TRADE UNIONS AND DEVALUATION- British Government Is Facing Sharp Crisis

Greymouth Evening Star, 22 September 1949, Page 6

TRADE UNIONS AND DEVALUATIONBritish Government Is Facing Sharp Crisis

LONDON, September 21.—-The British Prime Minister (Mr Attlee) will make an important speech at Llandudno next Saturday about events*leading up to the Government’s decision to devalue the pound. His object will be to steady opinion in the Socialist ranks. Observers say that the Government is facing its sharpest crisis. The general council, of the Trades Union Congress, its most powerful supporter, announced last night, after a stormy meeting lasting for nearly four hours, that “it could not pass judgment on the necessity for sterling devaluation.” The 33 members of the general council had been specially summoned to decide their attitude iowards the economic consequences and labour and wages problems arising from the Government’s devaluation decision.

According to the Daily Telegraphy bitter resentment of the Government’s policy was expressed at the meeting. Near Open Breach The Daily Mail says the council came nearer than ever before to. an' open breach with the Government. A compromise was eventually reachon a statement which did not repudiate devaluation, but which pointedly refrained from endorsing it. The statement said: “The general council is satisfied that the grave I step to devalue would not have been taken by. the Government without a | careful assessment of all the factors> involved. But, lacking fuller in-1 formation about these factors,, the! general council could not pass judg-I merit on the necessity for devalue-| tidn.” ■' ! ‘ ! The statement added that an early meeting with the Chancellor of the Exchequer (Sir Stafford Cripps) was being arranged. The Board of Trade yesterday told exporters, in a notice issued for their guidance on the new sterling-dollar exchange rate, that it was imperative they should act swiftly to take full advantage of the new situation. “There is nothing to prevent exporters from raising their sterling prices where they already hold an assured dollar market which could not easily be expanded, for example, because of production limitations,’’ said the Board- of Trade. Price Question “It may well be appropriate for a

number of exporters to raise their prices in terms of sterling so as to earn something like the same amount in dollars as previously, but buyers in the United States and Canada will probably expect some cut in prices to them, and in certain ranges of goods competitive conditions-in North America will require reductions in the dollar prices, especially where a reduction in the dollar prices of sterling area raw materials leads to lower manufacturing costs in North America. “Exporters must settle for themselves the most advantageous prices in these circumstances. With the new exchange rate it will generally be found that a sales policy designed to secure the maximum dollar revenue for Britain will also bring about ’the maximpfm sterling revenue to the firm concerned.”