What would Mr Jenkins do?

Ferdinand Mount

Athe back of a Commons cubby-hole, I chanced upon a pile of Bills. They had scarcely been touched. Dust was already gathering upon the eau-de-nil paper, although they could have been there only a couple of weeks. 'Hope Marketing Bill', I read in the autumnal gloom. For a moment it seemed as if Mrs Thatcher, despairing of mere pep talk and prophecy, had finally decided to legislate for optimism. Sharp young men in pinstripe suits with waistcoats would soon be telling you 'for my sins, I'm into hope marketing.' Even sharper young men in dungarees the colour of dried blood would confess to being Creative Optimism Designers. Before the final 'e' refocused itself into an 's', I reflected how this modest little Bill would provide a meaning to life for thousands, not least for those lost souls who sit on the Conservative back benches.

All they have to look forward to is their majorities disappearing under an SDP tidal wave of personnel officers from Cheadle and Islington management consultants. The poor souls have had a dreadful fortnight. First the Crosby by-election, then the Chancellor's statement on public expenditure which was delivered with an absence of brio remarkable even by Sir Geoffrey's standards.

The rebellion in the debate which followed may not seem to an outsider to amount to much. Yet even 14 abstentions on a major issue of economic policy is a relative rarity in the Parliamentary Conservative Party. Backbenchers may rebel in droves on detailed constituency issues such as heavy lorries and the closure of rural post offices. But on the big things they are expected to toe the line.

Oh the glumness, Honks, as the Mitfords would say. Tory MPs are stunned by the torrent of reflationary rhetoric swirling around them. First, there is Peter Shore jumping up and down on the prostrate form of Dr Alan Budd (what they don't seem to teach them at the London Business School is that no proper economist ever says he was wrong about anything).

In British politics now, there is nothing to equal Mr Shore in full lather. He is a positive aerosol spray of moral indignation. Mean, immoral, disgraceful, unfair, brutal, strident, naive—the Tories were all this, and more. Is M. Mitterrand, so universally eulogised at the Labour Party Conference, mean and immoral too? Is Herr Schmidt— 'my good friend Helmut'—strident and naive? If not, how come unemployment is rising so fast in France and Germany?

But all agree that it is Ted Heath who steals the show with a display of Superflationspeak on the grand scale. Economic growth, he announced, `can only happen by a process of reflation'. In that case, there can have been no growth at all during the two centuries we were on the Gold Standard —odd, didn't seem like that at the time.

The terrible depression in the 1930s, Mr Heath proceeded magnificently on, was `only cured by rearmament'. That sounded odder still, the first time we heard it, from Tony Benn, because surely the whole point about the `devil's decade' is that Britain did not rearm, at least not until the late 1930s. And the really spectacular economic growth took place in the early years of the decade, primarily as a result of a rise in real personal incomes. Moreover, it sprang not from public capital investment in the heavy `industrial base' but from a consumer boom in radios, fridges, vacuum cleaners, rayon frocks and semi-detached homes on the bypass. If anything, rearmament slowed the rate of economic growth.

But who cares? Superflationspeak is mother's milk to politicians. After the boundless expansionism of Mr Heath and Mr Shore, Shirley Williams sounds almost ungenerous on her return debut. The SDP's reflation bid stops at a mere £5 billion, most of it apparently to be spent on insulating lofts. Lag For Victory.

At least she is in the Creative Optimism game, though. And, after all, the Tory rebels are only asking for a few crumbs of political hope. `The Budget must contain a package for the revival of industry, or it will threaten the survival of the Conservative Party,' wrote Mr Christopher Patten in The Times in a spirited defence of not abstaining and giving the Treasury one last chance.

This, I think, sums up the two interwoven arguments most frequently advanced against the Government: that a substantial recovery can and must be brought about by the Government directly stimulating manufacturing industry, and that this substantial recovery is the necessary and sufficient condition of the Conservatives getting themselves re-elected.

Both arguments are plausible, but neither, I think, is quite as obviously and undeniably true as supposed. If, as the neoKeynesians tell us, the weakest element in the recovery is consumer demand—because of the squeeze on real incomes—then there is something to be said for easing that squeeze directly. if Sir Geoffrey does have a couple of billion to spare at the time of the Budget, he could, say, bring VAT down to 121/2 per cent. This would have the merit of acting directly on the retail price index and so tending to restrain wage demands; it would go part of the way to undo his original error of hiking VAT up to 15 per cent; and the money would be spent on things people actually wanted—as opposed to the dubious utility of the barrages and tunnels proposed as stimulants for industry.

Nor am I so sure that a recovery brought about by either means will produce a Tory win. First of all, all these packages, however composed, are bound to produce some inflationary effect, even if only a temporary and retrievable one, and that effect is liable to show up just at the wrong moment in the autumn of 1983.

It may be that no Western government, however ingenious, energetic and compassionate, is going to get re-elected during this slump; it may be simply impossible in the time available to make a big enough dent in unemployment to dissipate the prevailing disenchantment. At any rate, what seems fairly certain is that no government is going to get re-elected in a country where inflation appears to be high and rising on polling day.

In ghastly times, when expectations are so deflated, the government's principal asset is authority. Ministers must not look rattled or appear to be constantly hesitating and reversing. Mr Michael Hese!tine's hasty ventures into local government legislation, for example, have spread a light dusting of cockup over a huge area. The abolition of the rates—one of Mrs Thatcher's favourite distractions—is also likely to end in tears.

Sir Geoffrey's proposal to knock 2 per cent off the real value of unemployment benefit may be theoretically defensible, in the light of the fourfold real increase in the benefit level since 1951, but it is more trouble than it is worth, to save £65 million. 'Remember Museum Charges' should be written on the desk of every Minister who sets out to save holy candle-ends.

Steadiness and a weathered look are, I thirtk, more vital assets to politicians seeking re-election than a boom-time atmosphere. It may not be conclusive to point out that the manufacturers of the last three election booms lost the elections; you could just as well argue that they would have lost by larger margins if they had not reflated. But the evidence does suggest that the trick becomes less impressive with repetition.

When in doubt, it is, I think, valuable, as one Minister suggested to me, to ask yourself: 'What would Roy Jenkins do?' That gravitas, that refusal to be hurried or to drop into the demotic, that appearance of serenely gliding over difficulty—all provide an advanced lesson for Wets and Dries alike. Mr Jenkins does not suggest doing anything 'massive' or 'dynamic' to break out of the impasse. The words he uses most are 'prudent' and 'cautious' and 'sensible'. Those I suspect are vote-getting words.