S Indica,a ic o Mr Wilson saves himself country's chronic balance
of payments prob. made to this end has been in vain.
qua non of any cure at all. ready, two of the principal props of the anti- of our or anyone else's advocacy. It was taken lished : few other countries, and none of as a result of the inexorable pressure of Britain's main trading competitors, have can- events. When, a few weeks ago, the Chan, celled out our advantage by devaluing in cellor of the Exchequer informed the Prime turn; while—in spite of the present excite- Minister that the prospect was for an even ment in the gold market—there has been no larger balance of payments deficit next year, world monetary chaos. For these initial suc- just as this year's is bigger than last year's, cesses the credit belongs to the international Mr Wilson suddenly found himself in the financial community and to the Treasury position of Mr Ramsay MacDonald in August officials at home who implemented the Gov- 1931, faced with the choice between saving ernment's decision. the pound, by a policy of savage deflation Unhappily, other omens are less favourable. that would shatter the Labour party, or By delaying devaluation until he was forced saving himself. MacDonald chose the pound, to take this step, Mr Wilson has done it in a and in the event saved neither. Mr Wilson, way that creates the least possible confidence Perhaps benefiting from this cautionary prece- in the act and jn the new parity. Nor is this dent, chose to save himself. the only consequence of delay. It has meant ..The SPECTA unreserveTtO Wel rip the '',Ibecitrue a simple matter of self-preservation Government'A "46:de'VAltie e pound. to do so—for, let there be no mistake, it is For the best part of two years we have con- Mr Wilson and Mr Wilson alone who is re- sistently advocated this course—at first alone, sponsible for the criminally negligent delay more recently in the company of a growing in taking this inescapable step—is something number of other commentators and experts. not susceptible of rational explanation. But but always as part of a reviled minority. We whatever the cause of the Prime Minister's have urged devaluation, not because we re- purblind obstinacy, it has forced the nation garded it as desirable in itself, but because it to endure three utterly and unforgivably was essential to the health and strength of the wasted years : three years in which every British economy.eWe have consistently pro- other objective of policy has been subordin- phesied the failure of the Government's previ- ated to the maintenance of the sterling ex- ous policies to provide any solution to the change rate, and in which every sacrifice tern, let alone any prospect of a reasonable But this is not a time for looking back.
rate of improvement in living standards at The important question now is whether the home; and so it has proved. And we have devaluation can be made to work—made to urged the drastic step the Government has transfer sufficient resources from the home now taken, after three years of denial and market to exports to create a quick and repudiation, not as a panacea, but as the sine healthy balance of payments surplus. Al- qua non of any cure at all. ready, two of the principal props of the anti- Not that the decision was taken as a result devaluationists' argument have been demo- of our or anyone else's advocacy. It was taken lished : few other countries, and none of as a result of the inexorable pressure of Britain's main trading competitors, have can- Minister that the prospect was for an even ment in the gold market—there has been no time at home, and hence a greatly increased cost of repayment. It has meant that,an act whose success depends on the exertions of businessmen and workers has been postponed until, thanks to the Government's previous measures, the goodwill of both sides of indus- try is all but exhausted. And it has meant that the putative export boom is now timed to coincide not, as should have been the case, with recession at home, but with a strong re- covery in the domestic economy as well. Un- less the inflationary dangers inherent in this situation are firmly checked, the devaluation cannot possibly hope to have more than a temporary success.
