April 30, 1955 THE ECONOMIC WEEKLY Weekly Notes No Politics in Budget? UK Turns Against Japan Varied Manufacturing Activity FAVOURITE of gods H O S E who are interested in HOUGH it was US which and critics alike—Mr Butler case studies of industry will A had sponsored Japan's acces­ T is indeed a very lucky man. His T find more than a handful in Mr sion to the GAIT and Britain had ' hunches ' have a habit of corning Cecil Stack's speech at the annual so long been luke-warm and hesi­ true; and because they come true, general meeting of 'Dunlops' How tant rather than hostile, the Presi­ the critics take care to apply stand­ quickly the pattern of industry is dent of the Board of Trade, Mr ards of criticism that are proper— changing, how many new lines of Peter Thorneycroft has now come meaning, in this context, standards production are being developed, the out openly against the proposal. according to which Mr Butler's part played in such development by The Government had decided, Mr budgets get a high mark. In fact, research and new techniques, financ­ Thorneycroft announced in Parlia­ they go further and admonish those ed and conducted by the principals ment, that for the time being it who naively look at Mr Butler's of the foreign companies operating would be unable to accept the latest budget as a set of fiscal deci­ here—Mr Stack lets us have a peep obligations of the General Agree­ sions based on or. related to econo­ into all these and more. For Dun- ment towards Japan and, therefore, mic realities. How patently absurd, lops use domestically grown raw trade relations with Japan should when the general election is only a rubber, supplementing in part by continue to be dealt with by mutu­ few weeks away, not to recognise imports. So thrown in, is a bit of ally negotiated arrangements. Bri­ that a nation's budget is a political the problem of price parity between tain's attitude towards Japan had document, especially under a sys­ agriculture and industry being de­ never before been stated in such tem of Government by party! If bated at the moment. It is, how­ forthright manner. Indeed the tim­ Mr Butler has kept one eye cock­ ever, a pleasant variation on the ing of the announcement is worth ed at the polls; pat him on the back usual theme. Domestic producers noting. The occasion was the de­ for his practical sense. of raw rubber have been given a claration of Britain's attitude to the price raise without car owners hav­ review of the General Agreement It is refreshing to see this eager­ ing to pay any more. In fact, tyre on Tariff and Trade. The acces­ ness to applaud not only in the prices have been cut and motorists sion of Japan to the GATT was, confirmed supporters of Mr Butler's can now have tubeless tyres, the however, a separate issue and could party but the high pontiff of eco­ latest marvel, at no higher cost than have been so treated. nomic commentary. When Dr Dal- that of ordinary tyres. An entire ton and Sir Stafford Cripps and Mr range of highly developed manu­ Gaitskell recognised the facts of What lends significance to it is factures, the production of which parties and elections, they were most the case of Lancashire which has has been taken up within the coun­ severely castigated for sacrificing been very much before the public. try—besides tubeless tyres, a new national economic interests to the In an editorial on the subject type of tyres for trucks and buses politics of the moment. And when " India and Lancashire", it had introduced only last year, industrial they resisted such temptations, they been argued in these columns that transmission and conveyor belting. were complimented for their cour­ Britain could not very well restrict the manufacture of which was begun age and honesty. But Mr Butler is imports of Indian cloth without only in 1953, high pressure hoses, a different kettle of fish. He can opening the door wide open to im­ the production of which was taken do no wrong, since the standards of ports from Japan. The solution of up only this year, and so on. criticism are adaptable when he is Lancashire's problem has, therefore, concerned. to be sought in means of expand­ In November 1952, the question ing exports rather than restricting It is of course silly to argue of fair prices for tyres was referred to imports. The latter conclusion re­ that the Chancellor has to con­ the Tariff Commission. There is no mains unaffected, though after this cern himself least with the poli­ monopoly in the manufacture of clarification, to the extent that Bri­ tics of the moment in his pre-elec­ tyres. From the pages of the dailies tain will have a freer hand in regu­ tion budget. Here is one more evi­ and the more prosperous financial lating her imports, the position is dence of the miracle wrought by weeklies, the producers glower at modified. a little. India, however, Mr Butler in the past few years. one another. But some of them enjoys no such freedom, having produce, some of them don't, and It is not only the British economy committed herself to support Japan's though all are foreign companies, that has become flexible, but stand­ accession to the GATT. Moreover, their foreignness has many shades, ards of budgetary criticism as well. the more important obstacle to ad­ in the methods of raising finance, And the amazing thing is that Mr justment of import duty on the part among other things; Consider- Butler's latest budget can stand up of India—which is likely to be deci­ ing the complexity of the pro­ quite well to the criteria which, we sive—is not affected, of course, by blem, what should he the fair price air now told, is demode and absurd these developments, since this con­ in an industry with such a complex arid grotesque. Disraeli said nearly sists in the high rates of excise structure and world-wide ramifica- eighty years ago that the subtle duties, The clarification of Bri­ tions, it is no wonder that the Tariff poetry of the British budget is tain's stand vis-a-vis Japan strength­ Commission has been sleeping over rarely appreciated outside the House ens the bargaining power of the it all these years—-and what arrears of Commons, He apparently under- Board of Trade with other poten- it has to clear, for prices have to be estimated the propensity to change tial or prospective impoters of cot- looked into, in retrospect, from of the world outside Parliament! ton textiles, besides India 1946 onwards! .