11657-Economic Survey-Galley 5
Page 24
11. Of the three-year total, some £2,800 million is attributable to produc- tion of arms, equipment and clothing, to works and buildings, and to research and development. The remainder includes such items as the pay and pensions of the Services and of their civilian employees, the movement of personnel and stores, and supplies of food, petrol and oil.
12. A large part of the production total is required from industries making engineering and other metal goods. Production of engineering and metal goods for defence is expected to increase from about £165 million in 1950-51 to about £360 million in 1951-52, with a total of £1,650 million for the three years 1951-54. Of the £360 million to be spent in the first year, aircraft will account for roughly one-third, vehicles for one-sixth, shipbuilding and marine engineering for one-sixth, and radio and radar equipment for one-thirteenth. There will be very big increases over the three years in production of combat aircraft and tanks, while large sums will also be spent on the building and conversion of naval vessels, on anti-aircraft and anti-tank weapons and ammunition, and on radio and radar equipment. Among other things this will mean that there will have to be a large increase in employ- ment in existing aircraft factories and Royal Ordnance Factories, which have hitherto been wofking below their full capacity. Substantial new capacity will also have to be quickly created for the production of tanks and aircraft in later years.
13. While the impact of rearmament will be heaviest on the metal-using industries, both the Services and civil defence will also be making consider- able new demands on production of textiles-for clothing of all kinds, web equipment, blankets, groundsheets, tents and so forth. These demands will fall with particular severity on the cotton industry.
14. Expenditure on works and buildings for defence purposes will rise very sharply in the early stages of the programme, from just over £80 million in 1950-51 to £145 million in 1951-52; for the three years 1951-54 the total is expected to be about £475 million. The extra work will include the creation of more factory space for arms production, extension and improve- ment of airfields, bringing disused airfields back into use, provision of addi- tional storage capacity, development of the Control and Reporting system and improvement of anti-aircraft defences.
15. The additional production and building work just described accounts for nearly two-thirds of the projected increase in defence expenditure during the first year of the programme. Most of the remainder of the increase represents the cost of maintaining and supplying the larger Armed Forces, including provision for the higher rates of pay introduced in September 1950. 16. At the beginning of April 1950 there were 713,000 men and women in the Forces. As a result of improved recruitment and the extension of the period of military service the total is expected to rise to rather over 800,000 by 1st April, 1951, and to about 870,000 by April 1952. This increase, coming at a time of very full employment, will make it more difficult for industry to find the labour it needs, but even so the total number of persons in civil employment will probably rise slightly. The calling up of reservists for short periods for training next summer will unavoidably cause some difficulty for industry, but every effort will be made in its administration to avoid serious interference with essential work.
17. The above totals make no allowance for expenditure upon the accumula- tion of strategic stocks of food and raw materials. Provision of £140 million is being made for this in the financial year 1951-52, but we cannot by any means rely on sufficient supplies being available for all this money to be spent. 18. The United Kingdom's defence programme is designed to cover its world-wide commitments, but so far as the defence of the West is concerned it is part of the much wider plans for the defence of the West being under- taken by the twelve North Atlantic Treaty Powers(1), and some adjustments may prove necessary as their joint planning progresses. Discussions are now taking place between the twelve Governments on the size of the collective defence effort required and the best ways of sharing the burden, and it will be some time before the outcome of these discussions is known. Meanwhile the United Kingdom is pushing ahead with its own programme, but it needs to be emphasised that this programme cannot be carried out in time without sub- stantial imports of machine tools from overseas, and these are not yet assured. Many of the tools needed can only be obtained from the United States and the Continent of Europe, since certain types are not made in this country, and the capacity of the British machine tool industry is inadequate to meet all the new demands. Orders for some of the components and other items in the programme are also being placed in Europe.
(1) The North Atlantic Treaty was signed on 4th April 1949. Associated witn the United States and Canada in signing this Treaty were the five Western Union Powers--Belgium, France, Luxembourg, the Netherlands and the United Kingdom-and in addition Norway, Denmark, Italy, Portugal and Iceland. These twelve powers set up the North Atlantic Treaty Opanisation to help them carry out their joint undertaking "to restore and agenteof 587
security of the the North Atlantic area