CAB129-45 — Page 44

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11657-Economic Survey-Galley 24

CONCLUSIONS

132. The account given in this survey of the United Kingdom's economic prospects in 1951 is in many ways harsh and unpleasant. It presents a sharp contrast to the broadly satisfactory condition of the economy in 1950. In the immediate future we face a decline in the rate of increase of national output, a worsening of the balance of payments, a reduction in fixed invest- ment, a fall in supplies of some consumer goods, and a continuing rise in prices.

133. For this unhappy prospect our own need for rearmament, and the similar needs of our allies in the Western world, are the main and unavoidable cause. Having, after full deliberation, decided that a rapid and thorough strengthening of our military defences is imperative if peace is to be pre- served, it is now our duty as a nation to carry out this programme with a clear understanding of its consequences to our civil life. The severity of these consequences is the price of peace, and a price that must be paid. 134. The Government has set before the nation two objectives. First, so far as it lies within our power, the defence programme must be pushed through, in full and without delay. Second, we must at the same time preserve our economic strength and independence. The attainment of these objectives will require an extensive re-deployment of the nation's resources and will make great claims on the energy, skill and adaptability of the British people. In the field of production, it will call for the utmost efforts to obtain as much coal and steel as we can, and to economise in their use; it will impose a heavy new burden on manufacturing industry, both in pro- ducing for the Services and in promoting new and increased exports to make up for some inevitable falls; and it gives a new urgency to the programme for growing more food at home. Finally, it places on us all the duty of accepting with patience the shortages and high prices that world rearmament entails, and of doing everything that we can, as producers and consumers, to eliminate waste and inefficiency.

135. The United Kingdom is not alone in the tasks it now faces, and in tackling them it cannot neglect the responsibilities it bears towards the Colonies or its special relationships with the other sovereign independent countries of the Commonwealth. The affairs of the Commonwealth and of our allies in the North Atlantic Treaty are closely interdependent, and there is already continuous and close consultation on economic matters between the many Governments involved. It has been the United Kingdom's policy to develop this collaboration in every way that promises to assist the free world in meeting the risks of dislocation and impoverishment that arise from current political tensions. The value of such international action has been shown again and again in the last five years. The Government believes that it has an even greater part to play in the future.

136. We cannot tell for how long rearmament must continue. The neces- sity for the present programme arises out of the policy of Powers whose motives and ambitions are obscure. We can only be sure that, the greater the success with which we and our allies pursue the objectives described in this survey, the greater is the prospect for a peaceful settlement of the world's economic problems. Such a settlement the Western Powers are seeking in every way they can. Meanwhile, it is our task in the economic field to sustain new burdens, and by the careful disposition of our increasing output to see that these burdens are as light and as fairly shared as the needs of defence permit.

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