London

ON THE WORLD TODAY

THAT the Labor Government of Britain is administering its new deal with a dropper will astonish only those who naïvely fancied that it would pour socialism down British throats. One would look in vain for a British nation struggling against totalitarian therapy — the dire condition Churchill and his Tory Party predicted during their ill-advised election campaign. Instead one can watch something like a gentle massage treatment to which the British people are responding favorably.

But if Attlee’s Cabinet is pursuing an enlightened twentieth-century approach to social and economic problems in the domestic field, its international ways are in the nineteenth-century tradition. In its attitude towards the rightist, regimes of Spain, Portugal, Greece, Argentina, the British Foreign Office under Labor’s Ernest Bevin is indistinguishable from the Foreign Office under Conservative Anthony Eden. Moreover, towards Russia and towards the leftist governments inside the Soviet security belt in Poland, Yugoslavia, Rumania, Bulgaria, and Hungary, Bevin is much colder and harder than his Tory predecessor.

Uneasiness concerning Soviet intentions permeates Bevin’s entire foreign policy. It explains British opposition to Russia in Eastern Europe. It partly motivates the British desire to conciliate the Arabs and other Moslems. In part, too, it accounts for Britain’s share in reinstating the French in IndoChina and the Dutch in Indonesia, because France and Holland are important prospective members of a Western European group offsetting Russian influence in the East.

Who controls Germany?

While British-American differences with Russia over Hungary, Rumania, and Bulgaria are in the headlines, it is the struggle revolving around Germany that is fundamental. Is Germany to be an instrument of the Western powers or of the Soviet Union? This has unfortunately become a pivotal question for a world already split into rival blocs. The divergence of political life in the occupied zones of Germany reflects a rift in the Grand Alliance.

This gap is all the more obvious when one compares Russian and Anglo-American policy towards German industry. Russia is anxious to hold Germany down, Britain to bolster her up. For Britain, the German danger has become remote and Lord Nathan, Labor’s Under Secretary of State for War, told the House of Lords lately, “We must be careful to safeguard against a breakdown of German industry.”

Russia, besides removing machinery and whole factories as reparations, is intent upon banishing the German menace for decades. But a united Germany with a prosperous peacetime industry is an essential plank in the British Labor Government’s platform for European recovery.

In the period ahead we are likely to see an even stronger evidence of the collision of Russian and British policy towards the Reich. Rivalry with Russia more than any other single factor is holding the foreign policy of the British government on the traditional imperial track. It furthermore suggests why the Labor Government is ready to make concessions to sustain Anglo-American partnership.

Labor’s reforms at home

Attlee’s Cabinet is showing boldness and imagination in living up to the Labor Party’s electoral promises for home reforms. No peacetime British government for many a year has had to cope with problems as difficult as those facing the new Labor administration.

The strike of some 40,000 dockers (about half the dockers in Great Britain 1 is just the first sign of industrial ferment in the post-war scene. This work stoppage was unofficial and against the union leaders’ will. Troops were ordered to unload perishable supplies at the strike-bound docks. Basic food provisions were endangered.

The men’s claims included an increase in minimum daily wages from sixteen to twenty-five shillings, and a forty-hour week. Before the war, at least three fourths of the dockers were casual workers, and today they want assurance of steady employment. Had they not felt they had a real grievance, they would hardly have persisted in the strike for so many weeks, without strike pay and in defiance both of the Labor Government and of their own union.

The Labor Government’s failure to define a national wage policy may lead to more disturbances. The withdrawal of special war bonuses, the movement of workers from better-paid to worse-paid trades, and the reduction of overtime are hurting many laborers financially. To peg wages is difficult for a Labor Government, but it will probably have to be done, not just locally in the dockers’ trade, but on a nationwide scale.

The Government has decided to keep the price level steady by continuing heavy subsidies on home food production. The aim is to avoid inflation, but the cost of living cannot long be kept stable unless wages also are held on an even keel.

Britain demobilizes slowly

Another and more urgent problem for the Labor Government is demobilization. On this score, Attlee’s policy has been the target of some telling criticism. Early in September, Minister of Labor George Isaacs estimated the number of men and women to be released from the armed forces by the end of this year at 1,100,000. Public discontent compelled the Government to think again, and at the beginning of October to raise the number to about 1,500.000.

In Parliament, Churchill strongly attacked the Government’s demobilization pace and presented his own timetable for discharging men from the forces. Under the Government’s scheme, 2,400,000 will still be in uniform next June. Churchill protested that by then only 1,550,000 ought to remain.

Navy personnel, instead of numbering 448,000 in June, should be back, he said, at its pre-war level of 130,000 or, at most, 150,000. Compared to the 699,000 the Government would keep in the Royal Air Force until June, Churchill proposed 400,000. For the Army, he suggested that a million would be enough. He earmarked 400,000 for the occupation of Germany, another 400,000 for the Mediterranean area, and 200,000 for garrisons in the United Kingdom, India, and smaller outlying regions.

His total of a million men for the Army differs little from the Government’s estimate of 1,156,000, but Churchill insisted that the cut to this size be made by March rather than June. Churchill’s estimates of the Army, Navy, and Air Force Britain needs, he said, assume no major war in the next few years. Finally, he charged that the Government’s demobilization rate is paralyzing efforts to start peacetime industry.

Isaacs did neither the Government nor himself much good by trying to flick off Churchill’s reasoned argument as “irresponsible and mischievous.” There is a strong belief that the Government is giving its generals, admirals, and air marshals too much rope for the country’s health, though too little to hang themselves. Feeling in the country and among men in uniform is impatient and often bitter. The men want to return to their families, friends, and jobs, and they are badly wanted at home. By attacking the Government’s demobilization program, the Tory Opposition scored its first success.

Labor’s five-year plan

The Government easily repulsed the Conservative assault against the bill prolonging for five years, instead of the two years the Tories of the Cabinet urged, economic controls and other sweeping powers under the Supplies and Services Act. This law grants the Government wide authority over the life, freedom, and property of every citizen. A majority of the Commons accepted the Labor Party’s long record of devotion to civil liberty as a guaranty against the abuse of such powers.

The Government stressed that it needs this extraordinary authority for long-term planning in the next five years, mainly to restore export trade and to harness the country’s resources to house-building. Passage of the bill reflected the British public’s willingness to grant the Government powers never before given in peacetime.

Earlier, the Commons had debated the Government’s bill nationalizing the Bank of England. This is the first measure of socialist change, but a mild one which could cause a banker to twitch only if he suffers from a chronic nervous tic. The bank’s stock, hitherto privately owned, will pass to the Treasury’s sole possession. But shareholders are to be generously compensated with an income equal to the 12 per cent they have on an average received as annual dividends during the past twenty-three years.

Conservatives were worried by a clause enabling the nationalized bank to give orders to any bank on any subject and to request information about the details of its business. But this provision simply formalizes existing practice under which private banks obey like good little boys when the Old Lady of Threadneedle Street whistles.

Much more importance attaches to the bill for nationalizing the coal-mining industry, and the Cabinet’s preparation of this measure is well advanced. Hugh Dalton, Chancellor of the Exchequer, intimated that the handsome compensation paid the Bank of England’s 17,000 stockholders should not be regarded as a precedent by owners of other enterprises to be nationalized. But the Government is leaning backwards to avoid confiscatory methods.

Housing

The Labor Government has meanwhile given the nation a clearer impression of its intention to fulfill its election pledges on that most urgent of issues — housing. Over three million dwellings and more than a quarter of a million other buildings suffered war damage in Britain. But before the Luftwaffe started dropping bombs, Britain’s slums were notorious, and even average residences lagged far behind most American homes in sound construction, sanitation, convenience, and comfort.

In March, 1944, Churchill talked about erecting half a million houses; but of these, only 4152 temporary dwellings have been built. Labor’s Minister of Health, fiery Aneurin Bevan, the Welsh former coal miner, who is charged with putting the Government’s housing program into action, was more careful than Churchill. In addressing Parliament, Bevan refrained from fixing a numerical target for the construction of permanent homes.

Such figures depend partly on release of building workers from the armed forces, and until this manpower problem is solved, no Minister can honestly commit himself to precise housing figures. The Government is counting on the availability of about 900,000 building laborers by next June. But if the supply of men falls far below this number, Bevan is going to have trouble.

Bevan did emphasize that building resources are to be devoted to erecting working-class homes, and that local rather than federal authorities are to be the government’s principal agents. Licenses for private building are to be issued sparingly and limited to houses costing a maximum of about $5000. Bevan was criticized for omitting to say how he proposes to smash profiteering in housing material.

The budget

The first objective of the Government’s housing strategy is to give decent homes to the lower income groups. The same policy — relief for the overtaxed little man — characterizes the first “socialist” budget presented to Parliament by the Labor Government.

The previous Chancellor of the Exchequer, Sir John Anderson, claimed for himself credit for aspects of the budget which he approves, but he struck at other provisions. He expressed concern at the maintenance of government expenditure close to wartime level, but this criticism ignored such large special payments as those being made to men and women upon their discharge from the armed forces, and to industrial firms upon termination of war contracts.

Anderson also objected to the absence of a clear wage policy to accompany the pegging of the cost of living. Finally, he distrusted the championship of more economic equality, which Chancellor of the Exchequer Dalton sponsors.

The trend toward fairer distribution of wealth was evident particularly in the total exemption from taxation of about two million of the poorest people, who until now have been paying taxes. There is also a substantial tax reduction for persons just above the lowest income plane.

The standard rate of income tax is cut from ten to nine shillings in each pound. To prevent the rich from reaping this benefit, the surtax is increased on those incomes exceeding $8000 yearly. The excess profits tax on business enterprises is reduced, but beneficiaries are warned to use these funds for modernizing equipment rather than for increasing dividends.

Dalton took the reasonable view that budgets can be balanced over several years, instead of annually. “There is no special sanctity,” he declared, “in the period in which the earth revolves around the sun.” He suggested that his budget is part of the Labor Government’s five-year plan, and that the widespread wish for tax relief must be weighed against the increased expenditure needed for housing, health, education, and other social objects.

While most of the tax reductions he promised will take effect only from next April, the purchase tax is to be abolished at once on a limited list of household goods like cooking equipment and heating appliances.

The rise on the stock exchange that resulted from the first “socialist” budget can be put down to pleasure among the wealthy at the absence of stern departures from orthodoxy, and at the higher net profits to be expected from a general lowering of taxes. Robert Boothby’s impassioned protest in Parliament against the “savage” duty on whiskey failed to evoke a cheer from the throats even of the King’s thirstiest subjects.

The favor which the budget won from the press, Parliament, and from men and women everywhere, showed that the British people will good-humoredly keep their belts tightened as long as they believe the Government really cares about social and economic justice.