POLITICAL COMMENTARY The Revolt That Jim Killed

By ALAN WATKINS

Ma JAMES CALLAGHAN has for some time been highly and perhaps justifiably sensitive to charges that he was over-influenced by Mr Nicholas Kaldor. `Nicky,' the Chancellor is said to have remarked on one occasion, 'may come up with twenty ideas. Nineteen of them go straight into the wastepaper basket. The other one I think over and maybe accept.' Is the selective employ- ment tax one of those ideas of Mr Kaldor's which, as it were, got away? In the lobbies on Tuesday, certainly, there were plenty of Members—not all of them by any means Conservative—who chimed that Mr Kaldor's hand lay heavy on Mr Callaghan's new proposal. There was one young minister, however, who became quite incensed at the suggestion. The employment tax, he said, stood out as Mr Callaghan's own choice. It was his greatest ambition (this minister continued) to go down in history as a reforming Chancellor.

This second explanation is not inconsistent with the first. But notice the word 'explanation.' The budget, so everyone to whom I spoke felt after- wards, was something that needed explaining. It was not at all what people expected. 'The press were led right up the garden path,' gleefully ex- claimed one ancient Labour MP to a colleague. And part of the explanation at least can be found in the personality of Mr Callaghan, which is a much more complex one than is generally sup- posed. It is a curious mixture of arrogance and real humility.

For instance, Mr Callaghan rarely had any doubt—whether his confidence was altogether well-placed is another matter—of his ability to handle and if necessary dominate Lord Cromer. On the other hand, he disclaims any great clever- ness, whether of the economic or other variety. Oddly enough, when Harold Laski was lamenting the general inadequacy of the 1945 intake of Labour MPs, he mentioned two who were more intelligent than the rest. One was Mr Callaghan. (The other, as it happened, was Mr Ian Mikardo.) It is significant that when this was recently pointed out to Mr Callaghan, his reaction was one of genuine, though no doubt pleasant, surprise.

But the Chancellor's pride, we may safely assume, was bruised by the continuing assump- tion that he was in office merely to carry out the Treasury's instructions and incidentally to do down Mr George Brown. He therefore determined to issue a declaration of independence. It would be going much too far to say that this was Mr Callaghan's dominant motive in framing his budget. Nevertheless this element of personal pride was undoubtedly present. Nor is this the only personal consideration to bear in mind. Mr Callaghan, as I have already indicated, wishes to be remembered as the Chancellor who introduced this, that and the other reform. In private he refers frequently to Gladstone. Indeed last year, When the Finance Bill was being fought in the Commons, one sometimes gained the impression that he was being buoyed up, not so much by any intrinsic merits in the new taxes, as by the pros- pect that they would make him remembered in fifty years' time. And something of the same kind may well apply in the case of the new employment

tax.

So much, then, for Mr Callaghan's personal motives. Let us now have a look at the political motives behind the budget—or at least at its political consequences. Until Tuesday afternoon there was a very curious atmosphere on the Labour back benches. There was a whiff of rebel- lion in the air. One could detect little or no dis- position to be suitably grateful to Mr Harold Wilson for the infinite blessings which he had bestowed on the party; and this feeling of dis- affection was as current among elderly, right- wing trade unionists as it was among the new Members.

It is possible to isolate several causes of this on the whole surprising atmosphere. There was the boring quality of the Queen's Speech and of the consequent debate on the Address. There was the small number of promotions from the back benches to the new Government. There was not merely the Government's attitude to the Vietnam war but the general Foreign Office posture adopted by Mr Michael Stewart. (A Stewart-must- go movement is now under way.) There was the whole subject of parliamentary reform and the encrusted attitudes thereto of Mr Herbert Bowden and Mr Edward Short.

But above all there were the fears about the management of the economy. And if on Tuesday Mr Callaghan had opened up the full deflationary package there is little doubt in my mind that he and Mr Wilson would have had a major revolt on their hands. Mr Callaghan. however, did not choose to do this. Instead he delivered up a budget which was variously described by Labour MPs as `exciting,' imaginative,"the best for years,' and even 'the best we've ever had.' Naturally some Members have their reservations. It is understandable that a Co-operative MP, Mr Laurie Pavitt, was critical on Tuesday evening. And Mr Walter Padley and the shop workers' union cannot be best pleased.

However, Mr Callaghan has removed the im- pression that this Government is being jointly run , by the Treasury and the foreign bankers. Whether his success will persist until the end of the year is of course another matter entirely. By then we may well have had an autumn budget (`the October measures' will probably be the phrase chosen) imposing all manner of fierce new taxes. But for the moment at any rate Mr Callaghan has succeeded not just in stilling the doubts about economic policy but, more, in making the back-benchers feel positively enthusi- astic about it. And, by a not entirely logical pro- cess, this enthusiasm will now spread to quite other fields of policy. The Government, it will be believed, has its heart in the right place after all. Will the voters be similarly enthusiastic?

Perhaps they ought not to be—after all, they have been given nothing--but the indications are that they will. The cynics among us might say that Mr Wilson and Mr Callaghan have been engaged in a skilful form of psychological warfare. First Mr

Callaghan declares that he sees no need for any

`severe' increases in taxation. reply the Con- servatives, 'how severe is "severe"?'; and Mr Callaghan refuses to go any further. Then, at a pre-election press conference, he appears to be back-tracking. 'We've got him now,' say the Tories; and again Mr Callaghan does not reply. Enter Mr Wilson, who makes several neo- Churchillian speeches about the way ahead being hard, and so forth.

Then in the post-election weeks the impression grows that the budget will be severe; numerous

articles are devoted to this grave theme; and the Government does not go out of its way to correct this impression. By this time the unhappy public is in a thoroughly complaisant mood, prepared for the worst. And, when the worst does not hap- pen, the public is disproportionately relieved and indeed elated. It is all rather like the case of a prisoner who is told on all sides—by his counsel, by his fellow prisoners--that the judge is in a bad mood and that he can expect a stiff sentence. When the time comes for sentence to be passed the judge lets him off with a lecture on the virtues of thrift and hard work. Naturally the prisoner is relieved, just as the voters are relieved today.

The credit for this happy state of affairs belongs chiefly to Mr Callaghan, and it remains to say something of his performance in the House on Tuesday. It was probably better even than his previous performances, which is to say a great deal (though it should not be forgotten that Mr Callaghan has by now had a remarkable amount of experience in introducing budgets in a remark- ably short space of time). Budget speeches, in- deed all House of Commons speeches from a Chancellor, have to be judged on rather different criteria from the normal, because they must by their nature be read word for word from a long script. Mr Callaghan varies his tone (there are hints of the Radio Doctor in his voice) and he does not fluff his lines. One BBC man who was present in the gallery was amazed that, in a speech of an hour and a quarter, the Chancellor made only one reading error: this was when he con- fused the capital and the current accounts.

All Chancellors, admittedly, are guaranteed a good audience, because all Chancellors have something to say—or so it is believed—however badly they may say it. But the budget audience on this occasion was more attentive than most.

It was so, not only because of Mr Callaghan's delivery, but because of its own character. It seemed much more thoughtful and much less partisan than usual. The inevitable Mr Leo Abse and Sir Gerald Nabarro apart, there was less dressing-up. Indeed Sir Gerald, with his black top hat and overgrown carnation, was an oddly poignant sight, a figure from Macmillan-land, from what now seems a far, far-away world. On the benches opposite sat rows and rows of young- ish men in bluish shirts, and they were clearly not in the least impressed or amused by the spectacle on the front bench below the gangway. They had come earnestly, purposefully, certainly somewhat humourlessly, to listen to the Chancellor, and listen they did. They approved of what they heard, though they might easily not have done so. One doubts whether Sir Gerald approved. It was not his kind of budget. Somehow one feels that it will not be his kind of Parliament either; which, is a way, may be a pity.