GREAT BRITAIN has reached a political watershed. Exactly what lies on the further side of the frontier cannot be told until the two major party conferences in October, but, in general, a great deal is already clear. The next British government is likely to be predominantly young and predominantly middle-class. The House of Lords will certainly change its character, for peers will be able to give up their titles to become “life commoners.” Finally, the next British government could well come to power on the rising tide of an “economic miracle.” Both major parties therefore must find a new philosophy of affluence.

Both also have to seek a way to restore the moral fiber of a rather shaken and uncertain nation. Many commentators have seen this as essentially a challenge to the upper levels of the British class structure. Class is certainly involved, but the moral and security risks uncovered have in fact been produced by the middle classes — Nunn May, Burgess, MacLean, Philby, Blake, and Vassall among the spies, and the dolce vita set surrounding the Profumo case among the rakes.

The challenge is obviously accentuated by the possibility of a British economic miracle, which is bound to affect political fortunes. Were an election held now, the Labor Party would win by a landslide. But the Conservatives have a full year in which to hold elections. A Labor Party with few outstanding figures in it could, in a year’s time, find itself in a boom, facing a new and more vigorous Tory administration filled with household names. It was this possibility that gave whatever power it had to the initial revolt against Macmillan, which otherwise was small in scale and leaderless. It was this possibility too that simultaneously produced the surge to Reginald Maudling, strengthened the support that already existed for R. A. Butler, and increased Macmillan’s determination to stay on.

Tory favorites

Maudling is forty-six years old, large, affable, easygoing, and intelligent. His career upward seemed to have been brought to an abrupt halt by the failure of the Free Trade Area negotiations in 1958. Last year he was elevated by Macmillan to the control of the Treasury in the government reshuffle that increased to fifty-five out of ninety the number of senior and junior officeholders under the age of fifty. In his new capacity Maudling has shown a cautious but intelligent attitude toward expansion. The economic tide has been running for him, and he has not had to struggle to make headway. His political youth, however, while an attraction, since Labor’s Harold Wilson is about the same age, could result in handicapping him. If he were nominated leader of the Conservatives now, he could have twenty years in the post, and would find it increasingly difficult to resist the swing of the electoral pendulum.

Butler’s assets have been these. He is sixty years old, the “right” age. He is a considerable political philosopher. He was a good Chancellor of the Exchequer for almost four years, up to 1955. He might have been Prime Minister instead of Macmillan, and very nearly was. He has a tremendous capacity for hard work. His drawbacks have been his sleepy public air and his extraordinary syntax

he once said Eden “is the best Prime Minister we have.” It is sometimes difficult to tell what he means, and he is not exciting.

The same cannot be said of the man who has been the third favorite, Lord Hailsham. As soon as the House of Lords bill was announced it was assumed that he would descend at the first available opportunity to what is still called the Lower House, and as Mr. Quintin Hogg, make his volatile presence felt as a contender for the highest offices. Hogg is fifty-five years old. He says what he thinks so fiercely and frequently that he has been called “a man who goes off at half cock.”

Iain Macleod, forty-nine, who had some supporters, fell back as a result of his inadequate handling of the Profumo affair when he wound up the debate for Macmillan. Edward Heath, fortyseven, a man with a host of friends and a great reputation from the Common Market negotiations, has never held high office.

Macmillan has long been convinced that, if he could ride out “the storm in the MI-5 teacup,” he could put the party back on the road to victory as, with Britain’s role again emphasized in the Moscow test-ban talks, confidence returned with prosperity. Many of the issues will be fought over at the Conservative Party conference at Blackpool next month, when the need to project a new and vigorous party image will become irresistible. But even then the question of whether or not a lame-duck government will become a dead-duck government may depend on whether there demonstrably is to be a British economic miracle, and if so, what kind.

Economic miracle

Essentially, the reason for expecting an an economic recovery is this: The trend of exports is seen to be related to the trend of relative prices more than to any other single factor. Between 1953 and 1961, for instance, the export prices of Italy and Japan fell 21 and 9 percent respectively, The quantities of their exports rose 345 percent and 290 percent. French prices fell one percent; French exports rose 111 percent. British prices rose 14 percent, its exports only 32 percent. American export prices rose 20 percent, exports 33 percent. Now, however, Britain appears to be entering a period of relative price advantage.

Internal prices in the European Common Market are rising very rapidly, from 5 to 8 percent per annum. European employment is full. Demand is very high and is increasing. European imports are also increasing. Last year, in spite of the turn of European tariffs against it, Britain increased its exports to the Common Market by 18 percent. If further gains are made this year, the United States will also benefit, but probably not to the extent of Britain, for 40 percent of America’s exports are agricultural, where the chances of increase are slight. One hundred percent of Britain’s are industrial.

The upturn of commodity prices is likely to put more buying power into the hands of countries in the overseas sterling area. Continued recovery in America should help still further the balance of payments, which is slightly in surplus at the moment. Net income from invisibles like insurance, banking, tourism, shipping, and oil is increasing. So it is not surprising that even at the height of the Profumo scandal, when in any other circumstances the pound would have plummeted, there was scarcely a tremor on the exchanges.

At home, the pace of inflationary wage increases has declined steadily since 1960. During the past two years, taxes have been gently reduced, the interest rate lowered, bank loans increased. House mortgages are at a record level. Car output has increased 22 percent in a year. Unemployment is higher than has been normal — at half a million in the summer — and productive investment has not yet picked up, but the possibilities for a continued advance to new high levels of general prosperity are greater than for many years past.

Labor’s image

All this could mean that the Labor Party must change its image. Labor has gained greatly from midterm disenchantment with the government, and later from policy failures in Europe and Africa, and finally from scandal, but it has lost elections before in good economic times to the Tory slogan, “Don’t let Labor ruin it.” And Labor has to face the inescapable fact that in Britain a dedication to socialism is not an electoral asset, a situation which the security scandals and the continuing story of the Berlin wall have served to confirm.

Harold Wilson, although supposedly much to the left of Gaitskell, is not a Marxist. An opponent famous and feared for his use of the dagger of wit, Wilson as leader appears to be turning himself into a quiet, pipe-puffing, serious, levelheaded, down-to-earth sort of man. He has confirmed the place in the hallowed Labor constitution of Clause Four (nationalization of the means of production, distribution, and exchange), which Gaitskell repudiated once unwisely, yet at the same time has managed to convince people outside the party that nationalization is no longer a serious part of the Labor program. Labor, he suggests, is empirical. It stands for planning that will combine more rapid economic expansion with more manifest social justice. Such planning cannot be static but must change as conditions change.

Unions and wages

The proper relationship between wage increases and productivity is now so obviously a prime factor in sustained growth that the Labor Party must add this plank to its platform. Almost every union has a program for increased wages and a fortyor thirty-five-hour week irrespective of productivity. Some are still led by rumbustious old-fashioned types like Ted Hill of the Boilermakers’ Society, who sounds as if he believes fiercely in the class war and urges that British shipowners should be forced to build ships in England without regard to costs, for the maximum benefit of boilermakers.

The unions have refused to join the National Income Commission, formed to guide and comment upon wage increases. They have, however, joined the National Economic Development Council, which also includes representatives of government, industry, and the universities. And Ned, as it is called, did have the courage to point out in a recent report that, if money wages are held below the growth rate, real wages can rise at double the rate achieved in the past fifty years.

Now the Council’s future is uncertain. The unions see its value as a voluntary and independent but influential body outside the government, because it could break the virtually absolute civil service control of planning through the Treasury. For that reason the Treasury would probably like to absorb Ned. But a third, forgotten factor in the political equation may give the Council an opportunity to assert its independence and enhance its prestige.

New industries make jobs

That factor is the geographical unevenness that will show up in Britain’s gradual recovery. Prosperity seems like a tide that can quickly flood southern and midland England but becomes shallower as it spreads west and north. Areas at the extremes of these islands could again be left high and dry.

While this is clearly a problem for planning, it does not appear fully susceptible to slide-rule or monetary planning, or even to direct control of the location of new investment. Scotland, for example, is surging with new industrial activity, much of it directed there. It now has a car industry: British Motors has a commercial-vehicle factory at Bathgate, and Rootes is producing the “Imp" small car, Scotland’s first automobile for thirty-three years, at Linwood. A $50 million pulp and paper mill is to be built at Fort William. New light-industry towns are being completed, like East Kilbride near Glasgow, planned for 70,000 people. But in its latest report the Scottish Development Department declares that short-term employment prospects are not reassuring, and that in spite of continuous migration from Scotland at the rate of 25,000 a year. The Scottish economy is “out of balance with modern market requirements.”

Figures issued recently for Wales indicate what these modern market requirements for full employment may be. Jobs in the thousands have disappeared from Wales in national government posts (minus 35 percent), farming (minus 31 percent), shipbuilding (minus 22 percent), mining (minus 11 percent). Jobs have increased in metal manufacture (plus 5 percent), distribution (plus 13 percent), local government (plus 14 percent), general manufacturing (plus 24 percent), office work (plus 25 percent), and utilities (plus 51 percent).

The pull of London and the south of England is mainly the pull of government, commerce, research, and education. Therefore, the unemployment problem of the future cannot be overcome without a considerable devolution of political power, for that power is the magnet which draws close the major trading houses, the major financiers, almost all the science-based industries, and most of the best-trained and most highly educated men and women.

New prosperity is thus likely to accentuate the challenge to orthodox planning. And a population explosion that has just begun could greatly intensify it. By the year 2000 the population of the United Kingdom could exceed seventy million.