Faltering Boom

Sir Anthony Eden called eleven members of his Tory Cabinet back from vacation for a special session last week. The main speaker was Chancellor of the Exchequer Richard A. Butler, and his topic was trouble.

"Rab" Butler's bad news was that the British boom is faltering. Production is higher than it has ever been, but consumption is higher still, and the island is not paying its way. The evidence, as Butler laid it before the Cabinet:

P: An adverse trade balance of $1.5 billion during the first seven months of 1955. Exports are up 4%, imports are up 14%.

P: Persistent labor troubles (rail, dock and coal strikes), which cost Britain 2,000,000 working days in the first five months of 1955, compared with 600,000 in the same period last year.

P: Dwindling coal production (down 3,000,000 tons over the same period of 1954) and a $12.6 million deficit for the National Coal Board in the first quarter of the year.

At the root of Butler's troubles is inflation--the result of overspending by both the people and the government, which is pushing a huge Tory investment program in roads, railroads and atomic power, while maintaining the expensive Socialist benefits of the Welfare State. Many British products are being priced out of the export market: German Volkswagen are pushing British light cars off U.S. and Swedish roads; Indian and Japanese textiles are flooding former British markets, not only throughout Asia, but in Lancashire itself.

Chancellor Butler was still hopeful that the inflation could be checked by his recent restrictions on credit and installment buying (TIME. March 7). But the new Eden government has so far had little success in settling labor disputes, and the National Coal Board has been forced to back down in its attempt to bring in Italians to help Britain mine its own coal. "There is no traditional background for the employment of foreigners," huffed the insular National Union of Mine Workers.

While Butler and Eden discussed present and future dangers, millions of their countrymen lay on the beaches in the rare August sunshine, enjoying the highest standard of living in British history.

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