Britons Advised To Increase Output

Press, Volume XCI, Issue 27631, 12 April 1955, Page 13

Britons Advised To Increase Output

(Special Correspondent N.Z.P.A.) (Rec. 9 p.m.) LONDON, April 11. Britain needs a modest increase of 5 per cent, in industrial output from existing plant to stop inflation and avoid “an inglorious bust after a glorious boom,” according to Mr Graham Hutton, economic adviser to the British Productivity Council.

In an address at Glasgow he said that since the war the £ had lost its value.

Listing Britain’s “catalogue of mass prosperity,” he said four-fifths of the people had never at any time consumed so much food a head and yet had not spent a bigger share of house’ hold income on it. Never before had four-fifths of the British people been able to spend so much on so high a basic standard of life and yet go on to spend so much on high-taxed pleasures like smoking, alcohol, radio, television, pleasure petrol, cinemas, sport, pools and betting. He estimated that each person spent 4s a week on pools and betting and as there were only about 14,500,000 separate households in the nation, that item alone amounted to 13s 6d a week. Tn the three years since the Stock Exchange slump in 1951, the country had made the fairest weather in the i post-war period. Earnings had risen more than the cost of living, rationing had ended and most controls, ex- | cept those over rents and housing, had gone, though it had to be admitted

that foodstuffs had certainly gone up more than earnings, mainly to help farmers and farm workers by way of subsidies. Effects of Inflation Mr Hutton asked why the £ had steadily lost its purchasing power, why wages continually chased prices up and why, in a decade, the Home trade regularly sucked goods, manpower and other resources away from the export trade so that often British exports were too dear for foreigners compared with the prices of other countries. The answer was inflation—the flow of money outpacing the flow of goods Britain produced.

Inflation was a result, not a cause, he said. The causes arose from living beyond the country’s means. The nation lived beyond its means by ordering up too much of everything and promising to pay for it all—to a total beyond its output and beyond what it was prepared or organised to turn out in a year. The post-war crisis could have been prevented with 5 per cent, more production from existing plant capacity, Mr Hutton said. Had that been achieved, it would have reversed the “awful upward trend” in British costs and prices and meant that wages ana other incomes, though staying stable, would be buying more for the first time since the outbreak of war.

The latest figures on Britain’s capital equipment showed that if she were to keep abreast with her competitors and maintain an increase in the standard of living, then more money must be saved and invested by the nation.

The country would either have to reduce her total consumption or better still, turn out a bit more from the sama resources. "Danger Signals Obvious** “That does not mean harder or longer human work, but it does mean turning out more from the same human and mechanical raw material, fuel and other resources without first paying out more money. It could bo done by better organisation, better ways of working and by new methods. If that is not done, Britain will either lose exports, which mean cutting imports and curtailing living standards, or she will have to make some people go without or return to a system of rationing. "The danger signals are obvious. But by proper organisation Britain could prosper within 10 years. She has brains and skill, but she lacks the same high order of skill in applying them. She might want higher standards of consumption—some by way of so-called socialism and the others by private enterprise— but neither group will get what they want unless they raise the average level of national productivity.” Mr Hutton said.