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BRITAIN LAUNCHING CAMPAIGN TO SAVE WEIL OVER £100 MILLIONS UPON YEAR’S EXPENDITURE

(Received 11.4 p.ni.) LONDON, October 5 The British Government is launching a campaign to effect a large saving—well, over 100 millions sterling—in the current year's expenditure.

CRIPPS STATES THE POSITION

LONDON, October 4

The Chancellor of th e Exchequer, Sir Stafford Cripps, in an address to bankers and merchants at a dinner given by the Lord Mayor of London, said that Britain’s deficit for the first quarter of 1949 was £82,000,000, and for the second quarter £157,000,000, and, on the same basis, the third quarter’s figure was £133,000,000. “As against that £133,000,000 is set £7,000,000 drawn on Canadian credit and £71,000,000 of E.C.A. reimbursements and other E.R.P. assistance’’, he said. “The total deficit is thus reduced to £55,000,000, the amount by which our reserves fell during the third quarter. That compares with £65,000,000 in the second quarter. The resultant figures of our reserves at the old parity was £351,000,000, compared with £406,000,000 at the end of June. On September 18, when the exchange rate was altered, our reserves stood at £330,000,000. So that in the 12 days to the end of the quarter they went up about £20,000,000 as a result of money reaching this country after the alteration of the exchange rate”. Sir Stafford described his speech as an “interim account of the country’s economic and financial position”.

He said that taking the first quarter as a whole, the annual rate of deficit was £532,000,000 at the old rate of exchange—an impossible burden and one which would have very rapidly exhausted Britain’s reserves.

Sir Stafford said that Britain’s situation was not so bad as some people might have feared “But it is quite bad enough. There is as great and urgent a need as ever to make rapid progress towards diminishing our dollar drain”. H e said there had been considerable success in diminishing inflationary pressure, but there were now signs of that pressure tending to build up again.

He also warned that defence expenditure was almost certain to exceed the original estimates by quite an appreciable amount. Industrial production had risen between 6 and 7 per cent, above 1948, but the pressure of demand persisted. He added: “With this rise in production and some fall in exports, we might have expected prices as a whole to fall. They have not. Prices have remained fairly stable—with some increases”.

Sir Stafford said that unemployment had dropped in the last year from 299,000 to 261,000. “The solution of our difficulties is well within our capacity, provided we are prepared to go all out with our efforts of muscle and brain”, he said. “The climate of international economic opinion is more realistic and more helpful than ever before. We have the advantage of co-opera-tion from North America and the Commonwealth and Western Europe. With that co-operation we must between us —and we shall —solve the world problem of matching the dollar and non-dollar economies. Upon the ability of the democratic nations to solve their economic problems depends the whole future safety and sanity of the world”.

Sir Stafford’s speech was broadcast to the United States and other parts of the world. The governor of the Bank of England, Mr C. F. Cobbald, called for vigilance by every section of the community, to hold inflationary pressures in check. The pound sterling stood at the centre of the trading world, he said. Its future depended on whether Britain and the sterling area as a whole could so manage their affairs as to earn what was spent and convince the world that they would continue to do so.

PRESS COMMENT

(Rec. 10.20). LONDON, October 5. Commenting on Sir Stafford Cripps’ speech, the Manchester Guardian says: “The only policy that will increase our dollar earnings is retrenchment in spending at home. As long as that is lacking, we shall go on moving quickly to bankruptcy”. The Daily Herald says: “What is essential is that none of us should regard this struggle as being the responsibility of the Government, or of management, or of the man-next-door, rather than our own. It is everybody’s fight”. The Financial Times comments: “The fact that the Government must face is inflation. Danger cannot be overcome without major changes in Government policies both at home in the matter of official spending, and abroad in the matter of releases of sterling in repayment of war-time indeubtedness”.

The financial editor of the Manchester Guardian states, that large American and Canadian orders for British goods are piling up. Some of this business has undoubtedly been accumulating in expectation of devaluation, but some exporters state that they are selling lines of goods for which no market was previously known to exist in the United States.

Within the past fortnight, a large chain of American dealers in motorcycles has undertaken to handle several British makes, whil e a number of other large American organisations have sent buyers to Britain to look for suitable goods. On the other hand, some British merchants are beginning to experience difficulty in finding the goods with which to fill American orders. Recently one firm missed a large dollar order because it could not give delivery in time, and then found that adequate stocks had been diverted by the manufacturer to a sterling buyer who was prepared to offer a higher price.

“It is futile to expect additional supplies to be produced as a result of Government exhortations”, states the Guardian.

“In the short run, they can only be sold for dollars if they are diverted from other Jiarket. Manufacturers cannot be expected to divert goods in this way on any large scale .unless there is sufficient incentive. It is entirely in the hands of the Government to introduce a Imancial policy which will free British products for sale in North America”. savinglrive not TO BE COMPULSORY (Rec. 10.20). LONDON, October 5. “The exhortation, not the compulsion, of the public will be the British Government’s chief weapon in controlling home inflationary pressure, to which Sir Stafford Cripps referred in his speech to the London city bankers”, says Reuter’s political correspondent. Sir Stafford Cripps said that to increase dollar exports and to maintain home standards of living, Britain must produce more, and yet must prevent inflationary pressure from rising, and so counteracting the efforts to improve the situation. Eut ofiicial quarters have discouraged suggestions that the Government would take wide powers in the direction of labour to ensure this extra production. Nor would the Government introduce measures for compulsory saving as a means of curbing home spending. The ofiicial publicity machine henceforth will work overtime in bringing home to Britain’s industrial population the realities of the drive for' recovery with the devalued pound sterling. Sir Stafford Cripps already has warned all Government Departments that they must cut their estimates for next year to produce a saving. The figure believed aimed at is at least one hundred and fifty millions sterling.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/GRA19491006.2.31

Bibliographic details

Grey River Argus, 6 October 1949, Page 5

Word Count
1,158

BRITAIN LAUNCHING CAMPAIGN TO SAVE WEIL OVER £100 MILLIONS UPON YEAR’S EXPENDITURE Grey River Argus, 6 October 1949, Page 5

BRITAIN LAUNCHING CAMPAIGN TO SAVE WEIL OVER £100 MILLIONS UPON YEAR’S EXPENDITURE Grey River Argus, 6 October 1949, Page 5