The Press TUESDAY, OCTOBER 22, 1957. British Unions and Inflation

Press, Volume XCVI, Issue 28414, 22 October 1957, Page 12

The Press TUESDAY, OCTOBER 22, 1957. British Unions and Inflation

One great public issue hung over the annual conferences of both the main political parties in Britain this year, though in the Labour gathering it attracted less attention than the retreat from Socialism and Bevanism. That issue is the cost of living, and the part played in its rise by regular union claims for wage increases. Economists are by no means unanimous about the importance to be attached to wage rates, either as a cause or as a symptom. Is inflation caused by high wages or excessive consumption, and, if the latter, how much is this demand influenced by easy w r age gains? Mr Colin Clark has given a new twist to the argument, or rather a fresh turn to an old twist, by attributing inflation to a combination of over-high taxation and import control. Both parts of the combination are affected, if not directly by wages, at least by other trade union claims for more welfare and more shelter for the industries in which they work.

When Labour came to look at this problem of living costs it dropped much of its old faith in rigid planning and economic controls. In effect, the conference untied Mr Gaitskell’s hands and left it to him and his intellectual group to think of new ways of containing inflation. Socialism was interpreted as a state of mind, not as a political policy. This left what the “ New’ Statesman ” has described as a key question unanswered. Would the trade unions under a Labour Government accept restraint and responsibility in their wage demands and shop rules? “ The “ uncommitted voter ”, the “ New Statesman ” thinks, “ wants not a showdown with “ Labour but a government “ which commands the loyalty “ of the unions in the common “ task of building a society in * which high productivity and * fair shares go hand in hand ”.

The “ New Statesman ” assumes, not surprisingly, that

only a Labour Government could obtain this co-operation, though the assumption is not altogether supported by British experience. In New Zealand, of course, the experience was just to the contrary, with industrial relations at their worst under a Labour Government.

The Conservative Party conference could not ignore the influence of the wages question on the floating vote. The Government has relied chiefly on monetary and fiscal policy to damp down demand and thus hold inflation on Mr Macmillan’s plateau, which was not, unfortunately’, very broad. Much of the Conservative Party is convinced that this is not enough while the Government evades a more direct responsibility for restraining both the demanding and granting of higher wages. The Government has refrained from saying “no ” to the unions, and has acquiesced in splitting-the-difference compromises. Even if this gentleness with the unions has not contributed to inflation, it has given unionists as a whole an advantage over the old middle class, whose salaries and incomes have risen much more slowly. The Conservatives are almost certainly right in believing that most of the votes they have lost in recent byelections have come from the dissatisfied group that has not kept pace with inflation. This group wants a stronger line industrially, not only to check the frequency of wage increases but to stop the unions’ restrictive practices. Something is being done to police the trade practices of employers; why should the unions be exempt? This all amounts to very much the same argument as the one put more delicately by the “ New Statesman ”. In plain words, the British people are becoming frightened of the power of the trade unions, particularly now that they are led by Mr Frank Cousins, who is proud to be described as “ militant