INCOMES POLICY
The dirigiste professor
JOHN BIFFEN MP
Professor Clegg has published his ideas on running an incomes policy at a highly topical moment.* Printing House Square has been stridently demanding statutory control of in- comes for some months, and it has now been joined by almost the entire popular press. The idea of the government accepting a respon- sibility for the relative distribution of in- comes within a society has hitherto had coma. paratively little popular political appeal. Pol- iticians have preferred to use taxation in order to attain social objectives and to nar- row what were believed to be intolerable extremes of income. Indeed the impact of such high levels of British direct taxation has resulted in the Left being mainly concerned with inequalities of wealth, not least because of the somewhat optional nature of our capital taxation, rather than with inequalities of income. And since the religion of craft Trade Unionism was the gospel of differen- tials, who could be surprised?
Professor Clegg, however, argues that the objective of an incomes policy should be a more equitable distribution of incomes. He claims 'existing pay distribution is unfair' and then asserts that certain occupations are relatively over-paid and should be identified as such by the government and only permit- *How to run an Incomes Policy and why we made such a mess of the last one Hugh Clegg (Heinemann 25p) ted to negotiate less than average wage in- creases. He bravely provides a limited list of such occupations and disarmingly concedes it might include University Professors. It is welcome that Professor Clegg _makes this point with such clarity. The really deter- mined advocates of incomes policy are likely to be avowed egalitarian and redistributive in their objectives; and it is the less percep- five advocates who assume or convince them- selves that the statutory control of incomes will substantially affect the rate of inflation.
Indeed, it is noticeable that the Professor does not deal at any length with the causes and consequences of inflation. He attributes the considerable rise in incomes that had taken place in 1970 'at least in part, as a re- sponse to the rapid upsurge in shop-floor militancy'. He advances this thesis as the credible alternative to the unconvincing ex- planations that the 'wages explosion' was either the delayed consequences of the 1967 devaluation or else the consequences of the 1968 French strikes which were said to de- monstrate that workers could obtain any pay increase they chose to ask for with a show of force. It is a weakness that he does not even comment on the arguments of the most determined opponents of statutory incomes policy. These, of course, are the economists and politicians who believe that inflation is primarily a monetary phenomenon and the present feverish symptoms derive from the substantial increase in money supply over the past eighteen months.
My second regret is that he does not dwell morE on the distinction between short period crisis-style general income freezes and the longer-term objectives and ambitions that are encompassed by an incomes policy. Indeed he makes no distinctions between the two; but they are, of course, fundamentally different species although the former is often held to be a pre-condition for the latter. It is noteworthy that Samuel Brittain feels con- strained to advocate a short sharp freeze — but his robust economic liberalism would recoil from an incomes policy.
Professor Clegg, however, is not much
concerned to argue points such as these. His book, after all, is for the believer. 'I do not try to argue the case for an incomes policy4 There is no need.' The machinery for such a policy which he believes could bring suc- cess is, in effect, the old Prices and Incomes Board writ large—very large. The author was a full time member for Mr Aubrey Jones's Board for over a year, and the experi- ence has given him a zest for wide-ranging public intervention. It was not vaulting ambi- tion that led to the demise of the last attempt to control incomes by statute; it was the very
• timidity of the government's proposals.
The proposed new authority which would discharge incomes policy would represent government, employers and unions. This authority 'should review all proposals for pay increases, giving reasons for their decisions', whilst 'the government will have to be pre- pared to give the force of law to the decisions of the administration so that minorities can- not profit from general restraint by pushing unjustified claims, or by cheating.' The objec- tives would be to aspire to a national job evaluation system 'which will place every grade of employee in the appropriate slot' and in so doing surmount the British malaise of 'misuse of overtime' and 'degenerated piecework'.
Professor Clegg believes there exists a strong public disposition to welcome the wide ranging government involvement in industrial affairs that these policies imply. Radical politicians from both political wings, and with lively memories of the 1966-69 experience, will be very much inclined to dispute this, and above all to doubt the com- petence of any machinery to acquire such detailed knowledge let alone be able to dis- pense universal 'income justice'. I suspect the Clegg formula would lead to an unprece- dented growth in refined forms of self employment in order to escape the income supervision he plans.
Although I am not temperamentally attracted by the thorough going dirigisme of Professor Clegg I read this book with much enjoyment, and appreciated the trenchant and uncompromising way in which he ack- nowledges that a government policy which assumes responsibility for the distribution of individual and group incomes must be statutory and pervasive. He offers no shelter of a half way house for those consensus poli- ticians who hanker after a 'voluntary' in- comes policy.
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