AND THE CITY
The market after the Labour Conference
Looking at Mr Wilson on TV Presiding like a god over the Labour Party Conference, I was reminded of the Athanasian creed: there is now not one Labour Party but three Labour Parties — the extreme Left, the Extreme (moderate) Centre and the Extreme Right, now calling themselves the Social Democratic Alliance. Extremism, like incomprehensibility, is common to all three. The question for the City to decide is whether a bull market can now live with Mr Wilson's post-conference commitments.
The first point to remember is that ministers as a rule conveniently forget what is said at party conferences. Certainly Mr Wilson's cabinet is not going to be dictated to by the extreme lefties on the National Executive Committee —
Who annoyed them by throwing off their Chancellor of the Exchequer
or by -Mr Mikardo who even insulted Mr Jack Jones, the present saint and saviour of the Labour Government. Nevertheless it may be thought that Mr Wilson cannot completely ignore all the resolutions which were passed unanimously and excitedly at the party conference.
The most important resolution Was that endorsing the NEC White Paper on `Labour arid Industry' Which was passed with much cheering after Mr Benn's rousing speech. The NEC had been angered
by the watering down of the Industry Bill to please the CBI. It objects to the fact that the Planning Agreements are now to be entirely voluntary without even reserve powers to compel key companies to comply, that there is no provision in the Bill to tie up capital grants to companies with the Planning Agreements, and that there are no powers for the compulsory purchase of companies except in the Case of foreign takeovers.
What the NEC White Paper asked for was reserve powers to issue directives "on a wide range of industrial matters," to invest in individual companies or to purchase them outright, to remove directors if necessary, in firms with Which the government has a Plan
ning Agreement, to put in an 'Official Trustee' to assume temporary control of any company which fails to meet its responsibilities to its workers or customers or the community as a whole, to ensure that capital assistance is available only through the Planning Agreement system, and finally to place an obligation on 'Category I' companies to conclude a Planning Agreement which will include discretionary powers over prices. Further, the NEC asked for £1,000 million a year for the National Enterprise Board over the next five years so that it can play a major role in the doubling of the rate of investment in manufacturing and control at least o,ne successful leading company in each of the main sectors of industry and commerce, including banks. All these extreme demands the Conference,, stirred up by Mr Benn, endorsed with acclamation.
If the Industry Bill, which has been sent back to the Commons from the Lords after amendment, were now to be redrafted to contain any of these wild proposals, it would of course, mean the end of large-scale private enterprise in Britain. The management of the big companies would simply sell out to foreign multi-nationals or retire abroad. The mixed economy would cease to exist. Even the smaller companies which would remain would find it almost impossible to carry on if they were to be subject to government directions and not to market forces. But in the interview which the Prime Minister gave to Robin Day at the conference he more or less made it clear — although he never makes anything very clear — that he had no intention of carrying out these extreme proposals. He only regards himself and his Government as bound by the election manifesto, not by any vote of the NEC at the party conference.
The next day Mr Wilson had to accept another resolution calling on the Government to honour its 1974 election manifesto. The policy of public ownership, it said, must be implemented in those areas. mentioned in the manifesto where action had not yet taken place.
Presumably this meant North Sea oil. Mr Short accepted the resolution as 'a friendly push' but he added: "All our commitments in the manifesto will be honoured. Two factors determine when they will be honoured. The first is Parliamentary time: the second is resources." This gives Mr Wilson a way out from his Spaghetti-Mikardo seige. Indeed, I feel sure that he has no intention of being moved from his mixed economy stance.
We may also be reassured by the fact that the loony resolutions from the wild men at the conference were defeated on a mere show of hands. For example, the resolution moved by Mr Loony-Mooney demanding the nationalisation of the 'commanding heights' of industry and commerce with minimum compensation and workers control was not even put to the vote. Nor was the Mid-Oxon resolution to take over the banks, the insurance companies and the financial institutions. But how will the City take Mr Benn's tirade — "We are not here to manage capitalism but to change society" — and his quotation of St Clement Attlee — "The cause (of evil) is the private ownership of the means of life; the remedy is public ownership"?
One would have thought that more and more public ownership would now be regarded as a bad joke. Most workers have surely realised that the public boards are mainly responsible for the current rise in their cast of living — dearer coal, gas and electricity and higher railway and bus, fares. The socialist cat was let out of the bag by Mr Marsh, the boss of the Railway Board, who said in a BBC interview: "The problem with the nationalised industries, and indeed with other very large companies, is that the unions are more powerful than the management and they are effectively more powerful than the government. So bargaining in the sense that the power is equal on both sides does not take place."
Nationalisation is surely an outmoded remedy for our troubles. It is only sought by those who want to run a communist state with centralised direction from a massive bureaucratic apparatus — jobs for the party boys and no freedom of choice either for workers or consumers. This sort of Britain would be anathema to the vast majority of its people. But even those socialists who are not wild revolutionaries seem to be convinced that we have got to have forcible direction of money into investment by companies tied down by state control of prices and worker control of management.
This would be the end of our mixed economy and our economic sanity.
I had been hopeful that the final obstacle to the return of confidence on the Stock Exchange, which would allow this trading market in equity shares to develop into a bull market, might be removed by the conclusion of the Labour Party conference. But I am disappointed. We remain a trading market tossed to and fro by the hopes of recovery and the fears of further recession. The Prime Minister has announced that the CBI and the TUC will be meeting himself and the Chancellor at the next meeting of the NEDC to thrash out an industrial policy which will save Britain. Has it not occurred to him that the English sickness is not merely a lack of investment — a refusal to put private savings money into plant which will be over-manned by the unions — but a muddled social conflict exploited by a political power struggle? The latter could be resolved if he defined his position more clearly from that of Mr Benn. The former would then probably disappear.