Running Out of Sea Room

"We're like a destroyer heading full-steam towards the shore," said a close associate of Conservative Prime Minister Edward Heath last week. "There's only so much sea room, and it's running out fast." Winter usually brings snarls to otherwise stiff British upper lips, but there is a mood of discontent and even despair in Britain today that is unlikely to disappear, as it normally does, with the first daffodils.

The stock market is at its lowest level in four years, and some stockbrokers are speaking of the prospect of a "horrible slide." Unemployment is the worst in 31 years, with 721,000 people out of work, 70,000 of them executives. The second largest auto insurance firm, Vehicle and General Insurance, has followed Rolls-Royce into bankruptcy--leaving one-tenth of Britain's drivers unprotected. The nation's largest industrial complex, Imperial Chemical Industries, plans to reduce its investments in Britain by some 25% over the next three years. Other investment cuts are expected in the petroleum, shipbuilding, motor and engineering industries. One notable light industry --the Rolling Stones--is emigrating to France to get away from it all. Inflation is running at nearly 9% a year, while the economy is growing by a paltry 1.1%. The one bright spot is the nation's balance of payments, which is expected to show another surplus this year, of around $1.4 billion.

Angry Silence. Deepening the malaise is what London's newspapers call the "angry silence" between the workingman and the Tory government. Few expect this week's scheduled meeting between Heath and Trades Union Congress Leader Victor Feather to start a real dialogue. Even if the seven-week strike of the 230,000-member Union of Post Office Workers ends this week as anticipated, by the end of April the number of working days lost in British industry may exceed the total of 10,970,000 for all of last year. That would be the worst record since the great General Strike of 1926. Last week a one-day protest strike against Heath's proposed Industrial Relations Bill--designed to curtail wildcat strikes by making union contracts legally binding--involved more than 1,200,000 workers. Another such walkout is planned for next week.

The postal workers' walkout has proved particularly grating. Everyone lost something, except for a handful of enterprising chaps who set up emergency mail-carrying services for high fees. When extravagantly mustached Union Leader Tom Jackson tearfully asked postal workers in Hyde Park last week to return to their appointed rounds while a three-man board studied their demands, he was booed for five solid minutes. The postmen, who were demanding a 13% increase in their weekly pay, which now runs from $36 to $66 (the Post Office offered 8%), had lost nearly $432 per man. The Post Office has suffered a net loss of nearly $72 million, and it is estimated that it will take at least six weeks to clear up the backlog of mail.

Small businesses, mail order firms, publishing houses, the football pools, charities and all manner of shopkeepers suffered. Britain's Save the Children Fund, which helps needy youngsters in 46 countries, estimated that the strike had cost it $180,000. Britain's newspapers lost nearly $12 million in advertising: two of them, the ailing Daily Sketch and Daily Mail, announced their proposed merger--a long-discussed union doubtless hastened by the strike. Sutton & Sons, a seed company that does its business by mail, puts its daily loss at $24,000. Littlewoods, the huge football-pools outfit, has had to lay off 8,000 of its 12,500-man staff. Few doubt that there will be a wave of bankruptcies reported at strike's end unless major banks can come to the rescue.

Kill or Cure. The capitulation of the postal union's leadership is being hailed as a victory for Ted Heath's hard-line stand against inflationary wage demands. After Heath's apparent victory over the Electrical Trade Union workers in December, though, a board of inquiry subsequently gave the workers much more than they had expected. Britain's bobbies have just won a 16.5% wage hike --well above Heath's 10% limit. Now the nation's 230,000 railwaymen are pressing for a 15% to 25% increase, and London's 26,000 busmen are negotiating for a 25% rise in wages.

There are those--the great bulk of conservatives, much of the middle class, some businessmen and the parliamentary majority--who still resolutely believe that Heath's kill-or-cure economic strategy is the right one: meet the unions head-on and allow a few mismanaged major companies to go under. Says one young Tory M.P. with typical sangfroid: "We knew it was going to get worse before it got better." While it is getting worse, more and more of the country is losing confidence in Heath's policies. Last month's Gallup poll indicated that Labor now enjoys a 71% margin in popularity over the Tories and that three out of every four Britons are dissatisfied with the government's inability to control rising prices. Given the profoundly anguished mood of many Britons today, the question may be: Will Heath's shock therapy cure the patient or send him into a coma?

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