SUCCESS, MUTED
There is no reason to doubt the substantial truth of Mr Heath's words, uttered significantly at Glasgow last weekend, that the country's prospects for growth—" and substantial growth at that "are better than they have been for a long time. In his domestic policies Mr Heath is showing that he means business, although he has demonstrated no more ability to contain prices than any other post-war Prime Minister. Mr Heath is entitled to boast "The Government has set in hand the expansion of the economy." The pound is strong. Last month Britain earned a record surplus in its trade. And the Minister for Trade and Industry, Mr John Davies (who, like the pound, is weathering the storms well), urges United States investment fund managers to buy British shares.
In any normal situation, all this would justify a loud blowing of trumpets. But the Government mutes its trumpets. The reasons for such unnatural and unprecedented reticence are not difficult to find. There are two of them; and they are not unconnected. The first reason is that it is clear to the Treasury, and thus to the Government, that all our new-found record trade surplus is going to be needed to pay our entry costs into the EEC: as the Economics Editor of the Guardian (a pro-entry newspaper) writes, "it is the cost of joining the EEC which provides the real reason for Whitehall's anxiety to maintain our competitive strength : that might well eat up our surplus, quite apart from the capital outflow which is expected . . . . In the long run, Whitehall thinks we may need every penny." Since we are going to give away our surplus, if the Government has its European way, it is understandable that the Government should eschew undue boasting about it. The second reason is that one essential condition for the success of any economic policy has not yet been achieved. This the Prime Minister recognized at Glasgow, when, having noted that "The major employers have agreed to work for steady prices and have taken practical steps, jointly, to hold prices down ", he was unable to do other than ask rhetorically, of the trade unions, " are they willing, as a matter of commonsense, to work with management for moderate wage settlements made possible by higher production and more efficient methods ? " Why should the unions cooperate ? They might well come to accept the Industrial Relations legislation, and to realize the commonsense advantages of the new pensions scheme. But the vast majority of them are opposed, rightly, to the Prime Minister's European adventure; and it is wishful thinking to expect them to cooperate with the Government's economic policies by keeping down wages when the Government's overriding policy can have no other effects than those of increasing prices, of diverting real resources from this country to the continent, of dividing the country, and of riding roughshod over its instinctive and intelligent desire to preserve its national identity.
Thanks to the success of the radical domestic policies of Mr Heath, the country is indeed poised for expansion; but because of that foreign infatuation which overrides all other considerations the country is committed—unless Mr Heath heeds his election pledge not to take us into Europe without the consent of the public—to squander its new found opportunities and to waste its present economic strength upon the pursuit of a chimera. The European policy is bound to fail. It is therefore to be hoped that it is abandoned sooner rather than later. The British economy demonstrates that it does not need to join the EEC to get it moving. The United States presses for the liberalisation of trade. More clearly now than ever, as the Government's domestic policies begin to prove themselves and while the chance to avert a protectionist trade war between Europe and America still exists, it is time to halt the rush into the arms of Europe. Mr Heath's muted success is establishing that we can do without the Continental entanglement.
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