Economic Introspection In Britain

Northern Advocate, 23 January 1947, Page 5

Economic Introspection In Britain

BY A. MITCHELL

Britain at present is in the throes of economic introspection. Her industrial troubles—the chief of which are lack of coal and manpower and restlessness over hours and wages—together with the publication of the statement on the economic situation, and the announcement of trade figures for the past yeai\ are providing plenty of material for thought. The trade figures endorse the difficulties facing the counti'y in the months to come.

They have tempered the enthusiasm manifested a short time back at the rising trend of exports, for they show that the excellent progress made during the first half of the year has not been maintained. And it is not expected that a further l-ecovei'y will occur for a further few months. While at one time it was hoped that the volume of exports for the year would show an increase on pre-war figures, it is now found that it is no higher than in 1938. The present indication is that expoi'ts will “flatten out” at 20 per cent above 1938, and that the target of a 75 per cent inci'ease is out of the question, at least for some time. SEVERAL REASONS Failure to maintain British exports in the second half of the year is due ; to several reasons.

They include the fact that shipments abroad of iron and steel after rising considerably, fell back to tlve 1938 level. Seasonal holidays had their effect, toe. The shortage of coal has also affected the position. In addition to influencing production, coal, which before the wax-, represented 7.9 of the total value of exports. provided no more thair 1 per cent last year.

(Spec., 11 a.m.) LONDON, Jan. 22

A serious aspect of the position was that failui-e to maintain a steady increase in exports occurred during a period when the numbers employed in the export tx’ade rose to nearly 500.000 moi-e than before the war.

With imports being deliberately restricted, Britain was able to keep them to 70 per cent of the 1938 figui'e. This, with improved exports, enabled her to halve the deficit of 1945. The deficit last year was just on 33,600,000. EXCHANGE PROBLEMS

It is not anticipated, however, that Britain will be able to keep her imports at 70 per cent of pre-war, since at that volume they will be below what will be required in due course to maintain export capacity. The counti-y's trade problems are not entirely concerned with production. They are also affected by the exchange problems of foreign countries which lately have become a serious hindrance to exports. Largely because some Continental countries have not sterling funds, Britain has been unable to import from them anything like the quantities of goods she did before the war. This not only means that they are unable to take British exports, but also that Britain had to buy supplies in dollar or “hard" curi'ency countries, which include America. Canada, Newfoundland. the Argentine, Sweden and Switzerland. This is resulting in the American and Canadian loans being used at a greater rate than previously anticipa’ffcj, Britain by no means faces a dollbr crisis yet. the fact remains that to stabilise her trade she needs to expox't more goods to dollar' countries and less to "soft" currency and sterling countries, while importing more for the latter. new difficulty Inability to purchase on a pre-war scale for the Continent and former

suppliers in the sterling area largely •explains why Britain’s buying from dollar countries has risen from the pre-war level of 30 per cent to over GO per cent. If Britain could buy from her former suppliers she would have 120,000.000 annually in dollars or "hard” currency. This currency position is one of the new difficulties which have been encountered in the past few months, and it is one that is expected to influence the export position for some time to come.

Meanwhile, as emphasised by the economic statement, Britain's chief need is for production and more production.

While incentives in the way of shorter hours, higher wages in some industries, and income tax reliefs are being considered, one of the chief problems is lack of manpower. Two suggestions are being made to increase the labour force.

One is to tap the reservoir of foreign labour available and set it to work in the mines, industry, particularly foundries, textile mills, and agriculture. NO DESPONDENCY The other is that the armed forces should be reduced. The Government statement showed that 1.500.000 were still in the forces in November, while nearly 500,000 were engaged in manufacturing supplies and equipment for them.

This is about one-tenth of the working population, and together with those employed in national and local government and the police and fire services, they total nearly one-quarter of the working population. The general effect of the publication ol 1 the facts and figures of Britain's economic and trade position is to direct increasing attention on the forthcoming "economic debate” in Parliament. All indications are that Britain is facing her problems squarely, realistically and with no despondency.