The Radcliffe Report

Press, Volume XCVIII, Issue 28987, 31 August 1959, Page 10

The Radcliffe Report

Not much has been heard in New Zealand yet about the Radcliffe Report recently presented to the British Government; but it is safe to say that the report will become a familiar authority on monetary affairs. The report is the result of two years’ inquiry by the Committee on the Working of the Monetary System, a committee of nine, including eminent bankers, industrialists, trade unionists, and economists, who sat under the chairmanship of Lord Radcliffe. The committee was set up at a time of great anxiety in Britain, when it seemed that radical changes in institutions and policies might be necessary if the currency was to be saved from submergence by inflationary forces. The British currency has not merely survived; it has gained remarkably in strength during the present year —a fact which provides a yardstick by which some of the committee’s findings and recommendations may be measured. The committee is highly critical of some institutions, especially the Bank of England for its lack of leadership and for its management of the National Debt But by and large the committee sees no need for drastic changes. The Treasury is accused, along with the Bank of England, of * hugging to itself financial statistics that

ought to have been given wide publicity in the interests of a better public understanding of the economy. The committee caused many of the statistics in question to be produced for inclusion in its report. One of the committee’s chief pleas, indeed, is for more economic statistics generally, and a more refined use of them in diagnosing economic ills and guiding economic developments. The technicalities of this report, the “ Economist ” observes, will provide the journal, which devotes much attention to monetary and economic affairs, with “ material to study for “ months to come ”. Economists the world over will be keen to examine the committee’s findings. New Zealand should have something to learn from it. Students of New Zealand’s expanding economy will be especially interested in the Radcliffe Committee’s views on risk capital, a shortage of which, it finds, is a real danger in Britain. To provide risk capital for the finance of innovations, the committee recommends the establishment of an Industrial Guarantee Corporation which would guarantee bank loans for risky ventures. Here is a policy at the opposite pole from New Zealand’s, which makes retention of profits that migut provide risk capital a subject for penalty.