A.J.P. Taylor liked to talk about the Great Depression of the Thirties. ‘It was all right for some, such as myself,’ he said, with satisfaction. ‘With a nice, safe job as a university don, I was sitting pretty. Prices were stable or going down. Don’t let anyone tell you deflation is a bad thing. It’s a jolly good thing for the middle classes with salaried jobs and savings. Life was good to us. Empty roads. You often had a railway carriage to yourself. You didn’t have to book a hotel room. Or a restaurant. Everyone glad to see you — service with a smile. You could buy a three-bedroom house for £600, new. If it hadn’t been for the rise of Hitler, I’d say it was the best time of my life, personally. Ha ha! Have I shocked you, old Catholic-Puritan Paul?’
What shocks me now is not cynicism and selfishness, which is no worse than usual. Better, if anything, but the way the country is rushing into insolvency. I was annoyed when Nick Sarkozy, the Hungarian operator and courreur des dames who is currently running France, told people: ‘England is finished. Bankrupt. No industry left. Currency no good. Caput’ — or words to that effect. What made it particularly galling is that everything he said is true. The National Debt is now £2,000,000,000,000, I believe, and is rising fast. That is already £30,000 for each of us. It will soon be nearly 60 per cent of Gross Domestic Product. We are adding to it at the rate of £200,000,000,000 a year. That is what is meant by Alistair Darling when he says exultantly: ‘We shall spend our way out of recession.’ Supposing Mr Micawber had said: ‘I shall spend my way out of insolvency.’ Not even Dickens made him talk such nonsense. Indeed, in theory Micawber was sensible, as old Keynes used to say. And at least he was a gentleman, and you felt it. Can’t say that of Darling, can you? Or, a fortiori, of Brown. Both of them professional Scotchmen.
In 1931 the prospective national deficit was a mere £170 million, less than is now spent on freebies for New Labour parliamentarians. But in those careful days it was regarded as catastrophic. Urgent action was required, and it was taken. Snowden, Chancellor of the Exchequer in the National Government, raised income tax to five shillings in the pound (about half what it is now). Even more shocking, everyone in the state sector, from cabinet ministers to the unemployed, had to take a cut of from 10 to 20 per cent. The only exception was the police, who took a cut of only 5 per cent. This was because Samuel, the home secretary, told the House it would be that figure, then said he had to ‘honour my mistake’. In fact it may have been deliberate, to keep the police loyal to the regime. All those affected (including the teachers who were cut by 15 per cent) accepted the cuts loyally. The one exception was the judges. They claimed the reduction was an attack on judicial independence, and unlawful as contrary to the Act of Settlement. As judges they were among the highest-paid people on the state pay roll, £5,000 a year, and therefore cut by 20 per cent, £1,000 a year. This still left them with 20 times the average wage. But they whined and howled and threatened. Lord Sankey, the Lord Chancellor, wrote a memo to the Prime Minister (15 January 1932, reproduced in Heuston’s Lives of the Lord Chancellors, 1885-1940, pp.513-15), saying they were in a ‘mutinous mood’. The controversy subsided into a morass of incomprehensible legal argument, leaving the country with the impression that judges were the most selfish group of people in the country.
There certainly ought to be a cut in public pay comparable to the 1931 savings, at least for the next two or three years, when huge additions to the national debt are planned. I would apply a 25 per cent cut to the Queen and members of the cabinet, plus all publicly paid persons in receipt of £150,000 a year or over. A 20 per cent cut should be made in salaries of other members of the government and those receiving £100,000 a year or over, 15 per cent to all parliamentarians, Lords and Commons, the cut to apply to allowances and expenses as well as attendance fees, and 10 per cent to all other members of the public sector. The only exceptions would be the armed forces, firefighters and police — the ‘danger’ occupations — who would be reduced by 5 per cent. The 1931 cuts were imposed immediately by Order in Council, and this led to later legal difficulties. I would use the Order in Council method again but follow it, as soon as possible, by parliamentary statute.
However, I believe it would be foolish to suppose that temporary cuts to public sector pay will be sufficient. In order to reduce the level of debt and restore international confidence in sterling, we ought to cut state jobs absolutely and permanently. John Prescott, deputy PM under Blair, boasted in his memoirs that he had been the leader in the process whereby New Labour ‘created’ over a million new public sector jobs. The actual figure, during New Labour’s first decade in office, was larger, probably about 1,250,000, and cuts should be of this magnitude. The Brown regime, in its present state of demoralisation, is incapable of such a radical retrenchment, and this raises the issue of an early election, or even of a national government on 1931 lines.
Finally, efforts should be made to recreate a viable industrial base in Britain. Here again, the 1930s provide an example. During these years Britain expanded a small car industry into a huge, varied and highly efficient one, world leader in many categories. It expanded its aero-engine and airframe sector into the most innovative in Europe. It created entirely new industries, in radar, electronics, pharmaceuticals and chemicals, and some of the best experimental laboratories on earth. Comparable opportunities are opening up today, especially a worldwide demand for quality combined with cheapness. That means raising productivity, and that cannot be done without a bonfire of legislation which in the guise of ‘protecting’ Labour actually destroys jobs or prevents entrepreneurs from creating them: bogus human rights laws, health and safety laws, employment laws, the whole apparatus of politically correct controls. These are not going to be scrapped by a homogenous New Labour regime. So the future again points to an early election or a national government. A chance for the Queen to end her reign with a historic act of courage.
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