Drop In U.K. Trade Gap To £41m

Press, Volume C, Issue 29567, 17 July 1961, Page 6

Drop In U.K. Trade Gap To £41m

(NJZ. Press Association—Copvripht) LONDON, July 15. Britain’s trade gap fell sharply to £4l m. last month according to Board of Trade figures issued today. The gap at the end of May stood at £B2m.

Political sources said that if this improvement continued. Britain’s current economic problems would look less challenging. However, they still expect the Government to take precautionary measures before Parliament rises early next month for its long summer holiday. The Chancellor of the Exchequer (Mr Selwyn Lloyd) will have a further opportunity to discuss these measures with the Prime Minister (Mr Harold Macmillan) when the two meet on Sunday at Chequers. Speculation There is wide speculation that the Government, to sidestep present inflationary tendencies, will invoke the emergency economic powers it took when the nation's annual budget was announced in April. These powers enable the Chancellor at any time to apply a surcharge—or a rebate—within a range of 10 per cent, on all the main in-

land revenue and excise duties, and on purchase (sales) tax. In addition to this “regulator,” he can impose a payroll tax in industry to discourage firms going through a slack period from clinging to labour which may be in urgent demand elsewhere. By releasing men who could be absorbed by other industries, employers would save the payroll tax—proposed to be 4s for each employee "on the books.” Record Levels Britain, a trading nation, lives by her exports, but these, though constantly achieving new record levels, are still not sufficient to pay for all she buys from abroad. The biggest single way of improving the situation is by boasting production and exports still further, but complementary measures can also help. One is to curb domestic consumption, which is now at a very high level, and is one of the factors swelling the imports bill. Mr Macmillan met the Conservative Government's parliamentary rank and file privately last night and told them he was “worried,” but “not afraid” of the economic situation.