London
THE approach of fall finds Great Britain possessed with the problems of the inescapable boom. Inflation spirals inexorably on. So do rising standards of living for the great majority, hardship for some, production records for industry, sales records for exports, recurrent difficulties for the Treasury, and social changes that are blind.
The parties — Tory and Labor — are puzzled, and beneath the smooth words of their respective dogmas, quite uncertain. “Most of our people have never had it so good,”Macmillan declared in July, lapsing into slang. And this heartening fact is obvious to all who live or visit in London. Yet the polls, although they have recently reflected a slight upward trend in Tory support, consistently show a majority for Labor.
Malaya now joins Ghana among the new independent states of the Commonwealth. Yet the Commonwealth itself seems somehow less substantial. Everybody is sure what it is not; nobody seems sure what it is. To some nations, like Canada, the Queen of England is also their Queen. To others, like India, the Queen is simply Head of the Commonwealth. The second title has yet to be given significance.
Meanwhile Europe is closer to home. In recognition of this fact the government has now appointed a “Minister for Europe” in young Reginald Maudling, Paymaster General, who this fall will coördinate the many aspects, economic and political, of Britain’s plan for a Free Trade Area attached to the more central Western European Common Market. His appointment is a sign that Britain cannot afford to see a Common Market established from which it is completely excluded.
The British are not halfhearted in support of Canadian Prime Minister Diefenbaker’s proposal for a Commonwealth Economic Conference, probably in the spring of 1958, but they are afraid it may turn into a series of embarrassing requests for more capital from the Old Country. To finance Britain’s own expansion and at the same time, through a surplus of trade, finance also the development of former colonies — which costs £200 million a year — is likely to prove to be the great external problem facing the Treasury. The economic support of the Commonwealth is almost the same thing as the economic defense of the pound sterling as a world currency.
And yet, although these kinds of greatness may seem to be in the balance for Great Britain, the industrial strength of the country cannot be gainsaid. “Go around this country; go to the industrial towns; go to the farms,” Macmillan has advised doubters. “You will see a state of prosperity such as we have never had in my lifetime — nor indeed ever in the history of this country.”
GETTING PRODUCTION UP
A group of official economists has recently concluded that, other things being equal, there is likely to be a “normal” increase of output each year of between 3 1/2 and 4 per cent. In twelve years time the average wage could be £1000 a year (instead of £650). By the time George Orwell’s year, 1984, rolls round, the average standard of living may well have been doubled.
It is not yet clear whether inflation is a real threat to all this or simply an annoyance. Full employment has accompanied inflation for a decade. There is, at a pinch, always devaluation. But it is certainly clear that inflation is a threat to the government. Gerald Nabarro, M.P., a sometimes rebellious Tory, was speaking for more than the electors of Kidderminster when he said, “Everybody is fed up with dearer coal, electricity, gas, fares, freights, postage, and everything else. This is the Tory government’s last chance.”
Inflation has serious social repercussions. New inequalities are produced. The salaried middle class is squeezed until it hurts to the point of emigration. Less privileged wage earners, for instance from the British West Indies, are drawn into the country, bringing with them quite new problems.
In a country that is slowly growing old, there is the overriding problem of the old-age pensioners. There are now 4.7 million of them. They get two pounds a week, which is poverty. To raise this to three pounds would cost the country an extra £220 million a year. And there will be 7.6 million pensioners in 1984.
MORE FOR PENSIONERS?
The Tory answer, besides the continuance of monetary restraints, is a twofold hope. First, that the potential increase in productivity provided by two years of uninterrupted but unused investment made while output stagnated will be realized. Second, that the way ahead can be firmly and acceptably pointed out by an impartial tribunal or commission of inquiry, to be charged with an investigation of the relationships between output, wages, profits, and inflation.
This project has been called an abdication of government by some observers. But the support given to it by Lord Beveridge reminds one that twenty years ago the Beveridge Report, investigating social welfare, laid the foundations of an all-party agreement on the institution of the welfare state.
Labor’s practical, rather than theoretical, answer is a proposal for an immediate increase of one pound a week in pensions; half pay on retirement for every statistically average wage earner by the end of the century; and a national superannuation scheme for all with built-in safeguards against inflation (pensions rising automatically with prices and wages). The basic principle would be that of normal contributory insurance, but the state would also contribute the equivalent of 2 per cent of each person’s earnings to the insurance fund. The fund would be encouraged to invest its money in ordinary industrial shares.
This attractive-sounding scheme acknowledges that the state can no longer finance pensions wholly out of taxes. It declares that flat-rate or completely equal pensions are “the very opposite of social justice.”It means the socialist state would in future acquire an interest in seeing that private industry is profitable. Against it, opponents argue that because it would not be entirely funded it could itself prove inflationary, borrowing from tomorrow to pay today. And it could bring on “back-door nationalization” through the control of shares.
LABOR’S NEW PLATFORM
Control of industry, rather than outright nationalization, is the key to the new policy statement on public ownership by the Labor Party’s national executive. Renationalization of the steel industry, returned to private ownership by an earlier Tory Government, is pledged along with the completion of the nationalization of transport. All other previously nominated industries — cement, sugar, chemicals, engineering, shipbuilding — are reprieved unless “after inquiry they are found to be seriously failing the nation.”
Through the acquisition of share holdings, the Labor Party declares, industries could be either influenced or controlled. The community would also be guaranteed “the opportunity of participating in the almost automatic capital gains of industry.” An attack on “the purchase of privilege” by big companies for their executives — expense accounts, cars, meals, travel, free houses, companypaid chauffeurs, interest-free loans — is also promised. A code of conduct for big business “if need be would be given the force of law.”
Trade unionists, however, in and out of Parliament have attacked this policy statement, although it has been issued under the joint signatures of, among others, Hugh Gaitskell, Aneurin Bevan, Harold Wilson, and Ian Mikardo. In part this attack comes because to orthodox Socialists of the old school the new policy is clearly “a policy of retreat.” Where, they ask, is the march toward the nationalization of production, distribution, and exchange?
STRUGGLE AGAINST INFLATION
There does seem to be general agreement on one point: “If a nation pays itself 7 percent more for doing no more work, as happened last year, price increases will follow as night follows day,” as Peter Thorneycroft, the Chancellor of the Exchequer, put it. In four years the nation has paid itself 25 per cent more for 8 per cent more output. That realization haunts the nation. And from this background rises a new figure of power and importance — Frank Cousins, general secretary of the Transport and General Workers Union.
Cousins inherits the union that Ernest Bevin built, the largest in the country. Its members have been involved, officially or unofficially, in most of the strikes that have recently had wide publicity — the Covent Garden market porters, the provincial busmen, the dockers. And Cousins has recently issued his own terms to the Tory Government: no wage restraint without the imposition of socialist controls on profits, prices, and luxuries.
This is all for the good of the Labor cause, but it may be a significant fact that attention has been diverted from Sir Tom Williamson, chairman of the Trades Union Congress, and focused on Frank Cousins. When a Labor Government is in power, or looks as if it might come into power, the TUC must tag along, for in effect it is or is going to be part of the government. But individual unions still maintain the right to differ. The balance of power in the Labor Party between Gaitskell and Bevan may one day depend on which side Cousins chooses.
THE PATTERN OF DEFENSE
Uncertainty over defense policies also plagues both parties. The pattern of defense was irrevocably set when Clement Attlee decided that Britain must make the atom bomb. But Defense Minister Duncan Sandys’ ruthless paring of the Army to 160,000 men, all regulars, by 1962 has shaken more than the old guard. Will 160,000 be enough to fulfill Britain’s Atlantic commitments and also to provide the highly mobile striking force that is envisaged for possible “limited wars”?
Some British strategists are also asking whether there can be such things as limited wars any more. Did not Suez show that a limited war will soon break its limits and draw in more powerful outsiders? Does not Cyprus illustrate the difficulties of a limited army facing almost an entire population? And how limited, really, was Oman?
In Cyprus Britain has given up its claim that the island is vital to the Commonwealth for defense purposes. By this much the situation is clearer and easier. The difficulty now is the deepening division between the Greek and Turkish elements of the population, backed by their respective homelands.
In Oman, Britain went to the help of the Sultan to encourage the others in near-by British-protected oil sheikdoms like Kuwait and Bahrein. Once again the necessity for a proper Anglo-American understanding of aims and means in the Middle East was stressed. For Oman has uncovered the possibility of a clash between the new American interest in the Middle East, based on Saudi Arabia, and the remains of the old British interest, exemplified by the Sultan of Oman.
In spite of Washington denials, the British public remains half convinced that America is after British oil. The Daily Express notes that in ten years the proportions of holdings of Middle East oil have been almost reversed, Britain now owning but 27 per cent and America 51 per cent.