ARTICLES

Are the British better off than we are?

The Old Country exodus has touched a new low, and Maclean’s Ottawa editor finds it’s not because of newspaper attacks on Canada but because Britons have worked to a new high in trade, jobs, housing and the everyday luxuries that make for a better way of life

BLAIR FRASER September 12 1959
ARTICLES

Are the British better off than we are?

The Old Country exodus has touched a new low, and Maclean’s Ottawa editor finds it’s not because of newspaper attacks on Canada but because Britons have worked to a new high in trade, jobs, housing and the everyday luxuries that make for a better way of life

BLAIR FRASER September 12 1959

Are the British better off than we are?

The Old Country exodus has touched a new low, and Maclean’s Ottawa editor finds it’s not because of newspaper attacks on Canada but because Britons have worked to a new high in trade, jobs, housing and the everyday luxuries that make for a better way of life

BLAIR FRASER

LONDON

Last June a small British travel agency, Simtours of London, got itself a hurst of international publicity by an unusual offer. For twenty-eight dollars down and two years to pay, Simtours would bring back from Canada any British emigrant who'd had enough and wanted to come home.

Not many took advantage of the opportunity (forty-five applicants by mid-July, several of them obvious cranks) but to Canadians the offer itself was startling enough. For forty years we had thought of Britain with a rather patronizing admiration — good old England, down but not out; land of austerity and rationing, of the Woolton or sawdust sausage and the stiff upper lip; land that rich prosperous young Canada would like to help, as much as could be done without inconvenience. But now this aged respectable poor relation had begun to behave in a very odd way, unusual and almost undignified.

“Merrie England today is merrier than any time since Edward VII,” Fraser declares

While rich Canada had her customary trade deficit ot more than a billion dollars last year, poor old Britain earned an all-time record surplus of a billion and a quarter. Rich Canada in June had 3.7 percent of her labor force seeking work, just double the percentage in poor old Britain for the same month. The austere British are driving twice as many automobiles, cooling their beer in three times as many refrigerators, doing their laundry in ten times as many washing machines as they did ten years ago. They are also earning twice as much money, and one family in six has a new house.

The Conservative government is campaigning for re-election on the slogan that “life is better.’’ The Labor Party, far from denying this boast, retorts only that life could have been better still by this time, but for Conservative over-caution. All these facts raise, on both sides of the Atlantic, a question that most Canadians never expected to hear again:

Are the British better off than we are?

In terms of material quantity the answer is still

unmistakably no. The average weekly wage of an adult male British manual worker even now is about thirty-five dollars — less than half the Canadian figure. It's true that currency exchange rates are a poor measure of real living standards. Many things are cheaper in Britain, especially rents. The British government has laid out one hundred and forty-three million dollars since the war on housing subsidies, and this has held housing costs below Canadian levels. Clothing and some foods are cheaper and medical costs are met by the National Health Service, to which the worker’s contribution is less than thirty-five cents a week.

Nevertheless, detailed comparison of standards of living still works out in Canada’s favor. Two out of three Canadian families own automobiles; in Britain, one out of four. In Canada eighty percent of households have telephones, ninety percent have washing machines, ninety-five percent have refrigerators; in Britain the corresponding fractions are only eighteen percent, twentyseven percent and twelve percent respectively,

although all have vastly increased since 1949.

Of course possessions are not the whole of a living standard. Which would you rather have, a deep freeze or Royal Festival Hall? A pop-up toaster or Westminster Abbey? But these differences have always been there, in good times and bad. They don’t explain why so many more Britishers now seem to think they’re better off at home.

There’s no doubt many of them do. Emigration from Britain to Canada fell off last year to less than a quarter of the year before, and for the first quarter of 1959 is less than half the figure for the same period in 1958. This year will probably be the lowest since the end of the war.

Some Canadians see this as the effect of a plot against Canada by a section of the British press. Vicious exaggeration of Canadian unemployment. they think, scared off Britons. A few Canadians undertook to try to correct these false impressions.

David R. Wardlaw, a continued on page 54

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Are the British better off than we are? continued from page 25

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Toronto corporation lawyer, revisited his native England this summer for the first time in ten years — partly on holiday but partly to see if something could be done, through the Chamber of Commerce or other such organizations, to present a true picture of Canada. He came back quite reassured. Misrepresentation, he found, had had little or no effect; the

chief reason why the British are staying in Britain is that they like it better.

"This is a rich country nowadays,” he told a friend in London.

Of the things that make Britain a richer country than she has been since before World War f, the biggest is something beyond British control. Last year, the terms of world trade altered sen-

sationally in Britain’s favor. The cost of British imports, mainly raw material, dropped an average of eight percent below 1957 levels, and the British could buy the same volume for about seven hundred million dollars less. Meanwhile the prices of Britain's own goods in the world market changed hardly at all.

The result was the first surplus Britain

has had in "visible" trade since Queen Victoria’s time. On top of that was the usual surplus on "invisibles” — the earnings of British shipping and other services, and of British investments abroad.

To the British economy this meant the difference between day and night. Prosperity in the sense of full employment has been almost continuous in Britain since the war. but up to now it has been prosperity of a rather austere kind. There were never quite enough goods to go round. The problems of boom were as real as the problems of depression. High employment meant high money earnings and a consumer spending spree on imported goods, which in turn meant a crisis of foreign exchange.

So the people's spending had to be choked off by various painful devices — high purchase tax to make retail prices high, income tax to keep buying power low, a high rate of bank interest to discourage industries from expanding and buying more material abroad than Britain could pay for.

It made for a gray sort of life. Canadian immigration officers in London recall that when Britons were streaming to Canada at a rate of ten thousand a month, the reason wasn’t so much the high Canadian wages, hut escape from British taxes, rationing and austerity.

This year is different. Thanks to that unprecedented surplus in the British balance of payments, the chancellor of the exchequer was able to show more mercy in the past ten months than in the previous tea years. Purchase tax and income tax were reduced and restrictions were taken off installment buying and personal bank loans. The effect has been electric — so much so, according to merchants and bankers, that all the published figures are already out of date.

“I rode on a bus the other day beside a middle - aged couple." an economist said. "I would have guessed her to be a charwoman, him a chronic out-of-work. I found they were just back from a holiday in Spain. I asked her how they liked it.

“ 'Oh. Spain is all right,' she said, 'provided you stay at the right places.’ ”

This was no isolated example. Foreign travel, once the privilege of the rich, is shared this year by no fewer than a million holiday-making Britons, double the number of ten years ago. Most are customers of bargain tours by bus — “See five countries in six days" — but anyvyay they are traveling abroad.

They are also traveling at home. Automobile production in April hit an alltime record of twenty-five thousand cars a week, approximately half for the home market, which means the British are now making almost as many cars for themselves as they produced altogether three years ago. The other ‘consumer durables" have rocketed in the same way — washing machines. refrigerators, vacuum cleaners, television sets, everything that makes home life more comfortable.

It's commonly said that these changes mean new luxury for the British working class, but so far this is true to a limited extent only. Middle-class homes absorb two. three or four times as much of the newly popular durable goods as do working-class homes, partly because of the disappearance of the British servant class.

Mark Abrams, an economist, recently completed a study of the modern British market that reveals some unexpected facts. He says it's not true that the British middle class is being wiped out by postwar taxation, but actually is growing at an unprecedented rate and has more than doubled in numbers since 1949.

The postwar redistribution of income

toward the working class stopped, he says, about 1950. and now the middle-income group is again dominant. The personnel of the middle class, though, has changed. The hereditary members, civil servants, the academics and the senior officers of the generation now growing old. have had an increasingly hard time in the face of postwar taxes and inflation. They are being replaced, or at any rate joined, by rising merchants, advertising men. a small but growing number of selfemployed artisans and small entrepreneurs, men for whom inflation has on t ie whole been a good thing.

Meanwhile the British working class has begun to move toward middle-class standards of comfort. The whole pattern of British buying has altered in the last few years.

In the 1940s. even while w'ages were rising, buying habits didn't change much. Shortages kept people from spending all they wanted, but in addition the British workingman proved to be an acutely conservative buyer. When the food shortage eased and most rationing ended, he simply bought more of the same old ‘filler" foods. (One result, noted by public-health officers, was that obesity became a leading physical handicap among workers' children.)

It's different now. The standard working-class diet has shifted to more meat, more butter, more fruit and vegetables. Consumer analyses show bigger spending on food, fuel and household goods, as well as on motoring and foreign travel.

All this means a virtually bottomless home market for British consumer goods. The change-over has barely begun. And when, if ever, the initial demand is satisfied, the replacement market will appear. For example, half of all the motor cars now on the road in Britain are 1953 or earlier models.

The unanswered question is. can Britain afford it? Has the time come at last when British industry can let itself go in serving the British market? Or will this boom end as other British booms have, with depletion of foreign - exchange reserves and a new bout of austerity ?

Only time will tell. Certainly there is no expectation that Britain can keep on earning the kind of surplus on foreign trade that luck gave her last year. Even before 1958 ended, prices of raw' material were rising, while the prices of British exports stayed about the same.

Nevertheless, British economists think that this time the British boom is soundly based, and that British export industries have got the momentum to carry them through.

I went through an automobile factory near Birmingham that is as modern and as nearly automatic as any plant I ever saw in Canada. The workers are well paid by British standards — most earn forty-five dollars a week, some more than sixty dollars with overtime. The company was about to announce a new car designed as Britain's answer to Italy’s Fiat and Germany’s Volkswagen.

It's the cutest thing you ever saw — looks like something you'd see in the F. A. O. Schwartz toy shop in New York, for the children of American millionaires. But its makers say this toy can reach 70 mph and can be parked in eleven feet of space. It will carry four fairly tall people in reasonable comfort.

In Britain, this automobile will sell for just under a thousand dollars. Canadian taxes and shipping costs would add a couple of hundred dollars, at least, but the makers are not really aiming at a North American market. Their eye is on the British market first, and Europe next.

That’s another thing that strikes a

Canadian visitor as new in Britain today, the indifference to North America. It’s taken for granted that if they did build up a substantial market there, new tariffs or quotas would be raised to cut it off. Canada's talk about building commonwealth trade turned out to be empty talk, and no longer attracts any notice. British exporters look eastward, to Europe and the Orient, and eventually perhaps to the Soviet Union.

Not only the auto industry but all the newer industries of Britain look forward with tranquil confidence to competition

in the markets of the world. They're a bit apprehensive of German and Japanese products, but they hardly ever mention North American.

These newer industries include electronics and heavy electrical equipment generally. They include atomic power, in which Britain hopes to lead the world, and heavy industrial chemicals, one of the fastest-growing industries in Britain. Flven such an apparently sick industry as British textiles may begin to benefit by enormous recent technical advances.

The really sick industry in Britain is

coal mining. The nationalized mines are kept going at a more or less arbitrary rate, piling up stocks that have reached some twenty-five million tons. Lately some of the costlier pits have been closed. with a resultant sharp rise in productivity. Adult recruiting into the industry has virtually ceased.

Steel and shipbuilding are borderline cases. The big companies are in good enough shape, steel plants operating near capacity and shipyards with orders in hand for three years ahead. But in both industries the smaller, marginal firms are

badly worried.’When I asked a mill manager in a small steel company what he thought of the British boom, he answered “What boom?"

Aircraft companies are also badly worried. The Comet. Britain's entry in the worldwide contest of jet airliners, is proving too small to compete with such rivals as the Douglas 8 and the Boeing 707. Only thirty-three Comets have been ordered up to now. compared to four hundred for the now-obsolete Viscount, and other new' British aircraft arc getting a similarly lukewarm reception. Smaller

aircraft companies are hard hit by cutbacks in the British defense budget. The industry as a whole has laid off ten thousand men in the past year.

However, all but 2,500 of these workers have found jobs in other industries, since the gravest shortage in the British economy is in skilled labor. It’s significant that most of the strikes and nearstrikes in Britain this year turn not so much on the issue of wage rates as on working methods, the right of employers to cut out restrictive practices and feather-bedding. If the employers win on

this point, as seems likely, British industry will be able to get costs down still further, and the outlook for British exports will be that much better.

Some other handicaps of the British economy may be harder to remove. Transport is outworn and overloaded — it takes up to three weeks to ship goods four hundred miles from London to Glasgow. A young British economist remarked, with bitter wit: "The public takes the view that if transportation is profitable it must be wicked, and if it is unprofitable it doesn’t deserve any new capital.”

About British roads, the same man said: “The road system in the U. K. is essentially that which existed in the eleventh century, with a better top surface.” Britain has the highest vehicle density to road mileage in the whole of Europe, which probably means the highest in the world.”

On summer weekends British highways seize up like frozen pipes, and traffic comes to a standstill. On either side of the innumerable village bottlenecks, the queues of autos may be as much as four miles long. Even in midweek the situation is long past being a joke, and is recognized as a major drag on industry.

Lately, though belatedly, expenditure on new roads and major repairs went up from the twelve million dollars budgeted in 1948 to one hundred and ninety million.

But these are mainly ailments of prosperity. Will Britain’s prosperity last?

The night before I left London I had dinner with a Canadian industrialist who had just completed a tour of inspection of British industry, and who was profoundly impressed. According to him. the day is gone when every upturn in Britain leads to another “dollar crisis.” Even if British exports don’t continue to earn enough to pay all the bills (and he thinks they will continue) he says the British will no longer be short of dollars. The American investor, he says, has begun the rediscovery of Britain. Extra U. S. funds will be pouring into the British Isles, the way they have poured into Canada since 1947; the British deficit on foreign trade, if any, will be met by the inflow of investment just as Canada's has been met for all these years.

Ironically, one reason why British investments are available at attractive prices is the presence of the British Labor Party as official opposition and a possible alternative government. The prices of British stocks have been rising for two years, but by North American standards they are still amazingly cheap in relation to earnings — good British shares still bring returns of five or even six percent. What keeps their price down is the threat of "socialism” at the next election.

Of course if the Labor Party should win the coming election, the threat would be accepted as real and the London Stock Market would have a major crash. Just how much actual socializing a Labor government would do is an open question— probably not much, if any — but this wouldn't make any difference. The mere election of Labor would be enough to scare investors out of a year’s growth.

But Labor politicians themselves admit. in private, that they'd be astounded if they won. Contentment is a hard quality for a political opposition to beat, and contentment is what every visitor sees in Britain today.

The reasons for it are anybody’s guess. Partly it may be the weather; not for decades have the British had such a golden summer. The crowds of young couples in the parks, who rather startle the visitor by their belief that the light is dark enough; the families queueing up for weekend buses; the sold-out theatres and the packed hotels; even the coagulated highways with their thousands of small cars moving in low gear — all these things contribute to an atmosphere of gaiety such as Britain hasn't had for many a year.

Maybe it won’t endure. Maybe another bout of austerity is just around the corner. But just for now. just for this halcyon summer. Merrie England is merrier than at any time since good King Edward VII died, and the result is a pretty thing to see. ★