A Moment of Daring

For all his efforts to doctor Britain's faltering economy with doses of austerity, Prime Minister Harold Wilson has lately managed to look more like a quack dispensing dubious pills. Unemployment climbed to a 27-year peak of 559,000 last month, and that total is generally expected to reach 750,000 by winter. Industrial production has stagnated for nearly a year. Foreign-exchange earnings, the crucial source of support for the British pound, have risen, but at a disappointing rate. Under increasing critical attack both within and without his own Labor Party, Wilson last week called up a surprise reinforcement: himself.

As part of a massive Cabinet and sub-Cabinet reshuffle that included firing five of his older ministers, the Prime Minister appointed himself Britain's economic overlord, much as a desperate Winston Churchill took charge of Britain's defense in the darkest hour of World War II. Even for a man of Wilson's stubborn courage, it was a moment of daring. By personally assuming control of the Department of Economic Affairs, Wilson not only gave himself the toughest job in Britain but gambled his political future on victory where two senior ministers have failed. "If he is only 75% successful," commented London's Daily Mirror, "he will go down in history as a great Prime Minister. If he fails, history will regard him as one of the biggest flops who ever lived in No. 10 Downing Street."

Standing by Sterling. Wilson's 17 ministerial changes reached well beyond the domestic economic realm. Herbert

Bowden's departure as Commonwealth Secretary to become chairman of Britain's Independent Television Authority removed a leading opponent of any British deal with embargoed Rhodesia (see following story"). Douglas Jay's ouster as President of the Board of Trade--a post equivalent to the U.S. Secretary of Commerce--showed that Wilson is determined to pursue British membership in the Common Market, which Jay bitterly opposed. And by keeping James Callaghan as Chancellor of the Exchequer against the expectations of many political analysts, Wilson again signaled the West's financial community that he stands by his vow not to devalue the pound.

As titular head of the crucial economics ministry, Wilson replaced supercautious Michael Stewart, 60, with Labor's fastest-rising star: lanky Peter Shore, 43. Though Wilson made it clear that he will run the show, Liverpoolreared, Cambridge-educated Shore will wield considerable power in shaping Britain's economic destiny. A left-of-center intellectual, Shore is a former research chief for the Labor Party who first began helping Wilson in 1955. An economist (as is Wilson), Shore becomes the youngest member of the Cabinet. In the past, he was eager to nationalize more British industry; as an M.P., he even introduced a somewhat peevish bill to compel company directors to divulge their incomes. But Shore's current prescription for economic uplift is hard to fault. Last week he was touting "the three Rs"--"Reorganizing industry, getting rid of weakness; Retraining, getting more skilled people; Re-equipment, getting better machinery."

Says Shore: "Governments have got to be tough with inefficiency."

A Snub from Labor. To do all that, one of the first places Wilson and Shore may have to show some muscle is in dealing with Britain's featherbedding unions. Southern Region Railway men, for example, are threatening a 24-hour strike this month because some train drivers have lost pay as unprofitable service has been curtailed. But handling such problems will be difficult. The powerful Trades Union Congress has gone so far as to snub the Prime Minister by not even asking him to address its annual meeting this week.

The unions' attitude symbolizes a growing unrest over Wilson's efforts to ease Britain's balance-of-payments problem by a deflationary squeeze that hit the public first with tighter credit and a wage freeze, then hit it again with rising prices. Said Tory Leader Ted Heath in a burst of unusual asperity: "The country should explode with anger at the stupidity and incompetence of this Labor government, which stands paralyzed while unemployment of its own creation mounts."

As if to demonstrate that it is not quite paralyzed, the government last week eased its controls on installment buying of autos, appliances and furniture; the minimum down payment for a car or truck was cut from 30% to 25%, on appliances from 33% to 25%. But even the government agreed that the move was only a nibble at Britain's knotty economic problem: how to resume its growth without inflation, and without attracting a flood of pound-imperiling imports. Harold Wilson is clearly confident that his economy is ready to rebound, but that is a lonely view in London.

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