Time to mend the fences
BUSINESS VIEWPOINT RFAY GEDDES
The 1960s will be remembered, among other things, for the attempts of the Government, industry and trade unions to 'work out their re- spective roles and relationships and to get Britain ready, after almost forty years, to be a low tariff country again by 1970—in Europe or not.
Let us first glance back and then forward— three years each way. Through 1965-67, indus- try in the private sector tried faithfully to work with the Government at many different levels. Hundreds of businessmen found a great deal of time voluntarily to serve on committees of inquiry, little Neddies, and a host of other pub- lic assignments. Industry was prepared to give a friendly hearing to government policies, to ministers who came new to economic respon- sibility and to their particular actions. This was natural—not a political choice. After all, indus- try cannot prosper nor create higher living standards if Britain does not succeed; we all sympathise with men facing a tough job; the main elements of economic policy are non- party—Europe, Kennedy Round, a healthy bal- ance of payments and then economic growth as the means to sustained social progress, and the elimination of hardship. And we all want our party system in Parliament to govern and lead us well.
Yet, by autumn 1967, and whatever the reasons, general anxieties about the way things were going had begun to polarise in the cm on to each new act of intervention or item of bad news and at times to magnify its significance.
Sir Reay Geddes is chairman of the Dunlop Rubber Company. He was a member of the National Economic Development Council until 1965, when he resigned on becoming chairman of the committee of inquiry into the shipbuild- ing industry, which produced the report that bears his name. Not very constructive, the critics said : but how else to show a deepening concern? An attempt, in March 1967, to describe the elements of con- fidence had not been noticed: nor had repeated advice on the needs of a healthy economy. No doubt they were imperfect: just the best that men of good will could do with limited infor- mation, and by no means disproved by events.
Then came 18 November and devaluation. The style of its announcement and its accom- panying package of measures caused every thinking manager to ask himself `Will this do the job?' and 'What does it all mean to our firm?' As `no news is as bad or as good as when you first hear it,' within a couple of weeks the questions changed: 'What can our company do about it?' and Will we stay quite the same company, doing the same things, as before?' Already, by 6 Deeember, this change had in- fluenced the CBI Council's statement: not bad going, after such a shock.
And so, in 1968, most of industry will be try- ing to make the best of its chances and the Government can, without great difficulty, put its goodwill account back into credit again. Can the cuts in government expenditure lay the foundation on which, brick by brick, confidence can be rebuilt? Leadership begins by example and, in Viscount Slim's words, a leader must say 'Come on,' not `Go on.' So perhaps it was right to let the cuts come alone, but the sooner the rest of the programme can be seen the better. We need a budget, indeed a whole par- liamentary session, which manifestly gives high priority to measures which will keep costs down and encourage enthusiasm and gives no priority to 'back seat driving.' But first, what must we in management be doing still harder than before?
Perhaps we should begin by reminding our- selves that we believe in the individual business as a prime mover. We hear a lot about the 'climate of opinion' and the need for a 'clear government lead.' Fair enough, the Govern- ment has a full part to play, but is it any fuller than that of management, union officials and others—often individual workers—who set the morale of each firm every day of the week? The work place, more than the hearth, the vil- lage green, or even the pulpit of St Giles's Cathedral, is where twentieth century attitudes are set.
As for attitudes, so for actions: the behaviour of a firm in productivity, prices and income., in exports and import-saving; in investment, the pace of innovation and the treatment of its human consequences. Laws, `carrots and sticks,' 'norms' and inquiries, like the management of the economy, all have great effects—sometimes helpful, sometimes perverse. But it remains true that for most companies, most of the time, boards and managements, with union officials, can be decisive, choosing courses of action, set- ting standards of performance and justly re, warding success or failure. This is made plain by differences between companies—as places to buy from, sell to, invest in and, of course, as places to work.
There are, it is true, intermediate strata of influence and authority between government proper and the firm. There is government as the biggest entrepreneur and employer, inevitably wielding great influence by example and pur- chasing power. And there are the national levels: trade organisations, employers' federa- tions and the unions. In many industries, the roles and procedures at national and local (company or plant) levels are being much dis- cussed and often -redefined. But the key, point ii a more human one. The middle manager or individual worker finds it as hard to relate his daily task to the 'national level' as to `the public interest.' But he can see, understand and identify himself with the 'plant and the firm (in -multiple firms, it is the 'operating unit'). The more he can identify his own and his family's prospects with the success of the firm, and the perfor- mauCe of the Plant, the better. British managers who have worked in highly productive and highly competitive industries in North-Arntrica see this as a key difference between there arid here.
It is important and urgent to make more of this... As tariffs fall and without inflationary demand at home, families security and prOs- pets will depend increasingly upon their. com- pany's ,success: a new focus of attention for many.
If it is true that the private sector i5 More its oivii• master than ij'fears, in attitude and in action, that. is helpful. But still competitive en- terprise.feels hampered by fluctuating demand, constantly 'changingpolicies, rising taxes, dis- tortions and distractions of various kinds. BOth goVernment and industry. probably do under- estimate each other's problems. Why is it that the..Gov-ernment has been consulting with.such relitatince those whOse collaboration it needs? Wis it because what they, hear would -be un- palatable? Or because they felt they would have to listen to destructive rather than constructive criticism? Or was if that the wrong sums in the National .Plan have. made them afraid to- plan ahead at all?
-Whatever the reasons, let the Government ask industry and the•unions once again to -take part in discussion with the Government of real issues before policy is decided. They will have much to contribute, all directed to fit Britain for the low tariffs of 1970. We need, it seems, a national programme, a job sheet to that end. The idea is not novel—in 1962-63, NEDC pre- pared a set of `Conditions favourable to faster growth' which was a helpful basis for the 1963 budget and other things. In 1965, the DEA had its `Check list for action.' But neither had the discipline, the clear priorities and programme, which a target date imposes. So why not 'Pro- gramme for competitive efficiency by I970'? In its preparation, the Government, industry and the unions might recover some of the sense of involvement and of endeavour shared which has been lost in the last three'years.
While we, as managements and union offi- cials, are getting on with our jobs, let us be told of progress and let us know that consultation is frank, constructive but 'in private. In that way, and well before results can be seen, confidence could be growing—in the Government and in the £. Here and in Zurich, it is much the same.
Previous page
