Silence after the battle, broken only by moaning

BRITAIN this October is a 'Landscape after a Battle'. The Poles, who could dedicate a whole museum to the genre, call it krajobraz po bitwie - which is also a metaphor in Polish journalese for a bitter pause after a failure.

After the battle there is a silence, broken only by the moaning of the wounded. Familiar buildings have vanished, or stand roofless. Expensive weapons lie broken in the mud. A few madmen in tattered uniforms wander about the place cackling or dictating dispatches about victory.

That is the landscape of Britain after the Maastricht debates, after Black Wednesday, after a Conservative Party conference so weak that it frightened even the Opposition. There has been a defeat: one of the rare moments in British politics when long-dominant assumptions buckle. There is a silence: our partners in Europe have moved on and left us behind. There are mad officers staggering about and claiming triumph: Douglas Hurd telling us that Britain has its own Maastricht treaty, which is nothing to do with the ugly European Maastricht, or the Governor of the Bank of England saying how jolly nice it is to be out of the exchange rate mechanism, or John Major's pathetic boast on Friday that 'nobody can bully Britain'.

There is also a blackened landscape, where victims lie in the icy wind and whimper. That is British society after 13 years of Tory government and almost two years of Mr Major's.

The great defeat was, first of all, a failure in exactly the contest for which Mrs Thatcher's regime trained Britain. This country, leaner and deplorably meaner than it had ever been, went out to confront market forces in the arena created by the Single European Act and the ERM, and it was beaten. The disaster that reached its culmination on Black Wednesday, when Britain was driven out of the ERM, took place because the currency-holders and speculators of Europe were invited to judge Britain on its economic performance and prospects. They turned their thumbs down. They found the United Kingdom weak and its chances of recovery in the foreseeable future slight. We can infer, though it was not said openly, that they judged that Mr Major's government was out of its depth.

For myself, I do not want to live in a country whose future is directed by currency speculators. But the point is that our government did want to live in such a country. The purpose of the Thatcher-Major 'revolution' was to make this economy competitive in the unrestricted free market. Putting sterling into the ERM was meant to be a demonstration that Britain no longer needed to protect its own currency.

The British government decided to live by the sword and it has been crippled by the sword. Worse, the Government ran itself unnecessarily on the sword-point by refusing to admit that the fall of the pound was a judgement on the British economy as a whole. We know now that the Bundesbank made this clear to London and urged various schemes for tactical retreat which were ignored. We know now - but we were disgracefully lied to about the affair, until the anti-German slanders being poured out by ministers and their tame hacks reached such a pitch that the Bundesbank published the real story in order to defend itself.

The currency dealers (or 'the market', if you like) saw that to be lean and to have lost a lot of weight is not the same as being fit. There has to be some evidence of muscle as well. This elementary distinction is now dawning on the British business community. This country is not so much lean as emaciated. Thirteen years of using mass unemployment as the easy way to control inflation failed in their aim. Thirteen years of neglecting manufacturing industry (oil would pay the bills) left an industrial base too weak to withstand the next phase of recession and high interest rates. We are in big trouble.

That is why Britain's 'landscape after the battle' reveals a double defeat. It is not just that British Enterprise PLC failed to pass the European quality tests. It is also ideological defeat at home. The attempt to manage the domestic economy by laissez-faire, expenditure cuts and tax breaks for the rich, is finally breaking down. Anyone could have foreseen that unemployment would reach the point where the suppression of demand would devastate production from below, as effectively as high interest rates were already devastating it from above.

Few, I think, would have predicted that old-fashioned sell-off privatisation would be renewed at the bottom of a recession - in times so bad that the buyers will not be constructive investors but the equivalent of scrap-dealers. Yet British Rail is going; the Forestry Commission is probably going; English Heritage is about to devolve many of its responsibilities to local authorities too broke to support them. Thirty more coal mines are apparently to be closed, with the loss of 25,000 jobs, because the new private power-generating authorities blundered into a commitment to buy gas - which is going to be more expensive than coal.

The ugliness of the Tory experiment - the return of beggars to Britain's streets, the bankruptcies, the sackings, the potholes - used to be justified in the old Stalinist way: only wait, and it will all prove to have been worthwhile. In this autumn of 1992, it becomes finally plain that it was not worthwhile, and that matters will get no better until the whole experiment is abandoned.

There has been a spurious discourse about 'small government', which has actually led to a huge centralisation of state power and the abandonment of the poor and helpless. There has been an equally spurious discourse about Liberty, to be attained only by sharp reductions of Equality and Fraternity. This boiled down to that notorious old liberty to sleep in the Savoy or under Charing Cross bridge. We were here before, in the Thirties.

Not many people really wanted this fag-end government. In April the floating voters decided for change but then, suddenly nervous of the Labour alternative, drew back at the last moment. It is time for a fresh government of the centre-left, committed to restore the public interest in economic management, in social provision, in the reform of the decayed British state.

And Maastricht? Not 'a treaty too far', as the Iron Baroness called it, but a treaty not far enough. Professor Wynne Godley, writing in the London Review of Books, argues that if the Community needs a central bank and currency, then it needs an authority to manage the rest of its economy as well. In Britain we are learning the hard way that modern economies are not self- adjusting systems. This lesson - a bitter end to the great free-market festival which began in 1979 - is true for the Community as well.

After the battle, we have to find how to live in a new way. That means rejecting invitations, Tory or Labour, to a Union Jack bunker built under Little England. My own nightmare is to be locked in a dark nursery cupboard with Norman Tebbit, Enoch Powell, Tony Benn and Kenneth Baker.

There is much clearing-up to do. The ruins have to go, including the mad survivors who still think they are in charge. This will take time, but perhaps less time than we think. There should be an election, and Labour should win. Then a referendum on Maastricht, which - led by a new government - would be won by the Yes camp. Then we would start to reconstruct a society, state and economy which were strong because they were founded on generosity, modernity and justice.