First of the Goodies

For 31 years, British tourists, never exactly spendthrifts, have been regarded as Europe's poor relations. In an effort to cut Britain's trade deficit the Labor government limited them to taking no more than -L-50 ($120) in foreign currency abroad annually. In a surprise move last week, however, the government abolished the limit. From now on, British travelers will be able to spend -L-300 per trip and take as many trips each year as they wish.

The announcement by Chancellor of the Exchequer Roy Jenkins followed a spate of encouraging indicators. After running a $600 million trade deficit in 1968, Britain last year piled up an estimated $1 billion surplus. Reflecting a return of international confidence in sterling, monetary traders last week bid the pound above par--which is $2.40 --for the first time in 20 months.

Plainly, Labor's draconian economic measures are finally beginning to pay off. Beginning in the summer of 1966, Prime Minister Harold Wilson put Britain under severe financial controls which included a wage-price freeze, higher income taxes and a tightening of credit. In November 1967, he devalued the pound by 14.3%. His aim was to reduce consumer demand at home while coaxing industry to sell more abroad.

After the travel restrictions were ended, London's Financial Times headlined its editorial: THE FIRST OF THE GOODIES. Harold Wilson would undoubtedly like to hand out more, including an easing of restrictions on installment buying. Trailing the Tories by 10.5% in the latest voter preference polls, the Labor Party sorely needs good news before the next general election, which Wilson may call in the fall. A boomlet would greatly enhance Labor's chances. Economic health would help Britain when it begins its admission talks with the Common Market around midyear.

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