CAB129-45 — Page 26

11657-Economic Survey-Galley 7

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26. The defence programme, the drive to increase exports of consumer goods and the rise in import prices (with its inevitable effects upon the cost of living) are together serious threats to financial stability. If incomes and prices get out of control, not only will much social injustice be caused, but munitions production and exports will be obstructed. The policies described above must therefore be supported by an appropriate fiscal and monetary policy. The Government's intentions in this matter will be announced in the Budget, but some of the underlying problems are discussed in a pre- liminary way in Chapter IV of this survey.

CHAPTER II

PROSPECTS FOR OUTPUT

27. The prospects for output in 1951 must depend in the first place upon supplies of manpower, fuel and power, steel and other raw materials, and each of these is discussed in turn in the paragraphs that follow. The likely trend of industrial productivity as a whole is then examined in the light of this discussion, and the chapter concludes with a review of the prospects for particular industrial groups--the metal-using trades, building and civil engineering, textiles and agriculture.

Manpower

28. During the war the total working population (in the sense of all those at work or offering themselves for work) was considerably increased. In the struggle for national survival many older persons who would otherwise have retired stayed on, and many women left their homes for work in factories and on the land. When war came to an end, the old pattern was partly restored, though many more women remained in industry in the new condi- tions of full employment. Between June 1945 and June 1948 the male working population declined by over 300,000 and the female by 1,000,000- a fall in three years of about 6 per cent. in total, part of which is accounted for by the raising of the school-leaving age. Since then there has been a very gradual rise amounting to about 12 per cent.

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29. The total will probably continue to grow during the next year or so, but there is no prospect that it can be forced to grow much faster than it has recently, short of pressures or compulsions entirely unacceptable in peace- time. Nevertheless, something can be done to encourage more people to go to work, particularly those who are unable to work the normal factory day. Hours of work can in suitable cases be adjusted to allow more women with domestic duties to work in industry. Special arrangements can be made to retain the services of the elderly and the disabled.

30. Nothing much can be expected from further reduction of unemploy- ment, which remains far below what was in the past considered a practicable ideal. With an average of only about 11⁄2 per cent. of employees out of work, a large proportion of those registered as unemployed are simply moving from one job to another. Nevertheless, it may be possible to reduce the total further by still more effective use of the Employment Exchanges. To this end, the employers' organisations have recently agreed to recommend the advance registration of redundant workers at the Exchanges, so as to shorten to a minimum the period between jobs. Significant pools of unemployment persist only in the Development Areas and a few other places. The Govern- inent is continuing its policy of encouraging new industry in these areas, and the enlarged defence programme will offer opportunities of helping further. 31. In general, therefore, national output cannot be much assisted in the next year or two by increased employment. When account is taken of the increasing numbers serving in the Armed Forces, civil employment is expected to be practically constant, while the number available for the production of civilian goods will, of course, decline. Recent trends and forecasts are shown in Table 2. The forecasts of unemployment are particularly uncertain because so much will depend upon supplies of raw materials.

32. It is against this background that the labour problems of rearmament Thane is be considered. Rather less than half a million worksoe6ef587

mated to be engaged on the production of munitions and equipment in the middle of 1950. While no exact calculation can yet be made, it seems likely that the new defence programme will require this number to be more than doubled when it is running at its highest level in 1953-54. This transfer will

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