Cool reception from press

Press, 17 December 1976, Page 5

Cool reception from press

NZPA London Mr Denis Healey’s miniBudget has been given a cool reception in leading articles in most British newspapers.

“The Times” says that the Chancellor of the Exchequer did not go far enough in his efforts to put Britain’s economy back on course; and even the pro-Labour Party “Daily Mirror” agrees with that.

In its leading article, “The Times” says, in part: “It may be that the Labour Party is, by its nature, incapable of making substantial moves to restore Britain’s capacity to create wealth.

"It cannot be an accident that this Labour Government never does enough: Mr Healey's measures marked the third time that he had done too little in one year.

“ . . . The cuts in expenditure on housing and roads will have real effect, but they amount to little more than a third of the total reduction in the borrowing requirement which the Chancellor seeks to achieve.

“Much of the rest is presentational. rather than real.” The “Financial Times” says: “The confidence of businessmen at home will not be greatly increased by this package.”

The “Daily Mirror” says on its front page: “The whole country was gear'd to make real sacrifices, determined to get Britain out of the relegation zone once and for all. "But the match has been postponed yet again because of a bad weather forecast inside the Labour Party and the Trade Union Congress. "Even the increases on drink and tobacco have been postponed until after Christmas. Perhaps Denis Healey thinks that will cheer people up, but the ‘Mirror’ has news for him: people don’t want cheering ua. They want to take their Medicine like adults and get on with it.”

The "Daily Mail” describes Mr Healey, in a front-page headline, as “The Chicken Chancellor.”

’siis package has made it plain that he had bowed low before the combined power of the T.U.C. and Labour’s Left wing,” the newspaper says.

“Instead of the swinging cuts in public expenditure demanded by every international economist of note to cure Britain’* cronic financial crisis, Mr Healey produced a rag-bag of cuts.” The genera] secretary of the Trades Union Congress, Mr Len Murray, said: “The Government has clearly fought hard to minimise the cuts and their inflationary impact. Trade unionists wifi

understand that if Britain did not get an I.M.F. loan, the alternative would be even worse.”

Mr Jan Hildreth, directorgeneral of the Institute of Directors, described the Budget as a stop gap. “We are still not tackling ithe basic problem of living within our means, and we are still not doing enough to promote wealth creation,” he said.

The first rumblings of protest from Labour Party’s Left-wingers were quickly heard. One of them, Mr Max Madden, commented: “It will have an adverse effect on employment, and it will increase the cost of living. The measures have been influenced by forces external to Britain, and are therefore unacceptable. Mr David Basnett, of the General and Municipal Workers’ Union, said that the Government was on the wrong course; and Mr Jack Jones, the leader of Britain’s largest union, the Transport and General Workers’ Union, described the cuts as very harsh, and added. "This is going to be very difficult for the working man and woman to wear.” There is a large fund of trust for the Government among union leaders, however, and support for the cuts has also come from the other side of industry, in the form of Lord Watkinson, head of the Confederation of British Industry, Britain’s main employers’ organisation.

Lord Watkinson said that the level of the cuts was about right, although he wanted a rescue operation soon for Britain’s construction industry, which would be hard hit by the 450 M cuts in house and road building. The reduction of £3OOM in defence spending was immediately criticised by the Opposition Conservative Party as dangerous to national security; and the cutting of overseas aid by £IOOM has angered organisations concerned with world food problems: the main body, Oxfam, said that the cuts would mean premature death for children in backward countries. Mr Healey had said that the British people were taxed enough already, and that the main burden of satisfying the I.M.F. should be borne by public-spending cuts. The Left wing attacked the cut-backs as “an appalling betrayal of Socialist policies.” N.A.T.O. reaction NZPA-Reuter reports from Brussels that North Atlantic

Treaty Organisation defenceplanners have expressed deep concern at the announcement that Britain will slash its defence spending by a further £3OOM over the E3OOM.

They say that the alliance is afraid that the cuts will weaken the British commitment to N.A.T.O. “It would be all but impossible to take that kind of money away from the arm--d forces and not affect the British role in N.A.T.0.” said one strategist at the N.A.T.O. headquarters. Officially, N.A.T.O. wil not comment until the British Government has outlined how it plans to save the E3OOOM. U.S. support A Washington report from NZPA-Reuter says that Britain’s main Western partners have welcomed the programme of spending cuts, but that sterling lost 1.5 cents against the United States dollar as the foreign exchange market in America reflected disappointment. The United States Treasury Secretary (Mr William Simon) described as excellent Mr Healey’s package of spending cuts, reductions in borrowing, and control of the growth of British money supply. Dealers on the foreign exchange in New York, however, obviously thought that the measures were not tough enough: the pound closed at 1.6630 dollars in New York, compared with 1.6685 dollars in London, and 1.6785 dollars in Washington. At one point, sterling i dipped to 1.6550 dollars. I “Earlier optimism which ■had driven the pound up to a peak of around 1.69 dollars over the last few days evaporated amid thin, nervous selling,” the dealers said. “The market felt that Britain had blown a golden chance to really do something about the economy, and sentiment for the pound changed in a few minutes after Mr Healey began giving the details.”

Mr Simon had told Reuters in a telephone interview, “The United States is going to support the British j moves strongly in the Internationa] Monetary Fund, and this was mainly responsible for the pound’s rally from 1.6550 dollars. The White House press secretary, Mr Ron Nessen, said “President Ford has consistently been a strong supporter of the United Kingdom’s efforts to achieve a stable economic recovery, and of the courageous ac-

tions the British Government is taking in this direction. The new measures, and the agreement reached between Britain and the I.M.F. are substantial steps towards a strong and more stable British economy, which is important not only to the British people, but to the entire world.”