Harold Wilson: 'A Sense of Timing'

"The Englishman's truly distinctive disease is his cherished habit of waiting until the 13th hour," wrote British Historian Arnold Toynbee last November. Events have since proved him right. It took a serious pound scare and a disastrous inflation rate of 26% to prod Britain's Labor government into coming up with what Prime Minister Harold Wilson called "a plan to save our country" from a "general economic catastrophe of incalculable proportions" (TIME, July 21). Last Tuesday, after two days of passionate, often bitter debate, the House of Commons approved the government's emergency package by a vote of 264 to 54, with all but five Tories abstaining The plan limits pay increases to a maximum of $13.20 a week, blocks the use of government funds to finance excessive wage settlements by the nationalized industries, and uses the price code to prevent private employers from passing on the cost of high settlements to the consumer. It also proposes strict cash limits on public spending.

The day after the vote, Prime Minister Wilson granted TIME London Bureau Chief Herman Nickel the first comprehensive, on-the-record press interview he has given since his February 1974 election. Meerschaum pipe in hand, Wilson sat in a pink velvet easy chair in his comfortable and attractive third-floor office at No. 10 Downing Street. Through the curtained bay window, the breeze carried in the strains of a military band playing in nearby St James Park. The Prime Minister had the relaxed self-confidence of a man who was realizing the rare joy of action decisively taken as he talked optimistically of Britain and the world.

ON THE WORLD ECONOMY

We believe, in common with all our European partners, that the time has come for a substantial reflation by those countries whose economic position enables them to do it. Germany and France have already said that they are preparing such measures, and we are pressing very strongly for further reflationary action by the United States and Japan. The world is at a turning point where such reflation could galvanize world trade because it is a slump in world trade, unprecedented since the 1930s, which has created the worst industrial depression since the '30s. I shall certainly be discussing this with President Ford when we meet together in Helsinki next week. As a big trading nation, we have set ourselves very strongly against physical import controls. But we are not going to sit back and watch a remorseless increase in British unemployment. If the slump doesn't begin to improve quickly, we obviously reserve our rights to protect our balance of payments by various means.

ON FIGHTING INFLATION

The continuance of inflation--and the setting up of group against group, with people getting what they thought would preserve their position at the expense of someone else--was more than economically disastrous. It could be a threat against democracy itself. But it's a much harder fight than tightening your belt against a common, identifiable and hated enemy. It was easy to portray Hitler as a hated enemy. Inflation is much more difficult to identify and personalize. The British people made great sacrifices, pretty uniformly spread during the war, but they were never asked to accept a pay limit in the sense that we are now asking them to accept it. The British trade union movement has never before made such an offer in peacetime or war. I am heartened by the tremendous response.

ON ENFORCING THE PAY LIMITS

It will be a difficult winter, and the real test comes if any individual group were to press [for more than the pay limit]. This would have to be a test case. But the government are determined to stand absolutely firm. We are backing the pay limit with some legislation, not designed to send people to jail, but, for example, to tighten up the amount of money available [to finance excessive settlements]. What we propose is reserve powers against maverick or rogue employers, not against workers, but we shall go to great lengths to avoid having to invoke them. The Trades Union Congress accepted these powers with great reluctance. I can't speak about any individual Minister, but it would be very hard for a number of people [in my government].

ON HIS STYLE OF LEADERSHIP

Any fool can have confrontation You can press at the wrong time and get the wrong answer, or you can work on people. You have got to have a sense of timing. You can't learn it, you can't read books about it, you can't lecture on it. You've got to have instinctive timing, which sometimes I've got right and sometimes I've got wrong. If I'd tried to force the pace beyond what a democratic trade union movement was ready to stand, I could have got a dramatic situation, and it's not always dramas one seeks.

ON UNEMPLOYMENT

We reject the monetarist heresy of using unemployment or financial policies that inevitably lead to unemployment as a means of dealing with inflation. We are taking specific measures to diminish the impact of unemployment, particularly as regards juveniles and school leavers, and should be shortly announcing special help in the form of employment subsidies in hard-hit areas to help employers to keep on labor who would otherwise be joining the dole queue. That will be cheaper, in fact, to the government than paying dole, as well as socially much more desirable!

ON THE POWER OF THE UNIONS

They have no veto, but what any government requires is consent. And the problem of getting consent from the unions is satisfying them that they are being fairly treated. What I've always tried to do is not just get to know the trade union leaders but get to know the people in the districts. I don't know how many times I've been to the districts since I became Prime Minister in 1964, maybe once every couple of weeks until just recently, just going around the country meeting in a single evening 300 or 400 people--ordinary people, shaking hands with them all, signing autographs for the kids, but above all answering questions, their worries, what they didn't quite understand.

ON BRITAIN'S ECONOMIC GROWTH

The big difference between Germany and Japan on the one hand and Britain and some other countries on the other has been that [the former] have promoted a very high rate of industrial development. Germany, of course, had the advantage of the total destruction of their industrial equipment, while we were struggling with old looms, old machine tools and the rest. Our basic problem is inadequate investment in the private sector. Some of our new legislation is directly related to getting up the level of investment; for example, the National Enterprise Board will be intervening in one industry after another where investment has lagged. In the public sector, we have had a magnificent record of modernization. Our railroads are so much better than yours.

ON PROGRESS TOWARD EQUALITY

It's a truism that it's easier to get equality with growth, but when the going is tough, you need equality all the more. We have come much further in the past 16 to 17 months by strengthening the social services and plugging tax loopholes on death duties and capital transfers. Criticism that this has inhibited industrial investment is not justified. The relatively small number of very rich who may have been affected weren't very active in investment anyway. The problem is providing incentives for middle management. The new and developing class problem is between blue-collar on the one hand and white-collar and management unions on the other, who are fighting all the time to maintain their pay differentials.

ON BRITAIN'S INFLUENCE

We haven't got vast military forces, though we make a bigger contribution to NATO than anyone of our size and spend more of our G.N.P. on defense than any other European country. Our contribution is now experience. Nixon used to say to me, and L.B.J., "If it's an African question, we'll ask you because you have so much more experience than we have." Modestly, I'm not speaking for myself or even my Cabinet, but certainly our parliamentarians and administrators are trained to deal with these problems. We can do more in that way perhaps than we were doing with defense.

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