Facing Up to the Morning After

Post referendum omne animal triste est.

With that revision of a famous dictum, London Times Pundit Bernard Levin summed up the mood of Britain last week.* On the Monday morning after the Common Market referendum, when the edge was off the thrill of victory and the agony of defeat as well, Britons were reawakened to the fact that all of their old problems were still with them. Indeed, some had got worse.

To be sure, there was a new sense of really being a part of Europe at last. In Parliament, Prime Minister Harold Wilson paid homage to the new spirit of commitment to the EEC by bandying about a fancy French word--eclaircisse-ment (enlightenment). His unabashed Yorkshire pronunciation brought down the House of Commons with gales of laughter. Apart from that touch of trans-Channel humor, Wilson was somber in talking about the task ahead. "Our future," he said, "will depend on what we are prepared to do by our own efforts, our skill, our technocracy--and our restraint."

The Prime Minister was referring, of course, to Britain's continuing desperate economic woes. The usually circumspect Bank for International Settlements, a Basel-based central bank for central banks, issued a blunt report that faulted British authorities for their "not very successful" attempt to cope "with a situation deteriorating on several fronts at once." The infectious gloom of the Basel moneymen spread to the London stockmarket, killing any hopes for an upsurge in the wake of the pro-Market landslide. The day after the B.I.S. report was issued, there was a rush of Arab petrodollars out of London and the pound fell to a record low, 25.9% below the Smithsonian-agreement level of 1971. Meanwhile, new figures published last week showed that investment in manufacturing industry is now dropping at the unprecedented annual rate of 15%.

Meeting problems head-on has never been Harold Wilson's political style, but there were signs that the Labor government had developed a belated sense of urgency about Britain's prolonged crisis. At a meeting of the Scottish Labor Party in Glasgow, Chancellor of the Exchequer Denis Healey announced that leaders of the trade union movement, industry and government will soon begin meeting to work out a program aimed at cutting Britain's 30% inflation by half within the next twelve months. "The key to solving inflation is the level of wage settlements," said Healey--meaning that wage claims would have to be reduced from the current 30% average to below 15%.

Healey insisted that the new plan, popularly dubbed Social Contract Mark Two, must be hammered out within the next few weeks, well before the Trades Union Congress's September conference sounds the opening gun for the next round of wage negotiations. Although a recent Opinion Research Center poll disclosed that 70% of Britain's voters, including 63% of trade union members, want the government to take legal control of wage settlements, the Chancellor rejected the notion of a statutory wage policy. Hopes for an effective policy of voluntary wage restraint were raised, however, when the T.U.C.'s economic committee drew up a working paper that recommends keeping pay increases below 20% in order to stem inflation and unemployment.

The question of what to do about the British economy became intertwined with the question of what to do about Industry Minister Anthony Wedgwood Benn, whose impassioned antiMarket campaigning had made him the darling of the Labor Party left and the pariah of its right. Business leaders, panicked by Benn's grandiose plans for public control of industries and investment, had been demanding his dismissal from the Cabinet. On the other hand, powerful union leaders including Jack Jones, president of the Transport and General Workers Union, had warned that any demotion of Benn would be taken as "a grave affront." The situation called for the kind of political juggling act at which Wilson excels, and he came through with a dazzling performance.

Benn swapped places with Energy Minister Eric Varley, a stolid Wilson loyalist who had also campaigned against the EEC but less noisily than Benn. Education Minister Reginald Prentice, a leading pro-Marketeer, was switched to the Ministry of Overseas Development as a gesture of evenhandedness. Although the Overseas Ministry is technically sub-Cabinet, Prentice was allowed to keep his Cabinet rank when Home Secretary Roy Jenkins threatened to resign over his fellow moderate's demotion. The Prentice move displaced Leftist Judith Hart, who was offered the Ministry of Transport but turned it down in pique. "I fear we are witnessing the first dangerous stages of what could prove to be a historic catastrophe for the Labor Party," she said, in an emotional speech to Parliament. The post she rejected was left temporarily vacant when Transport Minister Fred Mulley moved over to fill Prentice's Education portfolio. As one Labor M.P. observed, it was "a classic Wilsonian reshuffle: no inspiration, all tactics, every move a tortuously devised counterpiece."

Gracious Loser. In effect, Benn had been moved neither up nor down but sideways. As Energy Minister, he will preside over the development of North Sea Oil, the only bright spot in Britain's otherwise cloudy economic future. Lest the oil companies panic, however, Wilson made it clear that Benn will have little hand in the delicate licensing negotiations the government is now conducting with them.

If Benn felt a bit manhandled, he did not say so. In fact he seemed almost to revel in his new public role as a good and gracious loser. "I have just been in receipt of a very big message from the British people," he said in a television interview. "I read it loud and clear." Whether that means he is ready to modify his radically leftist approach to economic policy remains to be seen. At any rate, his politic response to the popular will suggests that Benn, at 50, thinks he is a man with a future. Wilson's gingerly handling of the Cabinet reshuffle indicates that the Prime Minister is of the same opinion.

*Levin was parodying the often incompletely quoted observation of the 2nd century physician Galen: Triste est omne animal post coitum, praeter mulierem gallumque (Every animal is sad after intercourse, except the human female and the rooster).

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