IN GREAT BRITAIN the most striking thing about the beginning of the new decade is its incredibly liberal air. For instance, the Tory Party, the traditional party of empire, is now anxiously and urgently seeking what must be a liberal solution to the remaining problems of colonial Central Africa. What makes liberality imperative is the likely impact on the whole of Africa of the emergence later this year of Nigeria as an independent native African state of 20 million people.
Furthermore, this traditionally protectionist party, in charge of a highly protected state, secure in an unprecedented third term and an unequaled prosperity, with trade in surplus and the nation‘s output up 9 per cent in a year, is driving or being driven toward free trade.
The height of Britain’s tariff wall has been the forgotten, and has emerged now as the dominant, factor in the situation. Britain’s tariff against foreign cars, for example, in theory is three times as high as America‘s, and in practice, because the sales tax is charged on the tariff as well as on the price of the car, is four and a half times as high. When the Common Market‘s common tariff comes into operation, Britain will have the highest “most favored nation” tariff of all the large European countries.
Public discussions of differences between the Six and the Seven — between France and Germany‘s Common Market and Britain‘s Free Trade Association — have in the past largely centered around Britain’s Commonwealth preferences. Now, with the changed world situation, the chief advantage Britain could gain out of an all-European union on its own terms would not be these preferences but the right to maintain higher barriers than others against competition from outside Europe.
This is a situation that is unlikely to last. Britain will have to alter the terms it offers France and Germany for association and the United States for partnership. France dug in its heels even before this became apparent. Now De Gaulle and Adenauer have joined to make the Common Market, excluding Britain, irreversible. Their aims are political. To them the Seven appear either as a diversion or a threat. The best they are willing to do economically, if Britain will not join them, is to go toward a further general liberalization of trade, through GATT (General Agreement on Tariffs and Trade).
This attitude intensifies the challenge to Britain to reconsider its own tariffs. Formation of the Seven — Britain, Scandinavia, Switzerland, Austria, and Portugal — was intended to make it easier to build a bridge between the two parts of free Europe. Some kind of bridge is even more important to the rest of the Seven than to Britain. Almost half their foreign trade is with the Common Market, and if there is no bridge, they will have to trade over a tariff. Britain‘s own high tariffs could be the price of a bridge for the others.
Britain relaxes quota restrictions
The apparently inexorable pressure toward a greater liberalism is increased by the sudden disappearance of the dollar gap. The British were for a long time perplexed by America’s lack of enthusiasm for the European Free Trade Area. Now that they have a dollar surplus, they understand better.
Besides, Heathcoat Amory has been urging the reduction of British prices. His policy therefore demands fresh competition. If wages rise, imports will be necessary to mop up the extra money and reduce the risks of inflation. At Stockholm, Amory was chaffed by a French observer: “Mr. Chancellor, it is easy to lower your barriers against small countries like Denmark. Are you really prepared to do the same for the big ones?” Amory looked astounded and rather hurt. “Of course,” he said, “of course.” What was first seen as virtue has assumed the characteristics of necessity.
Britain only recently freed almost all United States goods from quota restrictions. It now seems that there may be quite a market for American textiles, women’s fashions, Polaroid cameras, optical instruments, refrigerating and air-conditioning plants, and fresh salmon in Britain, even across the high tariff barrier. If British tariffs too were lowered, America’s compact cars would come within the range of the British purse. A trade balance could again be restored.
The new prosperity
The British purse is stouter than it has ever been before. Taxes now take a fraction under 30 per cent, instead of over 40 per cent, of national income. This actually gives the British a slight edge over both the Germans and the French (at 33 per cent). In the standard-of-living league, Britain is among the leaders, second among European countries in the number of cars per 1000 population (72) and sixth in the world rankings; first in Europe in television; third in radios.
There are British millionaires again. If you want to live in the polished quiet of St. James’ Place, between the Ritz and the dark-red Tudor palace, you can buy the lease of one of the new apartments overlooking Green Park. The flat will cost you, in addition to the original high price of the lease, $6000 a year for ground rent, taxes, service. And, to get such an apartment, you will need to be quick. Demand is brisk.
There are more boys at the expensive public (private) schools than ever before. Eton, this term, has a record number of pupils — 1191.
And there are two interesting new aspects to this prosperity. The first is that it marks a dramatic change from old basic industries to new. Coal is no longer basic to Britain. Even shipbuilding may not be in a few years. The truly basic industry is the automobile industry, now producing at the rate originally scheduled for 1962. Its companion industries are chemicals and kitchen gadgets.
The second new thing is the cheerful assumption that prosperity is permanent. It is now generally believed that the cold War in its familiar form is over; henceforth it will assume the shape of economic competition. This produces few qualms in a country that knows it is rich and believes it is going to be richer.
Heresy in the Labor Party
Ironically, it is the assumption of permanent prosperity that has been mostly responsible not only for the defeat of the Labor Party in the election but for its irreparable division ever since. Hugh Gaitskell himself can see no great slump ahead. Labor, he says, must learn to live with widespread wealth. If it seeks power, it must stake a claim to improve prosperity and to control it. In a particularly courageous speech to the annual party congress, Gaitskell urged the ruthless excision from the Labor Party’s constitution of Article 4, “Nationalization of the means of production, distribution and exchange.” For him this is irrelevant now. Socialism is about progress, order, and justice, not nationalization.
But for Aneurin Bevan, for Party Chairman Barbara Castle, for the ambitious trade-unionist Frank Cousins, and for the vocal Michael Foot, this is heresy. Bevan probably stands beside, although not behind, Gaitskell now only for tactical reasons. Harold Wilson stands alone, waiting. For, to the left, nationalization is not just the means to economic justice. It is economic justice. Nationalization is the essential factor, without which, according to the dogma, the end cannot be achieved.
There have always been these two distinct threads in the weave of British socialism. At Blackpool, at the post-election party congress last year, they parted. In their hearts, all Laborites know the same past pattern can never be repeated, the threads never joined again, at least while Britain is prosperous. Poverty was the twist holding them together.
This is the realization that spurs Jo Grimmond, leader of a Liberal Party at present so small that it can caucus in a taxi on the way home, to make his vigorous bids for the formation of a new, combined Progressive Party, leaving the Marxists out on a limb. And his urgings may seem to reflect the mood of almost half the electorate. But there is one snag. The liberal element of Labor still believes wholeheartedly in planning. The Liberals believe in free enterprise, with as little government interference as possible, consistent with justice. These two cannot easily join ranks.
One way or another, if any strong single opposition party is to emerge, one of the groups has got to change its mind. This may sound most unlikely, even in politics. Yet it could happen. It all depends on whether or not British prosperity is as permanent as they say.
Slowdown in investment
The one worrisome factor about Britain’s expansion is that private investment in industry is scarcely rising. The most dangerous factor of all for Britain in the economic division of Europe is that both internal and external investment could be increased in the Common Market at Britain’s expense. American investment is already increasing more rapidly in the Common Market than in Britain or in the Seven. Outside of Britain, there are no internal sources of investment in the Seven. And next year, perhaps, while the Seven are shopping less successfully for capital, the gradually increasing effect of a tariff barrier against them in Europe could further slow down their rate of expansion.
Failure to solve this problem could produce, temporarily, the conditions necessary for the reuniting of the divided leaders of British Labor. It could bring another credit squeeze, deflation, and possibly recession. Expansion is vital for Macmillan.
Liquidation of the empire
Equally important for the government will be its handling of Africa. The solution of the remaining colonial problem there is the cause that probably stirs the British people more than any other. The fourminute miler and television personality Christopher Chataway, with a compassion equal to his sense of publicity, made the main point of his maiden speech in the Commons a demand for a ban on test cricket games with the national South Africa eleven until Negro players can be included.
The African standard of liberality ascends geographically in measured steps from south to north. Uncomfortably in the middle is Nyasaland, an essentially black territory, a colony with its native leaders imprisoned as a result of an “emergency” declared last year. To the south of Nyasaland are the Rhodesias, to which Nyasaland is federated against its will for a trial period, with Southern Rhodesia strongly attracted to South Africa and apartheid and Northern Rhodesia unwilling to stand alone.
To the north are Tanganyika and Kenya. Tanganyika is about to organize a partnership government with settlers represented but African natives holding the dominant position. Kenya, its Mau Mau terror abated, is at last allowing native farmers into the white highlands. And further still to the north are Ghana, already sovereign and black, and Nigeria, much larger than Ghana.
Labor, suspicious that the Government is ready to face another grubby colonial war to appease the Rhodesias and to insist at any price on the maintenance of the federation, has refused to serve on a royal commission to probe the problem. But the man who has to solve it is Iain Macleod, former Minister of Labor and a genuinely liberal Conservative.
Macleod’s political future, and to a considerable extent, Macmillan’s future, too, may depend on finding a solution to the problem of partnership between blacks and whites in Central Africa. It can only be found through the discovery of a new formula for partnership. Without that there would be the probability of turning Central Africa into Britain’s Algeria. But everybody in Britain knows now that the colonial era is finally over. And most are proud of it.