Wages in Britain

Press, Volume XCIV, Issue 28158, 22 December 1956, Page 10

Wages in Britain

After the Trades Union Congress in September formally rejected the policy of wage restraint, British industry appeared to be moving towards a clash with the unions on wages. Some 6,000,000 workers put in claims which, if granted, would cost about £250,000,000 a year. The Chancellor of the Exchequer protested—some thought much too mildly—about “ damage to the “ British economy from a wound “which we are in danger of inflict- “ ing ourselves ”. More tellingly, he dealt with the T.U.C.’s argument that only a “ planned ” economy could get Britain out of its difficulties. No-one except the Communists—least of all the trade unions —would tolerate the controls implied by a “ planned ” economy, Mr Macmillan said. In the fullest sense these would mean control of wages, the direction of labour, and probably rationing. Since the September meeting of the T.U.C., Britain’s economic position has been complicated in various ways by the Suez crisis, but employers have still been required to deal with the wages demands submitted to them. In the last few days three crucial sets of negotiations have come to a head. The engineering employers have rejected the biggest claim of the year—a demand for a 10 per cent, wage increase that would amount to £100,000,000 for 2,500,000 engineering workers. The National Coal Board has continued to resist the miners’ demand for disqualification

of the bonus shift method of payment on the ground that an increase of absenteeism and loss of production cannot be risked. Demands by railwaymen for an extra 15 per cent, have led to an award by the Railway Staff Tribunal of 3 per cent, to footplatemen; and the Transport Commission has made a similar offer to railwaymen affiliated to the National Union of Railwaymen. These increases to railwaymen are of dubious economic merit since they will add £ 1,000,000 a year to the Transport Commission’s deficit, which is already substantial. The 3 per cent, increase matches the increase in retail prices as measured by the official index. It is, in effect, a “ cost-of-living ” award which may set a pattern throughout industry. The difficulty, of course, is that noone can judge even short-term trends in the cost of living in the present abnormal circumstances. Deflationary pressures in the situation arising from the Suez crisis may lower the cost of living. On the other hand, higher prices for petrol and oil, and higher freight costs for imports, may push up living costs. The wage position is further complicated because the Suez crisis may not affect all parts of the industrial structure uniformly. The probability of short-time working in some industries—notably the motorcar industry—must weaken the bargaining power of some unions. On the other hand the crisis will strengthen the bargaining power of miners and railwaymen. More home-produced coal would improve the balance of payments by saving dollars on imported coal and by increasing earnings through exports. At a time when it is desirable—and necessary—to curtail road transport, industry cannot afford a shut-down on the railways. Britain is facing an economic emergency, if not a crisis. Industrial unrest could be disastrous: any substantial rise in the cost of its exports would be scarcely less damaging. The national interest demands a period of peace in industry until the nation’s economic position becomes more secure. It is to be hoped that the T.U.C. and the unions will recognise the need for restraint in the most difficult circumstances that employers and workers are forced to share.