Sir: In support of your commendably' consistent stand against the
"folly" of a statutory incomes policy, and against "the absurd sophistries and complications of Phase Three" in particular (March 23), the following passage — from the 1973 annual report of the Austrian National (central) Bank, not yet published in English — illustrates how they order this matter elsewhere:
''... Austria's practice in this field — unlike that of some other countries — rests on a voluntary basis. Rather than embark on anything so drastic as a prices and wages freeze (which could leave serious adjustment difficulties in its wake), she has therefore pursued a policy of continuous co-operation with both sides of industry, which has resulted not only in the stabilising influence of the Joint Commission on Prices and Incomes but also in agreed solutions to a number of other economic problems. One touchstone of this is, of course, Austria's good climate of industrial relations, marked by an almost complete absence of strikes ..."
One need only add that Austria's rate of inflation last year, though somewhat higher (partly as a result of the introduction of VAT) than in 1972, nevertheless compared even more favourably with that of some other countries than before, and that Austria is now embarking on her seventh year of uninterrupted economic growth — 3 feat paralleled by few. Since you chose to link the battle over statutory incomes policy with that previously fought over floating exchange rates, however, one must also add two other things. Austria, a non-member of the European coinmunity, is informally participating in the joint float of other European currencies (that infamous 'snake') af her own free will. And your hope that, following that famous victory over the floating pound ("a painful and expensive education in the realities of life' It ever there was one), the two maj°.r parties might now "begin to focus their debates on the real economic problems of the country" is not — outside "senior politican" ranks — shared on all sides.
W. Grey 12 Arden Road, Finchley, London N3.
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