'lnflationary Influence Of State Expenditure'

Northern Advocate, 17 August 1949, Page 5

'lnflationary Influence Of State Expenditure'

LONDON, Tue. (11 a.m.). —Warning that the “vast increase in state expenditure” was an inflationary influence in Britain’s economy, the Federation of British Industries says Britain is still living beyond her means. In a statement on the economic crisis the federation says Britain is in grave danger of being unable to get the food and raw materials it- needs.

Unemployment and more austerity would result if a solution were not found. Britain had a special responsibility to play its part in the establishment of Western recovery. If she did not earn it. she had no right to expect a higher standard of living than her neighbours. “Evidence is accumulating that Britain is believed by other countries to be attempting to achieve too quickly what she can no longer afford,” the statement says. “Taxation, and therefore Government expenditure, must come down. “The tax-gatherer collects 8/- from every £1 that the nation produces. “Profits are taxed even more heavily than this, and no opportunity is left to create adequate reserves.” The federation urges a further lifting of controls and the adoption of all aids to productive efficiency.

It contends that schemes like nationalisation of the iron and steel industries are “irrelevant to the present crisis and are distracting and damaging to prospects.”