Business: BRITAIN'S RESISTANCE TO PAINFUL CURES

TAX increases in Britain are imposed with guillotine-like dispatch. Disclosing few, if any, details in advance, the government presents the bad news in its annual budget and gets quick approval from a compliant Parliament. In what has become a national guessing game, Britons start hedge-buying weeks beforehand on goods and services that they expect to be hit by new taxes. They are urged on by shop-window posters that read "Beat the Budget." Because of Britain's economic difficulties, the guessing in recent years has been over where—not whether—the tax ax would fall.

Thus, few Britons were surprised when on Budget Day last week Chancellor of the Exchequer Roy Jenkins announced higher taxes and other austerity measures. This time, politics impelled Jenkins to go light on wage earners and to hit business heavily. Still, his prescription calls for much the same medicine that has so far proved ineffectual in curing Britain's ailing economy. Somewhat lamely, Jenkins told the House of Commons that the long-promised economic recovery "has been a good deal slower than we had hoped."

Britain's economy is considerably weaker than Jenkins admitted. Technically bankrupt, with foreign debts that greatly exceed its reserves of gold and foreign currencies, the country depends on international loans to support the pound. Sterling's devaluation 17 months ago was supposed to give Britain time to overcome its chronic trade deficit, the main source of its precarious financial condition. Instead, the country wound up with a 1968 trade deficit of $1.1 billion, and the red ink has continued to flow this year. Last week the Board of Trade reported a March trade deficit of $124.8 million, a disappointingly small improvement over the $ 153.6 million deficit of the month before.

Dallying Over Demand. Efforts to improve the trade picture have been bungled repeatedly by Harold Wilson's Labor government. After devaluation, Wilson dallied for months over steps to curb domestic demand, which was not only stoking inflation but sucking in imports that Britain could ill afford. The government belatedly imposed a record $2.3 billion of new taxes a year ago and subsequently put new restrictions on bank credit and installment purchases. All such restrictions reckoned without the canny determination of the British consumer, who ran up his personal debt and ran down his personal savings to get rid of his money before rising prices and taxes further reduced its value. Consumer spending, instead of declining 1.9% last year as the government had intended, rose by 1.2%. Wages also rose by 7% last year and prices by 6%, despite government efforts to control both. The government undermined its own wage-restraint policies by agreeing to a big raise for workers on the government-owned railways.