Reduced Capital Cuts
In view of the fact that the reduction of capital investment by £2oo,000,000 announced by Sir Stafford Cripps over a month ago was generally regarded as insufficient there can be little enthusiasm over this week's White Paper, which reduces the cut to £18o,000,000. It is true that every pound of this amount has been hard to find and that there is hardly an item set out in the White Paper which, envisaged in real terms, does not mean some sacrifice of comfort or of long-term efficiency. But can it be envisaged in real terms ? The trouble, after all, is not that an excessive programme of capital works is actually being carried out. The amount of such work which can be done is physically limited at all times by the material resources available. The real trouble is the amount of capital expenditure which is being attempted, in the face of the certainty that only a part of it can issue in factories built, machinery replaced, roads made, and so on. Always it is Mr. Dalton's excellent phrase " too much money chasing too few goods " which best describes the situa- tion. It is the goods which are short, not the money, or the plans for spending money. Such obvious considerations might have tempted the authors of the White Paper to look again at the list of capital projects, knowing that further cuts would not really be amputations of limbs, but something more like the destruction of castles in the air. It is true, of course, that many projects have -been begun and it would be a pity not to finish them, though there is no trace in the White Paper of any frank admission of the fact that most of these schemes were begun in the course of 1946 by deliberate decisions, and that many of them were decisions to attempt the impossible. It is equally true that practically any cut in existing capital plans represents a sacrifice of long-term efficiency to short- term necessity. But they have got to be made. The fact is that for the time being we simply cannot afford the most up-to-date equip- ment. Nor can we get more men. For a long time we can only have harder work and smaller consumption.
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