BRITAIN’S PROGRESS IN RECOVERY DRIVE

Otago Daily Times, Issue 26963, 24 December 1948, Page 8

BRITAIN’S PROGRESS IN RECOVERY DRIVE

LONDON, Dec. 7,

In view of the approaching publication by the 19 Marshall Aid countries of their long-term recovery plans, the recently issued survey of the basis on which the British programme has been prepared has a special interest. ’

This survey shows the progress made in Bi'itain to date towards the long-term objective: independence of outside help by 1952-53, the time when Marshall Aid will come to an end. Her achievements include a 20 per cent, increase in industrial production above the 1938 level and a 25 per cent, increase on pre-war agricultural production. The volume of her exports has been raised to 40 per cent, above 1938 (the latest figure, that- for October, is 42 per cent.) while the level of imports has fallen' to 20 per cent, below the 1938 level.

Notable progress has been made in the drive to reduce dollar expenditure. While Britain’s exports to the western hemisphere expanded from a monthly average of £17,000,000 in the second half of 1947 to nearly £21,000,000 in the first six months of 1948, her imports from the western hemisphere have been, reduced by nearly one-quarter in the first six months of this year. Britain, in fact, is now taking only one-third of her total imports from that source compared with nearly half in 1946. The anti-inflation drive, which aims among other things to keep down British export prices and thus to strengthen the competitive sales position abroad, has shown a good measure of success. During the last six months wages and dividends have remained fairly steady and wholesale prices have taken a downward turn—for the first time for two years. As a result of all these efforts Britain has been able to effect a great reduction of her balance of payments deficit. In the first half of this year it fell to £140,000,000, equivalent to an annual rate of £280,000,000. Last year the deficit was £630,000,000. Her deficit with the western hemisphere in the first six months of 1948 was at an annual rate of £390,000,000, compared with £670,000,000 in 1947.

incidentally just be compensated by ERP.

It is on the basis of these achievements that Britain's recovery programme is planned. But though progress has been good, the task ahead is formidable. A further essential increase in production must be realised by increased output per worker (with unemployment now only 1J per cent, of the industrial population, Britain has practically ’ no reserve labour to draw on). To help achieve such an increase the country will have to devote a substantial part of her limited resources to the further expansion of the modernisation of industry. The actual sum aimed at is £2,000,000,000 -one-fifth of the national resources, It is an essential part of the British plan for recovery within the period of ERP Aid that capital investment should be maintained at this level of £2,000,000,000 next year and in each of the following years. This will necessitate both a high level of output by the capital goods industries in the United Kingdom arid savings from the home public amounting to a total equivalent to one-fifth of thq, national income.

Other tasks ahead include further expansion in Britain’s agriculture—by 1952-53 it is expected to be 50 per cent, above the pre-war levels. But even this high output will cover only one-half of the country’s food requirements. To obtain the other half she must find alternative sources of supply to the dollar area, and these will be in Europe and the Commonwealth.

Britain’s objective of making herself independent of outside help is not to be attained at the expense of the sterling area's gold and dollar reserves. It is thus encouraging to find that the rate of reduction of these resources has been halved; from £147,000,000 in the first quarter of this year to £76,000,000 in the third. This rate of drain should