For sometime past the much-vaunted growth target of A% per annun, first elaborated by NEDC and since built in to the heart of Labour's strategy, has been under question, A long article in the latest issue of the Westminster Benk Review speaks of the 'fetish of Ay, and this notion, that A growth is a distant unapproachable dream goal, has increasingly filtered through the financial pages of the heavy newspapers into the calculations of political commentators, The financial crisis of last week has intensified speculation on this matter. The Sunday Times carried a most interesting item by Michael Shanks, under the heading “Requiem for 4%." He emphasises the fact that the three billion dollar credit which has been negotiated to buttress the pound against the danger of devaluation leaves Britain "more thoroughly in paw to international finance capital than et any time since the war."
"He who pays the piper", he continues, "calls the tune. It is an illusion to think that the Government can conduct its internal economic and social policy without reference to the views of its foreign creditors." Indeed, the explosion in the Parliamentary Labour Party against the deferment of pension increases, in which numerous members stood firm for an immediate payment, seems to have been scotched only by recourse to this argument.
The fact that devaluation did not take place has insulated the workers from the most severe cuts in living standards for some time. It has also insulated the City from a shakeup which many key industrialists would have been pleased to administer to it. But now that the weapon of devaluation has not been employed, there is an interim in which it becomes possible to jell out a campaign for offensive, socialist policies which will meet the crisis. ——4 If this is not quickly done, there can be no doubt that the question. of devaluation and other severe attacks on the standard of living of the workers will be posed again, in cirmcustances which may not be so easy for the left to fight. Of course, the whole of Labour's social security and welfare programme depends on increasing output substantially. The 4% is a crucial part of the strategy. But the 4% is not readily attainable in circumstances in which the “pre-election "Go" of the Conservatives has now been replaced with measures which amount to post-election Labour "Stop" on economic growth.
Michael Shanks shows his appreciation of this problem: "To a Labour Government walking the narrow tightrope between a slender majority and dependence on the goodwill of international finance this is an agonising and frustrating predicanent . The political consequences could be very serious indeed, There is a danger that the Labour Party, remembering the “bankers! ramp" which, according to the party's mythology, cheated it of power in 1951, may conclude that the same thing is happening in 1964, and that any attempt to treat with capitalism is therefore impossible, There is a definite possibility that a Labour Administration, under pressure, mizht swine sharply to the left and revert to the rezime of controls and sccislissation of the nost-war years."
It is the duty of the left to clear the field for action to ensure that this prediction is fulfilled with interest. There is a "bankers! ramp", which has already confiscated the old age pensioners! Christmas bonus, and will, unless checked in time, lead to worse inroads in the future. Labour's targets can only be achieved by a policy of far-reaching structural reforms, including the widespread take-over of obstructive enterprises and a serious apparatus of physical controls. The physical controls which Mr. Shanks fears were elaborated during the last war, and administered by safe supporters of the system (see Rogow and Shore's account: "The Labour Government and British Industry, 1945-51") and on the whole they failed. ‘The physical controls we
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