Let's talk to Ted
Jock Bruce-Gardyne
Tories loathe dissent. No young Labour MP can be said to be on his way until he has put his name to a motion critical of his own front bench, and the path to membership of Labour's National Executive is paved with votes against Labour Government defence white papers. But the way of the Tory dissenter is strewn with thorns: so Mr Heath is in the freezer.
Nowhere more so than among the secret votaries of wage control. All Tories nowadays include a ritual invocation of the money supply in their speeches. But to some of the most eminent it is rather like the sign made by Sardinians against the evil eye. God knows what it means, but better make it just in case. Of course when we get back into office we'll be setting norms and targets for wages with the best of them.
Then along comes this awful spectre from the past not just demanding state control of wages, but running up a banner from his masthead reading 'I back Jim Callaghan'. How on earth are the Tory troops to be weaned away from free collective bargaining if they have their former leader telling them that that means backing Labour? Yet when I read of Mr Heath saying it has 'never been the case' that 'every policy in the Conservative Party is handed down from on high, and is accepted by every member of the party', my response is 'welcome aboard, Ted.' True, I don't recall that that was precisely his own attitude towards those of us who wanted to discuss the wisdom of his decision to commit the party to devolution in Scotland before he announced it, or who lacked the agility to imitate his somersault on wage control in 1972. No matter, circumstances alter cases. Now he has discovered the virtues of dissent in late middle age, better by far, surely, to engage him in debate than to damn his motives and his pretention.
His first great theme concerns the sovereignty of Parliament. For government to rely on the forces of the market place to regulate wage bargaining would, he tells us, lead to tensions and conflict in our society beyond the capacity of our par liamentary system to sustain them. But he also warns that trade unions which challenge the present Government's 5 percent pay norm are challenging the authority of our democratically elected representatives.
Not for the first time Mr Heath seems to be finding it hard to differentiate between the wishes of Ministers and the will of the legislature. When the miners and others challenged his pay code back in 1973 he made the same mistake. He regularly used to speak as if employees who obtained, or employers who conceded, a wage increase in excess of what the code permitted were in breach of the law, whereas a cursory glance at his own legislation would have shown him they were not. Similarly today Parliament has not endorsed the 5 percent wage limit, let alone given it the force of law. Of course he thinks it should. But it has never been asked to — for the excellent reason that the Government knows it would refuse. So while Mr Moss Evans may, as Sir Harold Wilson would say, have parked his tanks on Jim Callaghan's green, it is rubbish to argue that he is 'challenging the sovereignty of Parliament.'
As for the claim that our parliamentary democracy could not survive the conflicts which would flow from a return to market bargaining, does not this come a little oddly from one who was constrained to dissolve Parliament and hold an election eighteen months ahead of time on the slogan 'Who governs Britain?' — not because of a crisis thrown up by market bargaining, but because the attempt to regulate inflation by law had run up against a brick wall? It was at the end of twelve months of statutory wage control that the nation was said to be 'ungovernable', and, whatever else it may have done, the scrapping of Mr Heath's counter-inflation legislation sufficed to expose the nonsense of such scare-talk.
Yet if the opinion polls are to be believed, most of us think Ted Heath's quite right. I do not find this at all surprising. After twenty years of accelerating inflation — coinciding, be it noticed, with the years of incomes policies — we have every reason to be terrified of it. How wise, therefore, how 'moderate' to suggest that 'we need to use all the economic weapons at our disposal against it'. I recall being gleefully told by Mr Heath in the summer of 1974 that Ameri can bankers whom he had recently consulted had assured him control of the money supply was 'all nonsense' — but let that pass.
The trouble is that none of the devotees of incomes policy have ever been able to explain to me how it can be rendered compatible in practice with the control of the monetary springs of inflation.
The theory is splendid. Economics in government spending, progress to a bal anced budget, and steadily shrinking rates of growth of the money supply combine to turn off inflation at source, while incomes control deters union leaders from pricing their members out of their jobs, and thereby saves us from the extra unemployment which might otherwise be expected to occur as inflation slowed down. The reality is utterly different. 'Norms' or 'limits' to wages either — as last year — set a startingpoint for wage negotiations far higher than would otherwise have prevailed, thereby adding artificially to both inflation and unemployment, or else — as this year — are set at levels which unions defy and destroy, thereby needlessly transforming individual settlements into inflation pointers. Worse still, in a desperate effort to obtain a measure of union acquiescence, governments undertake to boost state spending or to guarantee special terms for lower-paid groups in the public sector which, by bursting cash limit controls, have the same effect. That is why, in Britain at any rate, monetary and fiscal restraint of inflation and incomes policy, far from being mutually supporting, are just plain contradictory. Yet, says Mr Heath, in the absence of centrally-imposed restraint, unions will press ahead with excessive wage claims regardless of their impact on inflation and unemployment. In part this demonstrates his persistent failure to understand the nature of inflation — a failure which he shares to the full with Messrs Healey and ' Callaghan. Excessive wage settlements will not generate inflation if fiscal and monetary policy hold it back: they simply cannot do so. It is sadly true that they will create additional unemployment. But then there is no way to slow the pace of inflation which does not involve a transitional increase in unemployment. Those who pretend otherwise are really saying that they dare not control inflation.
This does not mean that there is nothing we can do to improve the 'responsibility' of wage bargaining at the margin. There is quite a lot. We can put a stop to the lunacy of guaranteeing the miners, for example, 3 market for their produce regardless of the costo of producing it. We can put a stop to the y t in which funds voted by Parliament for capital investment in British Leyland or the shipyards are being diverted to foot the wage bill. We can put a stop to the Treasury's willingness to underwrite uneconomic wage settlements in the private sector bY devaluing the exchange rate. And surely, ia the light of what happened last week at Vauxhall, the time has come to deny the succour of supplementary benefits and tax rebates to strikes which have not been approved by postal ballots of all concerned. I am afraid Mr Heath would regard all h as 'provocative', much as the late Geoff. this Dawson felt that reports on what was going on in Germany in the 1930s would only 'provoke' the Nazis. For his corporatist vision of the future depends for its realisation on the emergence of a permanent 'social contract' by which, in return for the right to tyrannise us all into unions and pledges of unlimited support for industries and businesses which have lost their markets, good old Len and Moss and Clive and the boys will see that rewards for success are restricted to what can be afforded by way of compensation for failure. But as Messrs Callaghan and Healey are once more learning, good old Len and Moss and Clive cannot oblige even if they want to. For the troops will no longer follow. Thank God!
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