ECONOMICS AND THE CITY
The Budget, Mr Benn and industrial relations
Nicholas Davenport
The depressingly dreary forecast of the National Institute of Economic and Social Research is not going to set stocks on fire in Throgmorton Street. Assuming Treasury policies remain unchanged in the April budget the Institute's appraisal is that, against a background of the deepest international recession since the war, output in Britain will rise only slowly, unemployment will continue to increase and the rate of inflation will stay near 20 per cent. This implies that there will be some improvement in the .balance of payments, but this, of course, would be eliminated if the rising trend of unemployment were halted. So we appear to be trapped. In the Institute's view we can only get out of the trap by acquiring a more effective control — voluntary or statutory — over the rate of increase of total incomes from employment, which is now the measure of our domestically generated inflation. At the moment we are foolishly paying ourselves 5 per cent more than the value of our output. One might have expected the Institute to urge Mr Healey to tell the working people — in the violent language he usually reserves for the rich — what damned fools they are. But the authors mildly suggest that the terms of the social contract should be tightened up — possibly replaced by a specific figure — and that, failing that, Mr Healey has little choice but to introduce a broadly neutral budget, which should not preclude some minor selective measures to reduce the fall in manufacturing investment and mitigate some of the more unfortunate social consequences of rising unemployment." I would not be surprised to find that that is exactly what he will do, with some swingeing increases in the taxation of luxuries, such as wines, spirits and cigars, which the one-time rich consume to drown their sorrows.
Tinkering with 'demand management' by adding to or subtracting from this tax or that tax in budget after budget — Mr Healey is having three budgets in a little over twelve months — is becoming a futile waste of parliamentary time. It does nothing to cure the 'English sickness.' This is nothing short of a collapse in normal industrial relations. The number of working days lost through strikes last year was double the number lost in 1973. The four-week stoppage in the coal mining industry was responsible for 51/2 out of the 143/4 million working days lost in 1974. Actually 1972 was even worse, for 24 million working days were lost. The Department of Employment recently published an analysis of industrial disputes for various countries over the period 1964/73 and found that some countries, namely the US, Canada, Italy and Australia, had an even worse experience than the UK, but some of our main competitors, France, the Low Countries, West Germany, Sweden and Japan, had exceptionally low strike records. Worsening industrial relations have clearly become an ugly feature of the mixed capitalist system in the industrial West and Britain is tending to become the leader in the race towards industrial anarchy.
The only minister in Mr Wilson's government who seems to be aware of this appalling danger is Mr Tony Wedgwood Benn. No doubt he is making full use of the industrial crisis to further his ascent into Mr Wilson's seat but it is not to be denied that he is talking sense when he declares that workers are no longer content to leave their livelihoods in the hands of managements which do not give them any information about their company investment and production programmes. The shut-down of a typewriter works by an American parent and the closing of a sausage factory by the multi-national Unilever played into Mr Benn's revolutionary hands. After his successful launching of a workers' motorcycle co-operative, following the sit-in at the Meriden works, Mr Benn has become the semi-royal head of all trade union dissidents and militants. No wonder the CBI are terrified of the Industry Bill with its powers of acquisition and of access to secret company information which is given not to the workers but to the union bosses.
It is time to ask what Mr Benn is driving at — apart from his personal political ambitions. Is he attempting, as he claims, merely to make the private sector more efficient by financing new investment, or is he out to extend the public sector until all the means of production are vested in the State? If the former, the CBI should quickly come to terms with him and agree upon some reasonable amendments to the Industry Bill. If the latter, Mr
Benn should be exposed by his social democrat colleagues in the Cabinet as the enemy of our free democratic system. As the ex-communist Djilas made clear in his historic book The New Class, a completely socialised economy creates not a classless society but a new class division between the elite bureaucrats with the union bosses and the enslaved workers who lose their freedom to strike for more pay.
There is no reason why a new capitalism acceptable to managers and workers should not evolve out of an amended Bill and a business-like, profit-making National Enterprise Board provided Mr Benn, Mr Foot and the Lefties of their party will drop their muddled Marxist Clause 4 socialism. But, in my view, it needs offering the workers a share in the capital profits. One obvious way of securing this revolution I suggested in The Split Society which I wrote in 1964. This was by way of a public unit trust in which the workers would be allotted units. I called it SPUT — State Participation Unit Trust — and 1 visualised its capital growth as the road towards the eventual collectivisation of capital. Unfortunately Mr Wilson did not take it up, as I have later explained*, but 1 have been encouraged to find that a similar scheme for the capitalistic distribution of wealth — as opposed to the socialistic confiscation and dissipation of wealth — has been worked out in much more detail for the American economy by Mr Louis Kelso in his Capitalism and Two Factor Theory. The theory of it explained by Mr Mortimer Adler in a brilliant introduction to The Capitalist Manifesto which he wrote in collaboration with Mr Kelso in 1958. Revolutionary ideas take time for fruition but the old capitalism clearly is finished and Mr Benn could be a timely catalyst if he were to persuade his devoted trade union followers to take up the capitalistic, rather than the wasteful socialistic, distribution of wealth. One of his admirers, whose name 1 am not permitted to divulge, has already suggested to him that he should start by nationalising the existing unit trusts!
Is it not obvious that Mr Healey should stop listening to the learned advice of the professional economists — whether it comes from the new Cambridge school or from the National Institute — and consider more seriously how industrial relations can be improved? Without more co-operation between managements and trade unions we are sunk. While the Labour party keeps its ridiculous Clause 4 in its frozen Constitution, which binds its members to the destruction of capitalism and the elimination of the private sector, we can hardly expect more cooperation from the workers in the factories. But perhaps Mr Benn can Cut through the ice and get things moving.
*Memoirs of a City Radical (Weidenfeld and Nicolson, 1974, £3.50)
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