Norman Stone - The Atlantic and Its Enemies

But then came the oil shock. Even food prices trebled by 1974 as against 1971, and the bubble burst in November 1973, when the minimum lending rate was pushed up to 13 per cent while public spending was cut back by £12bn. One of the new banks could not obtain credit, and the other banks had to set up a ‘lifeboat’. It was not enough. The Bank of England itself had to move in, in the winter of 1974-5, and a well-connected bucket shop concern, Slater Walker Securities, had to be rescued in 1975. The Stock Exchange collapsed. Heath’s effort to spend his way through the strange ‘stagflation’ had thus come to grief, and inflation by 1976 reached 25 per cent.

In this dismal tale came a damp squib: since the later 1950s the importance of the European recovery had been plain for all to see. Germany boomed and boomed, and so, despite 1968, did France. Italy was also picking herself up in a remarkable way, and by 1970 any Englishman could see for himself how far his country was lagging behind. By 1960 British governments appreciated that their might-have-been alternative, the former imperial lands and some of the smaller European countries such as Finland and Austria, did not give them quite the same weight as would membership of the European Economic Community. Besides, the Americans were very keen to have Great Britain as a member, for the obvious reason that she would act as an Atlantic bridge for them, in a hostile view, to walk upon. The British tried in 1962-3 and were told ‘no’ rudely and in public by de Gaulle, who wanted to build up Europe as a sort of ‘third force’. He did it again in 1967. After his resignation, and after the shock of 1968, there were more realistic French governments and de Gaulle’s successor, Pompidou, could see, with the shocks of the world’s financial system in the early seventies, and the American disaster in Vietnam, that the Atlantic system needed buttressing. On the British side the various mishaps of that period caused a good part of opinion to wish that, like Italy, England could be governed by foreign-made rules, since the domestic ones were so demonstrably not working. Besides, on both sides of the political divide, senior politicians believed in big government, erecting concrete blocks of some hideousness in celebration of it. The Europe of Brussels did much the same, and the tourism shops in that city even sold ballpoint pens with a paper-clip as pocket-attacher. In 1972-3 the Heath government pushed British membership, and did so in some desperation. It signed away British fishing rights, condemning picturesque fishing villages to decline as floating fishing factories vacuumed the fish out of the sea. It also had to accept the Common Agricultural Policy, which put up food costs for the poor by £25 per week, and deprived former colonial territories of an appropriate market, all the while getting the ordinary taxpayer to pay. Still, ‘Britain in Europe’ appeared to be the only way out of the troubles of the Heath-Wilson period, and in 1975 a referendum confirmed British membership. Italians had constantly voted with enthusiasm for not being governed by Italians. Now the British did the same. Heath had quite unwittingly done that service to the cause he most believed in. But Europe offered no immediate relief, quite the contrary.

The attempt to deal with the union problem was farcical. It had split the Labour government in 1969. Heath tried to deal with it by law, and made the law look an ass: jailing dockers, however repellent they might be, in peacetime, was a reductio ad absurdum of Marx’s Eighteenth Brumaire , called for ridicule, and got it. London, at the time, was plastered with government posters explaining an incomes policy of percentages of percentages minus some figure that had been thought up for the lowest-paid, and the face of the Prime Minister on television was an invitation not to bother voting at all. Heath’s incomes policy did not get off the ground; it was sabotaged by the miners in 1972 and fatally in 1973-4. A Prices and Incomes Board was established (under one Aubrey Jones, a marketer of soap powder in the 1960s). Of course, it was absurd for some central body to be controlling such details unless it had the equivalent of wartime powers. But the Atlantic world attempted such things, even under another supposed conservative, Nixon. The whole thing tended to freeze pay as it stood, ‘relativities’ being a minefield, i.e. who was paid more than whom for what. The Cabinet, to its bewilderment, found itself discussing what the secretaries should be paid. With the Coal Board, there were immediate problems, because miners saw themselves as essential, could also discern that the rise in oil prices would make coal very desirable, had their wages politically determined, and did not see why their daughters should earn more as hairdressers. In 1972 they put in a claim for 27 per cent and 10,000 of them besieged the Saltley Coke Depot outside Birmingham. This was settled. Dockers then wanted their slice.

In the end it was the inflation that caused much of the trouble, but there was as ever in England an historical element. An extraordinary British anomaly, a tribute to the very high standards of the past, was that the trade unions were subject only to the criminal law: gratuitous mayhem, of a kind that no-one, in the English nineteenth century, would have expected. In 1906 a Liberal government anxious to please labour produced a trade union law that assumed common decency. The matter was not even debated, so that the then worthies could devote their oratorical talents to the Irish Question. The trade unions’ power to ‘picket’, i.e. to deter potential customers and strike-breakers, was unchallenged. That power was not supposed to include violence, but there was nothing to prevent strike pickets from roving around to stop firms that were indirectly involved in the affairs of the struck-against one. A would-be mining revolutionary, Arthur Scargill, sent men with brickbats to raid the power stations and stop the use of coal, and the police stood by, helpless. In the docks, a similar protection-racketeering prevailed. In the event, power was switched off for much of the day, and industry itself went over to a three-day week (during which it produced more than in the previous 5½-day week). In February 1974 Heath narrowly lost an election, and Labour returned, this time producing a ‘social contract’ with the unions which was received with derision. The general idea was that there would be a ‘fairer’ society — i.e. direct taxes on the better off that would reach almost 100 per cent — if the unions restrained wage demands. They could not control their own people and the overall inflation was such that they were required to put in for higher wages in any event.

The public service unions now started. From 1961 to 1975 central government employment had risen by 27 and local government by 70 per cent. The NUPE (National Union of Public Employees) grew, from 265,000 to 712,000 between 1968 and 1978, and in 1973 came the first National Health strike, which included consultants. Jack Jones became a figure of power, as head of the TGWU, the largest of the unions, pushing for an extension of union power over Labour. It was he who produced the idea of a ‘social contract’, an echo of the ‘social partnership’ of consensus-minded Catholics. There would, he promised, be moderation in wage claims as a consequence. There followed some preposterous calculations as to permitted wage rises. As in the United States, these were soon shown to be imbecilic. Jack Jones apparently dictated academic salaries, and some deluded dons, unable to believe that an enlightened government could do this to them, demonstrated in mortarboard and gown outside Downing Street with the electric slogan, ‘Rectify the Anomaly’. By June 1975 weekly wage rates had risen by up to one third, and by summer 1977 inflation stood at 13 per cent and wages rose by 14 per cent, the better-paid workers now paying marginal rates of income tax. In fact taxation was wicked, in the sense that it was destroying the good. A married man with two children had take-home pay of £70 per week in December 1973, but £63 in 1977; by 1979 the incidence of taxation was growing, such that there were 2.5 million more taxpayers than in 1974, but the government’s own poverty figure was £55 per week for a married man with two children. There was every incentive, therefore, for said married man to abandon his family and sue for ‘benefit’. A million people earned less than £55, the lowest 10 per cent of earners in the National Health Service earning £48, and the overall average itself was now low: £80 in industry generally or, for the 2 million local government workers, less (dustmen earned £56). Anthony Crosland, the ideologist of modernized Labour, became a near alcoholic. His final contribution to the country’s future was to destroy the selective grammar schools that had been a great glory, and a means to inspire and promote bright children from poor backgrounds. This was done in the name of equality: schoolchildren were all now to be brought up in the same huge ‘comprehensive’ schools, and examinations were increasingly rigged to demonstrate that these unlovely places were a success. As ever, in England, when equality was in question, all that happened was the proletarianization of the lower-middle class.