BRITAIN'S HUGE PLAN FOR TRADE RECOVERY BY 1953

Gisborne Herald, Volume LXXV, Issue 22825, 21 December 1948, Page 7

BRITAIN'S HUGE PLAN FOR TRADE RECOVERY BY 1953

(N.Z.P. A.—Reuter—Copyright.) (11.15 a.m.) LONDON, Dec. 20. The British Government’s long-term recovery plan, which was announced today, provides for an expenditure of upwards of £1,735,000,000 from 1949 to 1953 on a huge-scale production drive.

The plan envisages a massive investment programme to support the production targets.

It will provide more meat, eggs, ] oil and fats for British people and an increase in clothing and household goods. Outline of Policies The plan is described as the outline of policies which Britain proposes to follow in order to achieve and maintain a satisfactory level of economic activity without extraordinary outside assistance by 1953. The agricultural output Is to be increased above the highest point reached in the war years. It is hoped to raise the coal outpui by one quarter, the generating capacity by half and to double the world-wide production of the British oil industry as compared with the 1947 levels. The export of coal is to be restored to the traditional scale. The steel output is to be increased by one sixth above the present level. The engineering industries, already half as great again as before the war, are to be called on to expand still furthur. The massive investment programme, concentrated on vital sectors of the economy, is designed to support these targets and to foster the production overseas of commodities essential to European recovery The investment resources in Britain will be concentrated on developments which contribute directly to the nation’s economic strength. More than twothirds of these resources are to be devoted to industrial and agricultural investment and under one-quarter to housing and social services. Major Development Major developments in the four years covered are: AGRICULTURE:—£4SO,OOO,OOO to be spent, about half on machinery. IRON & STEEL:—£2SO,OOO,OOO to be spent on the first stage of the indus-

increased import of capital goods and other manufactures needed for their development. A high proportion of this investment will be concentrated on basic services, but there are also schemes for developing exports of food and raw materials. Increases are proposed in groundnuts, sugar, rubber, tin, copper, cobalt, bauxite and lead.

Colonial production of sugar in 1953 , is assumed to be two-fifths more than 1936, rubber and copper more than twice as large and bauxite more than 12 times as large. The outline of the balance of payments in 1952-53 is based on the assumption that the total overseas earnings will rise by over one-quarter from £1,650,000,000 in 1948-49 to £2,090,000,000 in 1952-53. On this basis invisible items would account for just over half the increase, the greater part being attributable to oil sales. Improved Earnings Offset There would also be some improvement in earnings from shipping, insurance and overseas investment, but this would be largely offset by debt charges on the United States and Canadian loans. The other half of the projected increase would come from exports and re-exports. This would call for a continued rise in overseas sales of equipment and textiles and in exports of solid fuels to about 40,000,000 tons compared with 16,000,000 tons in 1948. Exports and re-exports to the Western Hemisphex-e in 1952-53 are put at £360,000,000. an increase of 55 per cent, over the first half of 1948. The plan points out that Britain’s labour force is fully occupied so the required increase in production can only be achieved by increasing the output per man when American aid ceases. When American aid ceases. Britain will be forced to strike a balance between external payments and receipts. However, it can be assumed that a reasonable standard of living is possible in 1953, and that the present conditions of full employment will be maintained. Closing Gap In Payments Increases in home consumption cannot, however, be allowed to be the first claim on British production they will be possible after the gap in the overseas balance of payments has been closed. The long-term programme aims, in fact, at doing rather more than just closing this gap foi\ in place of a deficit of about £630.000,000 in 1947. it is hoped that, in 1953. there will be a surplus of £100,000,000 for investment abroad. The programme envisages a continuing shortage of dollars and a deficit with the Western Hemisphere put at over £70,000,000. To cover it, Britain would have to rely on the good production and the dollar earnings of the rest of the sterling area—with which Britain is expected to have a surplus estimated at more than £200.000,000 — and on the United States commercial investment in sterling area countries. The programme admits that the balance envisaged is a precarious one, depending largely on factors outside British control —especially on the readiness of the United States to buy manufactures, petroleum and raw materials from the sterling area.

try’s development plan. COAL:—£150,000,000 for development and reconstruction. OlL:—The 1947 output of crude oil by British companies to be doubled by 1953, Seven new refineries or major extensions are contemplated in Britain at a cost of about £125,000,000. ELECTRICITY:—£SOO,OOO,OOO to be spent on new generating stations. CHEMICALS:—£2OO,OOO,OOO to be invested in developing production, especially oil derivatives, dyestuffs, plastics and alkalis. TEXTlLES:—Extensive re-equipment of the cotton and woollen industries and the building of new factories for the production of synthetic fibres. SHIPPING:—A £60,000,000 building programme, with emphasis on tanker construction. Britain also proposes to undertake a substantial net investment in the colonies, thus assisting them to finance the