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Salient. An Organ of Student Opinion at Victoria College, Wellington, N.Z. Vol. 10, No. 12. August 20, 1947

English Summer Clouded by Economic Crisis

English Summer Clouded by Economic Crisis

England is cloud-cuckooland this summer. Political passions must correlate highly with the weather, and the fine warm holiday season has eased the tension of the winter. The Royal engagement is still the main topic of the day, and seems to be fairly generally approved. The Press, indeed, has been sentimentally sycophantic; only the "Daily Worker." provided a channel for the strong republican feelings of many people, and it rather spoilt its case by far-fetched attempts to link Philip with the present regime in Greece. The general opinion seems to be that if we are going to continue the pageant of the Royal Circus (and it seems to serve a purpose as a symbolic figurehead for the country) then this young man is well suited for the job, which will indeed be made easier if there is real love between them. Royalism is no longer a burning political question.


But beneath this calm surface very real problems are hidden. This country is facing a frightful financial crisis, and responsible observers of all parties do not conceal their alarm. The enormous gap between imports and exports, which will exhaust the American Loan by Christmas, is the main symptom. The miners' five-day week may not succeed in getting us the minimum of 200 million tons of coal needed to keep industry going. Transport bottlenecks are imminent, because of obsolete and inadequate rolling stock. Houses are not being built at the rate expected. The basic industries are not producing enough, through the coal shortage, manpower starvation and obsolescence.

Marshall Plan

That the Government fully realise the seriousness of the situation is instanced by recent pronouncements in the Commons. But what are they doing about it? One reaction was a campaign to publicise the economic White Paper, but it produced only the ill-starred and stupid work "Work or Want" poster, which would look better at ASCOT than in a factory or a mine. The Transport Nationalisation Bill may help in the rationalisation of an overloaded industry, but will not come, into effect until next year. A planning board, after long delay, has been appointed, but so far has not shown itself to have any more power or responsibility than the usual consultative committee or Royal Commission. First tobacco, now newsprint, soon probably films, are being cut, but no one pretends that this will bridge the gap.

The real trend of opinion within the Government is probably shown by the enthusiasm with which they have welcomed the Marshal offer. Sir. Bevin has carried all before him, at home and in Paris, to try to make dollars safe for the democracies. It seems likely that the Cabinet did not originally want another loan and that the Marshal plan has caused a change of opinion.

Is this in fact sufficient? Quite apart from the strong likelihood that the credits will be so tied with conditions as to constitute a mortgage on the Continent, there is no certainty that it will be approved at all by a Congress clamouring for tax cuts and ignorant of these elements of economics which inevitably foretell a break in the American inflationary boom. There is no certainty that we will get the machinery and capital goods we require to reconstruct our industries.

There is absolute certainty that sooner or later we must balance our trade budget. The sea on which we are drifting is narrow and confined, and not even a Gulf Stream of dollars can prevent us from eventually striking some very Jagged rocks.


What is to be done? Above all, we must co-ordinate our industries, and use them to the greatest advantage. Traditional economic incentives are not sufficient to ensure that we get first things first. Only comprehensive and realistic planning of production can do this. We need at present, for example, large quantities of mining machinery, electric generators and railway trucks, just as during the-war we needed tanks, guns and aircraft. These goods can, and should, be made by such organisations as the Royal Ordinance Factories, whose vast, modern, excellently equipped machine shops are working short time, or by Rolls Royce, whose skilled workers are wasted on luxury goods destined chiefly for the Home market. It will be necessary to redistribute labour, by means of wage incentives, or for example, denying paper to football pools to release thousands of women for the cotton industry. It will be necessary, perhaps, to allow payment by results in the building industry, to increase the production rate.

Above all, it will be necessary to make drastic cuts in the armed forces and military expenditure. Britain is a debtor nation, and her show of military might is an extravagant bluff. We cannot defend this island, let alone the Middle and Near East, Let Americans and Russians play the war game. We have nothing to gain and everything is being lost. Only the most naive arguments or national prestige can justify our losing the productive power of a million of our best workers.

Labour Toadies

The Labour Government is a good government; it is intelligent, informed, critical, listening to the opinions of the people, seeking honestly the well-being of all classes, but its besetting sin is lack of moral courage, of dynamic leadership. It sees difficulties, but will not court unpopularity among some classes for the ultimate well-being of all. If it is not very careful it will find one day that it has been unwittingly Bold up, and the bailiffs will move in.