The Gisborne Herald. IN WHICH IS INCORPORATED "THE TIMES." GISBORNE, FRIDAY, APRIL 8, 1949 AUSTERITY: CRIPPS HARD TASKMASTER

Gisborne Herald, Volume LXXVI, Issue 22917, 8 April 1949, Page 4

The Gisborne Herald. IN WHICH IS INCORPORATED "THE TIMES." GISBORNE, FRIDAY, APRIL 8, 1949 AUSTERITY: CRIPPS HARD TASKMASTER

QUESTIONS which have been in the minds of the British public for weeks—whether the Budget will give some measure of relief from the long, hard burden of austerity, whether it will be wholly economic or partly political to influence this year’s general election —have been answered. The. Chancellor of the Exchequer, Sir Stafford Cripps, has called for continued austerity; over-all taxation is 1o remain about the same because of the demands of defence and social services, and the price of food is to be considerably in c r eased.

This is a heavy blow. For 10 years now the British people have been under the whip, first to produce more for war and in the past four years to produce more for peace. The announcement recently of a large surplus in last year’s accounts raised hopes in some but few illusions in others who had in mind the continued high level of Government expenditure. Higher prices for food from overseas are to he passed on, in part if not completely, to the housewife because of the Government’s unwillingness to increase further the enormous burden of subsidies. A halt has been called. In the first year, 1940-41, food subsidies cost £63,000,000, in 1945-46 £265,000,000, and today they arc £485,000,000. It is estimated that if the present prices are maintained and there is a moderate increase in supplies the total subsidies payable would amount to £568,000,000. New Zealanders Should Take Notice

New Zealanders would do well to reflect on this situation. The British housewife in future is to pay an extra 4d lb. for meat to offset higher prices for Argentine and Dominions’ produce, a further 4d lb. for cheese and an additional 2d lb. for butter. No longer can price rises be cushioned by subsidies. The effect of this strengthens forecasts that from now on a determined effort will be made to force prices downwards. If such action is taken New Zealand cannot ultimately escape its impact. New Zealand is bound economically to Britain perhaps more closely than any other country conducting international trade. What occurs there is consequently of the utmost importance. The general objectives of Britain’s 1949-53 programme are the establishment by not later than the middle of 1952 of an “equilibrium in its balance of payments at a level consistent with the full employment of its resources,” and the achievement and maintenance of a “satisfactory level of economic activities without extraordinary outside assistance” by 1952-53.

Planning is based on three fundamental facts: (a) The economic fact that Britain’s economy must be heavily dependent on international trade, (b) The political fact that it is, and intends to remain, a democratic nation with a high degree of individual liberty, (c) The administrative fact that no economic planning body can be aware of more than the very general trends of future economic developments. The White Paper setting out Britain’s aims states that in preparing long-term programmes it is essential that “recovery must not be bought at the price of arbitrary and excessive interference with the rights of the individual.” After stating that policy embraces public control of certain basic industries and control of imports, home consumption and investments, the White Paper, somewhat incongruously, adds: “The execution, as well as the preparation, of plans must be based upon the willing co-operation and understanding of the general public.” There is not much evidence of this at present but it may mean a change in the future. As a com monsense policy it sliouid be heeded by New Zealand, where during the past few years co-operation with the general public has been negligible, as witness the speed with which much legislation has been rushed through Parliament. Increased Production and Exports

Britain’s tasks for 1949, according to last month’s economic survey, are increased production and exports. An increase in production as large as in 1948 is regarded as impossible, but some improvement especially in the key industries—coal, steel, textiles and agriculture—will be attempted. Another great effort is to be made to expand sales to the United States and Canada. This is the most important single item of economic policy. The survey said: “We must seek-continuously to bring down costs particularly of exports and maintain and improve the quality of our products. The rise in productivity in the past year and the growth of joint consultation should contribute substantially to these ends.”

Sir Stafford Cripps again emphasised the importance of. this in his Budget speech, but it is difficult to reconcile such an objective with the Government’s determination to press on with its steel nationalisation proposals, which will cause dislocation, temporary if not permanent.

The Budget is unlikely to be popular and it will come as a shock. It is not a vote-catching, election-winning Budget. The Chancellor of the Exchequer does not court popularity; he says his prime consideration is the national interest. In the circumstances his decision is courageous for he will meet criticism. A Liberal National member of the House of Commons has commented: “At .the expense of unpopularity in his own ranks and for the sake of the country he has applied a brake to socialist dreams.” Therein lies a lesson for New Zealand’s leaders, also in an election year. It is the avoidance by all parties of extravagant, vote-catching promises, in the fulfilment of which there is a likelihood of conflict with and harm to the true interests of this Dominion.