The Press FRIDAY, JULY 22, 1966. Mr Wilson’s Strong Measures

Press, Volume CVI, Issue 31118, 22 July 1966, Page 10

The Press FRIDAY, JULY 22, 1966. Mr Wilson’s Strong Measures

Mr Harold Wilson’s Government has chosen a strong dose of deflation as the chief of the promised additional measures to bring Britain’s economy under control. Restrictions on overseas spending on defence, aid, and travel are supplementary measures; but the real squeeze will be on internal spending, public and private. The Government has rightly preferred deflation to such drastic alternatives as devaluation and direct control over imports, both of which have influential advocates. Neither would be easy for the British people; but almost certainly other nations would be hit much harder by them than by the present measures. Some economists think Mr Wilson Is too stubbornly opposed to devaluation; but these critics surely overlook Britain’s responsibility to other countries-—which is also Mr Wilson’s responsibility —as the banker of their sterling. Mr Wilson’s statement serves notice on the foreign exchanges where lack of confidence has created crisis after crisis for the Labour Government during its tenure of office that Britain will not devalue sterling except as a last resort.

Mr Wilson’s message is also, of course, both a warning and a plea to the British people. If the Government is to succeed in its efforts to get the economy under control, it will need co-operation, hard work, and a measure of self-sacrifice from all sections of the British people. They alone have the power to cure Britain’s economic malaise. The Government may be open to reproach that it has failed to meet earlier crises sufficiently resolutely. But at least it has striven to establish a comprehensive wages policy, an essential foundation to sound economic growth: and this is a task no other Government has ventured. The Opposition’s calls for the Government to resign would have sounded better if the Conservatives could point to a better record in the management of the economy during the years when they held office with majorities substantial enough to justify strong government—a luxury Labour has enjoyed only in the last four months. It remains to be seen whether Mr Wilson’s deflationary policy will succeed. Success must depend largely on the support and co-operation of the trade unions and of political Labour. Inevitably, the Government will be forced to turn its back on some of its promises; and for a time, at least, growth in the economy must be sacrificed. If growth comes to a stop and business investment is reduced there can hardly fail to be substantial increases in unemployment which, in spite of all the pressures and difficulties it has suffered, the Labour Government has held at a remarkably low level. The reported attitude of Mr George Brown, Mr Wilson’s deputy and the Minister committed more than any other to economic growth, hints at future political troubles for Mr Wilson; and the recent resignation from the Cabinet of Mr Frank Cousins is not a good augury for Mr Wilson’s hopes of an effective wage-freeze. Mr Wilson's proposals seem likely to hit Labour’s rank and file more severely than anything the Conservatives imposed. They will sorely test the loyalty of the whole Labour movement—a loyalty on which Mr Wilson has courageously staked his political future.