REDUCTION PLANNED

Otago Daily Times, Issue 26634, 3 December 1947, Page 5

REDUCTION PLANNED

CAPITAL EXPENDITURE IN BRITAIN RESTRICTIONS ON BUILDING LONDON. Dec. 1. Capital expenditure in the United Kingdom will be reduced from about £1.600,000,000 to about £1,420,000.000 in 1948, according to a plan outlined in a White Paper. The reduction, which the Chancellor of the Exchequer, Sir Stafford Cripps, forecast in the House of Commons recently, will be brought into operation progressively. Investment at the end of 1948 will be at an annual rate of about £1,320,000,000. The proposals provide for a reduction in the rate of expenditure on building, plant, machinery, and vehicles and an increase in expenditure for shipbuilding. The White Paper adds that it should not be assumed that an appreciable increase in the general levels of spending for 1948 would be possible in 1949 The White Paper said the Government did not intend to reintroduce the system of licensing for the purchases of plant and machinery, but would rely for the present on the co-operation of private industry. The Government would discuss with industrial organisations postponement of investment which did not make a significant contribution to the expoit drive for the output of basic industries.

Labour for Housing The labour force employed on the housing projects would be reduced to about 525,000 in June, 1948. The labour force for industrial construction would also be reduced. The White Paper said the projects to be deferred would include extensions to London airport, the construction of nursery schools except where they were needed to assist mothers to enter industry, and major proposals for community centres, adult education centres, and youth clubs. Post office and roadmaking labour forces would be reduced. It added that the construction of some buildings for civil and defence services would proceed, but in some areas would have to take second place to housing for miners and farm workers. Work on theatres, cinemas, sports grounds, and racecourses would be stopped except for reasons of public safety, but building for the 1948 Olympic Games would continue. The White Paper warns that the electricity supply might still be inadequate in 1951 and 1952. Sufficient, steel would be given the gas industry to maintain plant which was now in a bad condition. Plant for Oil Refineries

"A realistic building and plant programme,” to cost £95,000,000, was being worked out to establish oil refineries in Britain, and thus save dollars. The programmes for large overseas investment by the British oil industry would be reviewed. A much larger proportion of the output of the motor vehicle industry would be devoted to export. The supply of goods and vehicles to the home market in 1948 would be restricted to about 50,000. The Treasury announced that the gross sales of gold in November totalled £48,000,000. Britain also purchased 60,000,000 dollars from the International Monetary Fund in November. ■ , . Reuter's financial correspondent says that informed quarters regard the £48,000,000 sales of gold as an explanation of the warnings which Mr Chifley gave last week. These sales are unquestionably grave, though perhaps no worse than expected.