British Hopes Have Not Been Realised, Chancellor Declares

Greymouth Evening Star, 7 April 1948, Page 5

British Hopes Have Not Been Realised, Chancellor Declares

(Recd. 11 a.m.) LONDON, April 6. Two serious economic problems confronted Britain—the balance of external payments and the balance between internal resources and the demands placed upon them, said the Chancellor of the Exchequer, Sir Stafford Cripps, opening his Budget statement and economic survey in the House of Commons today.” “The hopes we had a year ago have not been realised,” he said. “We in 1947 received considerably less in imports than we hoped and paid much more than we had calculated. The rise in the export volume was not as great as planned, although with the increase in prices the value of exports was only £75,000,000 below the estimate. The earnings from invisible exports were £90,000,000 below the forecast. The net shipping earnings were only £17,000,000. The net income from investments was £51,000,000 in 1936 and £124,000,000 in 1938. We have had to continue to sell some of our foreign assets.”

The drain on the gold and dollar reserves was the most serious feature of the whole situation. The high rate of the continuing drain could not be allowed or Britain’s remaining reserves would be exhausted. Marshall Aid Plan The Chancellor added that the European recovery programme, which “comes as a light and hope to the freedom loving peoples of the world, cannot add significantly to our reserves, but can help to reduce the drain upon them. We shall need all the reserves we can muster when aid comes to an end. We shall not be able to indulge in luxuries. We must send more goods abroad before satisfying the home market, unless production increases.” He said the Uinted States’ great act in bringing the European recovery programme into operation had given the Western European countries time and “we cannot afford to waste a minute of it.” The respite which the European recovery programme gave afforded time for effective co-opera-tion between the Western European countries, which should not in any way prejudice Britain’s close working with the rest of the sterling area, particularly the sterling area of the Dominions.

Britain must expand her exports to the dollar countries and also to South Africa, because she was the source of gold. If the inflationary tendencies were not controlled exports would suffer from the too strong drag of the home market and the too high prices at which British goods would be offered overseas. The Chancellor warned the House against developing production plans which had no relation to the actual facts of Britain’s present situation. Armchair critics presented many proposals which would involve the movement of many hundreds of thousands of workers. ‘We are dealing with production by human beings. They cannot and must not be dealt with as if they were pieces of machinery,” he declared. Export Targets Reduced The Chancellor said the export targets for the end of 1948 had been reduced. The Government now aimed to reach the level of a 50 per cent, increase on the volume in 1938 by the end of 1948, instead of a 60 per cent., which was the target fixed last September. “A total of £400,000,000 had been saved in expenditure on defence, civil defence, Board of Trade services, foreign and Imperial services and Foreign Office, fuel and power..”