THE Tories go to their annual party conference this October uncertain for the first time in ten years and more than a little rebellious. Some have been openly rebellious over the Common Market; almost all still have some anxiety, knowing now that the momentous question is no longer whether Britain should join the Common Market, but whether, on its own conditions, it can.
Others are anxious about the swift hand-over of control in Africa to Africans in areas where societies are multiracial. Most suspect that their government’s policy of monetary restraint will fail to solve what is a different kind of crisis, yet are far from united on what the next step should be.
Prime Minister Harold Macmillan finished the summer parliamentary session with authority, but seemed tired. He had admitted that his historic hope that Britain would “join Europe” is still a hope rather than a decision, despite the vote in Parliament; he had taken tough measures to defend the pound; he had left no doubts as to the government’s firmness on Berlin. Yet he had not united the party or rallied the nation.
Gaitskell. in contrast, rebuffed last year by his own conference, has re-established his authority. He is certain to turn the tables on the proponents of unilateral disarmament at his own conference. Should the Tories be jostled or driven into an early election, lie has an even chance again of being the next Prime Minister.
The strange thing is that the Labor Party is no less divided than the Conservative. The unilateralists prove to lie also the isolationists, man for man, in regard to the Common Market. The leadership’s Common Market policy is: “Perhaps, if it is possible.” And, in spite of the polls, the party is still without a popular economic program.
The Trades Union Congress, meanwhile, fights on two fronts, against the government over wages and against its Communists over their infiltration of its ranks. The T.U.G. fears that entry into the Common Market will abruptly halt the forward march of wages, the issue of the moment, and its attitude receives inevitable support from the unwanted Communists.
The country at large is in a mood for leadership. Macmillan has been inhibited by his memories from claiming as much as he might for his moves into Europe. His way requires great changes in the European Economic Community itself. Channels to the Commonwealth that the E.E.C. has kept closed will have to be opened. Macmillan’s Common Market also would contain 300 million people instead of 160 million. He might well be charged with trying to dilute it, as he was in 1958. Otherwise, this could be a great unifying cause.
The economic crisis
The economic crisis the country is now living through is partly caused by another wage inflation; last year the British were paid more than two pounds extra for every pound’s worth of extra production. It is partly a consequence of the sudden drying up of invisible exports, particularly of shipping and the profits from overseas investments. Net invisible income ten years ago was running at the usual rate of 300 million pounds; last year it was only 22 million pounds. The crisis is also a matter of prices, but most of ail it is a crisis of reputation.
Britain, once shipbuilder to the world, is now the biggest importer of ships. Its own exports are now less than half the size of Sweden’s. In the United States, where German cars have increased their market in competition with compact automobiles, British cars have lost almost two thirds of their market. These happenings alone tell most of the story. For firms and industries with high reputations for quality, skill, and dependability still have no difficulty whatever in selling their products.
Jaguar, among car firms, continues to experience steady expansion. General machinery exports are up by more than 50 million pounds so far this year, electrical equipment by 14 million pounds, airplanes and jet motors by 6 million pounds. The British average national income, at 360 pounds a year per capita, still is considerably higher than the French, Dutch, Belgian, Italian, or West German income. There are 400,000 known industrial vacancies, and fewer than 300,000 registered unemployed to fill them. This is certainly not a country going through a slump.
In the end, there can be only one way out of this crisis — a great national effort to increase Britain’s exports. Some 250 million additional pounds would avert danger, but 600 million pounds a year would be required to ensure success.
The need would seem to coincide with economic justice. The British arc coming to the conclusion that when poverty is overcome, simple justice lies in seeing that efficiency pays best.
Recipe for recovery
A majority program for British recovery would almost certainly include these ingredients: a gradual end to the subsidizing of inefficiency; a reform of company and private taxation to increase rewards for eiliciency; a design both to accommodate growth through financial policy and to keep the overall increase of incomes within that growth; more industrial competition in the home market; and plainly visible measures to put an end to an era in which, instead of efficiency, mere ownership of property, real and industrial, has paid most handsomely of all.
Selwyn Lloyd’s measures, beginning in his April budget with the raising, from $5600 to $14,000, of the level at which surtax is charged on top of the 37.5 per cent standard rate of tax on earned income, and ending with the application to join the Common Market, have to some extent conformed to this specification. But Lloyd seems to have made two serious mistakes. The lesser may have been to start freezing salaries in the field of education; the greater, to shuffle so very unwillingly toward a kind of capital gains tax.
Fhe Labor Party’s touchstone
A big, bold, definitive tax on unearned capital gains has become the touchstone of the Labor Party’s program. It is the only quid pro quo offered for the wage restraint which Labor, too, in private, acknowledges as essential.
Where the Labor Party’s program seems to go most obviously wrong is in its promise of a new attack on salary earners also. Indeed, Labor seems to be about to hit at all successful earners, whether companies or individuals. Ted Hill, boilermaker, a bit of a maverick but 1961 ‘s chairman of the T.U.C., has called surtax payers “the werewolves of society.” But if the dividends of growing industries are to be frozen and surtax reimposed on earners, how, then, is efficiency to pay? The Labor Party answers that the first thing is not to make efficiency pay but to encourage it by planning and controls.
Labor’s domestic program proposes a National Industrial Planning Board to “ensure speedy and purposive industrial investment” and to “direct the industrial expansion to areas where labor is available.” Steel and transport would be renationalized. The state would buy controlling shares in several other industries. All building land would be bought out and publicly owned. Half-pay pensions would be introduced for all.
Communists in the unions
The program is silent on one of the questions that most immediately matter to Britain, the relation of pay to productivity. Where Labor is silent, the politically insignificant Communist Party is loud. Its energetic support for increases of pay, earned or not, is going to be particularly embarrassing this winter.
After a long court battle before Mr. Justice Winn, five leading officers of the Electrical Trades Union, including the president, Frank Foulkes, and the general secretary, Frank Maxell, were this summer found to have rigged the union ballot to get Maxell elected. Anti-Communist John Byrne, defeated candidate, was declared by the court the proper general secretary. The union leadership cynically passed a series of special rules to render Byrne ineffective, for which action they were investigated by the T.U.C. The Labor Party then had no alternative but to move in and order die E.T.U. to prove itself non-Communist or suffer expulsion from the Labor movement. After all, one was reminded, the Communist Party is officially proscribed by Labor. Most people had forgotten this.
In other unions the Communists are content to exercise control, if they can, from below. In the London docks, for instance, they can call a strike almost any time there is a grievance, whatever the T.U.C. or the Labor Party or any court may say about it.
A cheerful cockney Communist, aptly named Jack Dash, heads tlie Port Workers Liaison Committee. This is an entirely unofficial but totally effective body. Here in the docks the Communists have taken advantage of the administrative setup organized by Ernest Bcvin. Nowadays the London clocks are run by a. board representing both employers and Bevin’s Transport and General Workers Union, led by Frank Cousins. When there is a grievance resulting from an agreed order, Cousins’ men on the spot are powerless to support the men with the grievance, for they cannot whip up opposition to an order signed by headquarters. But Jack Dash can, and he does. Because of wildcat strikers, about a hundred firms have ceased to ship through the port of London in the past two years.
Communists also have influence in the Shop Stewards Movement. Shop stewards represent the union men in any particular factory shop on day-to-day issues. These, of course, are what spark wildcat strikes, rather than national issues. Communists are particularly strong in the car industry, at airports and seaports, and in shipbuilding.
The wage issue
The coming confrontation over wages, which seems inevitable following Selwyn Lloyd’s ill-prepared demand for a “wage pause,”has a climactic air. Big new wage claims have been made by engineering and shipbuilding workers, farmworkers, railwaymen, miners, the electric power industry, post office engineers, professional civil servants, and, of course, teachers. The professional men sound as adamant as the wage earners about getting what they demand. The government itself can say no to all except the engineering and shipbuilding workers.
Taken to the limit, this clash could produce an economic crisis in the old sense, with unemployment and distress. A further wage inflation would be disastrous. But if it is resisted by the government, postponed in response to the pressure of public opinion, or called off out of a growj ing sense of union responsibility, the result might well be a belter understanding of the natural wage-priceprod activity-prosperity equation.
In this connection, it is not entirely impossible that a revolution that has come to British soccer football in this past year may have an influence. Soccer is the great British game. Until this year, the economics of the game in Britain has been based on the solid trade-union theory that all players are equal.
British footballers, throughout the past, have been bound by their clubs. The clubs might or might not transfer them to other clubs, lor sums up to 60,000 pounds, ol which the players themselves had no share. Their wage was the same for all-stars and extras — S56 a week. Managements pointed out that, after all, this is a team game. Spectators, brought up from youth with a healthy respect for the concept of wage equality, rather agreed with the management.
Possibly the poaching of the topmost British stars by Italian clubs, willing to pay them Si50 a week and up and to give them a substantial part of the transfer lees, which reach 300,000 pounds, broke this united front. 1 he situation deteriorated so fast that Britain could have become a nation of second-rate teams.
A new agreement was reluctantly signed. It is not yet considered satisfactory by the players. But, on many a ground this year, star players will take the field paid two or three times as much as their teammates on account of their extra skill or their drawing power with audiences. And first-rate football can still be enjoyed by the spectators. I he football game is not as portentous as a union meeting. but it is much nearer home.