TNAG-0119-FCO40-155-Lord-Shepherd-s-visit-1969 — Page 82

15.

There are some who argue that there

was an easy way out; but it is one we have

rejected. They argue we could effect a

radical change in our Balance of Payments by

slashing our overseas commitments, and

then imposing import controls.

The fact is that we have adjusted our

defence commitments but we still spend more on

world defence than any other country except U.S.

and Russia per gross national product.

At the same time as we have had to use

these severe controls of demand in the economy

we have also been attacking the underlying causes

16.

of the problems which have beset us since

the end of the second world war and perhaps earlier.

We are endeavouring to change radically

our policy towards labour relations. This

has given rise to bitter antagonisms on the

part of many.

There is the need to change the

attitudes and actions of both management

and trade unions in a way which will be more

compatible with the long term interests of

industry and workers and also with the long

term growth of the economy,