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ANNEX
Draft of The King's Speech on the Prorogation of Parliament, 1948-49 Session
MY LORDS AND MEMBERS OF THE HOUSE OF COMMONS:
The long Session which is now ending has been marked by a continuance of the economic difficulties with which we have been confronted since the end of the war.
Fortunately there is work for all, and through the sustained efforts of My People a notable increase in production has been achieved. I pray that, under the guidance of Almighty God, we shall overcome the difficulties that still beset us and reach the goal of a stable and prosperous economy.
During last winter our overseas account as a whole was brought into balance. Trade with North America still presented special problems, but the size of the gap between receipts and payments in respect of that area was being progressively reduced as the drive to increase direct and indirect dollar earnings gathered momentum. Thanks to generous assistance from the Governments and Peoples of the United States and Canada, together with the continued efforts of My People, there was every reason to believe that the gap would be closed.
In the early part of 1949 a fall in demand for goods from the United Kingdom, and from the other countries linked with sterling, seriously affected our earnings of dollars and the resultant difficulties were much intensified by a widespread belief that there would be an alteration in the value of the pound sterling in terms of the United States dollar. My Ministers took prompt action to reduce imports and to initiate discussions on some of the wider aspects of the problem. In July, a meeting of Commonwealth Finance Ministers was held in London to exchange views on the urgent economic problems confronting us. In September, My Ministers in the United Kingdom and Canada met representatives of the United States Government in Washington, and discussed with them the trade and financial relations between the sterling and dollar areas. Complete understanding was achieved in these talks. There was recognition that the freer development of world trade required the sustained effort, not only of these three countries, but of all other countries which desired to promote a free exchange of goods throughout the world.
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Before the Washington discussions began My Ministers had reached the conclusion that a radical adjustment would be necessary in the rate of exchange between sterling and the dollar, and an alteration in the rate was announced on 18th September. In order to make the devaluation of sterling an effective aid in foreign trade, My Ministers decided upon substantial reductions in Government expenditure and capital investment, thus maintaining their policy of disinflation as well as encouraging an increase in exports, especially to the dollar and other hard-currency areas.
An outstanding event during the Session was the conclusion of the North Atlantic Treaty, a defensive alliance of twelve Powers, each of whom has agreed, in harmony with the Charter of the United Nations, to give mutual assistance in case of armed attack. I am convinced that this Treaty will be a powerful aid to the preservation of peace and the defence of freedom.
My Government, in association with the other Governments signatory to the Brussels Treaty, have strengthened and developed the various organisations set up under that Treaty and My Navy and Air Force have taken part in joint Western Union exercises.
Persuaded of the need for closer unity between European Nations, My Government also decided to join with other European Powers in the establishment of a Council of Europe Members of both Houses of Parliament attended the first meeting of the Consultative Assembly at Strasbourg in August as representatives from the United Kingdom. I shall watch with close interest the progress of this venture in international co-operation.
My Government have continued to play their full part in the work of the Orangea&ion orl 027opean Economic Co-operaga and baken the lead, both in proposals and in action, to free a substantial part of international trade from import controls.