Wants Tougher Incomes Policy

The scan: The Week v5 no23.pdf (PDF, Marxists Internet Archive, opens at this page)

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from an economics correspondent "A mach tougher incomes policy" is called for in the latest issue of Economic Review, the journal of the National Institute of Economic and Social Researche The National Institute, which contains the most influential group of economic - but sometimes rather inaccurate = forecasters outside Whitehall, also have a go at attempting to prove that the seamen's strike, if prolonged, will worsen the balances of payments, They estimate that the losses could be up £20 million a month through reduced shipping earnings and a permanent loss of exports. But the main bone of contention in the journal is that wage rates are rising too fast, "Advocates of faster growth," the journal states, "mst now acknowledge that the need to slow down the rise in wage rates is immediate, and some new action on the incomes policy front, to be effective in 1966, is needed." Commenting upon this, the Financial Times of June lst said: "The latest issue of National Institute Economic Review makes disquieting reading. True, the balance of payments forecast has been revised and the Institute now believes that after taking credit for a positive balancing item we shall be paying our way both in the second halfof this year and the first ..half of 1967. But, one cannot help feeling that this view. errs on the side of optimism, even assuming - as has been done - that the price of copper will fall and the seamen's strike is settled without grave damage to exports. In the longer term more worrying though, is that at best we shall achieve external balance at a time when the economy is expanding at the rate of only 2% per annum. On the basis of this the repayment of our foreign debt will require four years of stagnation at homes..." In other words, “even at best" all Mr, Wilson is likely to achieve is to balance British capitalism foreign payments by slowing down the growth of the economy, The problem of increasing the rate of increase in production without affecting the balance of payments seems no nearer solution than beforee