Britain Lowers Its Sights

...London has failed to retain a large pan of its short-term deposits from oil producing countries, and native capital investment has also slowed...

...An industrious entrepreneur in Northern England kept saying of his salaried compatriots: "They don' wanna wuk, that's the troobul...

...Most Britons seem apathetically resigned to whatever comes next...

...If this wins out, though, the European Community's best chance of ceasing to be an authoritarian technocracy will be lost for a few years at least...

...Things could not only be worse, they happen not to be all bad...

...the Britons who "don' wanna wuk" react by robbing these Stakhanovites...

...This economic leveling process has not reduced antagonisms between the classes, nor has it lessened analogous tribal enmities...

...Politically, Tories and Laborites remain locked in a cold civil war based on Britain's seemingly indestructible distinctions of class and tribe...

...RUSSELL WARREN HOWE, who frequently contributes to these pages, recently returned home for a visit...

...Crime is still manageable, the "botherboys" and "skinheads" of the '60s have mostly vanished from the streets, and trust in one's fellow person remains endemic...

...Another issue facing the Callaghan government concerns the Common Market...

...While the bill under consideration does not relinquish oil revenues, it delegates more local economic power than previously announced...

...High interest apparently did help Britain to keep its Nigerian sterling balances, despite threats of withdrawal when London refused to return General Yakubu Gowon to Lagos to face charges of complicity in a recent abortive coup d'etat...

...The two countries had to be covered by the same piece of legislation because neither could be put off until after the other without a rumpus...

...Foreign observers are struck by the absence of any sense of compromise between the two parties, divided more by emphasis than by ideology...

...How long will England stund for thut...

...A leading Scottish Nationalist MP, a cautious conservative, expects independence in four years: "In the next Hoosse, whoever wins, Labor or Tory, we'll hae the balance o' po-er," he says...

...A few weeks ago...

...Nevertheless, it opposes two-tiered interest rates designed to bring in foreign captal, apparently because it isn't sure a not so great Britain needs those sterling balances anyway...

...What about sterling parity...

...He hopes it will be enough to buy off Scottish nationalist sentiment, and that by the time of its passage their unemployment (nearly twice the British rate) will have eased...

...The eventual replacement of the British Army with a paramilitary force is as far into the future as Callaghan can visualize...

...an escapee from the Dartmoor maximum security prison got free gas for his stolen car by saying he had left his credit card at home, and free repairs for the faltering jalopy simply by showing an Automobile Association badge (the true owner got the bill...

...Callaghan believes it is essential to control public spending...

...Racial friction here is at least the equivalent of that in American cities, and the anti-immigrant feeling is probably as bad as in France or Holland (although public transportation and health facilities would virtually collapse without their black and brown employes...

...Their populations are the same (4 million), and Norway's oil-based economy pushed its per capita income ahead of America's last year...

...True, the salaries of union members and certain pension holders have kept pace with inflation, down from 30 per cent last year to 15.4 per cent (some unions have even come out ahead...

...A country of 56 million, unable to feed itself or sell enough exports, obviously cannot live on the delights of decadence, relaxation and thatched roofs alone...

...today, it jostles with the lira for last place in the major currency league and is, for the moment, a less reliable investment than the Spanish peseta...

...In any event, with its potential oil revenues and the hopes of becoming a banking nation, Scotland sees itself as another Norway...

...It's ridiculous," he complained...

...the 55,000 increase in 1975 was only managed thanks to 70,000 immigrants...

...This is particularly favored by Harold Lever, who, as "Chancellor of the Duchy of Lancaster"??minister without portfolio??is Callaghan's chief economic advisor...

...One iconoclastic minister told me: "It's better for us to borrow at more reasonable rates from foreign banks...

...Even its rejection by an alliance of hard-line Laborites and Tories would only fuel Scottish ire and increase the Nationalist vote...

...they were waiting for the vote that was to come at the end of a sparsely attended debate...

...One hears many stories of "Paks" (Pakistanis) who work 18-hour days with noble frenzy and take home bulging pay envelopes...

...They'll be glad to see us go, I'm thinking...

...But the sheer relaxed pleasantness of England is itself one factor in the country's current failure...

...Labor still takes pride in the fact that real poverty is limited to indigents and some pensioners, and satisfaction in the recognition of Europeans that Britain's civil service has remained one of the world's most competent...

...And we should simply abolish exchange control??it's expensive to monitor and counterproductive...

...Said another Cabinet member: "A planned economy doesn't have to be a monolithic thing...

...The only welcome economic development is that Britain has achieved zero population growth...

...We've got goovmint by insomniacs...

...In the words of one minister: "Let's face it??Britain's not finished, but we're just not going to do as well as the Frogs, the Jerries and the Japs...

...As a result of past concessions to unrest, Scotland has 71 MPs in Commons??more than its population justifies...

...Forced busing has effectually reinforced segregation by emptying some inner city areas of whites and creating ghettos of Asians and West Indians...

...Callaghan mourns the inflationist ambiance created by the more militant unions??the financers of the Labor party??and regrets that the British don't have the self-discipline of the Japanese...

...If he can thus keep inflation down, investors will be attracted by cheap sterling and high interest rates (the prime rate is 11.5 per cent, the "highest in the civilized world," as a Callaghan aide put it...

...DEVALUATION AND DEVOLUTION Great Britain Lowers Its Sights BY RUSSELL WARREN HOWE London In this summer of uncharacteristic, almost subtropical heat, a sense of disaster hangs over Great Britain...

...The Northern Irish are not ready for a settlement yet, he thinks, so direct British rule will continue indefinitely...

...Permissiveness thrives in life styles and the arts, and the pubs are still as communal as a New Guinea tribal longhouse...

...At present France, with a quarter fewer people than Britain, will have as many parliamentarians...

...Although a $5.3 billion stand-by credit from the central banks of 10 nations last month enabled the Bank of England to ease sterling from its $1.70 floor, Callaghan feels the pound remains undervalued...

...The Scots would probably stay in the Common Market, but note that Norway has not suffered from remaining outside...

...A few days after the parliamentary altercation, I found myself on the broad, beautiful Commons terrace beside the Thames, backed by the Gothic extravaganza of the House itself...

...When Jo Grimond, leader of the parliamentary Liberal party and MP for the Orkneys and Shetlands, filled out his address form for the present House, he rightly listed Bergen as his "nearest railway station...

...London would prefer to postpone direct elections to the European Parliament (set for 1978), unless it can be more proportionally represented...

...My host, an ailing Labor minister with a pronounced Manchester accent, shuffled, glass in hand, from one Tory Member to another, suggesting unsuccessfully to each one that he "just go home"??so that he, the minister, could go to bed...

...In addition, the 3 million Britain-based Irish view themselves as exiles created by the Crown's impoverishment of the Irish economy...

...Leading Scottish businessmen, former backers of the Conservatives or the Liberals (who favor more decentralized rule for Scotland), have joined the Scottish National party and overtly support independence...

...He wants the Bank of England to "firm" it at about $1.80??still cheap in the eyes of British economists and shoppers from the Continent, whose invasion of London stores has helped Britain redress its payment balance...

...But the lower middle class??the bulk of the populace??and the managerial class have both lost heavily, in money and incentive...

...meaning independence...

...Devaluation is the result of inflation," said the minister...

...If a current bill to give Scotland and Wales regional legislatures and greater economic control of their own affairs passes, it would provide a stepping stone to independence...

...A recent Commons debate even erupted in fist-lighting...

...Today the Nationalists are the second largest Scottish group in the House of Commons, and they are expected to take 50 seats at the next election...

...A decade ago, sterling was responsible for handling 40 per cent of the world's trade and 60 per cent of its insurance...

...Inflation, though, continues to take its toll...

...Instead, the Bank of England spent $6 billion shoring up sterling, followed by a sudden "free fall" in May...

...Perennial difficulties have been severely compounded by the situation in Northern Ireland...

...If decentralization were not essential, the USSR would outproduce the U.S., since Russian industries aren't burdened with advertising and promotion costs...

...Yet in this time of crisis Britons have lost neither their stiff upper lip nor their sense of humor...

...It should have started earlier and been more gradual...

...The policy on Scotland, it should further be noted, reflects an important general trend in Labor thinking toward the decentralization of power...

...Ever again...

...Anyhoo, we'd just take it...

...The humble herring??-the hamburger of Scottish families for generations-costs 36 times what it did in my childhood...

...Glancing over his shoulder to the North, Callaghan would like to give more seats to Scotland, as underrepresented at Strasbourg as it is overrepresented in Commons...

...There is no less of a class problem among British natives: Britain is as small as Oregon, but it contains as many indigenous accents as does the entire U.S., and ethnicity is a much more troublesome issue...

...Previously a powerful voice in the Middle East, Britain is now content to shoulder Kissinger, take part in Geneva talks if they resume, and help Washington lean on Israel??but not too hard, since most English Jews vote Labor, which also shares membership in the Socialist International with Mapai, a dominant Israeli party...

...For a decade, London has faced a no-win dilemma in Ulster: With Dublin unwilling to absorb a million extremist Protestants for a sliver of land and half a million Catholics, it has been unable to leave and unable to persuade the "Prots" to give the religious minority some real say in the province's affairs...

...Callaghan's greatest "foreign" problems are closer to hand, in Ulster and Scotland...

...The once highly independent Britain does get along well with its Common Market partners in the area of foreign policy, where there is little disagreement among the nine member nations...

...By way of compromise, France has quietly proposed that the two countries join forces to preserve the current system, whereby political parties nominate members of their national legislatures to go to Strasbourg...

...Perhaps because of his Irish ancestry, the Prime Minister looks upon Scottish nationalism as solely an economic matter, the result of past neglect of their economy...

...Should independence not come so soon, effective control of Westminster by a band of non-English nationalists will probably strike future historians as more important than the sterling crash...

...To halt the outward flow of pounds, the government forces British citizens to pay a 20 per cent premium (the "dollar premium") over exchange rates to buy foreign currency...

...Scotland's identification with the Scandinavian country has historical and geographical roots, too: Many Scots in the northernmost regions hail from Norway, centuries back...

...Now North Sea oil-most of it in Scottish and Norwegian waters??has given the old irredentism respectability and a rationale...

...The pound has lost about 40 per cent of its value in less than a year??most of it in the past three months...

...The most immediate problems facing Prime Minister James Callaghan and his Labor government, however, are economic...

...In Scotland, ethnic nationalism has simmered since Elizabeth cut off Mary's head and stole the kingdom...

...Three-way power-sharing, between London and the two religious factions, is an admitted failure??two generations of Ulster people having become accustomed to the violence that begins in the first grade...

...The reason private enterprise survives is because it practices the decentralization of decision," said one major Labor planner...

...MPs of all parties guzzled Scotch whiskey and draft beer in the 84-degree heat, complaining of the ban on vote-pairing imposed by Tory leader Margaret Thatcher following the scuffle...

...At the same time, there is acceptance of Britain s decline...

...In Scottish affairs, he hopes to get the devolution bill through both houses by July 1977 and have Scottish and Welsh assemblies elected a year later...