London

WHAT is happening in Great Britain is not far short of revolution. It is a painful, bewildering, disturbing, and yet hopeful process. Harold Wilson is changing the Labor Party from a socialist to a radical party, from a worker’s to a technocrat’s party. Edward Heath is seeking a new “Tory radicalism.”And all this is happening at a time of high prosperity and yet grave economic peril, when the strength of most of the old British social and political values seems to have abruptly petered out.

Wilson is the toughest parliamentary operator since Churchill. With a majority wavering between four and one, he has forced through sixtyfive major bills in a single session. He has also performed major surgery on Britain’s tax system.

Heath leads a Tory triumvirate of thoroughly professional politicians—himself, Reginald Maudling, and Iain Macleod. These three joined Parliament together in 1951. All were members of the One Nation Group, a radicalTory ginger group of the time. None is a member of “the Eton and Oxford brigade,” although all three are first-class scholars. They are distinctly middle-class, and the country has the impression that Heath, who calls himself a working-class product, was chosen as titular leader largely because he is more distinctly middle-class than the other two.

A time for professionals

Like Wilson, Heath too is a professional politician. Unlike Wilson, he is not an economist. Nor is he a wit. But he has a transistorized mind; he can select pertinent detail from a mass of information with remarkable speed and produce decisions from it with machinelike consistency.

As events have proved, for all these men — indeed, for all politicians now — the major problem can be simply stated: how to put Britain on a paying basis. And how to make it pay in a world of instant know-how, of computerized efficiency, of global industry, of social and class uniformity, without an empire (without even, in an economic sense, a commonwealth), and outside Europe. This question overrides all others and tends to make a nonsense out of party dogmas.

So rapidly has the context changed that it already seems almost incredible that it was not until this year that the Tories actually elected their political leader, that right up to 1965 they always had him selected for them by a secret and indefinable process and usually from a narrow coterie of great families, great landowners, and people of great wealth orbiting the throne.

But then, until only two or three years ago even the captains of the big-league cricket teams in England had to be members of the Establishment, and unpaid. What has finally ended this year is the Age of the Amateur — which, it should be acknowledged, gave Britain many great and gifted men and a valuable heritage of culture.

However, nobody has any doubts anymore: this is undeniably a time for professionals. The parliamentary system itself is under attack as amateur and irrelevant. The old party dogmas are suspect. Britain’s problem today is seen as largely one of management. The British are taking the politics out of politics. The major questions are these: how to increase the nation’s efficiency, how to stabilize costs, how to increase profits, how to boost productivity, how to improve quality. Thus the two party leaders operate as efficiency experts rather than as political philosophers.

Heath’s strategy is obvious. It is to persuade the electorate that the new Tories are the less political of the two major parties and the more managerial. Wilson’s major mistake — or possibly it has been simply his misfortune —has been that in making his own transition from socialist to managerial leader he has had to give too many hostages to the left. These have exacerbated the crisis.

Against capital gains

Chancellor of the Exchequer James Callaghan’s reform of the tax system, for instance, has not simplified it, but has made it vastly more complex. What could be worse, his tax reform appears to be based upon the old-fashioned socialist principle that the shareholder is functionless. It is seen therefore as an attack on investment.

A capital gains tax at 30 percent does not sound too harsh perhaps, particularly if the wealthy have been making hay in seemingly endless golden summers with no gains tax at all to cloud their days. But gains made within twelve months are first taxed at 41.25 percent or higher, depending on income. And the longer-term 30 percent tax is a flatrate tax on all gains by all people with no allowances whatsoever. The new corporation tax is specifically intended to cause firms to cut dividends and to plow back more capital instead. It discriminates quite harshly against overseas investment.

Lord Robbins (Lionel Robbins), Britain’s most respected senior economist and a colleague of Keynes’s at Bretton Woods, has spoken eloquently against the new capital gains tax on both individuals and corporations. The investor, in a period of rising prices, is subjected to an additional capital levy because of the high incidence of the gains tax, he says. “I must say I think this is flagrantly unjust. . . . When one of the main desiderata is an increase in savings, it is also inexpedient.” Of the corporation tax, acknowledged by many as a good idea in itself, he adds, “It will be a bad thing for this country if ever it comes to be assumed that the payment of dividends is simply a ritual to keep the stock markets sweet.”

Stock market business in London has dropped considerably. The average income of brokers is thought to have fallen by about 60 percent. This does not worry nonbrokers. But overseas investment, often more profitable than investment at home, has also been heavily hit. Savings in general have fallen by more than 50 percent. The rise of industrial investment has stopped. To “save the pound” in these circumstances obviously requires a miracle.

Throughout the eleven months of Labor power there has indeed been a race between this miracle and catastrophe. British prices have increased in three months by 7 percent. It is impossible to run an inflation at such a pace, and at the same time, a world currency based on fixed exchange rates. By August every penny in Britain’s gold and convertible currency reserve of $2.75 billion was pledged in debt due for repayment within five years.

Labor has maintained all along, however, that it can work the miracle. It alone, it has been sure, can gain the confidence of the trade unions. It alone can achieve a smooth changeover to stability and prosperity by national, regional, and local planning. Through its new National Board for Prices and Incomes, it has already been able to ensure that no decisions to increase prices or wages can easily be taken in the future with no regard at all for increased output or efficiency.

The tide seems to have turned for the shipbuilding industry. Unemployment in Scotland has been halved. Industrial production in Northern Ireland is rising at 10 percent a year. The average of pay increases everywhere has been gradually falling. It is not yet down to the 3.5 percent guideline set by Economic Affairs Minister George R. Brown, but it has come down from 7 percent to 6.3 percent in May, to 6.1 percent in June, and to 5.5 percent in July.

Roads but no highways

It may be that behind the crisis, the movement that is essential to the breakthrough has already started. The British have certainly begun to question why it is that in a time when technology makes all men equal it still takes 170 men in Imperial Chemical Industries to turn out the same chemicals that 100 men produce at Du Pont; and 100 men in Coventry to produce as many cars as 80 in West Germany or maybe 65 in Detroit do.

Why, they ask, is it that only the British cannot afford new roads? Britain now has more cars per miles of road than any other country on earth. In England the figure is put at 49.5 vehicles per mile. This is more striking still when one knows that the British have more miles of road per square mile of area than anyone else, if you use the term “road” loosely. It is a statistical fact that there are in England three miles of road in every single square mile of the country.

The trouble is that most of the roads are lanes. Nowhere in the civilized world now — using that term, too, in a freewheeling way — are there fewer auto highways. The total of what the British call motorways is just 194 miles.

A body called the Roads Campaign Council lobbies for more highways, without success. The Labor road program has just been cut in half, at least for the duration of the crisis. The Roads Council bombards newspapers with facts, figures, and speeches. It organizes deputations of members of Parliament to the European Continent to study continental highways. Traffic congestion costs £530 million a year ($1.5 billion), it claims, deducting 2 percent from the potential gross national product.

British drivers certainly put up with conditions that few others would tolerate for long. Jams that are quite literally twenty-five miles long are regular occurrences on summer weekends. They can always be avoided, of course, by taking to the lanes. If you are, or have with you, a good map-reader, motoring in England can still be beautiful and uncrowded. But half the charm of lanes is that they don’t run straight.

It is an odd thing that the British produce such quantities of great racing drivers. In Jim Clark, Britain again has the world’s best, even possibly the greatest ever. But in their newspaper columns when they turn commentators, as they usually do, the great racing drivers find themselves more often than not explaining how to cope with roundabouts (traffic circles). Overpasses and underpasses are still rare.

The authorities have been experimenting with a “give way to traffic from the right” campaign at roundabouts. It has not been a total success. Theoretically, this would allow roundabouts to be emptying all the time. In practice, however, when traffic is heavy, either everybody gives way to everybody, in the polite British way, or nobody gives way to anybody (although still politely). The roundabouts seize up solid. The racing drivers advise their readers to get in the right lane and then get there firstest with the mostest.

No money in railroads

Another odd thing is the fact that Britain once upon a time had a foolproof system for enabling roadbuilding to keep pace with the increase in traffic. Taxes on cars and trucks were put into a special Road Fund. Alas, Churchill himself (Chancellor of the Exchequer from 1924 through 1929) raided the fund. He took the car taxes for the general revenue. They now about pay for the national health service, and the fund has been abolished.

One has to admit, of course, that Britain is a very small, narrow, crowded country. It does not have as much space for more roads as most others. This thought has led to the growth of a new group dedicated to the abolition of all railroads in Britain, the uprooting of the tracks, and the use of the roadbeds as automobile roads.

The group is called the Railway Conversion League. Masterminded by its founder, Brigadier T. J. Lloyd, an able army engineer now retired, the league can prove statistically that if the railroads were thus transformed into roads, they could make a profit. (As railways they currently lose $250 million a year.)

But Lord St. Davids, of the Inland Waterways Association, insists: “The only real answer to our transport problems is major inland waterways. As far as I can see in the future of Britain, waterways are the only sense that can be found.”

Fond as the British are of messing about in boats, even the longest traffic jam has vet to convince motorists that boats are really the answer. It more and more looks as if some modern version of the road fund that Churchill raided is required, so that extra traffic will provide extra money for roads and that the economic cost of road traffic can be fully met.

The task, in short, is to modernize and rationalize Britain. The chief goal of Britishers now is easier living; it is no longer a question of finding work or avoiding hunger.

Picture of America

For this reason —that the task is modernization — the work of the American Embassy in London probably needs modernizing too. The ambassador is ambassador to the Court of St. James’s, of course. But the court, in both the narrowest and widest senses, is losing its influence. Douglas-Home, one can assume, was the last nominee of the court to figure as Prime Minister of Great Britain. Every ambassador in London to some extent now feels that he is going with the wrong crowd, and is fettered by protocol.

David K. Bruce, one of the best U.S. diplomats, has had a great personal success, though he is little known to the public at large. The picture of America that the British have is projected to them mainly by the face and voice of President Lyndon B. Johnson himself.

There are ways of improving the U.S. impact. Why, one wonders, does the recurrent American exhibition in St. James’s have to be closed to the public and open only to those with cards of invitation? A permanent but changing American exhibition would be a considerable draw here. And one can make a strong case for arguing that Britain needs one.

The British are getting the feeling that the Americans arc losing interest in them. At the popular level, relations are not as close as they were only a little while ago.

Yet there is no denying that behind the scenes the American mission here has achieved considerable influence. Its members are gradually getting across a message that is apposite: that we are all liberals now, and that this takes most of the problems of the management of any advanced economy out of the realm of party political controversy. At the top levels the British and the Americans have established an unusually close and sympathetic understanding.