HE Financial Times correspondent in Paris has been reporting on pressures which are being applied on the Government to carry out deflationary measures. The Group of Ten, which includes the richest members of the International Monetary Fund, is unlikely to provide financial heip for Britain if the Government does not introduce stringent deflationary measures in the Budget. European officials at the 0.E.C.D. have been urging more drastic action by the U.K. Unless this advice is followed “‘it is doubtful whether the Group of Ten’s General Arrangements to Borrow can be activated,” according to a source close to the group. The arrangements were brought into action for the first time last November and provided $400m. of Britain’s $1,000m. drawing on the LM.F. The source emphasised that there
is no ground for believing that the pound should be devalued. But he emphasised that there was a strict limit to the concessions European Governments were prepared to make to avert a sterling devaluation. The essential point, he said, was that Britain must eliminate its balance of payments in the very near future, and although there was considerable sympathy in Europe for the Labour Government’s desire to get away from stop-go policies, the agonising decision must be made. But he also stressed that, once the U.K. balance of payments position had been restored, it would be incumbent on the international community as a whole to ensure that Britain would be in a position to conduct a long-term policy of steady growth. Britain’s reserves were far too small at present to permit such a policy, and other countries with a strong reserve position would have to contribute to a long-term loan to the U.K.
Feb, 25, 1965 — THE WEEK
Oniy Answer-Profit
F.B.I. Chief
UST what big business thinks of
efforts by the Government to
achieve an ‘incomes policy’ is shown
by a speech made by Sir Peter Runge,
president of the Federation of British
Industries.
Sir Peter, speaking at a dinner of
the Ayrshire Chamber of Industries,
at Kilmarnock, called for industry to
rivet its attention on efficiency.
“You may all ask how I measure
efficiency,” he declared. “I have only
one answer—by profit.
“This is a word from which people
appear to shrink. It is as though it
carries a murky association, as though
it is synonymous with money grubbing
and is no more than the means by
which business and industry line their
pockets.”
But is was only through profits
that the country’s economy could ex-
pand, the national wealth increase,
and the nation’s standard of living im-
prove.
If Sir Peter’s criterion is accepted,
the incomes policy must be in ruins.
Obviously if profit is the measure of
efficiency there can be no limitation
on dividends, etc. This could only
be interpreted as interfering with
efficiency.
by Dave Windsor
Good advice from