FINANCE AND COMMERCE

Bay of Plenty Beacon, Volume 10, Issue 91, 7 February 1947, Page 5

FINANCE AND COMMERCE

CRITICAL YEAR IN BRITAIN'S EFFORT TO "FREEZE" WAGES Concerned at the possibility of inflation, the British Labour Government is attempting to secure, temporarily, voluntary "freezing" of wages at current levels, and to obtain greater production. The Government believes that inflationary tendencies will reach crisis point this year, unless there is an "armistice" with the trade unions withholding demands for higher wages until higher production has stabilised the nation's position. A Labour Ministry statement emphasised that while the cost of living is only 31 per cent, higher than before the war, wages have increased 64 per cent., amounting to £I2OO million a year. In addition, food subsidies will cost between £350 million and £4OO in 1947. The Government, expecting serious foreign competition in exports, aims greatly to increase British exports. Therefore costs must be kept down.

There is an insistent demand for goods for the home market, with private incomes totalling £7OOO million after reduction of income tax and showing a £IOOO million gap between supply and demand. Consideration may be given to claims for higher remuneration in essential industries and public services when output is substantially raised and exports reach a level of 175 per cent, above pre-war figures. The Government is worried about the continuing draft of workers from heavy industries to "white collar" jobs when, apart from the coal mines, Britain's iron foundries want 20,000 additional workers to regain pre-war production, and the building industry, with the greatest demands on record, has 60,000 fewer workers than before the war.