Chancellor Presents His Budget

Chronicle (Levin), 7 April 1949, Page 5

Chancellor Presents His Budget

(W.Z.P.A.-

-Reuter,

Past Year One Of Great Achievement

Copyright)

? V Received Thursday, 10.50 a.m. LQNBON, April 6.. -The Chancellor of the Exchequer, Sir Stafford Cripps, told the House of Commons today tbat it was "quite impossible to reduce taxation so long as defence'and social services were produced on their present scale." Presenting the fonrth past-war Budget to a -crowded Ilouse, Sir Stafford said that 1948 had been a year of great achievement for the British people. He added that this could and should encourage the people in the heavy task that lies ahead. There still remained the serious and baffling problem of the dollar balance, for which a solution must be found by at least 1952, when the European reeovery programme would end,

Britain had already reduced her adverse balance on the overseas aeeount from £130,000,000 in 1947 to about £120,000,000 according to the provisionalfigures for 1j48, said Sir Stafford. In the latter half of last year an overall balance in overseas payments had been achieved, but there was still a formidable deficit on the dollar aeeount amounting oyer the year to £430,000,000 for the sterling area jirt a whole. Export Target Exceeded. Sir Stafford then told the House that the export target for 1948, which many people had proclaimed . jt far too optimistic, had been ( xceeaea owr practically the whole licid ot expons uiiu to most desi.iiuUons. Thxs target ior j.ox9 had bevii set at 155 per cent. over uie total. This wotud not be an t-asy tasx. In many countries the * iiu oi' the sellers' market has oeen o ;• is being reached. ueaiing at length with the forer t.sts aiready made cf Britam's proeress in the coming year, Sir Stafloiu Uripps satd uiat the net in-v.-aole in'come for 1948 would proiiaoiy snow a surplus of £100,000,000 aaamst a deficit in 1947 of £i :UJ.000,000. A gruaual increase in the net rcreipi,s from shipping and the Caiiiings of British oil companies v.a ; loreseen, continued the Chanrv.ior. Unless there was a fall in the prices obtained for exports, a .substantially larger overseas inconie for 1949 was expected. There were signs that the progressive increase in the world prices of primary products was coming to an end. Sn- Stafford said that for the first tiiiie for many years the value of * iie coods and services Britain*got irom the rest of the world was being matched by the total she exported or performed for the rest of the world. He repeated his warning that this should not be permitted to conceal the size ,and gravity of the dollar deficit, much as it had been improved since 1947. He said that at the end of Marcfi ihe gold and dollar reserves stood at £471,000.000 compared with £553.000,000 at the beginning of the European reeovery programme. Dollar Deficit. ••In very good terms we have bevn able to restrict our dollar expcniUfure to what could be covered by our dollar earnings, together wiri: 'he aid at our disposal, and v." .n'end to continue that policy." Tiif-rc was, however, still a dollar cMlc:» of £360,000,000 a year and WA must be eliminated in the next thi • o years. Imuorts from the Western Hemi-sph'-rc had been reduced from 46 pir nnt. of the 1947 total to about!

the prewar figure of 32 per cent. in 1948, proceeded Sir Stafford. Thq aim would be to balance trade with the Western Hemisphere not at the lowest, but at tne highes't possible level of imports and exports. "We are making a very considerable contribution to the increase of world supplies and to the reeovery

of other countries," said the Chancellor. Reviewing Britain's internal I economic situation, Sir Stafford ' said that one of the reasons for the j increased production in all criticalj sections was the general improvement in the stocks of niaterials and components. He pointed out that the total investments in industry during the last year had exceeded the Government's estimate. This should be regarded as a real achievement, as it took place without further inflation and was accompanied by a large increase in exports and the maintenance of the British living standard. The total call on national resources for investment in 1949 was expected to be about the same as in 1948 — perhaps a little lower;