconstruction. The increased production which meets a large part of the cost is not a threat to the future but a lesson. The lesson will be lost, of course, if unemployment is permitted to return; but if any lesson of the war can be said to have been learned so thoroughly that economic and social policy is bound to be regulated by it, then it is that unemployment can and must be conquered. Again, in so far as the cost of the war represents present sacrifice, the future is not burdened by it. Reduced consumption meets the cost of the war as it is incurred. Saving by deferring •maintenance and replacement of capital goods, such as plant and machinery, or by letting stocks run down, is on another footing, however. Here a burden is imposed on the future, but one which need not press heavily for long. In a third respect, the .war affects Britain’s future more seriously; that is, in the loss of oversea investments and therefore of importing power. The problem, in simple terms, is that of restoring by increased export trade —which itself will call for imports in the form •of raw materials or semi-finished manufactures—loss of about half the fcre-war total of “ invisible exports It has been calculated that this requires something like a 4 ( 0 per cent, increase in Britain’s export trade; and the difficulty is obviously formidable. But it is not insuperable. When President Roosevelt sent his “ ostrich isolation ” message to Congress, last January, he spoke plainly of the way to overcome this kind of difficulty, which is not Britain's only: Some people attempt to spread the, suspicion that if other nations are encouraged to raise their standard of living our own American standard of living must necessarily be depressed The fact is.the very contrary. It has been shown time and again that if the standard of living of any country goes up, so does its purchasing power, and such a rise encourages a better standard of living in the neighbouring countries with which it trades. That is just plain, common sense and it is the kind of plain, • common sense that provided the basis for our discussions in Moscow, Cairo, and Teheran. The. Atlantic Charter, the Master Lend-Lease Agreement, the world food conference, and the international monetary agreements have all in one way or another accepted and emphasised the principle that prosperity, like peace, is indivisible; and the key to Britain’s problem, as of others, lies in the furtherance of measures to promote international trade. .It is something, but not enough, to “ remove restrictions ”. More positive measures will work at home and abroad, to maintain full employment and to raise the standard of living, and therefore the import demand, of the undeveloped or under-developed countries. Finally, given these not impossible conditions, Britain will be, not a bankrupt unable to avail herself of them, but a nation which has armed hundreds of thousands of workers, including women, with new technical skill; which has studied the problems of production with intense energy and great success, both on the technical and on the organisational side; and which has, while sacrificing great capital assets, also established great new ones. Lord Teviot has thought too heavily, perhaps, about the National Debt. If the Government had to pay it off, it would (in a sense) be bankrupt. But it does not. It has to make a series of acceptable adjustments, from year to year, between two classes of British citizens, those who pay taxes and those who receive interest. The problem of these transfer payments eases or stiffens with conditions of trade and industry; but it has never been, and is never likely to be, a problem to which no fair solution can be found.