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A BRIEF HISTORY OF INCOMES POLICY
17. But what reason is there to believe that the Tripartite Talks and Counter-Inflation policy in 1972-4 have any more chance of success than those Incomes Policies instituted by every Government since 1945?
"On 4 February (1948) , therefore the Prime Minister (Attlee) introduced to the House a White Paper on Incomes, Costs and Prices (Cmd 7321). He said that the policy hitherto pursued against inflation: high direct taxation of personal incomes and distributed profits, PAYE and heavy indirect taxation would cease to be effective if personal incomes continued to rise. A race between prices and wages would not do the worker any good because the prices always kept ahead. The nation could not afford a rise in production costs without a corresponding increase in production. Wages must no longer relate to the historical status of an industry in the wage scale but to the national need to attract labour to the vital industries ...
"It did not follow that wages should be stabilised at their present level. But there was no case for increases in profits and rents, or in salaries and wages apart from increased production. To the scornful, this was 'fighting inflation by exhortation'. It was a public appeal to the trade union movement to adopt a self-denying policy in the interests of the nation and its own long-term interests, an appeal made after private discussions had failed to elicit a satisfactory reaction from the TUC. It was not surprising that old habits and attitudes die hard in a movement founded to fight for better wages and conditions ... On the following day (24th March) a delegate conference (of the TUC) ...accepted the Government's recommendations by a majority of 1,167m card votes. But there was a large minority, 2,032m, against acceptance. Some unions were under pressure from the Communists to regard the whole scheme 'as a terrible attack upon the people's standards ... an attempt to enrich the capitalist at the expense of the workers' .. ." (Annual Register 1948, pp. 37-9. The TUC support ceased officially on 28 June 1950, in practice it had stopped about 6 months before.)
"Sir Stafford Cripps spoke on the second day (of the TUC conference), asserting that if costs went up, real wages must fall ... It was untrue to think in terms of taking from profits and adding to wages; corporate dividends totalled, after tax deduction, £320m, wages £3,260m and salaries £1,435m. A drastic cut of 25% in (distributed) profits would raise wages only 4d in the pound." (ibid p. 46)
"On 15 May (1952) the Chancellor of the Exchequer (R.A. Butler) gave a warning to representatives of trade unions and employers of the danger of inflation if new wage increases were granted. The export drive, he said, would be seriously affected and this would entail further import cuts which in turn might lead to considerable unemployment." (Annual Register, 1952, p. 39)
"On 25th July (1957) the House of Commons debated the economic situation and the Chancellor (Peter Thornycroft) announced that, in spite of discouragement from trade union leaders, the Government intended to persist in its plan to appoint an independent council on prices, productivity and incomes." (A. R. 1957, p. 36)
"On 5 September (1957) the Congress (TUC} agreed with acclamation to a motion of Mr Cousins, general secretary of the TGWU, rejecting wage restraint in any form." (ibid, p. 43)
"It became the custom in anti-Conservative circles to jeer at the Prime Minister on account of his recent electioneering slogan 'You've never had it so good'. The odd thing was - not so odd to economists but to plain men - that we were still having it so good. Unemployment was at a minimum. The 'working classes' ... were always demanding more wages and usually getting them ... We were consuming more than we produced ..." On 25 July, Selwyn Lloyd, Chancellor of the Exchequer, announced financial measures and at the same time said "in wages and salaries 'there must be a pause until productivity has caught up'" (A.R. 1961, p. 33)
"Mr Brown's White Paper on Prices and Incomes Policy (Cmd 2639) came out on 8 April (1965) to a barrage of hopeful publicity which left Mr Brown himself visibly fatigued when he appealed on television at the end of the day. The intention after 5 months of discussion with employers and unions, was to set a 'norm' of 3-3.5% for the average annual increase in money incomes. The permitted exceptions were when employees accepted more exacting work to step up productivity, when the national interest required a particular distribution of manpower, when existing pay was 'too low to maintain a reasonable standard of living', and when a group of employees had fallen behind the remuneration of people doing similar work'" (A.R. 1965, pp. l9-20).