In the City
My election address
Nicholas Davenport
Fellow-workers in the City, you will have read the Labour manifesto and will rejoice to see that the Stock Exchange is not yet being taken over by the State. Nor the banks, nor the insurance companies. I am sure that jobs galore will be waiting for you after the election if the Tories win. But do not be deceived by Labour's apparent moderation. They still hate you. Even their mild manifesto said that while the City played its part in financing the government and helping Labour's 'programme for the revival of industry' (sic!) Labour was concerned that 'the lure of short-term profit could outweigh the social gains to be had from industrial investment.' So you see that they still regard the Stock Exchange as a casino.
Mr Callaghan, who stands, as he says, solidly in the Centre, has been warned by his own moderates, the Special Democratic Alliance, that 43 members of the outgoing Parliament 'appear dedicated to forging Left unity . . . not substantially different from the United Left Front strategy of the Communist Party'. Some of us saw this coming a very long time ago. The News Chronicle of 19 May 1950 had this prophetic passage about pre-war Labour Leftism: 'John Strachey favours the policy originally advocated by controls' . . . The class struggle,' he said, 'is being and will be in the next phase fought out precisely over the question of who is to use the central controls'. Have not our recently striking civil servants taken this tip from the then communist John Strachey? They have the power now to hold up the government, the collection of taxes and, for all I know, the holding of the last democratic election. The curious thing about this 1950 analysis of the then Labour Party differences was that it was written by the very man who now writes this column. (Loud cheers!).
Comrades — I am entitled to call you comrades because I know no other place of work which is more egalitarian in practice and in spirit than the City — I hope you are now working out how long it will take you at a compound rate of inflation of say 10 per cent to become rich and liable to Labour's proposed wealth tax on assets over £150,000. Your freehold suburban house and garden and and all its furnishings and garage and motor car, added to your wife's fortune if she has one, will before long bring you into the tax net of confiscation. You must really warn your wife that you will have to divorce her for tax purposes if Labour wins the election.
How utterly mad it is to think that you can distribute wealth by confiscating the savings of a few who have been able to create a very modest fortune. A confiscatory tax will only drive the wealth creators out of the country.
Some 20,000 to 30,000 business managers left us last year and according to Mr Alex Jarratt, the able managing director of Reed International, our managers are the best in the world. There is only one way to distribute wealth — by allowing the workers to hold 25 per cent of the capitalised and unitised public boards and ultimately 25 per cent of a giant public unit trust. That is my election platform: Turn the workers into capitalists and let them see how their capital can grow in a bull market on the Stock Exchange. I read in the Economist last week that the Conservatives are planning to convert British Airways from a nationalised corporation into a mixed public and private company along the lines of British Petroleum. If it !re still run by Sir Frank McFadzean it would no doubt be a great commercial success but only if 25 per cent of the equity were loaned to the workers as I have suggested.
It is not for me to bemoan the decadence of the spoon-fed British, as my gloomy friend Peregrine Worsthorne inclines to do by suggesting that the worker will work no harder when he is less heavily taxed. Let us try it and see. Let us reduce income tax at the lower end to 25 per cent and at the higher end to 50 per cent maximum. I am sure that it would revitalise the industrial scene as some spring sunshine would revitalise my poor daffodils.
And let us not bother to work out at this stage how this tax cut is to be financed. Even Mr Callaghan has said that there would be room for increasing expenditure — the Labour programme would cost an extra f24 billion — and for making tax cuts provided productivity increased and the economy could grow at a rate of 3 per cent plus a year. He might have added that if a new administration were to take advice from able business administrators £24 billion of government expenditure could be saved by eliminating waste, incompetence and over-manning without dismantling the basic welfare state.
I am sure that the economy is much more likely to grow at a rate of 3 per cent per annum if my equity participation plan for workers were adopted and their 'don't care' attitude to work were changed. But tax cuts 'at all levels to reward hard work' must be the first move, as the Tory manifesto says, and if the Tories are accused of thereby upsetting the borrowing requirement they have a joker in their pack of cards to play which Labour has missed. For years I have been calling public attention to the monstrous debt charge (now over .£8i billion a year) which Labour has been piling up by issuing billions of 'tap' stocks with absurdly high coupons. The Tories have given hints that they will reduce debt by selling assets to the public. I am not referring to their selling back to private ownership the recently nationalised aerospace and shipbuilding concerns but to their much more sophisticated idea of converting British Airways into a sort of British Petroleum and issuing shares or units in it to the public and to the workers. I am not sure whether they have it in mind to do the same for the gas, electricity, coal and national oil boards, as I have recently urged, but if they were to steal this idea from this column I would be delighted. The important point is that if you sell units in a national Energy Trust to the public you are not saddling the Exchequer with a debt charge.
Comrades, I know that you will expect me not to end this election address without giving you a Stock Exchange tip. I have already said that during the election the market will go up and down with the opin ion polls. When you see a bad poll for the Conservatives, and the market drops, then jump in and buy. That's all. Happy voting! Happy investing!
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