Attlee Defends Decision On Devaluation

Greymouth Evening Star, 26 September 1949, Page 2

Attlee Defends Decision On Devaluation

LONDON, September 24—The alteration in the exchange rate was no magic word which would get Britain out of her troubles. It was just one of those things that , had to be done, said Mr Attlee at a Labour rally at Llandudno today. The alteration (he did not use either the words “devaluation” or “revaluation”) had been made by Britain herself, uncompelled by anyone. He added that while there must be increased prices for some commodities, there was no occasion for general price increases. The alteration would spread “the load” fairly over the whole nation. He condemned “mischief makers,” who only wanted to bring Britain, particularly the Labour Government, down. He emphasised the need for increasing production, lowering costs, and improving selling methods. “The alteration in the exchange rate is the most effective and speedy way of bringing down the cost of our goods in terms of- dollars, but it also means we have to pay more for our imports,” said Mr Attlee. “We have again to create confidence in sterling as an international trading currency —a matter very vital to the whole world. This confidence has been shaken by black market operations and by the belief, sedulously fostered, that the value of sterling would be written down; but it also has this great merit over other methods. It operates fairly over the whole nation. It excludes rival methods, •whose advocates are shy of coming into the open, namely, of allowing heavy unemployment and of cutting down social services and the standards of life of the poorer sections of the people. “Freer Flow Of Trade

“We have taken this step ourselves, uncompelled by anyone, because we believe it the right thing to do at this time; but let nobody suppose this is some magic spell, which will get us out of difficulties. It won’t. This economic trouble is not one which can be cured by one nation. It needs co-operation, and I am sure that co-operation will be forthcoming. The danger facing us was that unless arrangemetns could be made whereby trade might flow between the dollar area and other areas, there would be a complete division in the democratic world on the economic plane. I believe the Washington talks have gone far to avert that danger, and that as a result of those talks, action will be taken on both sides of the Atlantic which will pave the way to a freer flow of trade. ’ Mr Attlee said there were mischief makers who did everything to foment demands for pay increases. They would like to see bad economic conditions, because therein lay, their hope of getting support for their Communist aims. There were Tory newspapers that in effect played the same game. “There was an unpleasant scene this week in the city with gamblers in gold shares. There are still people who think of nothing but selfish profit. There are workers who are led away into unofficial strikes, and there are, far worse, those who deliberately seek to cause them,” he added. . There was no occasion for general price increases, continued Mr Attlee. It was every citizen’s duty to cooperate in preventing inflation in the sphere of Government activity. All economy consistent with efficiency must be made. This did not mean the stupid cutting-down of services. Social services were an economically sound investment, for health was a national asset. “In the next nine months there will be a General Election, which will decide whether Britain continues on the course it has been pursuing—Democratic Socialism —thereby giving a lead to the world, or whether it is to fall back, and attempt to return to the miseries and injustices of capitalism. The Labour Government stands for Democratic Socialism, which is infinitely more in tune with the workers than Russian Communism. Make no doubt about it, the Communists, if they succeeded, would rivet heavier chains on the workers than any which burdened the workers under capitalism,” he said. Bread And Flour Subsidies ' “Britain will continue to subsidise heavily the ‘dollar’ foods of bread and flour,” said the Minister of Food (Mr Strachey) in a broadcast tonight, They would be subsidised as before devaluation. If the prices had not been raised, the amount Britain spent on food subsidies would have soared. A loaf of bread will cost ah extra penny from tomorrow. Mr Strachey said the Government would not let the cost of subsidies get out of hand, because that would, endanger the system. They meant to maintain subsidies until there was no food shortage. “If you abolished food subsidies you could go a long way towards abolishing rationing,' even now, but only because prices would become so high that people would cut down their food consumption to well below the present level. That is the simple method by which they have largely abolished rationing in several European countries, although they are consuming much less food per head in some of those countries than we are,” he said. “Devaluation and the consequent export problems are the test of work-ing-class statesmanship at this juncture of our history,” said the Lord President of the Council (Mr Herbert Morrison) at a Labour rally at Filey, Yorkshire. “If the workingclass is public-spirited and rises to the occasion, it will be a great thing for the well-being of our country. “To maintain full employment we must keep our costs low, particularly in the export trade. It is a choice between keeping costs down or returning to the horrors of substantial unemployment.” Mr Morrison expressed the Government’s thanks for the attitude adopted towards devaluation by the general council of the Trades Union Congress and the majority of trade union leaders.