The Press TUESDAY, APRIL 13, 1965. Prices And Incomes

Press, Volume CIV, Issue 30724, 13 April 1965, Page 16

The Press TUESDAY, APRIL 13, 1965. Prices And Incomes

The British Government’s policy for income and price stability depends upon the co-operation of employers and workers, which has been given in the formulation of the plan. In carrying the policy through, the leaders of both labour and capital have now to engage and maintain the support of their followers. A good start was made with the acceptance by Mr Aubrey Jones, a Conservative member of Parliament and a former Minister of Supply, of the presidency cf the National Board for Prices and Incomes. The board, on which management, trades unions, and consumers will be represented, will tackle its job against a background of generally full employment, pressure room unions for wage rises, a record balance-of-payments deficit, the rising prices of British exports, and a Government plan for growth in the economy at an average rate of just under 4 per cent a year. Add to these the facts that Government expenditure abroad is still increasing and at home has not been curtailed and that the new taxes on the consumer will certainly promote a demand for higher incomes, and the task of the new board seems as difficult as it is urgent.

The Minister of Economics, Mr Brown, has proposed that annual increases in incomes should not exceed an average rate of 3j per cent. This should mean that incomes generally will rise in line with the real output of the nation. Exceptions wall be made where greater increases in pay will serve some vital national interest such as to attract labour to an industry for export production. But where possible, says the White Paper published last week, prices should be reduced. Various criteria have been set under which enterprises will be permitted to raise prices, or expected to lower them. All this leaves a great deal to the discretion of Mr Jones and his board, and to the advice he will get from Mr Browm on which cases are of economic importance.

Although the top-level representatives of management and employees have agreed on the considerations which should guide the fixing of incomes and prices, much will depend on the ability of Mr Jones to convince minor units in the economy that their decisions must take into account the over-all objective: to hold the value of the pound. The Government hopes to achieve price and income stability through co-operation and persuasion rather than detailed regulation. It has accepted the need for competition to stimulate expansion and hold prices. But the success of the experiment depends almost entirely on the degree to which employers and unions stick to their promises. Success for Mr Jones would be a milestone in industrial co-operation and a triumph of price and wage stability without precedent in a free, competitive society.