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From International Socialism, No.55, February 1973, p.25.
Transcribed & marked up by Einde O’Callaghan for ETOL.
National Board of Prices and Incomes
Joan Mitchell
£4.75
In 1948 a Labour government issued a White Paper which said that there were no grounds for general increases in play; in 1956 a Conservative government hit on a new disguise for exactly the same thing by urging employers to guarantee price stability by resisting wage demands; in 1961 another Tory government enforced a public sector ‘pay pause’ and in 1962 established a National Incomes Commission to investigate pay claims and settlements.
The Labour government elected in 1964 was also committed to a prices and incomes policy but claimed that this one was to be different. Frank Cousins, General Secretary of the Trasnport and General Workers Union, called it a policy for ‘a planned growth of incomes’. Clive Jenkins, General Secretary of the Association of Scientific, Technical and Managerial Staffs sprang to its defence and complained:
‘A circumstantial story that a Wilson Cabinet will hold back wages for the first 18 months of his Government is, incredibly, being peddled. It is a lie.’
The Labour Government’s incomes policy was certainly different from those of its predecessors for, whilst they were essentially tactical solutions to immediate economic problems, the 1964 proposals were part of a new overall strategy making British capitalism more competitive at the expense of working people. It was a strategy that aimed to increase investment, rationalise industry and encourage mergers, cut trade-union power and dramatically increase labour productivity.
Those years have passed but because the problems have not, and have even got worse the recent introduction of the Tory wage freeze and the joint Government-TUC-CBI talks have all re-created interest in them and the mechanisms that were employed. The publication of the National Board of Prices and Incomes by a former Board member, Joan Mitchell, is therefore of particular interest at the present time. Clive Jenkins has called the ‘wanton destruction of the NBPI a political disgrace’ but Mitchell’s account of its decisions makes clear that socialists should respond rather differently. The book is primarily a summary of the 170 reports that the Board issued in its lifetime and is a useful reference work for those who wish to know its main recommendations in each case. It is not so useful in explaining either the details of the Board’s actual functioning or inner workings or its political history. These still need to be written although the two besti books towards this analysis still remain – Incomes Policy, Legislation and Shop Stewards by Colin Barker and Tony Cliff and The Employers’ Offensive by Tony Cliff.
Where Mitchell is interesting, however, is in her introduction to the Board where she explains its attitudes towards profits and prices. It is indeed in this section that the recent remarks of Clive Jenkins can clearly be seen as an expression of his concern to try to find a means whereby the current rising level of wages struggles can be avoided: rather than as a lament for the passing of an institution that had anything to do with any notions of ‘fair play’ or ‘social justice’. Mitchell explains that before the 1964 General Election:
‘It had become clear through both the discussions at NEDC and through various proposals by the Labour Party, that direct or reciprocal restraints on income and profits were not practicable. The other half of the incomes policy would have to be prices policy, rather than profits policy.’
This was because, far from profits being held down:
‘High profits are the main incentive to invest more resources in sectors where demand is expanding.’
Once established as an idea the Board needed a chairman and Mitchell tells how he was selected:
‘It became known that the employers’ representatives had refused to agree to anyone but a businessman for the chairmanship. Fortunately the trade unions were not so intransigent.’
Aubrey Jones, a Tory MP and Director of Guest Keen and Nettlefold was accordingly appointed the Board’s £20,000 a year chairman and was joined by the Managing Director of Esso Petroleum, the former Director of the National Federation of Building Trade Employers, a Director of Unilever, the Deputy chairman of J.H. Sankey & Co., a member of the TUC General Council, Joan Mitchell and several others.
This was the Board established to implement Labour’s prices and incomes policy and Mitchell frankly admits the difficulties that it encountered when it occasionally tried to control prices:
‘It was impossible to record every price change, let alone examine it. There are several million changes a year, many of them seasonal and many of them of quite trivial importance.’
By contrast, wage increases were fewer in number and subject at one time to both the opposition of the employers and a special TUC vetting process. Consequently, ‘pay cases did not present the same administrative complications as prices.’ The summaries of the various Board reports on prices are a fascinating commentary on the anarchy of capitalist production and the real causes of inflation. In a report on Tea prices, for instance, the Board discovered that when Brooke Bond increased their prices by 10 per cent the other big three – Typhoo, Lyons, and the Co-operative Society – allegedly thought about restraining theirs but eventually ‘rejected this policy on the grounds that consumers would consider the cheaper teas were of poor quality.’
Mitchell’s book also deals at length with the effect of the Board on wages and whilst Aubrey Jones has said that he thought the net effect of the policy had been that the ‘annual increase in earnings in recent years may have just been under 1 per cent less than otherwise it would have been’ there is little doubt that it nevertheless had a very real effect on the living standards and conditions of millions of working people. In Report No.123 the Board claimed that six million workers had been affected by productivity deals: it was this development that the Board stimulated by its opposition to general wage rises and its complaints against companies that sought to increase prices instead of confronting the unions. As the Labour leaders and TUC bosses begin again to talk of incomes policy, and try and spread myths about the NBPI, Mitchell’s book will be very useful for its many facts about what it was really like, what it really sought to do, and how little in common it all had with socialism. This is a useful reference work although somewhat too dear at £4.75.
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