REALISTIC VIEW

Grey River Argus, 8 April 1948, Page 5

REALISTIC VIEW

CRIPPS’ DECLARATION Accepting the Challenge of Freedom (Received April 7, at 10.0 p.m.) LONDON, April 7. In preparation for his Budget speech, Sir Stafford Cripps declared that the Government had called upon every section of the community to help “in this, all our struggle,” to secure “a victorious solution of our problems.” He added: “The financial programme of the Budget will serve to reduce the pressure and ill-effects of inflation, and will strengthen our productive effort. “By this action, we shall make plain, both to our own people, and to that large part of the world which is watching anxiously to see how we meet the challenge of our difficulties, that we are building, it may be somewhat slowly and painfully, the strong and stable foundations for our reconstruction, by the ordered use of our resources, by guarding the value of our currency and by the way we are determined to tackle our job—the way of free men, working together in a free democracy, for the good of our nation, and of all the. free peoples of the world.”

CFUPPS REVIEWS POSITION Sir Stafford Cripps in Parliament said last year's hopes were not realised. They had got considerably less imports and paid more for them. The Government, expenditure abroad exceeded expectation by £36,000,000, and the earnings from invisible assets were £90,000,000 below the forecast. "We had to continue selling somn of our foreign assets”, he said. “The drain on our gold and dollar reserves was most obviously the serious feature of the whole situation”. The gold drain was over 50 per cent, greater than the overall deficit, amounting to' £1,023,000,000 during the year. “The import programme for the first half of 1948 is estimated to cause a drain on reserves of over £200,000,000. Such a high rate of continuing drain, if allowed to continue without external aid, would exhaust our remaining reserves in 1948. “It. is clear that the large Budget surplus last year did not decrease the inflationary pressure to a marked extent. We must secure an exceptionally large Budget surplus in the coming year to yield a balance after meeting all forms of Government expenditure”. TWO PROBLEMS Two serious economic problems confronted Britain—the balance of external payments and the balance between internal resources and the demands placed upon them. “The hopes we had a year ago have not been realised”, he said. “We in 1947 received considerably less in imports than we hoped, and paid much more than we had calculated. The rise in the export volume was not as great as planned, although with the increase in prices the value of exports was only £75,000,000 below the estimate. The earnings from invisible exports were £90,000,000 below the forecast. The net shipping earnings were only £17,000,000. The net income from investments was £51,000,000 in 1936 and £124,000,000 in 1938. We have had to continue to sell some of our foreign assets”. The drain on the gold and dollar reserves was the most serious feature of the whole situation. The high rate of the continuing drain could not be allowed or Britain’s remaining reserves would be exhausted. Britain must expand her exports to the dollar countries and also to South Africa, because she was the source of gold. If the inflationary tendencies were not controlled, exports would suffer from the too strong drag of the home marget and the too high prices at which British goods would be offered overseas. He warned the House against developing production plans which had no relation to the actual facts of Britain’s present situation. Armchair critics presented many proposals which would involve the movement of many hundreds of thousands of workers. "We are dealing with production by human beings. They cannot and must not. be dealt with as if they were pieces of machinery”, he declared. Export targets for the end of 1948 had been reduced. The Government now aimed to reach the level of a 50 per cent, increase on the volume in 1938 by the end of 1948. instead of a 60 per cent., which was the target fixed last September. “A total of £400,000,000 had beer, saved in expenditure on defence, civil defence, Board of Trade services, foreign and Imperial services and Foreign Office, fuel and power”. The keynotes of the Budget were to fight inflation and to encourage the producer, the housewife and the person living on small fixed incomes. The extra cost would fall on those who drank alcoholic liquors, smokers, bettors, and, to some extent, by wav of the purchase tax on buyers of the less necessary goods. The rest of the burden would fall on those with considerable invested capital, who will be asked for this year of special difficulty to make this once for all contribution to solving the nation’s problems. The Budget surplus on orthodox lines of accountancy was estimated at £789.000,000. The overall surplus of all Government expenditure would be £330,000,000. That was a measure of the contribution which he honed the Budget would make to the total saving necessary to counter the inflationary tendenev. “I am convinced that, we as a na-* tion are tackling our problems with a sense of realism and determination, which promise a victorious solution to our problems”, the Chancellor said. “The Budget, has been framed to hack up the national effort by Government, action”. AMERICA’S HELP The Chancellor added that the European recovery programme, which “comes as a light and hope to the freedom loving peoples of the world, cannot add significantly to our .reserves, but can help to reduce the drains upon them. We shall need all the reserves we can muster when aid comes to an end. We shall not be able to indulge in luxuries. We must send more goods abroad before satisfying the home market, unless production increases”. He said the United States’ great act in bringing the European recovery programme into operation had given the Western European countries time and “we cannot afford to waste a minute of it”. The respite which the European recovery programme gave afforded time for effective co-opera-tion between the Western European countries, which should not in any wav prejudice Britain’s close working with the rest of the sterling area, particularly the sterling area of the Dominions.