Staggeringly Complacent

The arguments about the miners’ strike will go on for a long time yet, as is evident from Richard Hyman’s piece on another page. My own view remains essentially what it was when I wrote what turned out to be a controversial article last summer (LRB, 6 September 1984). Mr Scargill’s demand that no pit be closed except on grounds of exhaustion was economic nonsense; his attempt to achieve his aims by extra-Parliamentary means which included violence and intimidation had to be defeated; but the support he enjoyed inside and outside the mining communities was an understandable reaction to a government indifferent to high unemployment and worsening poverty, and determined to ram highly contentious policies through Parliament despite the paucity of its electoral support. This reading still seems to me to be correct.

One issue raised by the strike that is not going to go away is the role of the Police. The Police were asked to do a difficult and dangerous job during the strike – the recent conviction of two Welsh miners for the murder of a taxi-driver being a grim reminder of the lengths to which violence was carried. But however non-paranoid one may in general be about the Police, one cannot but feel very uneasy both about some of the things that happened in the mining villages, and about the de facto creation during the strike of a national police force whose accountability to anyone was difficult to discern. This unease is enhanced when a Home Secretary as relatively hard-line as Leon Brittan is shouted down, as he was recently at the annual conference of the Police Federation; and when one’s own and one’s friends’ children come back from perfectly peaceful demonstrations in Grosvenor Square with vivid accounts of specific instances of gratuitous police brutality.

There is another legacy of the strike whose longer-term implications are unclear, but which could be of considerable significance. When it became apparent that the miners were going to lose, it seemed quite likely that the Labour Party would find their defeat an occasion for further self-laceration. Accusations would fly from left to right ... treachery ... stab in the back ... betrayal of the working class ... It is early days yet, of course, and Mr Scargill’s merciful absence from our television screens for the last two months does not mean that he has retreated into a life devoted to growing roses or breeding whippets. The Labour Party Conference is just beginning to appear above the horizon, and anything can happen there. Nevertheless, there is a feeling that the moderates have emerged from the trauma considerably strengthened, and that the hard left has been discredited. Scargillism is out, at any rate for the foreseeable future. Centre-right Labour MPs are being reselected with much less difficulty than was anticipated a year ago. Benn is a spent force, the Trots in disarray. The sense that the balance within the party has swung back towards moderation must have been a factor behind Labour’s strong recent showing in the opinion polls; and this strong showing will in turn reinforce the position of the moderates.

In one way, this is bad news for the Alliance. Some of the SDP’s earliest supporters were in no doubt that they were embarking on a process of replacing an increasingly irresponsible and hard left-dominated Labour Party as the main opposition to the Conservatives. But what happens if the Labour Party manages, as the next election draws nearer, to present itself as a party of moderation and realism? The awkward squad – the Heffers and Skinners – will be eased off-stage. The reassuring figures of Healey and Hattersley will become ever more prominent. It will be explained to Kinnock that some of his rhetorical excesses can be counter-productive. All this will count for quite a lot. Nevertheless, even nowadays image is not quite everything. Some of Labour’s policies will come under close scrutiny as the election approaches. Neil Kinnock, for example, has always been a unilateralist, and might actually persuade his Cabinet to close down the American nuclear bases. This prospect would delight many voters, but might alarm many more. Then there is the recently reiterated pledge to renationalise British Telecom. The heart rather warms to this proposal: the privatisation of BT was a scandal – not just a case of selling off the furniture to pay for the food, but doing so at a knockdown price (the 50p part-paid shares have risen to over 160p). But the head asks whether such a pledge is wise. Will the numerous shareholders of BT be pleased? What would be the effect on the PSBR?

However all this may be, things have changed. Replacing Labour is no longer the name of the Alliance game (if indeed it ever was: some at least of the founders of the SDP were principally concerned to break the mould of confrontational two-party politics and usher in an era in which government by a single party would become the exception rather than the rule). The waning force of Bennism may inhibit the defection of Labour voters to the Alliance: but the still-surging tide of Thatcherism is a strong encouragement to moderate Conservative voters to switch to it. (This might change if the Tory wets got their act together, but Mrs Thatcher was right about one thing, as the Pym fiasco has just demonstrated: the Tory wets really are wet.) On present form, it is in the Conservative South rather than the Labour North that the Alliance will win seats, and this is why the talk is now of Labour being the biggest single party in the next House of Commons – with the Alliance holding the balance of power.

But such speculation can easily be confounded. All this can change very quickly: therein lies much of the fascination of politics. Meanwhile we are stuck with a government whose behaviour becomes increasingly bizarre. There is Lord Hailsham – such a venerable member of the Cabinet that even Mrs Thatcher can apparently not bring herself to pension him off – engaging in a rearguard action to preserve the privileges of part of his own legal profession that would have got him short shrift from this union-bashing government had he been trying to do the same thing for some group of manual workers. There is Sir Keith Joseph, behaving more than ever like a leading member of a religious sect dedicated to self-flagellation, determined – in an era in which knowledge-intensive activities are increasingly what really count – to reduce even further the Government’s expenditure on higher education. Or take another example. For many years I have been telling students that a poll tax is an ‘efficient’ tax in the technical sense that people cannot avoid paying it by changing their behaviour (short of emigrating or committing suicide); but that of course no government would actually dream of introducing such a regressive tax, so we need waste no time discussing it. Lo and behold, some kind of poll tax is now the leading candidate to replace the rates.

And then there is the strange case of Nigel Lawson. A week or two ago he gave evidence to a House of Lords Select Committee. It was suggested to Mr Lawson that some of the great captains of industry – the Lord Weinstock, the Lord Aldington, the Lord Kearton, not to mention plain Mr Harvey-Jones of ICI – were deeply unhappy about some of the Government’s economic policies. Nonsense, replied Mr Lawson robustly: they may whinge in public, but in private all these industrialists will tell you that we’re really putting up a jolly good show. Before passing a verdict on Mr Lawson, I should declare an interest. Some eight years ago, when Mr Lawson was still, like the rest of us, trying to turn an honest penny by doing a bit of scribbling on the side, he wrote a lengthy review in the Financial Times of a book I had just published. The book was called ‘staggeringly insular’. Since it represented an attempt to analyse the inter-relationships between party politics and economic policy in Britain between 1964 and 1975, this criticism did not seem entirely apposite. But I did like his adverb, and added it to my repertoire. Like a bouncer or a reverse pass, it loses its point if employed too often: but surely this is a legitimate occasion. Mr Lawson’s handling of economic policy is staggeringly complacent.

Unemployment is very high, and still rising. Inflation – already considerably higher than with our main competitors – is edging up again. Manufacturing investment, in real terms, is not merely 30 per cent below what it was in 1979: for the last three years net investment in manufacturing has been negative – in other words, gross investment has been lower than depreciation, so that the size of the manufacturing capital stock has been shrinking. Employment in manufacturing is now down to 5½ million – 30 per cent below what it was only ten years ago. Does this kind of thing not worry the Chancellor? Not in the least, replies Mr Lawson: the future lies in services. Many people, including some of their lordships, take leave to doubt whether the growth of services (to a large extent an employer of part-time married women) is going to solve either the unemployment problem or the problem of how to pay for imports as the oil begins to run out. But Mr Lawson remains unruffled.

Of course it is not really his fault. Giving evidence to another Parliamentary Select Committee in 1980, Milton Friedman, the great guru himself, concluded that ‘a. only a modest reduction in output and employment will be a side-effect of reducing inflation to single figures by 1982, and b. the effect on investment and the potential for future growth will be highly favourable.’ The Government clearly believed in this fairy story when it was recounted to them. But perhaps the time has come to have another think about a model whose predictions can be so grotesquely inaccurate.

Meanwhile, not far ahead, things look like getting rougher. The steam has gone out of the American boom. The Germans and Japanese have no intention of taking up the slack. World growth will slow down, and probably turn into a recession. Protectionist forces in America will gather strength. The developing-country debt crisis, never far from the headlines, will be alleviated somewhat by lower American interest rates and a lower dollar, but this effect will be offset, perhaps swamped, by the slowdown in the growth of world trade and a further fall in commodity prices. As always, it will be the poorer developing countries that will suffer most. But among developed countries the kind of nation that will find the going particularly hard will be one which starts the recession with a high unemployment rate, a rising inflation rate, an overvalued currency, an undue dependence on the export of a commodity such as oil, a weak manufacturing base, a chronic shortage of modern skills, and a government with an antagonistic attitude towards a large section of its work-force and an unshakable conviction that it is always right. Mr Lawson is indeed staggeringly complacent. But it is with Mrs Thatcher that the responsibility ultimately lies. As Aneurin Bevan unkindly observed, when Mr Macmillan was Prime Minister and Selwyn Lloyd Chancellor of the Exchequer: ‘Why criticise the monkey when the organ-grinder is here?’