§ 35. Mr. Croninasked the Chancellor of the Exchequer by what percentage labour costs per unit of output increased in 1958; and by what percentage wages increased in 1958 as compared with the previous year.
§ Mr. ErrollIt is estimated that labour costs per unit of output were 6 per cent. higher in the first nine months of 1958 than they were in the same period of 1957. I regret that figures for the whole of 1958 are not yet available. The index of weekly wage rates rose by 3½ per cent. between the beginning and end of 1958; the corresponding increase during 1957 was 5½ per cent.
§ Mr. CroninAre not these figures of the greatest significance? If labour costs per unit of production have actually increased, is it not clear that the Government's monetary policy, although it has produced increased unemployment, has had no beneficial effect whatever on inflation but has actually increased it?
§ Mr. ErrollNo. The hon. Gentleman has chosen, perhaps unintentionally, a highly selective period for making the comparison. It would be possible to take other periods which would show very different comparative figures. The fact is that the higher labour costs in the earlier part of 1958 were a reflection of the very large wage increases of 1957.
Mr. WilsonI can understand hon. Members opposite not wanting these points to be underlined. Do not these figures, and indeed the figures for previous years, confirm the argument put forward by my right hon. Friend the Leader of the Opposition in the Budget debate last year, that the real cause of the increase in labour costs per unit of production is the fact that production has not increased and that that is the greatest bar to the increase in productivity which we need?
§ Mr. ErrollNo. As I said, the period chosen was highly selective. If a later period were taken, very different deductions could be drawn.