STERLING DEVALUATION: GOVERNMENT TO SEEK SUPPORT FOR POLICY IN HOUSE OF COMMONS

Otago Daily Times, Issue 27197, 28 September 1949, Page 5

STERLING DEVALUATION: GOVERNMENT TO SEEK SUPPORT FOR POLICY IN HOUSE OF COMMONS

New Zealand Press Association—Copyright

Rec. 9 pjn. LONDON, Sept. 27. The devaluation debate will open in the House of Commons to-day when the Chancellor of the Exchequer, Sir Stafford Cripps, will move a motion of confidence, which was tabled in the House yesterday. The motion, which is surprisingly long, reads:— “ That this House approves the action taken by the Government in relation to the exchange value of the £, supports the measures agreed upon at Washington by the Ministers of the United States, Canada, and the United Kingdom, which are designed to assist in restoring equilibrium in the sterling-dollar balance of trade for the purpose of enabling the economy of the sterling area to’ maintain stability independent of external aid, and calls upon the people for their full co-operation with the Government in achieving this aim, while maintaining full employment and safeguarding the social services.”

Commenting on the debate, the Times, in a leading article, says the Government will be asked especially why devaluation could not be preceded by economies throughout the sterling * countries even though it was delayed until the last reserves- of gold and dollars had fallen dangerously low. The fear will be expressed by some speakers that international stability and co-operation have been harmed by the way in which devaluation 1 has been carried out- Doubts will also be expressed by many whether even now the Government knows the next right steps to take. Is devaluation yet another expedient to delay but not dispel a dollar crisis, or does it fit neatly into the new recovery programme? That, The Times adds, is the decisive question. Reuter says the Government believes that it will be most difficult for members to vote against the motion, as it stands, and that their only way of opposing it would be, to put down a reasoned amendment. It is substantially a motion of confidence, as it asks the House to give its support to the Government’s policy. The latter part of the motion is ingenious, as it places any member in the awkward position of appearing to vote against full employment and social services if he opposes the motion.

TUC Policy Delayed After a two-and-a-half-hour talk with Sir Stafford Cripps and other Cabinet Ministers, the General Council of the Trades Union Congress decided tot night not to formulate any policy on devaluation for several weeks. The trade union leaders, who represent 8,000,000 British workers, apparently only sought information —and gave no indication that the information they received was satisfactory. A formal statement issued after the meeting said merely that there had been, a general exchange of views on devaluation. Usually reliable quarters said the possibility of a national minimum wage was among the suggestions discussed. It was also understood that Mr Harold Wilson, the President of the Board of Trade, had indicated that he hoped soon to be able to order 5 per cent, cuts in the prices of some household goods. Pacific Air Lines A Sydney message says: Because the devaluation of sterling had increased their costs. Pacific Airlines have increased their passenger fares by 43 per cent. The passenger fare from Sydney to San Francisco is now £285 15s, instead of £2OO. The America to Australia fare remains at 640 dollars (£285 6s Sd Australian). The companies have increased their freight charges proportionately. The companies are the British Commonwealth Pacific Air Lines, Pan-American Airways, and Canadian Pacific Air Lines. A Cape Town report says: Imports of raw materials to South Africa from the. hard currency areas in'the'first six months of 1950 will be cut to 50 per cent, of the present import quota. Sterling area imports will continue at the present rate.

Motor Industry The motoring correspondent of the Daily Telegraph claims that in spite of large increases following the devaluation of the £ the British motor industry is still being forced to work below maximum capacity owing to the restriction of its sheet metal supplies. Representatives of leading manufacturing companies said there was a grave' danger that a production “ bottle neck ” would be created unless supplies of sheet steel were speedily increased.