Home thoughts from abroad
Nicholas Davenport
Having put my electoral affairs in
order by giving a proxy vote to nly son to exercise — and having departed for the tourist dollar area, where the pound sterling is held almost in contempt, I can look back on our tortured island and listen with some amusement to the views of foreigners on our Plight, knowing that while they Pity us now, we shall probably be Pitying them in five years' time. In the Caribbean islands where the population explosion abounds, Where families grow much faster than their capacity to feed and employ themselves, economic ruin surd
y stares them in the face unless they can apply compulsory vasectomy to their young men. In the great United States, where the social structure is not strong enough to withstand the explosion of wealth their economy can create, anything can happen from the impeachment of Nixon to the dictatorship of Nixon. Our little local difficulty between Mr Heath and a few Marxist-Cornnlunist trade unionist bosses paled Into insignificance.
Here I must remark on the apPalling ignorance of the British Political scene shown by the American press. The average American business tycoon one Meets cannot understand an 1.11glish prime minister who is a aehelor and musician, who reverses the Tory political prinelPles on which he was elected, ho goes behind the back of the (Intericans and makes oil deals With Iran and the Arabs, and who refused to allow American spy Planes to fly from British bases during the Middle East war. The ''.'ost well-informed article on Bri1‘14811 politics I have read was by a r Abrahams in a leading ,,Maican paper called the ;;"eaner. Like most commentators !'e did think that Mr Heath would lUst win but he saw the full itnplications of a Labour victory W,Ith Mr Wilson and Mr Healey "„.°rninated by the Marxist left who ',"ould insist on a 'soak the rich' Zuciget and break up the existing 4()cial structure of British society. -rut even Mr Abrahams did not p°resee the possibility of sarliament becoming a rubberftaMping machine enacting the trlial legislation giving effect to _e decisions taken by the Com`nunist-dominated trade unions. thlooking beyond the election, "e Americans see a hard slog for
the British for the next five years. We have three great assets to exploit — our financial services, our manufacturing expertise, and, the North Sea oil and gas deposits. The idea that our financial services would be in much greater demand as soon as we joined the EEC seems to have been grossly exaggerated. The financial links between London and the Continent were always there and apart from facilitating an increased investment in Europe by our trading and store groups no significant demand for our financial services has followed.
As for our manufacturing expertise — the high-conversion rate from raw materials to sophisticated manufactures in the chemical, electronic and machine tool industries — we are entirely dependent upon trade union co-operation, which comes and goes. We could lose whole industries if it went.
So we come back to North Sea oil. By 1975 it will begin to help our balance of payments. Already it has begun to develop subsidiary industries from Edinburgh to the Shetlands. If non-trade-union labour can be employed, if Labour socialisation of oil can be avoided, this development will be extremely rapid. But I do hope that the new British government will not try to regard the development of our North Sea oil deposits as independent of the combined energy programme of the western industrial world which Dr Kissinger is formulating. The United States still holds the key to the solution of our energy crisis. Without the American oil companies' contribution it will be impossible to raise the long-term development fund for the resettlement of the Palestinian people and bring peace to the Middle East. From information I have gathered here the plans for this development fund are already well advanced.
The $300,000 million budget which Mr Nixon has presented for the fiscal year beginning in July is said to be fairly neutral but Mr Malek, the deputy director of the Budget Office, is reported to have said, "The President is not going to tolerate a recession. If we have to bust the budget to prevent it, we'll bust the budget." That is the language we British love to hear when we come to the dollar area. At home we could do no such thing: our next budget could bust us all. But Mr Nixon can still talk from strength. Every American I have canvassed has told me that there is "no hope in hell" of getting a two-thirds majority in the Senate for impeachment. With his immense popular vote he has created a new power base in American politics. Poor Mr Heath must be feeling terribly jealous.
Postscript on return It had not occurred to me, nervous as I was about the outcome of February 28, that I should return to see no government at all. The Stock Exchange, whose members had been gambling heavily on Mr Heath in the betting places, fell less than I would have expected — twenty-four points in the industrial index, which is less than eight per cent — but after failing in an attempt to rally it is now set upon a downward course. Statistically — with industrial shares selling on
a price earnings of ratio of 9.3 — the market is still much too high, seeing that industrial profits are likely to fall by at least ten per cent in 1974, but a strange quirk will probably help to keep away a further disastrous fall. This is that a minority government of any sort will not be strong enough to do much damage to the investor. Even a Wilson government could not take over the hundred companies, or nationalise the North Sea, or impose a wealth tax with a tiny majority of two. The introduction of Liberals would add a bizarre touch, but not a deadly one, for the City. Next week I will analyse in more detail the most frightening situation the capitalists have ever experienced — that militant Marxist trade unionists who set out to smash Mr Heath personally have succeeded in smashing Mr Heath completely. Whether theyintend to go on and smash the weakened parliamentary system is not for roe to guess.
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