Gale warning
BUSINESS VIEWPOINT JAMES BOSTOCK
James Bostock is chairman of Lotus, the shoe manufacturers.
Just as farming depends for its success on an equable climate, so a nation's business com- munity depends on equable economic and political weather in which to operate. Whereas the farmer's weather is in the hands of the Almighty, the economic weather of a country is largely in the hands of its government and no one can say our present economic weather is other than stormy and capricious. Of course this country has had storms and upheavals before, but in its present troubles an entirely new factor has appeared, unknown since the days of Gresham: the British people in all walks of life have lost confidence in the value of their money. Hence the spending spree which was not only to beat the Budget but continues as a process of converting paper money into tangible goods. Hence the run on antiques, pictures, silver, wine, postage stamps and all the rest. Hence high land prices, high equity prics and tumbling gilt-edged, which latter are another form of paper money. High spending means a continuing high level of im- ports and high interest rates mean higher costs.
Many business people agree with Mr Cecil King's view that, in spite of the Budget, the economic storm clouds have never looked blacker. Our reserves are exhausted yet our huge international debt is still increasing, not only through high imports but also through the Bank of England's operations to prop up a sick pound. This may well mean either an- other devaluation or a floating pound which would add momentum to the decline in the value of money. There are some countries that have learned to live with a high rate of in- flation as one of the facts of life—Brazil and other Latin-American countries are examples —but it is quite out of character for European countries to do so. This century has seen gal- loping inflation bring down governments and destroy democratic systems. If it is to be averted, fiscal ingenuity alone is not enough. Confidence is the essential keystone and con- fidence in a government rests not only on the methods employed but much more on the character of the men who employ them. This confidence, both at home and abroad, has evaporated and has not_ been helped in any way by a man of the sterling worth of Ray Gunter pulling out of the Cabinet.
The business world has lost confidence, not primarily because of politics but because of the utter incompetence and lack of sense of reality of Harold Wilson and his administra- tion. If there is one thing that characterises a successful business it is personal initiative and responsibility. Committee rule has very little place. Yet the Government has created a plethora of committees, so many of which are grand talking shops. The new ministries are in practice committees with blown-up, grandiose titles. A live business trims its over- heads, but the greatest expansion in the economy that has taken place since Labour assumed office is the growth of the Civil Ser- vice. (What a job McKinseys would do if they were let loose here!) Social justice can only be achieved by raising the standard of living and the most effective way of doing this is by adequate incentives. Yet these are abhorrent to socialist dogma and we have the highest personal taxation in the world. High taxation hits, above all, the middle classes. The big boys whom the socialists wish to catch will always be too smart for them. High taxation can never overtake the horse that knows how to gallop in Labour's favourite race, the 'Inflation Stakes.'
Government incompetence shows itself abroad as much as at home. South Africa is one of our best customers and the Cape route is one of the key shipping routes of the world yet, in order to pander to the left, we refuse South Africa arms to defend it on the, grounds of that country's internal politics. Of -course this must affect adversely our normal trade. We do not let the internal politics of other countries interfere with the selling of anus; in fact we are still selling arms to Nigeria which are being used for perhaps the worst massacre in African tribal history. At the same time we encourage terrorism in Rhodesia. The only hope of achieving the kind of regime we want in Rhodesia is to encourage the liberals, yet the effect of sanctions, which are assuming more and more a vindictive charac- ter, is to drive them into the arms of the ex- tremists, who regard Ian Smith himself as a liberal.
The white Rhodesians are a tough and independent race who are Rhodesians first and foremost and will always sink their political differences to defend their freedom. Sanctions have failed and, in spite of the United Nations, the loopholes are becoming larger and larger. Of course sanction-busting costs money and sanctions themselves impede progress, but, in spite of it all, the standard of living of the white Rhodesians is much higher than in the United Kingdom. I speak with knowledge, having recently visited Rhodesia. The Rhode- sian African's standard of living is higher than that in any independent African state yet it is he who is the chief sufferer from sanc- tions. The fact is that Rhodesia is independent now. The UK government has no power there yet keeps up the farcical pretence that it has. Never has our prestige abroad been so low. Even the Greek junta can tell us where to get off.
At home, the Government has based its in- dustrial policy on great mergers. It believes in size for its own sake. Is this right? Is an elephant better than a thoroughbred? Bigness inevitably means depersonalisation and is not this sense of depersonalisation one of the causes of unrest today, particularly among the young? There are some businesses which by their very nature must be big, such as cars and shipbuilding. Others can gain by their limited size. They are more flexible in policy, can more rapidly adapt themselves to changing conditions and can make quicker de- cisions. My own trade, shoe manufacturing, is an example. Personal relations in the in- dustry are some of the best in the country, which accounts for the fact that strikes are almost unknown. The industry must always be extremely adaptable to changing fashion, and competition, the life blood of growth and efficiency, is intense.
By and large there is' great determination on the' part of business to.get on with the job but There is a deep sense of frustration with a government composed largely of arid' in- telle:ctuals who are dragging us deeper into the. mire. BuSiness people are sick and tired of being admonished and exhorted by people who in the tough reality of industrial life could hardly run a toffee shop. It is entrepreneurs who .produce the goods-.-and it is our great misfortune that so many young ambitious men want to 'emigrate today, beckoned by the shining lights of- Australia, Canada, South Africa and even Rhodesfa.
But are the' in- fact right? In spite of all, there is still no pleasanter country to live in with the'beauty of its countryside, its social balance and sense' of fair play and its love of sport. (Why don't we see even 'do occasional minister at Ascot?) Our history shows that times of great troubles bring out our best qualities. Never have our young people shown'greater independence in their way of living, in their way of dressing, in their zest for life. There is stirring in all classes of society and in all age groups a great dissatisfaction with things as they are and with the way we are being governed. However, it is my belief that the great economic and financial troubles which lie ahead in the next few,,months may sweep away this crowd of little men and women who are attempting to govern us.
To hell with intellectual airy-fairyism and let us make way for the British merchant venturing spirit 'which wants richness and the expansive life for itself while enriching our still great country. Then will come the British economic miracle.
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