When this issue of The Economist went to press early on Friday morning, the only winners of the election so far were the Don't Knows. In one of the gravest crises of its peacetime history, Britain appeared to have cast an indecisive vote for indecision. It was impossible to say who would eventually receive the Queen's commission, but it was already possible to urge what should and should not be done.

If Mr Wilson does have any sort of an overall majority at the end of the long count, then he will take up the task of government again, albeit in appallingly difficult circumstances. Even if he should not have an overall majority, it will be better to have a Liberal-supported Labour government.

Britain would be rather badly governed by a minority Heath cabinet which was told by Liberals from the commanding depths of the Parliament that it should yield a little more to inflationary wage claims here, give a few more subsidies to particular vested interests there, unite (as it is called) the country by class-conscious and envy-ridden measures against the rich, and create a slump by heavy taxes designed to puncture business's failing confidence at precisely the wrong moment. Britain should be better governed by a minority Labour cabinet that would be told by centre-seeking Liberals to curb its own natural predilections to move in all these unfortunate directions. A minority Wilson administration could also have on its side a trade union movement which felt some obligation to try to keep a weak government in office, instead of to make a last heave to get a weak Tory government out.

If it's minority Labour rule

If the odd result of this mishandled election should be to bring in a minority Labour government, just after the polls have been showing Labour to command its lowest share of the popular vote for decades, then a great responsibility will fall of Labour's critics in the business and financial establishments, and in the other two parties. All should tone down their shrillness of opposition to Mr Harold Wilson in the next desperate few weeks, however much he sometimes annoys them. They might have to be joining him in a National Government soon.

The people who could in these circumstances do most to save Britain, the people who might now have the historic opportunity and duty to come to the aid of the country and their own party, are the members of the Trades Union Congress. The perils to be avoided are hyperinflation, a massive run from the pound and a collapse into very large unemployment. These are miseries which would bear cruelly on every working man, and every trade union leader worthy of his membership really does now need to stand up and be counted. Once a Labour government had settled the miners' dispute—and Labour's platform was that that would be settled in time to restart five day working next week—the TUC should agree to an incomes policy. There can be several alternative forms, but the following might be one of the best for a new Labour government.

Keep in being the threshold agreements, so that workers' real incomes are maintained, and agree that a certain sum (say £1 billion) is the maximum that can be allowed for centrally bargained wage increases in stage four until the autumn of 1975. Then ask the TUC to come into the conciliation and arbitration board that decides how this £1 billion is shared out.

In order to operate an incomes policy Mr Wilson would need a Labour Willie Whitelaw—ie, a very senior colleague—beside him as Employment Secretary. Either he should bring a big trade union leader into the job (but where is one to be found?) or else the best choice might be Mr Jim Callaghan. Then the two normally top jobs of Chancellor and Foreign Secretary could be divided between Mr Roy Jenkins and Mr Denis Healey, and preferably in that order. It is unlikely that Mr Wilson would make this choice. He is usually committed to the principle of Buggins's turn, and would probably feel he must allow Mr Healey the Exchequer because he has done the homework for the job. Since the homework Mr Healey has been doing has been in preparation for a totally different situation, this is quite a risk. The danger is that a wrong financial policy in the next few weeks may precipitate the country into a crisis.

The first fears are of a run from the pound which could send it below $2, and with the fall gathering pace. That would feed petrol on the fires of a cost inflation already running at around an annual 15 per cent. Yet the forward prospect is for a deficiency of demand which is likely to send Britain under any government into heavy unemployment by 1975, especially as businesses have been drained of first liquidity and then confidence by the miners' strike, the ravages of the three-day week, and now by the country's vote for indecision. This is the worst example that we have had of the classical nineteenth-century point of trade cycle crunch.

Forty years ago the writing of Keynes and the experience of Roosevelt's New Deal were supposed to have taught governments what to do in these circumstances. The need is a budget which tries to restimulate growth, but one which must not be so reflationary that it shocks the conservative susceptibilities of foreign gnomes and domestic businessmen. The danger is that Mr Healey might think that the way to restore confidence at such a moment is to introduce a deflationary budget; and he might say that, as this would be economically very brave, he must be allowed to make this budget of heavy tax increases more pleasing to Labour's own folk by making it particularly displeasing to those who might then start cuts in physical investment and runs on banks—eg, Mr Healey might hit hard at what Labour calls the “exorbitant profits” of British business (which has in fact been running at about an annual £4 billion rate of loss for the last two months). A budget of this sort would be likely to drive Britain into both slump and pawn. It is the big danger that needs to be avoided under any government in the next four weeks.

If minority Tory

A Conservative government with any sort of an overall majority would be unlikely to preside over quite such a collapse of the economy and of confidence, although a minority Conservative government that depended on placating the Liberals' whims most definitely could. As the Tories are not going to get an overall majority, we think that any third party candidates holding the balance should not put him in. Yet Mr Heath has one asset, and in the tightest corner of Britain's peacetime life some will say this might be the moment for the country to draw on it.

Mr Heath is not greatly loved, but he is respected for being his own man. He does not make his mind up quickly but when it is made up he does not flinch from the consequences; this is what even some of the miners' leaders, differing wholly from him, have acknowledged. What Mr Heath will have to do if he returns to Downing Street is to go on telling the truth simply to the people, make no easy promises and resist the civil service and political advice that clings to the conventional and settles in superficial effects. Mr Heath might still be chosen by some non-Tory MPs to try and go on leading Britain through difficult times with a difficult vote of absolutely no confidence behind him. What should he do then?

A Conservative government has made it very clear how it will try to buy off the miners, if the miners will only let it. The price will not stop at the immediate settlement, but the country expects the miners to be brought off before the industry's gloomiest forecasts of lay-offs and shutdowns are fulfilled. Yet the country, while saying that the miners should be better paid, has also been saying that it wants firmness against further inflationary wage claims. That must be put to the test. It was said of Baldwin that his advice for an easy time in politics was to never get across the Treasury, the Vatican or the National Union of Mineworkers. But there are powers in the land that governments must be prepared to get across if sectional interests are not to run loose. The miners have been declaring that they mean to come back again this year with an even bigger claim. That may be the right tactics for them if they believe they have the whiphand. But the country will need to stand up to them and their imitators one day. To do so it will have to be prepared to import what will not be produced and to distribute what pickets try to stop moving. The Government needs to start preparing the country for this sort of probability. It is not a matter of threatening anyone by using the powers of the state, but of explaining, from the start what the choices are, refuting the hysterical utterances that will be made in the name of trade union unity, and organising for what can be done if the country wills it in another early general election.

Liberals for distraction

Some people say that this has been a reviving election because Mr Jeremy Thorpe's new Liberal party re-passed puberty during the campaign, and strange things do happen when a party or a person does that. Those strange things included the loss of Sutton and the gain of Hazel Grove.

The new Liberal phenomenon is not unique to Britain although exultant Liberals and stunned Tories and Labour-party men have been behaving as it were. Much the same sort of thing has been happening recently in several other countries which lie on the fringe of the successful French-German heartland of the European community and which have a higher-than-average rate of inflation: countries, in short, which face particularly difficult decisions about their national identity and the management of their economies. The reaction of part of the electorate in each of them has apparently been to flinch away from the need for these hard decisions and to look instead for a party that seems to offer an easier option. They have voted for the politics of distraction, or the politics of good intentions, rather than the politics of dealing with harsh reality. In Denmark, Finland, Belgium, Switzerland, very odd parties have grown up; in Sweden, a worthy and vague one.

Such attitudes do not account for the whole, or even for most, of the new Liberal vote. But some people voted Liberal because they wanted to hold the line against inflation without fighting the battle that is necessary if the line is to be held, and others voted against Mr Heath's common market by switching to Mr Thorpe who also supports it. These are the duckers-out from any willingness to recognise the issues let alone confront them. In such voting there is an evasion that bodes ill for the hope of clear eyed government.