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War Economy

Economic Policy Co-ordination

Economic Policy Co-ordination

After the demise of the Organisation for National Development in 1945, Cabinet had become once more the sole co-ordinator of economic policy and its administration.

Early in the 1950s, a sub-committee of Cabinet was formed to deal with economic and financial policy. Primarily, it was an advisory body to Cabinet. It might sometimes decide minor questions, but would take all major policy issues back to Cabinet for decision.

Attached to this sub-committee was a committee of permanent heads known as the Officials Committee whose function was to give advice on economic and financial policy matters which were page 569 referred to it by the Cabinet sub-committee, or which on occasion it might raise itself. The Officials Committee was supported by a working party of officials from the Departments concerned.

With slight changes in name but with very little change in function, this Committee system has persisted through various changes of Government up to 1964, and has provided a satisfactory working arrangement for the co-ordination of economic and financial policy. In comparing it with the Organisation for National Development it must be remembered that the Committee has not been asked to make economic plans on so comprehensive a scale as was visualised by that organisation. Because it has had virtually no administrative functions, but purely the function of giving advice to a Cabinet committee, the Officials Committee as a Departmental co-ordinating body has been successful.1

With some notable exceptions,2 Government economic policy since the war has been very short-term, concentrating on the more immediately pressing issues, and influenced unduly by the periodical wooing of the voters at election time. Fluctuations in the restrictiveness of import licensing and bank advance controls were very much affected by this latter influence.3 These two controls have carried much of the load in the administration of external and internal economic policy respectively.

1 Policy decisions made by Cabinet through this system have been carried out by the administering department concerned, under the control of its Minister who is responsible to Cabinet, not by the Officials Committee.

2 For example, electric power planning.

3 See also p. 548, note 1.