NO ALTERNATIVE

Otago Daily Times, Issue 27275, 29 December 1949, Page 5

NO ALTERNATIVE

WAGE CLAIM RESTRAINT COUNCIL’S STATEMENT TO BRITISH UNIONS NZPA—Reuter—Copyright LONDON, Dec. 27. There was no alternative to a policy of restraint in wage claims, the General Council of the Trades Union Congress, representing more than 8,000,000 organised workers, declared today in a statement issued to affiliated unions. It was giving the economic background to its recommendation for restraint made last month, and due to be discussed by a conference of the unions’ Executive Committees on January 12. These recommendations suggested that unions should reconsider the existing pay and sliding scale arrangements—wages tied to the cost of living—with a view to holding agreed ■wages rates stable while the index of retail prices remained between the upper and lower limits of 118 and 106 points. The General Council said that the recommendations should be regarded as a contribution to a collective effort for national recovery. They were made with the realisation that they would not be effective unless other sections of the community also made their contributions. Fear of Deflation The only alternative to a policy of restraint, the report said, was “ acceptance under duress of such a measure of deflation as brought our movement to the edge of disaster in the interwar years.” Deflation meant mass unemployment, savage wage cuts and reductions in the standard of living of all wage-earning classes.

Defending its policy of continued restraint, the council said that devaluation had given some competitive advantages to British exports to dollar countries. There also had been some increase in Britain’s gold and dollar reserves, but there was no guarantee that the demand for British goods or, in some industries, that British productive capacity could be expanded so as to increase dollar earnings to the required extent, or even, in certain circumstances, to dollar earnings gt the predevaluation rate.

There was no firm evidence that the high tariffs surrounding the American market would be sufficiently reduced. At the same time. Britain was having to pay 44 per cent, more for her dollar imports, which, having already been subject to serious curtailment, could not easily be cut further. Britain’s domestic price level was being forced upwards. The impetus given to this tendency by a priceincome spiral would dissipate the competitive advantages derived from devaluation, leaving no alternative but reduction in prices by deflation and mass unemployment.