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Wages And Salaries

Volume 645: debated on Tuesday 25 July 1961

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Turning to wages and salaries, of course, increases in real wages and salaries are desirable, but only provided that national productivity increases sufficiently, always remembering that increases for those who work in fields such as the social services have to be found out of increases of productivity in industry. As the figures which I gave a little time ago show, at present we are heavily over-drawing on our productivity account. In my view, there must be a pause until productivity has caught up and there is room for further advances. It is not possible in any general statement to cover every particular case. Where commitments have already been entered into, they should be met.

Subject to this, however, a pause is essential as a basis for continued prosperity and growth. In those areas for which the Government have direct responsibility we shall act in accordance with this policy. The Government ask that the same lines should be followed elsewhere both in the private sector and in those parts of the public sector outside the immediate control of the Government.

In itself, however, such a pause is certainly not a lasting solution to the problem of rising costs and prices. A pause must mark the beginning of a new long-term policy. That policy is that increases in incomes must follow and not precede or outstrip increases in national productivity. During the pause we must work out methods of securing a sensible long-term relationship between increases in incomes of all sorts and increases in productivity.