Political Commentary
Hoist with the wrong petard
Patrick Cosgrave
The sort of difficulty the Government is going to have to face — and the rest of us compelled to observe — in the administration of the present incomes policy has been well illustrated by the controversy over the salary increase, awarded to Members of Parliament. True, the Government can put its collective hand somewhere near the supposed site of its heart and say that the settlement was made before the new guidelines came into force, but everybody knows that that is what the Prime Minister would call a semantic point. A large section of public opinion has been outraged by the willingness of Parliament to vote its own Members so substantial an increase, while a large number of MPs consider the increase miserable. Some trade..-unionists deplore it; others, like Mr Scargill, are delighted by it because of the room for manoeuvre it gives them. The other evening, on the terrace of the House of Commons, a former Conservative minister argued to me in the most feeling of tones that the position of MPs in the public esteem (if that is the right word) would be made virtually untenable if they accepted the increase. Many other members, of course, might be unable to survive without it.
Let me, before proceeding with the general argument on how the introduction of incomes policies distorts not only politics but equity as well, say that I believe MPs should get a great deal more money than they have been offered. True, the present House of Commons does not compare very well in distinction with previous Houses. Especially in the recent intake of both parties there are not many men and women — a handful at most — who _give any promise of major distinction; and Over the last twenty years or more there has been a steady overall decline in the calibre of members. But, unlike most other employees, Members are' elected rather than appointed, and if the political system does not attract people of higher ability then the system is at fault, and not the usually decent, public-spirited and hard-working men and women who come forward for election in the certain knowledge that they would be financially better off, and live much easier lives, if they adopted some other profession and applied even a part of the same energy to it. Further, as Mr Eric Heifer recently put it in a long and cogent letter to the Times, we should stop — as almost unconsciously we do — lumping members' allowances together with their basic salaries: in no other salaried profession does one have to meet the basic costs of secretarial help, postage, research and communications out of one's own pay cheque.
There is, therefore, only one ground for chortling at the public relations pickle in which Members have found themselves, and it is this: if they are foolish enough to be willing to vote for economic packages which include compulsory incomes policies, /then they should not complain when the distorting mirror of such policies lets them in fof public opprobrium. I am not, for. the moment, concerned with the essential monetarist case against incomes policies --that they attack the symptom rather than the cause of inflation — save to add to its general propositions the belief that, when trade unions over-exercise what amounts to a monopoly control over labour, the only discipline on them is that of unemployment, and the government should therefore allow unemployment to rise, placing the blame for its rise where it belongs. But the point to be made now, and which the case of MPs' pay illustrates, is that the existence of an incomes policy, and of general dischssion about it, makes impossible the operation of any reasonable criteria for judging what the labourer's hire is worth. , In the main, discussion about Members' pay has centred less on how much work they do, or how valuable to the community they are, than on whether at this particular time they could or could not be asked to make a sacrifice — not, be it noted, because the full sum that Lord Boyle recommended for them would, if saved, make the slightest difference to the national battle against inflation, but because, well, somebody, it was vaguely felt, had to set an example. Thus, already, one cansee that the movement away from reality — reality being the proposition that increasing wages is not the cause of inflation — leads quickly to a distortion of analysis of political problems, and irrelevant, and even damaging, criteria are brought into play. There is a reason of principle for this. Increasingly in the last generation we have allowed or encouraged the state — and that word would here include a government of either party — to make more provisions for us, and to regulate more and more aspects of our lives. In some areas the statehas done its job to our satisfaction, in many others to our extreme dissatisfaction. The dissatisfaction has arisen particularly when we have asked the state to do things which by its nature it is incapable of doing fairly or well, the principle of which is the settling of true or just wages and salaries. There may well be moments, it is true, when very limited government action — say, the introduction of a total wage freeze for six months and for six months only — could have a salutary political and economic effect. But if government is to try to decide what everybody's work is worth then, as surely as the night follows the day, it will impossibly and disastrously entangle itself in a destructive web of distortions. _ As to the argument made in several quarters — and especially in the editorial columns of the Times — to the effect that on-going incomes policies are the only alternatives to high unemployment, the answer is that they are not alternatives at all. The cause of unemployment — excluding, of course, those who cannot or will not work — is the unwillingness of some workers to consider the plight either of other. weaker trade unionists or of the lower paid members of their Own unions in their fight for wage levels which the market simply will not and cannot bear. In this area it is absolutely essential for some future government to state openly again and again that the principal cause of unemployment is militant trade unionism. It is not desirable, however, for government to seek to fight that trade unionism, first because it cannot win, second because its most tolerable — and that only temporarily so — weapon, incomes policy, does not and cannot work for more than a very limited period. The right posture for a government during a period of excessive wage claims is, therefore, on of neutrality save where it is itself an employer, and there it should refuse4to meet any wage claim which requires supplementary Treasury subsidies.
Reality is always a difficult medicine when times are such as to encourage panic; and we have become so accustomed to demanding things of the government of the day — and politicians have been so willing :to promise them — that a good deal of education will be necessary to persuade the British people that the right posture for government during an economic crisis is an inactive one. Fortunately. government need not be wholly inactive, for it has something to do which is equally difficult to contemplate as withdrawal from the field of wage regulation, but which would have the highly desirable effect of reassuring foreign investors and international traders in sterling. And that is, of course, the savage reduction of public expenditure. Again, I am not concerned this week with the economic case for such reductions as with the difficulty politicians find in following that case through. Especially in the Tory Party, whose leader has, with some courage, nailed her flag to the mast of public expenditure cuts, it is very easy to find senior politicians perfectly willing to say, "Of course, public expenditure is one of the causes of inflation. Of course, it should be cut. But, loott here old boy, it's politicallY impossible to do it." Little, of course, is politically impossible if it is properly explained and implemented in a resolute fashion by a government with a strong will and a clear mandate. What would be comic if it were not tragic, of course, is that the very politicians who speak of the impossibility of making large enough cuts in public expenditure usually end by advocating as an alternative the one thing which detailed and painful experience has demonstrated with the utmost clarity Is politically impossible — the implementation of a continuing statutory incomes policy.
It is characteristic of governments, of course, to be exceptionally unwilling to admit error and from this unwillingness flows another danger in a period of incomes policy. As with Mr Heath, we can look forward in the case of Mr Healey — since he has insisted that he is going to attempt to keep the present policy for several years — to a time when every single scrap of the Government's energy is devoted solely to attempts to preserve its incomes policy, against a mounting wave of industrial disputes and a mounting chorus of public dissatisfaction with the way it is working. Because an incomes policy is essentially a policy making for the distortion of the economy it has exceptionallY widespread effects, its tentacles reach into every government department, and its consequences eventually involve every minister.
We are now entering yet another of those. periods when an apparent pause in the rate ot inflation will be followed by another explosion, 'of wage claims which the Government will fight and fail to prevent. And all this will tsle followed by another inflation, leaving Britain even weaker than she is now. All this because of a lack of ministerial and political ability t° tell and face the truth. Perhaps, after all, Ws are not worth that salary increase.
Previous page
