Hopes Of A Year Ago Not Realised

Chronicle (Levin), 7 April 1948, Page 5

Hopes Of A Year Ago Not Realised

(N.Z.P.A,

— Reuter ,

Sir Stafford Cripps Presents ®udget

Qopyright)

Received Wednesday, 10.30 a.m. LONDON, April 6. Two serious economic problems confronted Britain, the balance of external payments and the balance between internal resources and the dernands placed upon them, said the Chancellor of the Exchequer, Sir Stafford Cripps, opening the Budget statement and economic survey in the House of Commons today. "The hopes we had a year ago have not been realised. We in 1947 received considerably less in imports than was hoped and paid much more than we had calculated.

"The rise in the export volume was not as great as was planned, aithough with the increase in priees the vaiue of exports was onlv £75,000,000 below the estimate. Tne earnings from invisible exports were £90,000,000 below the forecast ancl the net shippin«- earnings were only £17,000,000. The net income from investments was £51,000,000 in 1947, cciiipared with £75,000,000 in 1936 and £124,000,000 in 1938. We have had to continue to sell^some of our foreign assets." *" Sir Stafford said that last year's hopes had not been realised. They had got considerably less imports and paid more for them. Government expenditure abroad had exceeded expectation by £36,000,000 and earnings from invisible assets were £90,000,000 below forecast. "We had to continue selling some of our foreign assets, and the drain on our gold aua dollar reserves was the- most obviously serious feature of the whole situation. The gold drain was over 50 per cent. greater than the over all deflcit, amounting to £1,023,000,000 during the year. We expect a net deflcit on invisible eanimgs of £49,000.000 for the coming lialf year. After payment of £70,000,000 for Government overseas expenditure and £140,000,000 for other outgoings the expected net deflcit on invisibles for the year is £80,000,000. "The import programme for the first half of 1948 is estimated to cause a drain on reserves of over £20u,000,000. Such a high rate, if allowed to continue witliout external aid, would exhaust our remaining reserves in 1948. "United States aid oan help reduce the reserves drain, but we must redress ihe grave unbalance during the next four years and use this aid not to improve living standards, but to strengthen our physicai re.^uarces. Producers must think of the national interest as indicated by the Government's plans rather than quick profits in easy markets. Marshall aid will wiil give us timo to cliange our exports poflcy, but tirne is our scarcest commodity and we cannot alford to waste it. "It is clear that the large Budget surplus last year did not decrease inflationary pressure to a marked extent. We must sec.ure an exceptionally large Buclgi-t surplus in the coming year to yield a balance after meeting all fornis of Government expenditure. i "The Budget must provide an eauitable distribution of the taxation load, and must adjust taxation so as»to encourage production by providing a better incentive." | Sir Stafford estimated expenditure for the year at £2,976,000,000, a decrease of £233,000,000 011 last year. No cut will be made in social services expenditure and food subsidies will continue at the rate of £1 00,000,000 yearly. I Sir Stafford estimated revenue onjiie present basis of taxation at. £3,754,000,000, giving a prospectivei si.rpius of £789,000,000. The esti^aied yield lrom income tax is £1.395,000,000, compared. with £11 00. 000, 000 last vear. He said he v.'oi jd leave further restrictions on ■ piOfito until next ^ear.