The British Election

Mr. HERMANT:

We are hear to address today by Mr. Warren Balwin, Senior Parliamentery Correspondent for The Globe and Mail, who has just returned from England, where he covered the recent British Election Campaign for his great newspaper. We have read his "On the Spot" accounts of the campaign, and therefore we are particularly pleased to have him with us in person today. Mr. Baldwin was born in Toronto, and is a direct descendant of the Honourable Robert Baldwin, who with Lafontaine formed a Ministry in 1842, and again in 1848, which made a great contribution to the development of Responsible Government in this country and is known as the first true Cabinet in Colonial history. Mr. Baldwin will now speak to us on the subject: "The British Election."

MR. BALDWIN:

It would be extreme arrogance even for a newspaperman whose errors are so often treated with tolerance to suggest that I could spend two short weeks in Britain and come back with any real knowledge of what had happened or why it had happened. I went over with so many questions. Was a Socialist Britain really different from the Britain we had known in the past? To what extent were present hardship the price of Britain’s Herculean stand for freedom? To what extent were they the price of a new experiment in Government? And make no mistake about it there are still hardships even with high wages and employment and a food situation very greatly improved.

Finally, I suppose there is the question we have all been asking--whether we admit it or not--Is the maintenance of close economic ties with the United Kingdom to day worth the effort we are making and the effort we will have to make? I can answer only one of these questions with any sort of conviction. I believe it is very much worth any effort--yes, and almost any sacrifice--to maintain and regain the close associations with Britain on which the economy of this country was first developed.

In a sense it will be a new association. I think you will agree that the tariff protected Commonwealth trading bloc as we knew it before the War, like the era of British investment in this country, is gone. The centre of the world has shifted and I believe in this new era it is Canada who will be called upon to take the initiative in co-operative efforts to solve our mutual problems.

But in all this I must make one reservation. I believe, Sir, that you do not want to hear political speeches at these gatherings but perhaps I may be forgiven for this one reference because I think these days we should look at these things realistically and speak of them frankly. If a certain element in Britain's Socialist Government which has been making Anglo-Canadian relations more difficult in the past five years should gain control in the present political crisis, further co-operative effort might be rendered useless. I say that after talking to many Labour supporters who are worried over the possibility.

I don't think it will happen. I know the great majority of the British people don't want it to happen and I believe in a sense that was what their vote meant last Thursday. Let me try to picture one scene in a big dingy London hall. It is the last night of the campaign and the obvious uncertainty as to the result has injected a new intensity of feeling and temper into the meetings. Lord Woolton is trying to speak. The soft spoken merchant Peer and Minister of Food in the Churchill war cabinet has been howled down at two previous meetings and the crowd of labour supporters in front of him looks just as hostile. The Conservative candidate, a native of New Zealand, sits nervously nearby. Mention of his name has brought boos from the crowd.

Suddenly, Lord Woolton turns and points to him. "Have you forgotten," he asks the crowd, "what New Zealand, what Australia, what Canada did for you in the War?" The boos fade to murmurings and die. For five minutes the speaker holds his crowd on this theme. Our business, he declares, is to get unity inside the Empire and a Commonwealth solidly working together. He pauses and the crowd breaks into a thunder of applause.

I don't know whether that particular Tory candidate made the grade. I don't think he did. But for the moment in that bare hall a kinship had been created which transcended the party battle-transcended even the fundamental differences between the philosophies of socialism and free enterprise. Gentlemen, that sort of thing may not solve our trade problems. It may not mean that the Canadian farmer will sell more of his bacon or his eggs in the British market, but somehow it sends one away with a reassuring feeling that those problems can and will be solved.

Now I don't want to leave the impression that this was typical of the campaign. The issue of Empire trade and a united commonwealth was fought for the most part in Lord Beaverbrook's Daily Express. There was no perceptible reaction from the man on the street. Nor did he seem at all interested in the pros and cons of devaluation or dollar shortages or the convertibility of sterling. He knew he was getting more pounds in his pay envelope--many more than he had ever seen before. He wasn't particularly interested in whether the outside world had or hadn't lost confidence in them.

No, with the single exception perhaps of the Churchill proposal for new talks with Stalin, the election was really fought, as perhaps most elections should be fought, on the issues that dig directly into the lives and pockets of the ordinary man. Jobs, houses, food, the cost of living, and taxes. The Labour government boasted quite truly that in their term of office they had freed three million seven hundred and fifty thousand people from income tax. But even here, of course, there is still indirect taxation. A package of twenty of the cheapest cigarettes today costs three shilling, sixpence, about fifty cents at present rate of exchange of which the government takes in taxes two shilling, nine-pence or about forty-two cents. Not much wonder Sir Stafford Cripps stopped smoking. But on the day before the vote the Tories distributed millions of little sheets. They showed a gleeful Chancellor of the Exchequer grabbing all but three cigarettes from the package of a mournful smoker. They announced and quite accurately: "Before you take one Sir Stafford Cripps takes seventeen." Underneath it read: "Today the Socialist Government takes eight shillings in taxation out of every pound you earn. There was no answer to that and my guess is that it may have been responsible for swinging quite a few hesitant votes the next day. Nor was there any answer which appealed to the man earning $21.50 a week who paid $3.75 a week in income tax alone.

Figures, I know, make dull speeches but with the help of a British publication, I made the following simple comparison which may of some interest. The sources are the British statistical service and the Dominion Bureau of Statistics

Of course, it would be manifestly unfair to blame high taxation entirely on a Socialist Government. But during an election campaign it is fair game in any country and it was certainly a factor in that vote which so nearly defeated the Attlee Government.

Housing, I think, was a much lesser issue. Not that there is no shortage. If you take the Canadian situation and on top of it flatten out some fifty thousand existing homes, you might get something comparable. But it was difficult to put too much blame on the Government on this score and I think the great masses of the people saw through any attempts to do so. The Government had promised about a million and a half dwelling units and built a million. But the British worker had the satisfaction of knowing that if he couldn't get a shelter, no amount of money could build a mansion. In fact, he is getting, priority. For the most part, building is concentrated on small units, some of them prefabricated. Others functional to the point of appalling ugliness.

But food is a different matter. I've heard so many people come back to Canada and say you could get anything you liked in Britain today. That is true if you live in London's best hotels. But the great mass of voters don't. They make do at home with rationed butter and eggs and sugar and soap, and meat which is pretty poor quality when you do get it. And they eat lunches in cheaper restaurants where the food is certainly nothing to tempt even a normal appetite. And they queue up for their meals and for a lot of other things. There's something about that British queue which I can't explain but which worries me. Britons have always been the pattern of a law-abiding nation. I love the story of the solitary taxicab standing at a deserted London intersection with bombs falling all around-waiting for the red light to change. But this queueing is something different. It seems to be becoming a state of mind.

And I was frankly a little concerned, too, talking to the secretary of a business man in a London office one morning who wanted to come to Canada with her husband. Her first questions were not about opportunities for work. She wanted to know how unemployment relief in Canada compared with Britain. I could have told her it is more generous. I didn't. I suggested that if her husband and she had good jobs they had better stay where they were. I don't think that is really typical of the British attitude--not yet at any rate.

But I think perhaps the Socialists' full employment slogan may have been the greatest single factor in preventing defeat of the Attlee Government. Full employment is a fact. It is a fact, also, that a great many people are afraid they might not have a job tomorrow. There was a generally and perhaps justified feeling that the boom was at an end. And the Socialists were able to sell the idea that the Tories would bring its end much faster. The Laborites never spelled out very clearly how they intended to maintain full employment, but generally, it was the same age-old pump priming promises heard from any economic planners. It's familiar enough over here but it must be admitted that a Socialist Government has one extra ace in the hole. When you own 15 percent of the productive capacity of a nation and control another 15 percent, it makes the problem of maintaining and creating jobs just that much simpler.

A good deal of all this was in the background rather than the forefront of the campaign. I think it was accepted on both sides that whatever government came into power, Britain was in for a difficult time in the months ahead. The effects of devaluation are being felt slightly already in the cost of living. They haven't hit yet in the place where they spell jobs. New shipments of raw materials are just beginning to flow from other countries to the British factories at much higher sterling prices.

Costs are bound to rise. There may be new wage demands and these things may play hob not only with Britain's dollar export plans but with her ability to sell in the buyers' market now developing in the sterling area itself. These possibilities are keeping industrialists awake at nights in London, in Birmingham and in Manchester. But quite naturally labour leaders weren't in the mood to say too much about them and Mr. Churchill, I suppose, knew well that any talk of coming unemployment would be more likely to swing votes to the Socialist camp than his own.

Incidentally, I've heard that at least one report coming back to this country has described Churchill in this compaign as a pitiful figure. Please don't believe that. I don't mean that he wasn't tired by the end of the campaign. I don't mean that he isn't, as he described himself, an old man. I'm not even sure whether he would today make the best Prime Minister. And obviously the electorate wasn't sure either. But he still has his own incomparable drawing power. The Socialists, I think, were lucky. They didn't have to make comparisons in personality. "Attlee has no color", one man told me, "but he's such a decent little fellow". That was true and a lot of people voted for that decent little fellow. But Churchill was and still remains the idol of the nation.

I listened to his final broadcast, sitting among a group of Londoners, all of whom had been through the Blitz. It wasn't one of his better efforts but he was using the old wartime technique--the old blood, sweat and tears theme. "Grapple with your problems while your ancient strength is still with you". You could almost see the minds and hearts around me turning back the pages of memory. No gentlemen, Winston Churchill can never be a pitiful figure. What's more, I firmly believe that if there had been any real sense of emergency about this election campaign, the people of England would have swept him back into power.

But there was no sense of emergency and until the end of the campaign no apparent interest. It would have been dull, too, without the repartee that British audiences delight in. Someone said the other day that the British were the most politically literate people in the world. I'm not sure about that. When it comes to sorting out issues I'd just as soon take the Canadian voter. But the Briton takes a lot more fun out of his election meetings. I think the story has already got back to Canada of the Labour member expounding the benefits of the welfare state, free glasses, free dentistry, free doctoring. "And who", he asked "is responsible for those bonny children playing on our streets today." The answer came from the back of the hall: "Free enterprise".

One thing, of course, that was bound to strike a Canadian was the fact that the very things which might have made this election of vital importance to this country were mentioned hardly at all. Could Britain get on her own feet before Marshall aid disappeared in 1952? The Labor manifesto made no mention of Marshall aid. Were the Socialists really sincere in their backing of the dollar export drive? As far as I know they were never challenged on this point by Conservatives or Liberals. Would the Conservatives, if elected, really wipe out the system of bulk purchasing by the state--a system which, in all fairness, we must admit was very useful to Canada while Canadian food was being bought-but a system which strikes at free trade and competition and is the very root of the controls and regimentation to which the people of Britain are subject today. Well, the vote last Thursday left that question unanswered, though I believe in a typically ingenious sort of way the British voter has checkmated the advance of socialism for the present at least. It has, of course, produced all the elements for a political crisis and it is hard to see how another year can pass without a second election. But in the meantime, it is doubtful whether Mr. Attlee will continue any further with the sort of nationalization of industry which, to quote the Economist, has never had efficiency as its main objective. It is doubtful whether even the steel legislation will be implemented.

I'm not an economist and don't intend to try to talk learnedly about an economic situation which has me completely baffled. But I had some slight opportunity of watching Britain's dollar exports board in action. Their offices are a hive of activity. They are working hard to increase Britain's Canadian and American dollar earnings but they are up against three main difficulties in swinging industry generally behind their drive. First there is still a good deal of that feeling--and I'm quoting members of the board themselves--that North America should be glad to get British goods at any price and on any terms of delivery. That is gradually being eliminated. But more important, they have to fight against what is really good sound business sense from the standpoint of the exporter. Most of these industries are established in sterling markets. Even with devaluation of the pound, it is still hardly more profitable to sell in the dollar area. And they have the extra cost of breaking into new markets on this side of the Atlantic. But it is not so much profit as risk that is holding them back. They have had experience before of being shut out of the American market as soon as the size of their exports presented a sufficient challenge to American home production. There is not the same feeling about Canada. But British industry is hesitant about leaving established sterling markets for this sort of adventure. And today production is just not large enough to feed both markets. How to increase it is a real problem. I could find little backing for the popular view that the British workman under socialism isn't working hard enough. In any event, it is questionable whether this would make any appreciable difference. The key to the problem, I was told, is machines. While Britain has been exporting all the capital goods she could produce to Europe, to India and to some extent North America, her own industrial plant remains run down and obsolete.

But allowing for one hundred percent success in the dollar export drive, it is obvious that this would only scrape the surface of the problem. In the old days production of the British factory was going to the building of foreign investment-to the creation of debts owing to Britain by other countries. Today it is going, or a large part of it, to pay Britain's debts. There are still, I think, something over ten billions of dollars in debts to sterling countries. As you know, there are two sides to this sterling debt problem. For a government sworn to a program of full employment they can be an asset as well as a liability. Up to the moment, at least, India and other sterling countries demanding liquidation of their balances have been not too particular about the price they paid for unrequited exports. The British taxpayer, of course, in the end pays, but the British workman is kept busy producing the goods. Anyway the Labor government has been liquidating these debts at a rate which it is admitted on all sides has tremendously increased her dollar problems. So long as this continues, there is obviously going to be no demand for sterling in the dollar countries no matter how much we are willing to buy of British goods.

Now, I know I'm in away over my depth but if you'll bear with me just a minute longer I'll try to come to the surface. I was talking to a particularly astute British business man in London, last week. He was a good Conservative and confidently predicting a Tory victory. After going over all the baffling problems ahead and admitting that a Conservative Government might have no better rabbit than the socialists to pull out of the hat, he emerged with this statement. The real hope for the breaking down of the sterling dollar wall lay not so much in immediate balancing of trade books as in restoring confidence in sterling which really meant restoring confidence in Britain as a going concern. He suggested that if sterling in free market should rise to the present pegged price the day of convertibility might not be far away. Of course, he was arguing that a Conservative victory would do just that. But the question I took away with me--and the question I would like to leave with you here, today, is simply this: "How many of us in this sense are still selling the pound sterling short".

I suppose most of you have had the same experience of standing on the sidewalk at Trafalgar Square or Piccadilly Circus and watching that maze of taxicabs and buses and cars all seeming to be going in every direction without the semblance of order or timing. Yet you know that if you step off the curb you have a far better chance of getting safely to the other side than you have in crossing Yonge Street. And you know, too, that if you hail one of those battered taxicabs and tell the driver to take you to some obscure place without a street number he will get you there. You can call it all muddling through and I admit it takes a good deal of faith to be convinced that it works. They are the most exasperating people on earth. Faced with a decision at the polls which you and I might consider terribly final they vote neither one way or the other.

It is hard to suggest what may lie ahead. It may be that North America should shoulder a large part of the sterling debt. It may be that a Commonwealth Conference being urged now from both sides of the Atlantic might help. But I'm sure of this. If we want to find the solution in the coming months and years you and I will be called upon to believe much more aggressively than we have in the future of Britain.