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Prices And Incomes Policy (Earnings)

Volume 720: debated on Thursday 18 November 1965

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asked the First Secretary of State and Secretary of State for Economic Affairs, on what basis increases in earnings are measured to give a guide to the progress of his incomes policy; and what calculation Her Majety's Government have made of the increase in earnings over the last year.

There are a number of different ways in which movements in wages and salaries are measured. The different series of figures vary in content, in coverage and in frequency. The main series published by the Ministry of Labour are:

  • (i) Index of weekly wage rates. This relates to about 15 million manual workers whose wages are subject to collective agreements, statutory orders and arbitration awards, and is calculated monthly.
  • (ii) Index of weekly wage rates. This has approximately the same coverage and is calculated monthly.
  • (iii) April and October inquiries into earnings and hours. These figures which are published twice a year, cover nearly 6½ million manual workers. Total earnings (including bonuses, overtime pay, etc.) are recorded on an hourly and weekly basis by industry or sector (not occupation) both in terms of cash and in index form.
  • (iv) Monthly index of average earnings by industry group. This covers about 7 million manual and non-manual workers. The gross earnings of weekly and monthly paid employees are analysed by industry.
  • (v) Average earnings of administrative, technical and clerical employees. This information is collected in October each year and covers about 3½ million salaried employees. Average earnings are analysed by industry group.
  • (vi) Occupational earnings in engineering and other metal-using industries. This information is collected in January and June each year and covers about 1 million adult male manual workers. It comprises more detailed information about earnings analysed by occupation.
  • In addition, the following statistics are prepared by the Central Statistical Office:—(vii)

    Total wages and salaries. This information is compiled quarterly and annually as part of the national income statistics and is based on Inland Revenue data. It covers all wage and salary earnings and includes the effect of changes in the numbers employed.

    (viii) Total domestic incomes. These are similarly compiled quarterly and annually as part of the national income statistics. They cover profit incomes (including income from self-employment and rent) in addition to wages and salaries.

    These different series of figures are used for different purposes. The Ministry of Labour figures provide information on the various factors affecting wages and salaries, such as changes in hourly rates and in working hours. The Central Statistical Office figures estimate the total wages and salaries paid.

    From the point of view of the general prices and incomes policy, it is the trend in total earnings per head over the economy as a whole which is the most significant figure, since it is this which needs to be set against the long-term trend in production per head. Unfortunately, it takes more time for information about earnings to become available than information about wage rates and, as the above list shows, there is no single comprehensive index of earnings per head. Taking all the available figures into account, it appears that weekly earnings per head have been rising by about 7 per cent. on average over the past year.