BRITAIN’S ECONOMY CUTS

Otago Daily Times, Issue 27221, 26 October 1949, Page 7

BRITAIN’S ECONOMY CUTS

MEASURES CONSIDERED INADEQUATE

Surprise In Political Circles “ TOO LITTLE, TOO LATE ” New Zealand Press Association—Copyright Rec. 10 p.m. LONDON, Oct. 25. To the majority of politicians, including many Socialists, Mr Attlee’s statement on the economic problem, in which he revealed economy cuts totalling £ 280,000,000, came as a great anti-climax, say the diplomatic correspondents of The Times and the Daily Mail. The Socialists were even more puzzled than most politicians because they had been keyed up—not the least by speeches of Ministers themselves —for heroic measures. The impression had been given, says the Daily Mail correspondent, that there was going to be the biggest attack on economic and financial problems since the Government took office. Consequently the question being repeatedly asked last night was “ what has happened to the great plan? ” Some Socialists were, however, obviously relieved, and one said: “There is nothing to hurt anybody in this plan,” but the Conservatives took a different view, declaring that the Government’s proposals were, far short of what was needed. Once again, it was added, the Government was doing too little too late. Newspaper reaction is severely critical and this comment by the Liberal News Chronicle is typical of what is being said: “ The nation was keyed up for drastic treatment. Instead it received a prescription lacking in human impact and impartng no stimulus to individual efforts.”

“Dearer Food And Probable Temporary Unemployment ”

NZP A—Copyright

gramme, to tamper with food subsidies, and, above all perhaps, to accept the principle of payment for prescriptions m the health service. Yet at each point the picture is of half measures. “Mr Attlee knows what the fruits of this programme should be—the diversion of goods from the ■ home market to successful foreign sales, the curtailment of excessive home demands upon men and resources while this vital oversea reckoning is righted, and the focusing of work and investment at home upon projects to enable the community to pay its bills or support itself. Yet always it seems that timidity has called the tune in the end.”

Rec. 9 p.m. LONDON, Oct. 25. The principal effects of Mr Attlee’s “financial cure” will be dearer food »and probable temporary unemployment for 175,000

people, says the Daily Express. It points out that food will be dearer because the removal of the subsidy on animal feeding-stuffs in February will mean an increase in the prices of home-killed bacon, beef, pork, muttop and/poultry, and of home-produced milk and eggs. Fish also will be dearer when the winter season ends, because the subsidy will then be cancelled.

The Daily Mail in an editorial stated: “What a fatuous fumbling with the destinies of a great nation; what an exhibition of futility and cowardice: what a way to run the country.” The Daily Telegraph says there is no trace of leadership in the proposals, no sign of rising to the times, and no matching of words by deeds. The Government is still drifting.

The Daily Express says temporary unemployment will ari'e among the building workers, who later will be guided into export industries/ The paper adds: “The details of how the various plans will work are still secret No department concerned in the changes could say last night how any proposal will be given effect. It is not even .known who will collect the shilling fees to be charged on health service prescriptions.” . “Mr Attlee and his colleagues have at last set out on the right road, but they have succeeded in going only a modest way on the journey,” says The Times in a leading article on what it calls the Government’s “ half measures” in tackling the economic crisis. - The article adds that the savings proposed, not a few of them courageous and rightly-directed, cannot but be reckoned too small and too slow in their effect. Selddm can so important a proclamation, made in all the surroundings of a great national drama, have seemed so sad a tale of opportunities missed. The Times adds: “As Mr Attlee has said himself, the total saving in public expenditure of £250,000,000 is a very large sum. It has taken some courage politically to invade the housing pro-

The Manchester Guardian says: “In all the painful history of the last two years and a-half no opportunity has been missed more thoroughly than was to-day’s.” The Labour Daily Herald says: "The hour for a supreme national endeavour is signalised by the Prime Minister’s statements. It is the people’s hour.” The. Communist Daily Worker says: “The health and vitality of the British people are directly attacked. The burden of the cuts falls on the homeless and the ill-housed, on the children, and on the ailing.” The Financial Times declared that Mr Attlee’s programme is a confession that the Government has run into an impasse from which it finds escape impossible. The whole conception is a confession of failure. The' Government has with the greatest reluctance, and after fatal hesitation, imposed inadequate cuts.

Bitter Criticism Expected From Labour Members

NZPA—Copyright

A British Medical Association spokesman, speaking of the “shilling a prescription” contribution to the health service, said that people who had been going to their doctors for cotton wool and similar things would think twice of having to pay Is on the prescription and buy the cotton wool from a shop for 6d. “It will mean that a great number of trivial complaints and abuses of the service will be cut down and doctors will be used to better advantage. It. should make people think twice before queueing up in the waiting room of a surggry for something they can ‘well provide themselves.” Britain and Atlantic Treaty

Rec. 9 p.m. , LONDON, Oct. 25. Government leaders to-day face their rank and file at a private meeting of the Parliamentary Labour Party prepared for bitter criticism of the inadequacy of the £280,000,000 economy cuts announced by Mr Attlee yesterday, says Reuter’s political correspondent. The Left Wing of the party feels that, by making a cut of only £30,000,000 in the £800,000,000 defence Budget, the Government failed to meet the gravity of the crisis. This faction wanted sweeping economies in overseas defence commitments and a cut of at least £100,000,000 in defence spending. Other Labour critics deplore the withdrawal of subsidies on farm feeding-stuffs to save £36.000,000 They do not accept the Government view that this step will not increase the cost of living. The economy measures announced by Mr Attlee are not nearly as farreaching as had been expected, and as a whole they will be widely criticised as utterly inadequate, says Reuter’s financial editor. Government spending has been cut by only £90.000,000, he says. Most of this small saving will not apply until the next financial year, starting in April. Many economists had calculated that, to bridge the dollar gap, the British Government would have to cut its spending by not less than £300,000,000 or £400,000,000. Similarly, the cuts in capital expenditure will not take full effect until the second half of 1950. Larger cuts in that field made at this stage in the 1947 crisis had almost no effect. The correspondent adds that in the City of London to-night there was some relief' at the absence of “ anticapitalist” taxes, which had been vaguely feared in some quarters. But there was deep disappointment at what was regarded as the grave inadequacy of the measures as a whole.' Absence of Taxation Relief Commenting on Mr Attlee’s speech, the Federation of British Industries stated last night that industrialists would regret the absence from the statement of any reference to reduction in taxation. “It is only when there is an increase in incentive at all levels of those engaged in ; industry that we shall obtain maximum production and the supply of goods that we require to meet the needs of both export and home markets. Nor shall we. until taxation is brought down, see the increase ih savings which is so necessary to our national efficiency.”

Officials working on the organisation of North Atlantic defence machinery said to-day that they did not expect the reduction in Britain’s defence expenditure announced by Mr Attlee to affect Britain’s role or commitments under the North Atlantic Treaty. They said they were waiting to see whether the final figures for defence would show a reduction in Britain’s armed forces or their equipment, or merely a reduction in the administrative expenses. Reuter said the reduction in welfare service expenditure and the increases in the financial contributions of participants was expected to offset to some extent growing criticism in Conservative circles in Washington that United States financial aid to Britain was being used extravagantly to make Socialism work.

The National Union of Manufacturers said it regarded the proposals as “totally inadequate” to meet the gravity of the situation. The statement was lacking in the inspiration, incentive, and leadership which the country so desperately needed at this moment. “Industry must still bear the full burden of the responsibility of renewing and re-equipping its plant and machinery in order that productivity may be increased and efficiency im The V National Federation of Building Trades’ Employers said Mr Attlee’s decision to cut the housing programme bv £35,000,000 meant a reduction of more than 20,000 houses a year in the total housing programme of 180,000. -Although it is not clear at the moment how the cut will. operate in nractice. it seems that it will fall £,.fj n iy on the already small programme of houses-fewer than 20,000 f year—being built for sale or letting privately under very strict conditions.