Up Like The Rocket

Press, Volume CVI, Issue 31116, 20 July 1966, Page 12

Up Like The Rocket

From the results of the 1965 family expenditure survey in Britain, lately published by the Ministry of Labour, the one striking fact to emerge is that spending, in round figures, increased by 35s a week compared with the previous year. Where the money went is perhaps less engaging as a subject for inquiry than the fact that it was there to spend—in the context of an economy struggling for equilibrium against inflationary pressures, and of trade union complaint about the inadequacy of wage levels. Far from justifying their demands for higher wages, the survey confronts the union leaders with the paradox that, in a year when they were claiming wage income to be far lower than it should have been, the wageearners in fact had more money to spend. The Minister did not comment on this peculiarity when releasing the results of the survey, thinking, perhaps, that the figures spoke for themselves. But the Government will be aware of the implications of the survey; and the Prime Minister, Mr Wilson, may have deduced from the disclosure of relative family affluence that new curbs on spending might now meet with philosophic acceptance rather than loud-voiced protest.

The details given in the survey might, it is agreed, be unreliable, concealing whatever tastes or extravagances the householder might prefer not to admit But wherever the money went from the family purse, the Government will be entitled to fasten on to one conclusion justifying its demand for wage stabilisation: during 1965, when factory output remained stubbornly unresponsive to the spur, wages and spending raced away together. The Government’s Prices and Incomes Bill is now before the Commons, showing so plainly the marks of a severe buffeting that its basic proposals may have to be re-written. Before the General Election, the draft of the bill set the norm for wages and price increases at 3| per cent. Mr Wilson and his Cabinet now have to reflect on the fact that wage increases certainly, last year and so far this year, have far exceeded that limit. The all-over record shows, indeed, a rise in hourly earnings since Labour took office in 1964 at a rate 2J times faster than that of output a man-hour. The significance of a rise of 35s a week in family spending, the largest on record, is not to be argued away—in spite of the old political cliche that figures may be made to prove anything. The Government’s job will be to make the survey’s central disclosure not only support its plea for greater responsibility on the part of both management and labour, but also justify its determination to make its incomes policy work, even a‘ this late stage. Neither the business bosses nor the controllers of the family purse, if they incline to a moment’s pause for contemplation, will relish the alternative.