By Norman St. John-Stevas
M.P.
RHODESIA continues to dominate the front pages, but the harsh economic facts of life have not changed and Britain is still engaged in a struggle for economic survival. The sterling crisis is over for the moment, but the government has only won a battle not the war.
Our future still depends on achieving a permanent rise in our exports and this in turn depends on British costs being competitive in world markets. Everything in fact hinges on the incomes policy and not even the Chancellor of the Exchequer can maintain that it is succeeding.
Indeed he has said as much. The facts speak for themselves and do not need labouring. The guiding light for increases in wages and salaries has been fixed at between 3 and 31 per cent per year.
In fact, over the last year they have been going up at the rate—I quote Mr. George Brown—of 7 per cent. This
clearly can only go on at the price of a cost inflation which will threaten our existing export markets and prevent us from achieving the expansion which is so desperately needed.
Why is the policy so manifestly failing? I believe the reason to be that the government has relied too heavily on the Prices and Incomes Board, presided over by Mr. Aubrey Jones.
The Board has been used as a substitute for policy. It has placed on a new institution feeling its way forward an intolerable burden of which even its chairman has complained.
I am not criticising the Board but the government. Mr. Aubrey Jones. by fashioning his Board into an instrument to increase efficiency, is making a valuable contribution to our economic health.
He has succeeded in making the public as a whole aware of their direct interest in wage increases which are immediately passed on to them in the shape of increased costs, but to expect Mr. Jones and his Board to fill the gap left by inadequate fiscal and monetary policy is quite unrealistic.
What, then, is the likely outcome? I can see only a move towards greater compulsion. Already the government is seeking statutory authority to require early warning of wage claims to be given to the Board. The next step along the road is legislative control of both prices and wages.
Clearly it is this that Mr. Frank Cousins, Minister of Technology, fears, and why his silence in support of the Government incomes policy has been so deafening. I have some sympathy with Mr. Cousin& fears, but not with his remaining in the Cabinet and ostentatiously refusing to give Mr. George Brown his support.
The doctrine of Cabinet unity is now fundamental to our constitution. and I don't see how Mr. Cousins can for much longer avoid the choice between speaking out or getting out.
Meanwhile, where do the Tories stand on the whole issue? There are undoubtedly those within the party, including Mr. Enoch Powell, who want to be shot of the whole apparatus of indicative planning which they regard as a mischievous delusion.
Mr. Powell wants a completely free market economy with the odd exception of a free Labour market. He, curiously enough. sees no contradiction between demanding the freest possible play of market forces and at the same time a virtual cessation of any immigration from the Commonwealth.
I believe that it would both be wrong and impolitic for the Tory party to abandon the middle way in economics. After all it was a Tory Government which pioneered both indicative planning and an incomes policy in Britain.
The roots of the Tory attitude welcoming government intervention to promote the welfare of all the people are found in the great socially reforming ministries of Disraeli in the last century and in those of Mr. Neville Chamberlain and Mr. Harold Macmillan in this.
Laissez-faire may have been the doctrine of nineteenth century liberals, but it has never been and I hope it never will become the central tradition of the Tory party. The argument inside the Tory party will doubtless continue and in this as in other matters I am in favour of building on traditions, not abandoning them.
This is sound principle and, I think sound politics.