Britain's New Dilemma
MARQUAND, DAVID
Britain s New Dilemma By David Marquand London As Beatrice Webb once observed, reputations rise and fall in the House of Commons like share prices in the Stock Exchange. Her observation applies...
...But while this helped the government get through a July which a tea room of computers would have found a good deal less reassuring than the Labor backbenchers did today, it poses a serious threat to the government—and ultimately to the tea room too...
...Since the beginning of this year, British politics have been dominated by the fever chart of the trade figures...
...The solid Right and Center trade-union MPs who congregate there have no love for the Left, and all their instincts are to defend their leaders from the attacks of the Left...
...While the role of the conference has greatly diminished since Gaitskell's time, it would be unwise to write it off altogether...
...Devaluation has given Britain the chance to escape at long last from the balance-of-payments straitjacket which has held back its economic growth for 15 years...
...The trouble, of course, is that a strictly economic point of view is of interest only to strict economists?not to voters or members of Parliament...
...When they are bad, the government's future seems hopeless...
...Their instinctive feeling is that something must be badly wrong when a Labor Government allows unemployment to rise or finds itself in conflict with the trade unions...
...Democratic politicians are not computers, however much the sillier sort of political scientist would like them to be...
...The second means that it will be under strong and increasing pressure to do just that...
...These are currently the two great flies in the government's ointment...
...A Conservative majority of 100 was certain...
...Their reactions are no more rational than anyone else's...
...The first means that it dare not stimulate the domestic economy this winter or relax its incomes policy by the slightest degree...
...if it does, additional imports will be sucked in and the elusive balance of payments surplus will recede still further into the future...
...Then came the June trade figures suggesting that Britain's balance of payments was at last beginning to move in the right direction, and the Basle agreements on the sterling balances suggesting that a speculative run on the pound had at last been ruled out...
...On the answer to it may depend, not only the fate of the government, but the fate of democratic socialism in Britain...
...On the other hand, they, more than any other section of the party, respond emotionally to the slogans of free collective bargaining and full employment...
...Early this summer, the censensus among politicians and political commentators was that Labor would be decimated at the next election...
...Indeed, the pressure has already begun...
...When a Labor Government deprives Kenyan Asians of their right to enter the country it annoys a few middle-class intellectuals...
...Since Britain can only achieve a high and sustained economic growth in the long run by earning a healthy surplus in the short, it follows that for the next few months the balance of payments must be given priority...
...The mass unemployment this country suffered between the wars bit deep...
...The only question about Opposition leader Ted Heath's arrival in Downing Street was when, not whether...
...What will the tea room do if unemployment reaches 700,000 or 750,000 this winter...
...It is also true that devaluation is beginning to work, and that even the most pessimistic commentators believe Britain will earn some surplus in 1969...
...When they show a slight improvement, the pendulum swings wildly to the opposite extreme...
...Hence the significance of the House of Commons tea room...
...Her observation applies to parties as well as to individuals—and never more so than in the nine months following the devaluation of sterling...
...Far more important than anything which happens at the party conference, however, is the development of opinion in the Parliamentary party...
...Even the by-election results and the poll figures indicated that the Government had finally turned the corner...
...Yet this is precisely what Prime Minister Harold Wilson will be pressed to do...
...This policy of economic Gaul-lism is...
...The Labor party, as a colleague of mine pointed out the other day, was born in the "Tabernacle...
...Full employment is a desirable principle: Postwar British governments have been right to make it the single most important imperative of economic policy...
...It was all rather like HiDavid Marquand , a Labor MP, contributes frequently to these pages...
...From a strictly economic point of view, therefore, the government has good cause to congratulate itself...
...The Government would be insane to embark on large-scale measures of domestic inflation at this point, They would not, in fact, make much difference to the unemployment figures this winter, but they undoubtedly would jeopardize the government's entire post-devaluation strategy just as it is beginning to show signs of success...
...one of 300 or perhaps 400 was well within the bounds of possibility...
...What matters in the tea room of the House of Commons—and it is the tea room that determines back-bench opinion in the Labor party—is yesterday's by-election result and tomorrow's poll finding, not next month's and certainly not next year's...
...This would be an act of economic lunacy, and in the end it would amount to political lunacy as well...
...and the corridors of the Palace of Westminster echo with sighs of relief from Labor backbenchers who imagine that they have been reprieved from political execution...
...laire Belloc's well-known lines: "The stocks were sold...
...and to escape the balance of payments catastrophe such a policy would involve by contracting out of the capitalist world altogether with a combination of import controls, exchange controls, investment controls, and the nationalization of privately owned foreign assets...
...in a way, the equivalent of the program of unilateral nuclear disarmament which almost tore the Labor party to pieces eight years ago, and which would have torn it to pieces but for the courage of the late Hugh Gaitskell...
...For there is now very little doubt that the euphoria on the Labor back benches at the end of July was wildly misplaced...
...It was the memory of prewar unemployment which swept Labor into power in 1945 and enabled it to keep its hold on the working-class electorate in 1950 and 1951...
...Ever since devaluation, the Left wing of the Labor party has been urging the government to allow the domestic economy to grow at a suicidal 6 per cent rate...
...And rightly so...
...the press was squared;/The middle class was quite prepared...
...And although devaluation is working, it is doing so much more slowly than the Government originally hoped, and at the cost of a much more substantial rise in unemployment...
...If a Labor GovHAROLD WILSON ernment threw away this chance, it would prove that Winston Churchill was right after all when he said that Labor is not fit to rule...
...Thus there are signs that the government will have a stormy passage at the annual party conference in October...
...Unemployment is a dirtier word in Britain than in any other industrialized country...
...The difficulty is that during the next few months the objective of full employment will be in conflict with the objective of a balance of payments surplus...
...That is now the crucial question...
...and the conference matters because it is the biggest tabernacle of all...
...Even after the Conservatives returned to power in 1951, the slogan of full employment remained the most potent of all Labor's rallying cries...
...All of which is hopelessly unscientific—and reassuringly human...
...As the Parliamentary recess was about to begin at the end of July, morale on the Labor back benches was higher than it had been for 18 months...
...So far, the Left-wing approach has cut little ice in the Parliamentary Labor party...
...it left a scar akin to that left by the Hungry Forties in Southern Ireland, or by the Reconstruction Era in Georgia and Alabama...
...to abandon statutory controls over prices and incomes...
...It is perfectly true that the Basle agreements have enormously reduced the chances for the kind of purely speculative run on sterling that finally forced the Government to devalue last November...
...It received a parting boost when the Conservatives funked the opportunity of holding the wide-ranging economic debate that normally takes place in Opposition time just before the House rises for the summer...
...It has won some support in the trade unions, though, and it has probably won even more in the constituency parties...
...When it appears to depart from the principle of full employment it thrusts a dagger into its own entrails...
Vol. 51 • September 1968 • No. 17
