The 'quiet' revolution
Nicholas Davenport
With the return of hold-ups on the Queen's highways as in the wicked old days one must expect before long the revival of duelling. This might present us with the chance of solving the problem on the railways. A duel might be arranged between Mr Sid Weighell of the NUR and Mr Ray Buckton of ASLEF with Sir Peter Parker as referee. Provided the pistols were well oiled and loaded the dispute between the two rival unions might be settled once and for all and the once excellent railway service restored. I fear that short of this denouement the overheads of stockbroking firms will continue to be saddled, as they were in the last two weeks, with London hotel bills for their commuting staff.
I hope that the inhumanity of some of the striking ambulance men and the bully-boy threats of some of the striking lorry drivers will not take possession of the Treasury and cause our bellicose Chancellor to imitate them. But there seems to be some danger of it. In the Commons a week ago he warned us about the sort of budget he would have to introduce if wage settlements were to run at an average of 15 per cent. Such a rise, he said, would add £1,000 million to the cost of government services, £1,000 million to the cost of local authority services and nearly £1,000 million to the costs of the nationalised industries. The effect on the public sector borrowing requirement might be less than half the projected £3,000 million because of the extra tax revenue generated but he would have to cut public expenditure or increase taxation to offset it and the local authorities would have to increase their rates by as much as 20 per cent. He saw inflation rising to 13 per cent by the end of the year.
So no one with a wage rise of 15 per cent, he added, would be better off, for the rise would be swallowed up in higher prices and higher taxation.
The Chancellor's scarifying warning followed on an equally scarifying speech by the Governor of the Bank of England, calling for stiffer monetary measures to counter the pay explosion. What do all these fiscal and monetary threats amount to? That because the strong-arm unions have exacted unreasonably high pay settlements the whole economy must suffer. Innocent business firms must be made bankrupt, the small enterprise men must go out of business when bank overdraft charges become too heavy for them to meet, house-building firms must be closed down because mortgage rates are too high for the newlyweds to think of setting up home — and so on. It is tantamount to the prime minister giving an order to the Minister of Health to have all the nurses in lunatic asylums whipped because the lunatics are smashing up the furniture. If some trade unions are foolishly pricing themselves out of jobs, bank money should surely be made cheaper to enable sensible firms to lower their costs and extend their business. To impose a slump on the whole economy because a few trade unions are not playing the game is not rational economics. The Government has somehow got to make the stupid trade gnion leaders see sense — not make them more stupid and more stubborn by a vengeful increase in income tax which is already work-discouraging.
In a last desperate attempt to make the trade unions co-operate in — and not work against — sound economic planning the Government is proposing to put before the TUC a new draft of a 'social contract'. The Government has already handed over vir: tual power to the trade unions — whose members can now stop public services and national trade when ever they choose to call a key strike — and apparently it now wants them to share in the economic power and planning which the Cabinet would ordinarily carry out through Parliament. There is no need to explain to readers of this journal that we are in fact caught up in a quiet revolution — after all, Mr Heath proclaimed a 'quiet revolution' — which involves reshaping the whole structure of our society. I don't know whether there is a majority in the apparently split Cabinet for this revolutionary change but there is certainly a majority for it in the Parliamentary Labour Party. Whether the Government can succeed in getting the TUC to agree to a moderate version of a new revolutionary 'social contract' remains to be seen, but the lines of it have already been discussed. Apparently it involves (1) handing over half the company boards to the trade unions and (2) directing investment in the City.
I have always been strongly opposed to trade union officials sitting on company boards. They know nothing about management, which is a highly skilled job, and they would create havoc with their conflicting interests. The least harmful innovation, if we have got to have some extra form of 'industrial democracy', would be the two-tier board system which seems to create little trouble in Germany. The prime minister apparently favours that way out of trouble.
As regards direction of investment I was delighted to see that Mr Joel Barnett, Chief Secretary to the Treasury, confessed that he was against it in a recent speech he made at a meeting of the Committee on Invisible Exports. He did not think that it would help industry. The ponderous Wilson Committee has not yet come to a final conclusion on this question but the evidence so far presented suggests that the supply of City finance had not been any restraint on industrial investment in recent years.
Nothing has yet been settled between TUC and Cabinet but if there is no,Cabinet majority either for a tough budget or for a revolutionary 'social contract', the prime minister must surely be forced into an early election. That possibility may explain why the Stock Exchange markets have on the whole been holding their ground in these critical days. No one wants to be caught short of stock if an early election brings victory for the Tories.
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