Wages and taxes

Press, 30 May 1981, Page 14

Wages and taxes

Sir,—l suspect that the reasons for the Federation of Labour not wanting tax adjustments are twofold. First, they want, through high wage demands, to have inflation in the country, thus maintaining the illusion of the failure of our democratic system of government which they want replaced by rule from Moscow. Second, as union members’ fees are linked to rates of pay, a tax adjustment would see no increase into the coffers of the unions whereas a wage increase of say 14 per cent would pour another S2M a year into their funds to take their annual income over S2OM. Their supposed concern over social services is truly a red herring: in causing inflation by high wage demands, where is their concern for . the savings of thousands of pensioners? — Yours, etc..

N. R. DIXON. May 27, 1981.

Sir,—No optimism is engendered by recent wrangling over past and future wage decisions. Individual differences between workers, the distorting effect of inflation, and the present inappropriate wage-fixing mechanisms combine to make a powerful tool which a cynical politician may use to gain media attention and turn voter opinion against the labour movement’ But the true effect of any wage increase will defy calculation until income tax is indexed to inflation. Meanwhile present union advocacy tends to ignore varying productivity or skill input, being more concerned with the mythical egalitarian goal of a decent basic wage for all bread-winners. Many businesses, therefore, make agreements, formal or informal, to attract aboveaverage skills, and most workers receive more than the basic award rate. Every dissatisfied individual needs to suggest solutions, and disesuss

them with his fellows; only then can an optimistic will to change permeate society and become a politically irresistible force. — Yours, etc.. GEOFFREY M. OLIVER. May 27. 1981.