BRITAIN’S MAIN PROBLEMS

Wanganui Chronicle, 30 January 1947, Page 5

BRITAIN’S MAIN PROBLEMS

BAD LACK OF COAL SHORTAGE OF MANPOWER London, Jan. 27. Britain (« in the throes of economic introspection. Her industrial troubles, chief of which are lack of coal and manpower and restlessness over hours and wages, together with the publication of the statement on the economic situation and the announcement of trade figures for the past year, are- providing plenty of material for thought. The trade figures endorse the difficulties facing the country in the months to come. They have tempered the enthusiasm manifested a short time ago at the rising trend ot exports, for they show that the excellent' progress made during the first half of the year has not been maintained, and it is,not expected that further recovery will occur for some months.

While at one time it was hoped that the volume ot exports for the year would show an increase on the prewar figures, it is now found that it is not higher than in 1938. The present indication is that exports will flatten out at 20 per cent, above the 1938 level, and that the target of 75 per cent, increase is out of the question at least for some time. CAUSES OF DECLINE.

The failure to maintain British exports in the second half of the year is due to several reasons. They include the fact that shipments abroad of iron and steel, after rising considerably, fell back to the 1938 level. Seasonal holidays had their effect, and the shortage of coal also affected the position. In addition to influencing production, coal, which before the war represented 7.9 of the total value <n exports, provided no more than 1 per cent, last year. A serious aspect of the position was that the failure to maintain a steady increase in exports occurred during a period when the numbers employed in the export trade rose to nearly ' half a million more than before the war. With imports being deliberately restricted, Britain was able to keep them to 70 per cent, of the 1938 figure, and this, with the improved exports, enabled her to halve the deficit of 1945. The deficit last year was just on £336,000,000. It is not anticipated however, that Britain will be able to keep imports at 70 per cent, of the pre-war amount, since at that volume they will be below what will be required in due course to maintain export capacity. The country’s trade problems are not entirely concerned with production. EXCHANGE DIFFICULTIES, They are also affected by the exchange problems of foreign countries, which have lately become a serious hindrance to exports. Largely because some Continental countries lack sterling funds, Britain has been unable to Import front them anything like the quantities of goods she did before the war. This not only means that they are unable to take British exports, but also that Britain has had to buy supplies in dollar or “hard” currency countries, which include America, Canada, Newfoundland, Argentina, Sweden, and Switzerland. This is resulting in the American and Canadian loans being used at a greater rate than was previously anticipated. Though Britain by no means faces a dollar crisis, the fact remains that to stabilise her trade she needs to export more goods to dollar countries and less to “soft" currency and sterling countries, while importing more from the latter.

Inability to purchase on the prewar scale from the Continent and former suppliers in the sterling area largely explains why Britain’s buying from the dollar countries has risen from the pre-war level of 30 per cent, to over 60 per cent. If Britain could buy from former suppliers, she would save £120,000,000 a year jn dollars or "hard” currency. This currency position is one of the new difficulties which have been encountered in the past few months, and it is one that is expected to influence the export position for some time. LACK OF MANPOWER. Meanwhile, as emphasised by the economic statement, Britain’s chief need is for production, and more production. While incentives in the way of shorter hours, higher wages in some industries, and income tax reliefs are being considered, one of the chief problems is lack of manpower. Two suggestions are being made to increase the labour force. One is to tap the reservoir of foreign labour available, and set it to work in the mines, and in industry, particularly in foundries, textile mills, and agriculture. The other is that the armed forces should be reduced. The Government statement showed that 1,500,000 men were still in the forces in November, whil 3 nearly half a million were engaged in manufacturing supplies and equipment for them. This is about one-tenth of the working population, and together with those employed in national and local government and police and lire services, they total nearly one-quarter of the working population.

The general effect of the publication of the facts and figures of Britain's economic and trade position is to direct increasing attention on the forthcoming economic debate in Parliament. All the indications are that Britain is facing her problems squarely and realistically, with no despondency.