After the presentation of the budget on Monday, The Daily Express on Tuesday offered a prize of £ 100 for the best letter it receives in answer to the question, “Will Selwyn Lloyd’s budget restore the fortunes of the Tory party?” On Wednesday, The Daily Mirror replied with a big “No” and utilised the occasion to reiterate its claim to being Britain’s most popular newspaper placing the “as effervescent as ever” Express second.
This kind of “cold war” is a regular feature of popular journalism. I have referred to it only by the way. But the question posed by the Express is a key to understanding the budget. Many tend to agree with the Mirror’s triumphant “no” though they are not without a sense of doubt. The Labour party itself seems to share this sense of doubt.
In an otherwise technical kind of budget, Mr. Lloyd has introduced two new features, one of which will definitely win some votes. How many is still a doubtful proposition. There is a promise to end the tax on owner-occupied houses in instalments beginning next year. Owner-occupiers number 6.5 million. Though many of them had already found means to evade tax, the measure will be welcome to them. It will cost the public exchequer £50 million. Mr. Callaghan, the Chancellor in the Labour shadow cabinet has called it bribery to voters.
Capital Gains
The other important feature of the budget is capital gain’s tax on ‘speculative transactions” in shares, securities and properties. The period in the case of shares and securities has been placed at six months and in that of properties three years.
This is one of those cases of being willing to strike but unwilling to hurt. The so-called speculative gains constitute barely three per cent of the capital gains. Also, the proposed tax can be easily avoided through formation of a company by the person concerned. And as The Financial Times pointed out, to impose tax up to 17 shillings 9 pence in the pound on gains in six months and not in six months and one day is to ask for trouble. The tax has been welcomed by the City, a euphemism for industrial and business magnates. Value of shares picked up on the presentation of this proposal. This effectively diverts the Conservative party of the facade that it is also working for social justice. Thus if I were entering the Express competition I would say that Mr. Lloyd’s budget might help a little but would not revive the fortunes of the Tory party.
It is easy to be uncharitable to Mr Lloyd as I was myself last week. The crisis of confidence the Conservative party faces runs much deeper than Mr. Lloyd’s unimaginative hold on the neutral budget. Apparently it stems from a revolutionary change in the British social set-up. A sizable percentage of the sons and daughters of working class families have in the post-war period graduated to middle class status through university education and executive jobs. For these young men and women the Liberal party provides a sympathetic haven.
The Liberal revival started sometime between the general election in 1955 and the general election in 1959. The second election followed Suez and this futile exercise in gunboat diplomacy might well have contributed to this revival. In the 91 constituencies contested by Liberal candidates in both these elections, the Liberal vote increased by 22.6 per cent between 1955 and 1959. In the same period Conservative vote rose by 3.4 per cent and Labour’s fell by about 1.8 per cent.
This trend has continued ever since. In all there have been eighteen three-corner by-elections since November I960. The Liberals have captured only one seat at Orpington but their vote has gone up everywhere. The Conservative party lost votes in each by-election and the Labour party in sixteen out of the eighteen. The Liberals have cut deeper into Conservative strongholds than into Labour’s. Towards the end of May and early June, the Tories will be defending two vital constituencies – Middlesborough West and Derbyshire West which they won with a majority of over 8,000 in 1959. A defeat or even a sharp drop in majority in one or both these “safe” constituencies could break the morale of the party.
The prospect is not that the Liberal revival will be so spectacular as to sweep the party into power at the next general election but that it will wean a sufficient number of votes from the Conservatives to make it possible for Labour to get into office by the backdoor – that is without a pro-Labour swing. That is the spectre that haunts the Conservative party headquarters. For Mr. Gaitskell it might be the only chance to escape oblivion.
Labour Peer
Mr. Francis Williams, the well-known journalist who still writes a regular column in The New Statesman surprised many of his friends and admirers when he accepted a Labour peerage recently. He had to do some explaining. But little did these friends and admirers know that he had a bigger surprise up his sleeve. He has now sprung it on them – a book entitled The American Invasion.
Mr. Williams’s case is that American investment in Britain has trebled in the last ten years. It is ten times what it was before the war and is increasing at the rate of over 13 per cent annually – in figures, around £ 170 million a year. The total investment is close to £ one billion two hundred and fifty million. With investment come’s control over business and personnel. More than half of this investment is in the hands of ten giants of American big business.
American investment is concentrated in consumer industries giving it a substantial or even a dominant share in drugs, office appliances, food, cars, electronics, printing machinery, kitchen equipment, cosmetics, heating appliances, tyres, sewing machines, laundry equipment, lifts, earth-moving machinery, photographic films, detergents and soap – all the way down to cigarette lighters, pens and pencils, pet foods and corsets and brassieres.
Mr Williams is convinced that the adoption of these things “in such quantities will mean adopting the whole social and economic philosophy behind it. I am thinking particularly of the crippling spread of instalment credit and the whole atmosphere of ‘live now, pay later’ in the shoddy world of planned obsolescence that appalls one on revisiting the United States,” he says.
The book is controversial enough. Mr. Williams’s references to American soldiers and civil servants, mostly in aid implementing agencies, are pure dynamite. Now he has received invaluable aid from Mr. Roy Thomson’s Sunday Times. Last Sunday the paper devoted half of its 28-page colour supplement to illustrate an interview with Mr. Williams with nearly a score of pictures. Mr. Thomson is, as everyone knows, a Canadian. At the moment Canadians are not too happy with the Americans.
Art Market
Frightened by the rising number of thefts of paintings, Mr. Somerset Maugham recently decided to dispose of his collection. He could not have chosen a better time. Never in human memory has the art market been crazier than it is today, thirty-five paintings were sold in fifty-five minutes for a colossal sum of £523,880 at Sotheby’s on Monday night.
A number of art critics had seen the collection on the eve of the sale. The general opinion was that it was an ordinary collection and did not contain a single masterpiece though there were Picasso, Renoir, Monet and Matisse. The prices they fetched confounded the critics. Picasso’s “Death of Harlequin” brought the highest price of £80,000 which is the highest ever for a Picasso so far.
The Picasso has been bought by one Mrs. Ramus who runs an art packing shop in a backstreet for some collector. For a whole week the poor woman has been pursued by people trying to find out for whom has she acted as go-between. Now having attracted so much notice she is haunted by same fear which made Mr. Maugham decide to sell his collection and stays all night awake at the shop.
The Times of India, 14 April 1962