from newspaper reports over the country during the General Election campaign, a reader gained the very distinct impression that London and the Midlands were islands of prosperity in a sea of underdeveloped areas. Lancashire was depressed about cotton. Gloucestershire was dubious about aircraft. Tyneside, South Wales and Scotland were made to sound like Calabria. Most of our basic industries seemed either to be in a bad way, or if they were undeniably prosperous, They Were in the Wrong Area.
Now that (in practice at any rate) the Government appears to take the view that Tory Freedom by itself does not work (it is Labour that is still talking about “prosperity”!), it has been forced to intervene—and frequently to subsidise—most of the important sectors in the ‘private’ sector of the economy: even those so far untouched do not seem likely to have to wait long: from preliminary noises, it appears that shipbuilding and machine tools (both undeniably important and manifestly incompetently run) are next in the queue.
Without engaging in agonising reappraisals of principle, or involving their Party in the niceties of revisionist re-formulations, the Government has admitted, de facto, that the ‘dash for freedom’ does not ensure a steady increase in the gross national product, or distribute employment evenly over the whole British Isles. Indeed, they have taken up policies which would not only have been condemned as rank socialism in the thirties, but could scarcely have been conceived during the retreat from planning and controls in the halcyon years of the Mr. Butler’s dash for freedom.
Each intervention has been piecemeal, reflecting different industrial situations. The old traditional pattern is still to be seen in the farming industry. This conservative enclave has been subsidised to grow certain crops, not because this makes economic sense, but because of strategic or Defence considerations: or to try and revive regions of depopulation like the Welsh hills or the Scottish Highlands. There can be no other reason, in the age of the Polaris missile-submarine,
The cotton industry, on the other hand, was paid to scrap machinery which should have gone years before. It was still there because the Lancashire manufacturers were unable to make the effort necessary to compete with foreign mills operating modern machines on a three shifts a day basis. Many of the newer textile industries were in countries with low labour costs and a large local market for cheap and unfinished cloth. The effort to compete in these fields was encouraged by a short-sighted Labour Government, which needed immediate textile exports, and sacrificed a planned rationalisation to that. But that was some time ago.
With the motor industry, the Board of Trade has reached a rough compromise, satisfactory—in the long run at least—to all. The Government has steered them into needy areas of high unemployment with one hand (BMC, Ford and Standard to the Merseyside; BMC, Rootes and Pressed Steel to Scotland; BMC, body pressings and radiators to South Wales), recompensing them on the other hand with direct grants (still to be negotiated), long-term loans, and a complementary, but necessary, loan of over £100 million to the steel industry. True, the motor manufacturers would have preferred to remain in their old lairs: but there are advantages to the motor companies in being induced and bribed into such an area as the Merseyside, where skilled labour is available, which is near to supplies of sheet steel and close to a large and convenient port. In return for the “dislocation”, the Board of Trade has, of course, agreed to an expansion in the industry worth £160 million over the next two years. (This is referred to, at greater length, in John Hughes article on the Railway Muddle).