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Personal Incomes, Costs And Prices

Volume 464: debated on Monday 2 May 1949

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asked the Prime Minister whether he has any statement to make on the Government's policy on personal incomes, costs and prices.

The White Paper of February, 1948, was based on certain principles which broadly can be summarised as follow: (1) that it is essential that there should be no further general increase in the level of personal incomes whether from profits or earnings without at least a corresponding increase in the volume of production; (2) that every effort should be made to reduce prices wherever possible; (3) that if remuneration is increased in any class of employment contrary to the intention set out in the White Paper there can be no presumption that the resulting costs will be taken into account in settling controlled prices, charges or margins or other financial matters requiring Government action.

The improvement in our state of affairs last year was undoubtedly due in large measure to the response on all sides to the plea for restraint in the White Paper. The need for that restraint is as great today as it was a year ago, and the principles of the White Paper remain as an essential and important element in the Government's economic policy. It is equally important that action should be continued to reduce prices wherever possible. I feel sure that the Government will continue to receive the wide measure of co-operation on all sides in this policy which they have been accorded over the past year.

Will the right hon. Gentleman say why he has given way to the T.U.C. to allow wages to rise on an annual basis of £100 million since he made his appeal on 4th February, 1948?

As I explained in my reply, there has, as a matter of fact, been great restraint exercised on all sides, but certain long-standing demands for increases have been met. As was explained at the time of the White Paper, it was not intended, in certain cases, that it would be possible or desirable to put an absolute bar on all changes.