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from a London reader Hoover, the domestic appliance manufacturers, warned the Government last week that plans to cut back home demand in domestic appliances could have drastic effects on the country's economy and send unemployment figures soar— ing again. A statement from the company saidt "Any further intensification of the hire-purchase restrictions or the increase of purchase tax would not only have a crippling effect on the industry, but would not be justified in the country's economic interest." The major proportion of the manufacture of washing machines in this country — around 70 per cent - is undertaken in Wales and Scotland, both areas of high unemployment. The Hoover factory at Merthyr Tydfil, Glamorgan, is working at only 50 per cent of its capacity and the one at Cambuslang, Lanarkshire, at 60 per cent. There is thus surplus capacity of both workers and plant and any further fall off in demand could result in redundancies. Hoover points out: "The home demand for washing machines in Britain is Tunning at only about half that in comparable Western Buropean countries, and from which intense competition is being experienced in the export field. In the Common Market, output of washing machines is running at approximat— ely 4 million units per year. In Italy alone, in 1966, their output at 4.9 million units was nearly treble that of the UK. It is high volume production of this order that results in lower unit costs and generates funds for investment in highly mechanised production methods. The success which stems from these two factors can be measured by Italian achievements in the export field, in which sales in 4966 amounted +o 730,000 units compared with
392,000 in 1965- "In the absence of tariff-free access to the Common Market, it is vital that at least the British home market should have stability and sufficient volume not only for lower unit costs but to justify the long term investment which the industry requires." Whilst these arguments are no doubt exaggerated to put more pressure on the Government, they certainly ring true. Wilson and his colleagues would have no excuse to say that they haven't been warned about the effects of their
policy.