Cripps Opens Economy Debate

Northern Advocate, 27 October 1949, Page 5

Cripps Opens Economy Debate

Chance To Rally Nation Was Pitifully Missed, Eden Says

LONDON, Wed. (11.30 a.m.).—The Chancellor of the Exchequer (Sir Stafford Cripps), opening the two-day debate in the House of Commons on the Government’s motion asking for approval of its latest economy proposals, warned the House that inflationary pressure had again increased in Britain’s economy. He told the Commoners that the capital expenditure cut of £140,000,000 would affect gas, electricity, housing, timber and the whole field of transport and communications. Under the Government’s economy plan national administrative staffs would be cut by not fewer than 10,000. Sir Stafford said the prime purpose of the Government’s whole economy move was to obtain the highest and most fairly distributed standard of living possible for all people. The only real solution for the country’s difficulties was more and more economical and efficient production. •

Within a little more than two years they would have to replace their Marshall Aid income by earned dollars, unless they were to cut their imports below even the present programme, which was barely sufficient to give them the minimum of necessary materials for their production. They had to do their best to prevent goods from being kept out of the export field by pressure oi home demand. Sir Stafford said that since devaluation a new vista o' export possibilities had opened up, particularly to the difficult hard-currency areas. The Government relied on manufacturers for a new and most intensive export drive into hard-currency areas, and had therefore to re-examine the situation to see whether the present financial or economic conditions were antagonistic to .that new drive. It seemed clear that, because of increased expenditure, the Budget would not produce as large a surplus as the Government considered necessary. (The estimated Budget surplus for 1949-50 was given in April as £469,382,000.) Sir Stafford said exports had fallen away from 156 per cent in 1938 in the first quarter of this year to 141 per cent in the third quarter. Imports had increased so that there was not at present an overall balance of payments. Inflationary pressure had again increased in Britain’s economy. The proposed reductions would be t put into full operation at the earliest possible moment. “We must do better than return to the 1949 Budgetary situation of disinflation,” he said. “We must add the further factor of reduction in domestic demand to counter the fall-off in supplies in the home market”

amount, and so I say that with the best of good will it is impossible to match the Government’s proposals with realities of the hour.”