WILSON TO EXTEND WAGE FREEZE IN BRITAIN
By John Walters
London
The Wilson government published a White Paper on November 22 setting out how it proposes to apply its “incomes policy" in the first six months of 1967. It lists the criteria for a period of "severe restraint" on incomes and prices after the six-months freeze imposed last July. The "norm" for general wage increases is to be -- zero!
"Increases in incomes during this period," declares the White Paper, "will only be justified in exceptional circumstances where they can be shown to meet the following criteria for exceptions, and even then only on a severely limited scale." The criteria concern primarily "productivity" agreements; but the language is so obscure that it is difficult to see how any wage increases can be justified even in this instance. Not only must there be a real increase in productivity, but it must be of such nature as to be in the "national interest" as well. Precisely what that means no one knows.
The Transport and General Workers Union [T&GWU] commented: "The criteria for productivity increases could have only been drawn up by people without practical industrial experience."
The other exception envisaged is the very low-paid workers. However the loophole is a very tight one. It would seem that the government has in mind workers whose wages are controlled by government orders; i.e., those who are so poorly organized and paid that minimum wages are determined by law. Many workers in such industries are paid above the minimum legal rate due to labor shortages in certain areas. The government is making clear that where wages do rise in such industries, those workers already being paid above the legal minimum are not to be granted an increase.
As far as the rest of the workers are concerned, there are to be no wage increases, no cuts in hours, and no increased holidays [vacations]. In other words the wage freeze is to be maintained in full force.
When it comes. to prices, the White Paper tells another story: "...price increases may be justified where there has been a marked increase that cannot be absorbed in the cost of imported materials or costs arising from changes in supply for seasonal or. other reasons, or which are due to action by the Government, such as increased tax- . ation; or where an enterprise finds itself faced by increased costs which it is unable to restrain and which is too large to absorb, such as the costs of bought-in-components forming a large part of its total costs."
Becoming. even more blatant in its defense of profits, it continues: "There may. also be exceptional circumstances in which without some increase in price the receipts of an enterprise are not adequate to maintain efficiency and undertake necessary investment." In other words, if the rate of profit for a firm slips, it will be justified in putting its prices up. .
Of course there is to be a dividend freeze for. the first six months of 1967; but this means that the investors incomes are only deferred, not lost.
The White Paper makes it very clear that the British working class are expected not only to endure a wage freeze again in 1967, but that this will amount to a wage cut. When wages are frozen while prices move up, it is obvious that the workers won't be able to buy as much as previously. _
In an attempt to sweeten this pill, the government announced a few days later that 600,000 lower~—paid workers will receive wage increases on January 1. Since these should. have been paid last July, nothing is being given away. The wages of most of the workers involved range from £10 to £11 fus$os to US$30.80] a week; and the highest increase will .be 13 shillings [US$1.82] a week. Where rent can run from £3 to £5 . CUS$8.40 to US$14] a week, it can be seen just how miserable such wages are, and it can ‘be seen that the . T&GWU demand for a £15 (US$42] a week minimum wage is a moderate one.
OA spokesman of the Association of ‘Supervisory Staff, Executives ‘and Technicians [ASSET] said, "The White Paper is muddled and incoherent. Obviously we are in for another 'new Ice Age.'" This is precisely what the British working class :faces unless it fights back. © - , -
On November 24, two days after the White Paper was 5 published,. the figures for unemployment in “November were released. The total jobless now stands at.541,585. This.
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is 2.3% of the labor force. Although a number of these come under the term "short-term" unemployed; i.e., partially employed, the significant fact is that the number of wholly unemployed is still rising. The trend has accelerated month by month from 14,000 in August to 26,000 in September to 33,000 in October. The November increase was 46,000 and | all signs indicate that this trend will continue well into next year. Most commentators seem to think that there will be between 700,000 and 800,000 unemployed by spring or early summer and that the number will continue to rise even if the rate of increase slows down somewhat.
Several conclusions can be drawn. First, the economy was definitely on the downturn when the deflationary measures were imposed last July. What they did was to accelerate the downturn. Secondly, the employers were tending to hoard labor, production falling faster than employment. Thirdly, the government decided that only a substantial amount of unemployment would give it the climate in which to impose a wage freeze for a considerable length of time. When the wage freeze was first announced in July, the unions were in a very strong position with regard to the labor market. They (or at least a big enough majority) were prepared to accept the wage freeze out of loyalty to the Labour government. Now when it is clear that the freeze is going to be continued, they face rising unemployment, and the layoffs are cutting into precisely those sectors that have been the most militant in the past. Fourthly, the government may have overreached itself by imposing such a savage deflation. The Financial Times, commenting on the latest unemployment figures said, "Whatever is done now, the rise in unemployment is likely to overshoot the level desired even by those in the Government most insistent on running the economy at a reduced pressure of demand."
Right now there are cautious hints from various commentators that the government should start some selective "reflation" before the economy slides into a slump. Such warnings are not as gloomy as they may seem. There is no doubt that there is now a recession in investment in the British economy; a recent survey put out by the Confederation of British Industry (the employers organization) showed that next year investment will have declined by about 12%. In this situation, if unemployment continues to rise at its present rate there will be a drastic reduction in aggregate demand in the economy, which could reinforce the downward trend. It may well be that the government will decide to inject some spending into the economy early next year in an attempt to overcome this.
However, Wilson has made it quite clear that there will be no general reflation of the economy in the near future. When questioned in the House of Commons about the latest unemployment figures, he said he was not going to be panicked into an early reflation, and that after the so-called redeployment of labor he expected to see an unemployment figure of about 2%; i.e., roughly the present figure. This means that he expects the figures to rise higher than that in the interim. So that even after reflation of the economy Wilson expects to have a large body of workers jobless -- to serve as a counterweight in the labor market. Thus Wilson seems to have accepted a thesis that has been peddled for a number of years now by one Professor Paish, according to whom it is necessary to run the economy with some idle capacity and idle manpower to sustain growth.
This does not mean, of course, that the present situation in Britain points inevitably to a deepgoing slump. Nevertheless the elements making for such an eventuality are present in a way not seen since the end of the second world war. Much now depends on two factors: firstly, what happens in the U.S. economy, and secondly how soon the British government attempts to reflate.
However, even assuming that a full-scale slump is avoided and that only a recession, even if more deepgoing than others that have occurred since the war, hits Britain, should the government succeed in carrying through its present plans this will signify a qualitative change in class relations, a defeat for the working class.
It is very obvious that British capitalism cannot go on in the way it has in the last twenty years. To face up to its manifold problems -- balance of payments, sterling, declining share of world trade, slow growth rate, declining rate of profit, etc. -- one crucial problem must be faced up to first. That is a working class that has not been defeated and that has enjoyed modest prosperity for twenty years. This is the major task which the Wilson government has set for itself in the coming twelve months -- to break and tame this working class and at the end of the process to have recreated the reserve army of labor which will be used to limit future gains.
What remains to be seen is how the workers will react to this in the long run. At the moment the large majority of workers are still basically loyal to the Labour government, even if they feel bewildered and uncertain because "their" government is carrying out measures that the Tories would never have dared to. It is true that a nunber of unions have opposed the wage freeze right from the start; and this has helped the
morale of those workers who have spontaneously reacted against the present: situation. However, this opposition by the T&GWU and ASSET has up to now been only half-hearted and formal.
An instance of this attitude can be seen in a recent strike. This took place when car delivery men employed by a Birmingham group of firms were told that half of them would be sacked. The T&GWU called an official strike and effectively stopped cars being moved from the plant at Longbridge. However, instead of calling out their members in the production plant they allowed them to continue working. This meant that the drivers strike was allowed to drag on for several weeks. Only when there was danger of the plant being shut down because cars could not be moved was a settlement reached.
The drivers did not gain an outright victory. The deal was to allow other firms, not involved in the strike, to move the cars. Meanwhile a number of strikers had drifted away to other jobs. When one or two of the smaller firms involved caved in this was hailed as a great victory because they agreed to take back those men who had not found other work.
Even more important for the labor movement as a whole has been the fact that Cousins, who resigned from Wilson's cabinet last July, has not come out for any general opposition to the government's policies. On the contrary, he has reiterated that he does not want to lead the left in such a struggle. This again has tended to disorient those rank and filers who thought that Cousin's resignation meant that an effective leader had been gained for the left in the Labour party and the trade unions. Up to now this has not been the case. Cousins hung his clothes on a hickory limb but doesn't go near the water. His opposition has been very limited, purely on the trade-union level and within the limits of capitalism. His main argument against the wage freeze is that Britain's problems can be solved by increased productivity and that this is what the government should concentrate on.
This ambivalence is also reflected in Parliament, not only by Cousins but by all the so-called "lefts." When the latest unemployment figures were discussed, not one of them, Cousins included, voiced any protest. It was left to the Tories to capitalize on the situation with demagogic speeches. The Tories are even voting against standstill orders on wages that are being imposed under the Prices and Incomes Act. This is pure hypocrisy on their part, in reality they fully support the wage freeze but want to pick up some kudos by seeming to defend "freedom."
Tony Topham voiced a widespread sentiment among labor activists when he wrote in a letter to the Tribune: "The only way to change the Government's policy is to threaten a concerted vote against the monstrosities which are being perpetrated in.our names. And to carry out the threat...Neither in sorrow nor in anger, but in cold blood, we are bound to ask are they aspiring 'statesmen' or leaders of the working class? How serious is their opposition? How effective do they want it to be?"
The appalling inactivity of Cousins and.the other opposition union leaders and "left" MP's is due to their very limited ideological basis. Contrary to what the sectarian ultralefts say, their position at present is not one of conscious betrayal; it arises from their inability to develop a program, one that is related to the struggles of the workers but that takes them outside the capitalist framework. :
The task in this situation is not to shout rude names at these people; rather it is to advance a concrete program of action and policy for the whole labor movement in such a way that it will advance the level of the movement.
What would be wrong is to place any confidence in people like Cousins, Jenkins and the "left" MP's, etc., to provide the basis for advancing such a program. They will do this only to the extent that a movement develops independently of them and becomes something they have to reckon with. In other words, the winning of such people to a program is incidental to the struggle for such a program, not the main task.
"CAPTURE" JF MONTES -- A CASE OF