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SUPPLEMENTARY NOTE
The Scope for Reduction of United Kingdom Non-Sterling Imports in the
1.
Second Half of 1952
We have examined the non-sterling import programme for the second half of 1952 in order to determine what reductions could be made and the implications of such reductions for the economy.
2. We have taken into account first, the extent of existing commitments for the purchase of these imports. These commitments are of two kinds. First, there are commitments by Her Majesty's Government-purchasing contracts by Govern- ment Departments, import licences issued, and quotas publicly announced and committed under bilateral agreements with other countries. It may be possible in individual cases to break commitments to re-negotiate contracts, to withdraw import licences, &c. But this is a proceeding which is most dangerous to our credit and damaging to our reputation for commercial integrity. We have therefore worked in the first instance on the basis of honouring existing commitments although there may be individual cases in which it is possible to get out of the commitments without loss of credit.
3. The second type of commitments consists of contracts already made by private traders; where imports are now uncontrolled, it would be possible for Her Majesty's Government immediately to re-institute control, but it would then be found that private traders had substantial outstanding contracts and, although it would be possible to frustrate them (as we did last November and as the Australians have done) such practice is commercially undesirable.
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4. The commitments may be summarised as follows (counting " uncontrolled " items as uncommitted ") even though in practice we should find that there were considerable private traders' commitments. The statements of what is committed broadly refer to the position at the time when the programme was compiled in the middle of May; some further commitments will have been made since then.
Imports in Second Half of 1952
NON-STERLING
Total imports Imports
£ million
Uncommitted
Committed
Total
of which uncontrolled
Ministries of Food and Agriculture
528
269
157
112
27
Ministry of Materials
572
359
229
130
50
Ministry of Supply, steel, &c.
116
112
69
43
2
Board of Trade, materials
13
10
2
8
7
Machinery
37
36
16
20
20
Board of Trade, manufactures
48
40
30
10
6
Tobacco
30
12
12
1,344
838
515
323
112
Defence supplies, petroleum, &c. ...
155
83
83
1,499
921
598
323
112
5. Thus of total non-sterling imports of £921 million, about 65 per cent. are committed, 12 per cent. are uncontrolled carrying implicit private commitments, and 22 per cent. are controlled but uncommitted.
6. The implications to the United Kingdom economy of cutting out all or part of the uncommitted purchases for each item are set out in the following paragraphs.
7. Ministries of Food and Agriculture. The import programme supports a ration level in the second half-year which will be the same as in the first half for fats and sugar, worse for cheese and (seasonally) for eggs, and appreciably better for meat, bacon, tea (though of course the latter involves very little expenditure outside the sterling area). Total consumption of food will be appreciably below
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