[Militant No. 536, 23rd January 1981, p. 6]
By Lynn Walsh
Smile, Thatcher urged us in her New Year message, and things will soon be getting better.
Do the Tories really believe this? Is their “optimism” a cynical con-trick, or are they really self-deluded idiots?
Faced with gloomy predictions from all the main economic commentators, the Tory Chancellor, Sir Geoffrey Howe, ordered us not “to be obsessed by forecast mongering.”
With a 64% rise in adult unemployment (90% in areas like the West Midlands) last year, Howe’s solution is to stop making official forecasts.
But the Paris-based OECD (Organisation for Economic Co-operation and Development), the “Treasury in exile,” forecast another 750,000 unemployed by mid-1982, bringing the official UK dole queues to more than 3 million, or one in eight of the workforce.
Truth not safe
Another forecasting organisation, Cambridge Econometrics, (SJAN) predicts that “unemployment will rise relentlessly through much of the 1980s to reach 3.7 million by the end of the decade.” By 1984, they predict, dole money and social security benefits for the jobless will absorb half of the revenue from North Sea oil taxes.
The London Stock-broking firm, Philips and Drew, foresee that unemployment in Britain will approach 3 million by the end of the year. “There seems no possibility of a sharp fall in the unemployment rate at any time in the next few years – especially if the present deflationary policy stance remains intact.”
The catastrophic rise in unemployment, with all the misery and suffering this means for working people, is the result of the disastrous decline of British capitalism, whose industrial output has halved since 1950 in relation to the other major industrial countries.
But all the crisis symptoms are intensified by the Tories’ ruthless deflationary policies.
Keynesian “solutions” are now discarded by the capitalist economists. But a few words addressed by Maynard Keynes to Winston Churchill in 1925, when as Tory Chancellor he was carrying out ruthless deflationary policies, remain prevalent.
“We ought to warn you,” wrote Keynes, “that it will not be safe politically to admit that you are intensifying unemployment deliberately in order to reduce wages. Thus you will have to ascribe what is happening to every conceivable cause except the true one.
“We estimate that about two years may elapse before it will be safe for you to utter in public one single word of truth…”
One or two senior managers, meeting recently at a luxurious conference centre in Wilmslow, Cheshire, were aware of the “truth”. The organiser, Len Collinson, a director of Dupal Coach Builders and other firms, described the conference as “one of my hawk do’s”.
The two managers were urged to get stuck into the unions, slashing manning levels, cutting down overtime, limiting the number of shop stewards, sacking workers for “absenteeism” and even for taking certified sick leave.
“We have an opportunity now that will last for two or three years … so grab it now … it’s almost vengeance.”
Chance for vengeance
Some firms, at least, are taking such advice to heart, although many, unable to keep up with their international competitors, will simply go under as a result of the Tories’ deflationary policies.
Nevertheless, a recent survey (3 January) by the “Financial Times” of 363 industrial companies showed that their trading profits rose by 10.8% (year ending April 1980) – more than most bosses are offering to workers in pay increases.
Overall, the trading profits were slightly down on the previous year (15.3%). “But (some) falls,” says the ‘Financial Times’, “were offset by stronger contributions from building materials and electrical, where earnings increased by more than 30% and a mixed bag of 13 capital goods companies, whose joint earnings rose by 72.7%.”
Other big companies, particularly in the financial sector, are doing very well. The 65 investment trusts and property companies increased their earnings last year by 35.9% and 26.9% respectively.
Overseas traders, moreover, pushed up their profits by 102%!
When he wrote to Churchill in 1925, Keynes warned that within two years “the adjustment (i.e. deflation with massive unemployment and cut wage levels) will have been carried through” – or “you will be out of office.”
The labour movement must make sure that before unemployment is allowed to climb to 3 million or 3.7 million Thatcher and the Tories are well and truly out of office.
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