Conference present

A way out of the fog?

John P. Mackintosh, MP

It seems unlikely that anything that happens at any of the party conferences this autumn will be of the slightest importance. Increasingly one feels that the politicians are talking to themselves, cut off from the rest of the community by a thick fog of public boredom broken only by the odd flash of anger. What, most people will wonder, can any of them do about prices, about the apparent incapacity of British industry to deliver the goods (literally and metaphorically) and about the sinking self-confidence of this country and the similar decline in its prestige abroad?

And yet they are wrong, for there is no doubt that further displays of whatever the opposite of leadership or of simple ineptitude is, can do considerable damage. For example, it may seem utterly unimportant which unheard-of MP is appointed, for some obscure reasons of internal party patronage or balance, as Under Secretary for filleted fish, but it can upset those who have to live by selling their particular commodity and if there is a crisis in the industry and the civil servants have an off day, it could mean dithering when a decision is required.

One obvious danger is that internal pressures may make the Government reflate too soon. Further damage may he done to the economy by persuading or paying over-manned industries to hold on to their labour. Industrial confidence may be lowered even further, if that is possible, by threatening firms that do not invest enough. A serious possibility is that the separatist parties in Scotland (to a lesser extent in Wales) may be given a real boost by the evident failure of the two major parties either to understand or even to be interested in what is happening in these countries.

And the conferences have a value because one thing politicians do take notice of is other politicians and these annual get-togethers at Blackpool do give some indication of how the various power struggles within the parties are going, of how each party is viewing its opponents and this affords some clue as to which of the dangers listed above is likely to be most serious.

Some months ago, it might have been thought that the chief issue for the Labour Party was whether it could adopt the kind of incomes policy which would have any impact on the rate of inflation. Then, when the .£6 limit was announced, it might have appeared that the chief issue was whether this policy would be endorsed or not. The most significant development before Parliament rose was that the major unions clearly were more frightened by inflation than by any question of reversals of policy on wages and they were prepared to take an incomes policy, Mr Jack Jones led on this issue, the miners voted for the policy, it was accepted by the TUC and the ground was cut from under the feet of the parliamentary left of the Party. They cannot go out on a limb against an incomes policy and find themselves loudly denouncing Michael Foot and the bulk of the unions.

What they can do and have done is to shift their ground. It is clear that the £6 limit will be accepted by the Conference and this is an indication of the new weak position of the left, all of which is a ray of hope as far as this inflation-ridden country it concerned. But the unions and their members do detest unemployment on the million plus scale. It is much easier to argue that the Government should do something about this: other countries have taken action and the connection between providing jobs and pushing up prices is obscure, to say the least. But it is hard for the state to do anything really effective to mop up unemployment which will not mean a higher borrowing requirement or higher taxation and the former is certainly likely to be inflationary. Still, it looks as if the gestures announced by Mr Healey last week will allow the platform enough to talk about to get by at Blackpool.

There remain a number of serious economic issues but they will not be affected by the Conference, The first is whether the £6 limit will be enough to bring down the rate of inflation. On the other side, there are the dangers of an increase in the oil price, rises in commodity prices as the rest of the world starts to reflate, higher import prices due to a sinking pound and all the internal increases in rates, rents, telephone, postage, rail and heating and lighting charges springing from last year's inflation. The second is whether investment can be pushed up and the failure to do more here is symptomatic of the low confidence felt by the industrialists and by financial institutions, and this low confidence will not be helped by wheeling out stocks, whipping posts or gallows for those who fail to invest enough.

The third issue is the same as the one already discussed — when to reflate? If inflation falls to 10 per cent or below by next spring, the problem is manageable. Mr Healey has to hold out against increasing public alarm over unemployment and increasing sensitivity among Labour MPs over the winter. But if inflation is not coming down appreciably or fast enough by March and if the foreign holders of sterling are as sensitive as they are now, then he will be in real difficulties.

It is against this background that the old left-right battle within the party has to be assessed. At the moment, the left have suffered their first serious set-back since the early days of opposition after the 1970 election defeat. They lost badly at the referendum not only on the issue itself but on the clear evidence that the sight of all of them on one side was a major factor in persuading the bulk of the electorate to vote the other way. Then they lost over the adoption of an incomes policy — which involved the desertion of Michael Foot and Jack Jones. If the anti-inflation policy works, if the Cabinet remains intact over the winter and an orderly reflation can begin next spring with the Budget, their defeat will be total and the Labour Party will be back in the hands of the social democrats (at least in policy terms; the old left-wing personnel may still be in office carrying out these policies).

But if there is a failure to bring down the inflation rate, if unemployment mounts and

„The, 4. O there is no apparent end p on the left will revive and with their demand for a f October er, 4 then

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75 siege economy and internal reflation. Then much will depend on whether the unions stay with the Government's policy. If they get more frightened by unemployment than by inflation and swing behind the left, if Mr Foot resigns to lead these forces in Parliament, then the left will revive and the battle for possession of the Labour Party will be renewed.

It is interesting (to politicians and political commentators) that all this can be said without reference to the Conservative opposition. In some years, Labour Conferences have clearly beer. waiting and wondering what the Conservatives would be saying from the saple platform in a few days time. But not next week. They will hope for a little quiet amusement as the Thatcherites and the Heathites lock in battle and they will hope to gain something from the clear confusion about what the Tory Party would do about inflation, the unions, the state of industry and so on. The position of the Opposition is curious because the public include them in their general distaste for politicians and all their works; they certainly inspire no confidence yet among the public, there does seem to be an almost non-political swing to the right. There is a sense abroad that taxation is too high, the state has done too much and that if governments have failed as badly as they have over the last fifteen years, why don't they go away and let people get on with their own affairs?

This mood ddes reach through in a vague way into the speial, isolated world of politics. It may help explain why the social 'democrats are doing better in the Labour Party. Mrs Thatcher has been trying to tap this vein in her United States speeches. But one opposition party which has or should have far less problem in picking up this kind of support is the Scottish National Party (and also Plaid Cymru).

While the politicians are absorbed with their own struggles and the economic situation, many of them (including some Scots MPs) want to forget about the nationalist challenge. Yet it has flourished on UK economic failures and if these continue unabated through the next year or two, the Scottish opt-out of these problems will look steadily more attractive. What will give the SNP a further great boost will be if the Labour Government's plans for a Scottish Assembly turn out to be half-hearted, if the devolution is of only minor powers or if the Government allows the Bill to be talked out (like the House of Lords Reform Bill in 1969) in Parliament. While an effective subordinate Scottish Parliament might not destroy the SNP (this will only be done by a period of real economic success at the UK level), it would allow a wedge to be driven between the developers and the separatists, between the protest votes and those determined to go for complete independence.

So, though the main thing is to get the Conferences over and start living through this difficult winter, there are decisions on when to reflate, on what kind of Scottish Assembly to create which still lie with the politicians and where clearsightedness and courage can make some difference. If these qualities are revealed and the economy picks up and inflation comes under control, that is if world events help or back up good leadership in Britain, then the slow process of re-establishing contact between the politicians and the public will have begun.

John P. Mackintosh is Labour MP for Berwick and East Lothian