Are the International Bankers Coming to Wilson's Rescue Again?

The defeat of the Wilson Government at the Brighton T.U.C. and the subsequent Labour by-elections reverse have made it clear that the present leadership of the Labour Party is in big trouble. It is virtually certain that at least some of the most important aspects of Government policy will again be rejected at the Scarborough Labour Party conference. This will lead to the situation where official Labour Party and:official trade union policy is at odds with that of the Labour Government, This is, as has been explained many times before in The Week, a very favourable situation for the emergence of a mass left wing opposition to the Government, If this occurs Mr. Wilson will have lost his value for British capitalism and, therefore, international banking circles, From the capitalist point of view the purpose of the Wilson administration is to get the working class to accept tionalisation measures without resistance. A mass left wing will make this auch ficult. At this stage the Tories are not an alternative because they would not command sufficient loyalty from the trade unions. British and international capitalism would, no doubt, prefer the Tories to come into power after defeats have been inflicted on the unions. Thus international finance has a vested interest for keeping Wilson in power for he time being and assisting him in face of the growing criticism from the Labour movement, It is in this light that one must consider the statement made by Mr. Pierre-Paul Schweitzer, managing director of the International Monetary Fund, at the Rio de Janeiro press conference, preceding the Fund-World Bank meetings. Peter Jay, in a special report to The Times Business News (25/9/67) wrote: Britain does not have to deflate any more even if sufficient payments balances cannot be earned in time to pay off her International Monetary Fund £500m. loan in 1970. M. Pierre-Paul Schweitzer, I.M.F. managing director, gave me this definite assurance here today. Given the outlook for the British economy and world trade, hesaid it would be economically wrong as well as politically unrealistic to expect further deflationary action .s.eeeees There would be no obstacle to anew drawing on the rights reconstituted by repayments. All that would be required would be the usual examination by fund staff culminating in what M. Schweitzer called "a nice letter from Jim sic FES This reassurance from the man who is effectively Britain's bank manager has major economic and political implications. M. Schweitzer made it clear that Britain must still aim to pay her way in the world, But more time means that unemployment will not have to be forced up to yet more drastic levels in order to make sure of the £200m. annual surplus otherwise needed. This means that Mr. Wilson's strategy for raising productivity by direct Government promotion of industrial reorganization and modernization will, perhaps, have the time which, as even its defenders admit, it needs in order to produce results. eeeeee Lt puts a new complexion on Britain's economic situation since one of the main arguments against the Wilson strategy was that it could not work anything like soon enough to meet the 1970 deadline. It also means that Mr. Wilson may be able to choose a later election date if he wishes...-++.++.- (MY EMPHASIS P.Jordan).