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German standards of living when we
have German standards of work."
Wage demands this year have
been ranging between 15 and 60 per–
cent, well above various "ceilings" on
pay increases which have been futile–
ly imposed in an attempt to curb
inflation. The government asserts· it
cannot promise to hold down spiral–
ing prices and at the same time bow
to union demands for massive wage
increases. The trade unions contend,
howeyer, that many employers can
afford to better the lot of their work–
ers without damaging the national
interest. Thus wage demands contin–
ue to skyrocket.
As wages rise faster than produc–
tivity, Britain not only feels the ef–
fects of rising intlation and unem–
ployment at home (sorne 1.5 million
Britons are currently out of work),
but increasingly prices itself out of
world markets, bringing upon itself
balance of trade problems which fur–
ther aggravate the interna) economic .
situation. The pound sinks on world
money markets, making vital imports
that much more expensive. A lower
pound, for example, means higher
prices for food, much of which must
be brought in from other countries.
Massive revenues from North Sea
oil have temporarily rescued the
pound, but have only masked the
continuing problem. Sir Richard
Marsh, a former Labor cabinet min–
ister and chairman of the British
Railways Board, charged recently
that Britain's true economic per–
formance is being covered up by the
revenues from North Sea oil:
"If
you
subtracted the North Sea oil reve–
nues you would realize that present
policies are leading us to the status of
· a banana republic that has run out of
bananas.
"1
do not think Britain has an im–
perial role to play again," he contin–
ued, "but
1
do not see any reason why
this country should decline into the
status of a national slum."
Welfare State
Another oft-cited factor in Britain's
decline is her massive welfare state
system and the staggering tax burden
required to sustain
it.
The high level
of state payments tó the unemployed
under this program has in many
The
PLAIN TRUTH August 1979
cases made it as much or more prof–
itable for British workers to stay on
the dole than to seek gainful work.
The punishing leve! of taxation
needed to fund social services has
often been criticized as stifling ambi–
tion- actually making it unprofita–
ble for diligent workers and entrepre–
neurs to further exert themselves.
The return on new investment in
Britain is less than in other countries
of Western Europe.
British taxes are among the high–
est in the world. According to figures
compiled by the Conservative party
last year, the average family of four
in Britain makes about $8,530. Of
this sum, about $2,180 goes to in–
come taxes and insurance contribu–
tions. For a family of four making
twice the national average, or about
$17,000, the taxes would run about
$5,355.
ln a rare intervention by a member
of the royal family into the country's
political and economic affairs, Brit–
ain's Prince Philip caused a row two
years ago by publicly criticizing the
welfare state and calling for more
rewards for hard work and enter–
prise. "The welfare state," he as–
serted, "is a protection against fail–
ure and exploitation, but national re–
covery can take place only if innova–
tors, and men of enterprise and hard
work, can prosper . ... The success–
ful technological innovators must be–
come heroes again. They must be al–
lowed to gain and keep their rewards
for success."
·
In the consensus of most observers,
the British welfare program must be
drastically reformed and the massive
tax burden eased if Britain is ever to
hope for national recovery.
Tax cuts were a major Tory cam–
paign commitment, as were cuts in
public expenditures. It remains to be
seen, however, how successful the
new government will be in imple–
menting these objectives.
Natlonallzatlon
The nationalization of British indus–
try is another factor cited by many
analysts as contributing to Britain's
malaise. Nationalization refers to the
acquisition or control of property or
industry by the national govern–
ment-a common practice in the
twentieth century even in countries
with predominantly private-enter–
prise economies.
Britain nationalized its railroads,
coa! mines, utilities and health ser–
vices in the 1940s. Since then it has
nationalized much of its air and road
transport, the majority of its steel
plants, the nation's 1argest car and
truck manufacturer and, during the
past two years, the nation's aerospace
and shipbuilding industries.
Governmental control of the econ–
omy is now so extensive that one
economist said wryly: "The prívate
sector is the part of the economy that
the government controls. The public
sector is the part that nobody con–
trols."
A poli published in London last
year by the respected Opinion Re–
search Center revealed that a large
majority of British voters-78 per–
cent-oppose further nationalization
of the country's industry. Seventy–
one percent bclieve that public own–
ership of industry has not been suc–
cessful.
The record of nationalization, to
be sure, has not been impressive. The
nationalized steel and automobile
companies are in deep trouble, and
their sizable financia! losses regular–
ly make front-page headlincs. The
nation which once had the world's
second-largest automotive industry
now imports half of its cars.
Party and Class
A closely related factor cited by sorne
observers for Britain's eclipse is the
antiquated class-based nature of the
British party system- a system pred–
icated on the adversary character of
the capital-labor relationship.
As the magazine
To The Point
(Febr.uary 2, 1979) observed: "A
tragic mismatch of labour, manage–
ment and government-this is the
prescription for the economic, and
ultimately politica1, anarchy now
threatening 'Great' Britain.
It
is a
situation in which everyone is 1osing,
and no one can win."
The Labor party was created in
1900 to forward the interests of
unionized workers. The unions have
largely controlled the party ever
since. Union money and votes are the
party's main support. To put the situ-
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