Maiming the Government
Tbh, e latest nosedive by sterling, and the devastating results of the Von and Ely by-elections, not to mention the publication of ,"eWs about a report (officially denied) by senior British civil servts working in Brussels, to the effect that the first seven months British membership of the Common Market indicates that joinitn,g the great European conglomerate was a terrible mistake for t'‘'Is country, have combined to thrust the Phase Three talks beveen the Government and the TUC into the background. This is reat pity: first because it is now clearly the intention of both tvir Heath and Mr Feather, not to reach conclusions at these sa'Its, but to postpone breakdown beyond the TUC conference in 'cePtember and the party conferences in October; and second bebao'Llise. as has been the fashion with all British political shibi_ eths since the war, the debate about incomes restraint and crldustrial order is a non-debate, having little reference to the ciluntry's real difficulties, and pursued by the participants only in 'er to conceal from themselves and the public the real and truth about the national situation. Mr Heath wants to postPc'lle the moment of truth in the hope that his much heralded rowth policy will at length have a desirable effect; and Mr ather and his colleagues because they prefer conversations th'it,11 governments — any governments — to facing the plight of reeir members considered as consumers. In both cases the end 0,sult will be a further delay, though one of only a few months, in t'i.!e twenty-eight-year-old delay in facing up to the problem of British economy: the sooner the incomes policy attempt col, Pses in ruins, and is seen to collapse in ruins, the better for the '°uritry.
F" Postponement will serve only to conceal two truths — that alileath's incomes and prices policy has already failed, as surely ra't', evidently as did Mr Wilson's; and that, acting from instinct than through intelligence, the trade union movement, and coe Much-despised militants in particular, have been perfectly bel:rect and responsible in refusing, in the interests of their mem to enter into any wages deals with a government which, as is 'ready more than clear, simply cannot control the economy. It taht4sually said that TUC leaders refuse such deals because they ti;not guarantee delivery on them: but it is at least equally true strqt the three-year record of the Heath administration demon tes quite clearly that the Government cannot deliver on its of the deal either, which is to reduce significantly the rise in ris,"e.s. It is the business of trade union leaders to secure a steady 44' n real wages for their members: there is no evidence that ecineeivable deal with Mr Heath would enable them to do t.,Ahd, as to the Prime Minister's emphatic quotation of pretty ris""ous Treasury statistics to the effect that real incomes have ten despite the rise in prices, an emphatic answer was given by ju'de electors of Ripon and Ely: what is at issue here is a conflict of torgernent between the statisticians of Whitehall and the electhAs,who have to do the Saturday shopping, and the electors are 'Judges.
1.(,_L dreadful feeling gains ground that we have been here bee. When we look at the benefits to our exports of a falling pound, we must recall Mr Heath's remarks on December 5, 1969, on Labour's devaluation. He said: "Today we are reaping the benefits of devaluation. But tomorrow we shall have to meet the cost of the boost to inflation it has given." When we see the Government increase interest rates to reduce the effect of the sterling crisis, we recall the Prime Minister's remarks on that same subject in that same speech: ". . . investment, the key to growth, is being sacrificed on the altar of high interest rates so that the Chancellor of the Exchequer can pretend to repay overseas debts by filling our coffers with expensive flight capital from abroad "; and we must then begin to wonder how long the present investment boom will last. Most readily, when we hear ministers expounding the necessity of an incomes policy, we can recall Mr Heath at Carshalton on July 8, 1967: "But if by an incomes and prices policy is meant Government control over all incomes and prices, disguised as a voluntary effort but in fact under threat of order in council and therefore compulsory, this is not only impracticable but unfair, undesirable, and an unjustifiable infringement on the freedom of the individual." Finally when, as last weekend, we hear Mr Heath telling his followers that all is well with the Government's policies, but that the effort to communicate them must be redoubled, we can only too readily remember his words at Manchester in 1969: "Twice before we were told that our troubles were over. In 1966, before the General Election, and the July measures followed. In 1967 — and devaluation followed, Now we are being told again that our troubles are over. What is really different this time?" As in 1969, so now — nothing is different.
Nothing, that is, except our bills and our financial commitments, which are very much higher. Perhaps the most intelligent, and the most logical — given their particular philosophy of economic management — suggestion made by the TUC leaders has been that the Government should adopt policies of food and other subsidies and pay for them by an increase of about E800m in direct taxes. The Spectator would not applaud such an increase, because it is contrary to our philosophy of free enterprise. But if the Government is prepared to continue with its policies of high public spending, then the mcney must be found somewhere, if inflation is not to destroy the currency, and with it the country. Mr Feather and his colleagues are wiser in their generation than Mr Heath is in his. And the evidence mounts day by day that the Government is in a state of intellectual confusion bordering on dishonesty. Mr Davies, for example, tells the House of Commons one fortnight that there is no question of a rise in our contribution to the Common Agricultural Policy: then he announces a £50m increase. Mr Heath tells us that he will spend and spend and spend on Maplin, the Chunnel, Concorde and industrial subsidies, but that he will also run a trade deficit and reduce taxation. Was this the world Mr Heath had in mind when he said at Manchester in 1969, "Above all, what we need is not more government, but better government?"
Few would deny that there are times when a modern government is required to embark on an expenditure programme which no collection of private entrepreneurs could undertake, but which is in the interests of the community: we believe that Maplin may be such a project. But there cannot be an indefinite number of such projects. At the time of the last budget, the difference between the Government's income and its expenditure on all projections was £4,000m; the shilling which led Mr Micawber to despair pales to an old penny by comparison. Yet, while it behaves, and proposes to continue to behave, in such a spendthrift fashion, the Government exhorts trade unions to responsibility, and suggests that speculators who make money from its follies are behaving immorally. And, while examples of Government irresponsibility in expenditure at home mount, we are also beginning to grasp the fact that on every likely or authoritative prediction our expenditure as members of the EEC will produce no income but much more spending for the foreseeable future: our much vaunted export growth lies almost entirely outside Europe; the various other member countries have made it clear that they intend to contribute to none of the schemes — like that for the regions — which would help this country. In a situation like this it does not lie in the mouths of ministers to condemn or criticise others. Let the fault of our ills be blamed on those who caused them, whether through incompetence or dreams. Let it be blamed on the Government.
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