HOW NOT TO STABILISE
By NICHOLAS
DAVENPORT
Is unfortunate that the Egyptian crisis ?aid . divert public attention from the ure important problem of British in- 11strial relationships. The Government has idede a great effort to bring the different
S
lictogether in support of its stabilisation but it has failed to secure the co- ma ix i iron of the trade unions. Four of the argest unions categorically condemn age restraint. On the agenda for the rades Union Congress is a resolution r°Posed by the Transport and General ourkers which asserts the right of labour
usD its bargaining strength to protect Prkers 'from the dislocations of an un- ion.,
r '"ied economy.' It rejects 'proposals to sin.'eeavzr control by wage restraint and by ,k g the nationalised industries as a drag .„nl.c '41 Ir.for the drifting national economy.' Ine voice of labour is, in fact, defiant. The (love rnment got the country into its 4Nmic YS, And it need not look to labour to make
o mess by bad management, it
viekri.fl[ces to help it out. That is the general otil'; The Government, I must confess, has , itself to blame for this impasse. Its 11113r QaCh to the solution of the economic 1",r°b1 em has been misguided. It has tried tstabilise the price level too much by - 4tidu tation, not realising that it is useless, kal_rather absurd, to exhort people to 9 ii, c inequalities of sacrifice. It exhorted Ze hankers the other week to restrain from ,nr 11 easing their advances although their 3fiquidity ratios had risen well above the ; Per cent, minimum and were likely to rease still further to 35 per cent, or more. ..4,t it the Treasury had raised the liquidity i,"iim.um to 37f per cent. by a simple ree. k. nye to the banks, exhortations for straint in advances would have been un- li k ke_ ssary. The Government has exhorted I, industrialists `to swallow' the rise in to 31 even if profits and dividends have e . reduced—and a remarkable number 1f companies from Imperial Chemical industries downward have bravely prom- not to raise prices for the time 'unless al-.unexpected or exceptional factors tene'—but this really amounts to 114el vihi wili Log. Any rise in imported raw materials , be passed on and 'exceptional factors,' ger, as the Suez Canal crisis, are already e4slir ig their shadow on the industrial scene. 112\,84in, exhortations to industrialists would lie unnecessary if the Macmillan disinfla- cal i r,.4ry measures had been adequate and it un[Y the Government's defence expendi- lorn_ P c 4 which have made them inadequate. ;1°411Y, the Prime Minister exhorts the 111....7. union leaders to exercise restraint tisinge claims—and wage rates have been I, ug even faster this year than last—but 'te has failed to take the steps which would n.14ke them willing to accept restraint, that f' S 'he has not called an industrial con .e.'t - _ k nee to consider automation and corn- 4itasation for redundancy. Without an retg „ Thent on these two vital questions the
0.4
, uwill of labour is not likely to be pured. But with an agreement I have no liti'clubt that increases in wages could be r. ked with increases in productivity. * * *
ceed to win the co-operation of labour. They have settled the steel strike not only with an increase in wages but' with a guarantee of •supplementary unemployment pay to bring the workers' insurance benefits up to 65 per cent, of normal earnings for fifty-two weeks. In return the union has given the steel companies a guaranteed three years' contract without a stoppage, which will enable the managements to plan a capital expansion programme on the basis of more or less stable labour costs. Last year the automobile unions secured what amounted to a guaranteed annual wage with the result that Detroit has been able to meet a severe recession in the motor trade with a 20 per cent. cut in output— without a strike. The motor bosses in Coventry, Birmingham and Oxford might ponder these things.
* The time has come to recognise that dis- missals for redundancy on a week's notice without regard to length of service in the factory will not be tolerated. Some com- pensation is essential and the sooner a scheme is worked out the sooner will labour co-operate in a stabilisation policy. The trade union leadership must be blamed for not having taken the initiative in this matter long ago. But the Government cannot escape responsibility just because trade union leadership has been weak and blundering. Its approach to the problem of industrial relations should have been more helpful and constructive : it should have told the unions that it welcomed annual wage increases provided they were linked with increases in productivity, that automa- tion was to be encouraged because any reduction in manufacturing costs woulbi foster the export trade and raise our standard of living, that some form of com- pensation over and above the unemploy- ment pay would be worked out, so that the transfer of labour within industry could be speeded up, that productive investment in industry would be stimulated and automa- tion encouraged, and so on. There is no doubt that with wage costs rising in the United States and Germany this country has a chance to hold its own provided the Government pursues an expansionist and not restrictionist industrial policy and secures the goodwill of labour.
Previous page
