BRITISH SELF-HELP

Gisborne Herald, Volume LXXV, Issue 22582, 10 March 1948, Page 5

BRITISH SELF-HELP

ECONOMIC CRISIS U.S. DOLLAR AID VITAL IMPORT CUTS LOOMING I N.Z.P.A.— Reuter— Copyright.) (9.30 a.m.) LONDON, March 9. . Britain must use the Marshall Plan aid—if it comes—to sustain her working strength and efficiency and develop new sources of supply at home and .abroad instead of merely providing greater ease and comfort for her people. ' This was made clear in a White Paper on the economic crisis issued today.

The White Paper says that, if the Marshall Plan aid does not come and Britain is forced to balance her overseas payments before her reserves are exhausted, such drastic cuts in dollar and gold purchases will be necessary that wholesale unemployment, distress and dislocation of production will follow and the prospect of a decent British standard of living will be delayed for years. Three-Point Programme

External recovery is possible only by reaching an over-all balance of payments and finding quickly a satisfactory means of paying for purchases from the western countries.

Britain must raise her export rate, develop home agriculture and new sources of supply within the Commonwealth.

Britain’s reserves, at the beginning of 1948 were about £680,000.000. They were likely to be reduced during the first half of 1943 by about £222.000.000, leaving about £450,000,000 by the middle of the year. The reserves, at the same rate of drain would, by the end of 1948, be down to about £225.000.000 and would be exhausted during 1949. Britain, without Marshall Plan aid, must make further heavy cuts in Western Hemisphere imports of goods- The imports have already been slashed and any further substantial cuts must fall on raw materials which were already at the minimum and would remain so throughout 1948. The White Paper says that the national export target, provisionally set in September at the rate of 160 per cent, of 1938, now had been cut to the rate of 150 per cent, by the end of 1943 because certain overseas markets had become saturated and through the lack of steel at home. Export and Import Schedules The White Paper forecasts the volume of exports for the whole of 1948 at 30 per cent, above 1938. It was 8 per cent, above in 1947. The Government fixed the import programme for the first half of 1948 at £792.000.000, compared with £1.092.000.000 in 1946 and £1,574,000.000 in 1947. The import programme for the second half of 1948 bad not finally beep decided, but it was estimated that if imports were maintained, as in the first half, they would for the whole year amount to £1.670.000,000. Allowing for exports, re-exports and invisible exports, this w"M give an overall deficit of £250." -.000. compared with £675,000.000 deficit in 1947. It would be necessary to draw further on dollar and gold reserves to meet the deficit—apart from the needs of the rest of the sterling area for dollars and gold. •

Britain’s 1948 coal target is set at 21 £OOO,OOO tons, compared with 196,500,000 tons produced m J 947, but the target is the absolute minimum and every effort must be made to exceed it-

Tire national income in' 1948 is estimated at £9.000.000.000. Reduced Standard of Living

The White Paper forecasts a somewhat reduced standard of living with an appreciable but not disastrous reduction in food and clothing consumption compared with 1947. A large part of the 1948 food import programme comprises such things as fresh fruit, fresh and canned vegetables and processed foods of rather low nutritional value. These have been bought in "softer markets to give some variety to the British diet in place of the Western Hemisphere food which is to be cut. They do not make up for the'substantial reductions in the consumption of stable foods. The expected expenditure on Ger many is £7,000.000 for -the first half of 1948 It was £79,000,000 in the whole of 1947.

The military expenditure overseas, says the White Paper, should drop from £211,000,000 in 1947 to £67,000,000 in the first half of 1948The attainment of the target of 14,000,000 ingot tons of steel in 1948 is not assured. Germany is the only significant source of scrap supply and negotiations are proceeding to get 1.000.000 tons from there. Steel above anything else, apart from dollars, will be the limiting factor in 1948. Labour is Unlikely to be in 1948 a limiting lactor in economic activity as a whole, but the labour targets for coal, 790,000, agriculture 1,110,000. 000, and textiles 760,000 can be reached. only through the considerable movement of workers from one industry to another.