ELEVEN YEARS OF TORY RULE

By T. E. UTLEY How the reputations of governments are made and destroyed will always remain, in the last analysis, a mystery. It is certain, however, that from time to time and often for no easily apparent reason other than general boredom the publicists conspire to declare a government's policy bankrupt.

This has been the recent fate of Mr. Macmillan's administration. Scorn had been poured upon it for the last six months from right and left and as a result, rational argument upon its achievement, let alone dispassionate judgment of its quality, is far from easy.

I believe that three-quarters of both cases against Mr. Macmillan and his colleagues rest on unproved assumptions and mere misrepresentation of fact. I hold that, within the limits of political possibility, the Tories over the last eleven years have done markedly better than could reasonably have been expected of them and demonstrably better than the Labour Party would have done. To establish this point, however, I must begin by trying to state as forcefully as possible exactly what is alleged by their critics.

THE INDICTMENT

THE prevailing impression of Conservative Policy over the last eleven years is one of extreme incoherence. The Tory Party has, it is alleged m to , lived from hand mouth. It has occa- sionally checked but has never fundamentally reversed the trends towards national bankruptcy and imperial and social disintegration which were going on when it came to power. Essentially, we remain in much the same position as we were

in 1951

This represents the common element in the criticisms of both right and left and, it must be admitted, it probably also represents at present the average independent view of the period. Within the limits of this general condemna- tion, two broadly opposite lines of criticism can be distinguished. The critics from the right— generally the more venomous—contend that they have been deceived. In 1955, they accepted the Government's explanation that it had had to sPend four years in establishing confidence and Providing first aid to a country ravaged by Socialism. They hoped that the second term of Tory rule would see the Government at work restoring the foundations of a Tory society; they looked for vigour abroad and economy at home. In 1959, they were willing to renew their act of faith on the understanding that the Tory Party was now controlled by Mr. Macmillan, a man of the right who, by his zealous support for British intervention in Suez, had established himself as a devotee of the imperial cause. Soon, however, they found that they had been deluded. Mr. Macmillan, like General de Gaulle, had seized power with the aid of the right only in order to betray the right. In Africa he em- barked on a policy of indiscriminate surrender; towards America he showed that he was willing, in the last resort, to accept the role of Euro- Pean agent: at home he treated full employment and the preservation of the Welfare State as aims which should take precedence over the revival of enterprise and the defence of the Pound. Such is the gravamen of the charge made by discontented Tories and Liberal converts. Criticism from the other side is also formid- able. The most telling Socialist complaint is that eleven Years of Tory rule have seen no funda- mental improvement in the country's economic P°sition. On the contrary, it is said they have been marked by a series of alternating booms and sinItimps, directly caused by government policy.. Nine Minute we appear, at long last, to have started to climb the broad and sunny uplands of prosperity; then, there is usually a general election and, when the Tories are safely returned to power, they calmly tell us that we are back on the brink of ruin. More than once during these last eleven years the country has seemed, in respect of the balance of trade and its effect on the national reserves, to be almost precisely where it was in 1951. If it has had a share in a general rise in the standard of living everywhere, its rate of economic development has been far slower than that of other countries, and most notably than that of the rest of Western Europe. Further. Socialists argue that the country as a whole has not benefited equally from this rise in prosperity, but that, on the contrary, the least productive sections of the community have done best. Britain, they say, has become a gambler's heaven; the people's welfare is built on private debt. The Tories have favoured personal con- sumption by the rich, at the expense of public investment in fields like education, health and industrial modernisation, and, by so doing. have hindered the growth of productive capacity. Their economic policy has been as objectionable on grounds of efficiency as on grounds of social justice. Admittedly, it is hard to discover any con- sistent theme in left-wing criticism of the Government's policy abroad. Since the death of Mr. Gaitskell, however, something like a coherent line of attack has emerged; it is ob- viously strongest in relation to defence, where the Government has been forced to abandon the development of a succession of extremely expensive weapons. One after another, they have been hotly defended and promptly renounced. The moral now drawn by the Labour Party is that it is idle for Britain to go on competing in the nuclear race as an independent power, that her efforts should be mainly concentrated on making a proper contribution to the con- ventional strength of NATO, and that she should in general bravely accept the inevitable role of a junior partner in the American alliance. The Government, it is alleged, cannot overcome these facts, and obstinately refuses to face them. Simi- larly, it is said, efforts, foredoomed to failure, to slow dovvn the pace of constitutional develop- ment in the dependencies have robbed_ us of the chance of appearing as genuine liberators. Such is the picture presented by the left. The charges which it carries certainly cannot be refuted merely by arguing .that they are cancelled out by those advanced from the right; indeed, up to a point, they are not. All the critics are

at one in seeing Tory rule as a succession of

and a eva muddles a makeshifts, hesitations and - sions. Can this indictment really be met by anything but an appeal, which is certain to fail, to blind loyalty and deep-set fear of Socialism? STOP-GO Essentially, the Conservative Party has beene, faced, during its whole period of office, with me precisely the same general economic and politi- cal problem in relation to home policy as con- fronted the Socialists between 1945 and 1951. It has had to try and reconcile the conflicting ex- demands of the public for full employment, ex- tensive social services, constant economic expan- sion, unrestricted trade unionism and stable prices. The Socialist way of approaching this dilemma was to maintain a high level of public expendi- ture and a high rate of direct taxation and to try to check the rise in prices by straightforward administrative controls. By 1950 that policy had failed and had, indeed, been repudiated by the electorate. Before making way for the Tories, the Labour Government was far advanced on the road towards its complete abandonment. This failure was due fundamentally to the Labour Government's inability to make direct controls at once strong enough and sensitive enough to stop the rise in prices. The most important of commodities in this respect, human labour, re- mained uncontrolled. Its price went up, and with it the price of everything else.

In theory, two extreme possibiiities have con-

fronted every British government since the war. The perennial dilemmas could have been over- come by simply giving up the task of trying to reconcile the people's conflicting claims, and preferring one set of claims to another. In theory, full employment and the growth of the social services could have been sacrificed to stable prices :.nd economic expansion. Some Western European countries, faced by the .challenge of war-time devastation, did precisely this, and are now reaping the benefit. In theory also, the policy of total control, rejected by Labour, could have been applied.

In practice, no British government was ever confronted by this clear choice between opposite

policies. Not only would neither policy, if frankly professed, have been swallowed by the electorate, but either could have been effectively vetoed by organised labour at a moment's notice.

One of the persistent errors of right-wing critics of the eleven years of Tory rule has been the belief that a Tory victory at a general election gives the party for five years the same kind of power as a surgeon wields over a patient who has been successfully anwsthetised. The fact that, under parliamentary democracy and free trade unionism, the patient remains free to kick the surgeon whenever he threatens a move which may cause pain or inconvenience is widely for- gotten.

The Tories had already embraced full em- ployment. They therefore had no difficulty in accepting Mr. Gaitskell's definition of 3 per cent unemployment as constituting full employment, and since at no time under their rule, apart from the recent winter, has unemployment exceeded this figure, remaining more or less con- stantly at about 2 per cent, they can claim to have-kept their word.

They also professed, however, to be able to stop inflation, to preserve and increase the rate of growth in the social services, and to raise the national standard of living as a whole, ensuring, in the process, that all classes had a share in the result.

Tfleir main instrument in trying to fulfil these pledges has been the discredited policy of 'stop- go.' When economic activity has shown signs of lagging they have stimulated it by tax conces- sions, by lowering the Bank rate and by boosting public expenditure; when expenditure has threatened to outstrip resources they have reversed these policies, always, however, treating Income tax concessions as sacrosanct.

What matters is that some version of the policy of 'stop-go' is an absolutely inevitable feature in the running of a modern economy. In the dark days of pre-Keynesian economics, `stop-go' took the form of a devastating series of economic blizzards, ruthless and impartial in their effects and not directly attributable to the actions of any government. Under Socialism, it took the form of a little more or a little less on the clothes ration, a few more houses built, or a few more housing projects abandoned.

The measure of the Conservative Party's suc- cess or failure is the extent to which its own version of `stop-go' has been consistent with reasonably stable development. At no time since the war has the gross national product declined in any year. Between 1951 and 1962 it rose from £12,926 million to £24,824 million. The words 'stop' and `go' relate, it should be remembered, not to economic activity itself, but to the policies which the Government uses to control it. In its effort to fight inflation, the Government has sometimes deliberately restricted the rate at which economic activity has been increasing; but this is quite different from restricting the rate of economic activity itself. Britain as a whole can- not be said, in any accepted meaning of the words, to have suffered a slump at any time since 1951.

FAIR SHARES It is equally incontestable that the increase in national wealth has in • some measure bene- fited nearly everyone in the community. For every shilling prices have risen in the last eleven years, wages have risen by two shillings and pensions by 2s. Id. The average level of salaries has also exceeded, though to a less startling 'Come outside and say that again: extent, the rise in prices. The total effect is that the average person's standard of living has gone up by 40 per cent in eleven years; we have gone a long way, therefore, towards fulfilling the Government's aim, commonly derided when it was announced a few years ago, of doubling the standard of living in a quarter of a cen- tury. In terms of real earnings, the lion's share of this improvement has gone to wage-earners and the holders of stock; salaried employees have done relatively well, the self-employed pro- fessional classes, though their impression of steadily increasing poverty is false, have bene- fited only modestly; professional pensioners such as retired army officers have benefited very little.

One of the most suspect of Conservative claims has certainly been thoroughly vindicated. There has been a steady and vast increase in the size of the social services. This is nowhere more startling than in relation to education. The Tories have built 6,000 schools since they came to power; their annual average of primary schools has been about 300 compared with Labour's figure of about 100; their annual average of secondary schools about 200 com- pared with Labour's figure of about. 25.

The catalogue of improvements in welfare could be extended tiresomely, and Mr. Powell's ten-year programmes of hospital-building and local health service improvements supply one of the most striking recent additions to it.

All this, it may be said, hears the mark of party propaganda, and leaves unanswered the question of whether more could have been achieved by another government, or whether Conservatives can reasonably claim that some specifically Con- servative element in their policy has alone enabled them to accomplish it.

Up to a point at least this claim is clearly. justified. What has been going on has not been a uniform expansion of the social services on the Labour model, but an expansion directed in accordance with strict Conservative principles to satisfying particular needs. The Tory view that the Government's first task is to help the people look after themselves and that it should assume responsibility for looking after them only when for one reason or another direct help is essential, has in fact and to an ever-increasing extent been the guiding light of welfare policy. Housing is an obvious case in point; the first task was simply to build houses to meet the desperate demand which Labour had failed to satisfy.

Once the target of 300,000 was achieved, it was possible to embark on a rational and long-term housing policy designed mainly to meet the housing needs of those who genuinely could not afford to house themselves. The Rent Act intro- duced a long-absent note of economic realism. By relieving private landlords of some of the necessity of subsidising their tenants, it undoubtedly created many cases of hardship, but it also brought more houses to let on to the market and ensured that relatively well-to-do tenants should in future have to pay something more nearly approaching an economic rent for the privilege of being comfortably housed. The next stage in the operation was to challenge the principle of indiscriminate housing subsidies for council house tenants by encouraging local authorities to adopt differential rent schemes. At the same time, the Government has continuously and successfully striven to make it easier for the relatively poor to buy their own houses. The effect of these policies is to enable public expen- diture on housing to be concentrated as never before on the really urgent task of wiping out the slums. Right-wing critics should remember that in relation to housing and the social services generally the Government inherited from its predecessors a country thoroughly obsessed bY the idea of uniform, indiscriminate public welfare. That idea has been nowhere more disastrous in its effects than in relation to housing; slowly, and in the face of much criticism, it has been exorcised from housing policy. Had it remained, the Government's vast success in housing the people would certainly not have been achieved without inflation and the diversion of resources from other urgently needed forms of capital expenditure such as road-building.

STRIKING THE BALANCE The accusation that under Conservative rule Britain has oscillated violently between frenzied economic activity and almost complete paralysis is obviously untrue. The accusation .that the rich and the relatively rich have alone benefited from increasing prosperity is equally false. Given the national income during this period, it maY be regarded as certain that any substantiallY greater increase in the social services than that which has occurred could not have been financed without inflation. Given this degree of expendi- ture on welfare as the upper limit, it may be said with some confidence that its distribution be- tween different kinds of beneficiary has been about as equitable as it could have been. To this extent, the Tory record is impressive.

One charge, however, cannot be wholly re- futed. The economy has not developed at the pace set by the other economies of Western Europe, and their comparatively late start after the war does not supply a full explanation. The impression remains (and the Government has scarcely denied it) that the spirit of British ill" dustry is intensely conservative. It may be said that more could have been done by special in- centives to the export industries, and bY 3 deliberate diversion of resources from consurnP- fion to capital investment. What is certain is that the indiscriminate encouragement of expeu- diture, such as has been persistently advocated by the Opposition, would have revived inflatioa, The British economy has desperately needed a stimulus from outside. The Government tried to provide that stimulus by its application t° join the Common Market, but the deus machina failed to appear for reasons for vvbicli, no one blames Mr. Heath. Whether in fact, ha° it appeared, it would have done its job, is open to a good deal of expert doubt. It is certain IRE SPECTATOR, MAY [0, 1963 that the chances of getting some sort of asso- ciation with Europe on terms acceptable to both Sides in British politics would have been infinitely better had Britain responded, between 1945 and 1951, to European initiatives. With Europe for the moment closed to us, however, are we thrown back on the policy of `stop-go', which has proved consistent with in- creasing national prosperity but has failed to develop our competitive power? The Government will, no doubt, seek general tariff reductions, but so it always has done in recent years. It knows, and its informed critics also know, that increasing trade within the Com- In°nwealth is not an effective alternative to more trade with Europe. It must look round for some Other source of economic stimulation.

The idea of a combined effort by employers, trade unions and government to plan production ,and to remove obstacles to its growth has for long belonged to the realms of pious platitude. An institution, the National Economic Development Co a "co, now exists to embody it. A dignified 'My setting targets for production, making lofty recommendations for the improvement of management and the elimination of restrictive Practices by labour and seeking to co-ordinate private and public investment plans is not in itself an answer to an economic crisis. Few of Neddy's admirers will go so far as to predict that it will succeed in doing more than increas- ing the national sense of inadequacy; without an unprecedented degree of co-operation between Capital and labour it cannot do more. On the Other hand, if that co-operation were forth- c,orning, it could lead to a smooth and rapid uevelopment of the economy. Precisely the same applies to the National In- comes Commission. The only merit that can honestly be claimed for it is that it exists and contains revolutionary potentialities for good. At any moment since the war the appearance of two bodies expressly charged with the task of guiding national economic development and setting out to . achieve agreement between government, employers and unions on the pace and direction of this development would have been inconceivable. At the C. j of eleven years of Conservative rule it has become possible. The kind of Britain which has emerged from these eleven years certainly does not conform to any blueprint of the Good Society. In terms of competitive capacity, it has yet to vindicate 1t5 right to survive. It has its spivs and its Lucky Jims, as communities differently organ- ised have their corrupt and power-seeking oureaucrats; it has the vices of a community dedicated chiefly to the enjoyment of wealth; Since it must perforce produce more wealth, and ,SI,nee these vices are a stimulus as well as a ,nindrance to production, they are not likely to tn removed by any process of moral regenera- io „,. n Which it is in the power of politicians to art- It is also a society in which vastly amore People own property than ever before, in Which, in general, the connection between ability and reward is closer and more than it has been hitherto. It is, above ualri°11s its ,a s°eietY which, while refusing to abolish traditional institutions, has exposed them eaffectively to the test of usefulness. If, for ex- "'Pie, the public schools survive, it will not be, for all radical critics may say, because they pro- vide those who go to them with a monopoly of top jobs, but because they foster qualities which parents are prepared to pursue for their children at considerable sacrifice to themselves; if these establishments prove in reality to be nothing more.than breeding-grounds of a trivial, even if innocent, kind of snobbery, they will die a natural death.

ABROAD As far as the main item in British foreign policy is concerned, relations with Russia, the Government has been relatively free from major criticism from any quarter since it came to power. It can claim to have taken the initiative in 1955, and again in 1960, in reopening top- level contact with the Soviet Union. It has con- tinued to play its part in containing Soviet ex- pansion, and for several years Soviet expansion has been successfully contained. Exactly what measure of diplomatic freedom could be achieved within the limits of the American alliance, on which, in the last resort, we depend for our existence, is open to endless dispute, but that a substantial measure of freedom has continued to be exercised without impairing the alliance will not be denied by anyone. Whether Mr. Wilson would be better or worse than Mr. Mac- millan in influencing and making friends with Americans is at present a purely speculative question, but it is certain that he would operate. essentially within the same framework of neces- sity, and in doing so would use essentially the same methods.

In one fundamental respect, however, the Con- servative Party's policy abroad is, now for the first time, being seriously, and more or less unanimously, challenged by the Opposition. The impression that defence policy has been a muddle is, indeed, fairly widespread in all political parties.

Britain, it is argued, has failed to make an adequate contribution to conventional armament in the West. She has also wasted millions of pounds on producing and discarding nuclear weapons.

Clearly, any large increase in expenditure on conventional armaments could be made only at the cost of nuclear armament or of a substan- tial reduction in social services, and would certainly involve the re-introduction of conscription. Just as clearly, it is economically impossible for Britain, like the US, to experiment 'She's not one of his wives.' simultaneously with the production of a large number of nuclear weapons. Any choice between the alternatives open to her that she may make is liable to be outdated before or soon after the weapon is produced. Since we cannot produce any nuclear weapon without the US's help, our choice, as the affair of Skybolt showed, is stilt further limited.

Essentially, therefore, the Government's policy stands or falls by the crucial issue of whether, at almost any cost, Britain should insist on having some sort of nuclear deterrent, as up-to-date as possible, under her control at all times.

Already, it may be said, British foreign policy depends on a gigantic bluff, the assumption that Britain will be ready to engage in a nuclear war, necessarily involving her own destruction, forti- fied only by the thought that she will be promptly avenged by her American ally. How much larger is the bluff implied in the notion that Britain will be prepared to enter a war without the assurance of American aid, on the assumption that if the enemy should deliver a nuclear attack against her, the loyal commander of a British Polaris submarine will mark his indignation at the destruction of his mother country by delivering a missile, large enough to cause considerable inconvenience, on the Soviet Union?

The calculations on which nuclear strategy now depends are indeed grotesque in character. Nevertheless, these calculations have provided a deterrent for several years. I can certainly think of no government, however radical, including any of those of Mr. Gladstone, which would have stripped this country of the only con- ceivably effective retort to a threat of extinction, yet it is precisely this that Mr. Macmillan is being urged to do.

Whether or not Britain is, or can remain, a great power is the subject of morbid and not very fruitful speculation. Under Tory rule she has preserved a measure of independence much greater than her material strength would, on the face of it, seem to justify; it is not easy to imagine a foreign policy which would have achieved more.

At the end of eleven years of Tory rule, Britain is neither a gambler's den nor a country in which the self-respecting, self-supporting middle classes are being subjected to a slower and more humane version of what happened to the kulaks. It is a country where ownership is more widely distri- buted than ever before, where there are more educational opportunities for more people than ever before and where there is a higher level of employment than anyone thought possible when the phrase 'full employment' was invented. We are still at peace and we are still playing a leading part in the diplomatic process by which peace is being maintained. It is almost arithmetically demonstrable that if the Labour Party's declared policy at home had been pursued in the last eleven years, we would be in a condition of roar- ing inflation as fatal to the chance of preserving the social services as it would have been to the chance of increasing production. Nothing, I believe, but the frenzied boredom of political commentators with the task of describing the same men tackling the same problems for over a decade could even momentarily obscure these facts.