BRITAIN, WHILE REARMING, MUST NOT ’ ENDANGER HER HARDWON RECOVERY

Wanganui Chronicle, 22 December 1950, Page 5

BRITAIN, WHILE REARMING, MUST NOT ’ ENDANGER HER HARDWON RECOVERY

LONDON, Dec. 21 (Recd. 11.55 pm). —“Though w.e must re-arm and re. arm swiftly, we must not throw away our recovery, nor sacrifice the economic independence we have just regained,” the Chancellor of the Exchequer, Mr Gaitskell, told members of the Institute of Export. He added that while the burden of re-artnament would be more likely to conflict with exports or with home investment rather than with current consumption at home possible damage could be mitigated in two ways: (1) By greater productivity within the field of engineering, for which the first, but not the only, condition was adequate raw material supplies. (2) Any diminution in exports of machinery and equipment could be made good by exports of consumer goods. This, 'in turn, would mean keeping down the demand at home and deliberately diverting supplies from home'to the export market. "While it is easy enough for us to sell, the prices of many things we need are .rising fast. Scarcity and shortages are beginning to appear, and words like “bottleneck,” with its close relations, priority and allocation, are coming into use again. We must not be cutting down too far. the supply of new equipment for industry and weaken the foundation ot future industrial progress.” . Mr Gaitskell emphasised that Britain must earn more by export. At the end ot next year the first instalment of interest and repayment on United States and Canadian loans would fall due in dollars. Then there were commitments under the Colombo Plan for south-east Asian development, as well as the question of gold reserves. Though these had increased, they were not yet high enough, and tn continue to increase them would not be easv.

In 1951 there would be a very much larger bill for imports than this year. Not onlv were average prices rising, but it would also be necessary to import larger amounts. There was no difficulty in selling exports, because overseas demands were likely to remain buoyant. The real question was whether Britain could supply goods, and this depended on two main factors —scarcitv of raw materials and I ho impact of the defence programme.