Keeping the way clear for the growth of exports also means continuing and developing the incomes policy. The recent O.E.C.D. report on the United Kingdom contains this passage:
The problem for the Government and for both sides of industry is to evolve a more permanent system for the determination of money incomes which is accepted as just and reasonable by the community as a whole and which, in conditions of full employment and steady growth, can assure the maintenance of a satisfactory competitive situation in international trade. Such a system will entail that the Government adopts a more positive attitude than in the past to the process of income determination.
§ Those are admirable words. I have been trying to take a positive action, but I do not think that it was quite so easy as it sounds, nor was it universally approved.
I should have hoped that we could all agree on the basic proposition that increases in incomes must be related to increases in production. If I may, I will quote from the T.U.C.'s reply of 24th January to my letter about incomes policy: It said:
It is, of course, a condition of reasonable price stability that increases in incomes should keep in step with the growth of real output.
§ The T.U.C. did not, however, feel able to co-operate at that stage in an attempt to work out how that should be done. I know that this is a controversial and difficult subject. There is plenty of criticism, and not very many constructive suggestions.
§ But I believe that the incomes policy has proved its worth. Weekly wage rates in the four months from last October to February went up only 0.8 per cent. compared with the rise of 2.7 per cent. in the corresponding period of the previous year. By checking the upward trend it is my conviction that the incomes policy will be found to have improved the position of those who suffer most from inflation.
Unpopular though our actions have been, we have gone some way to compel the country to face up to this problem—in many ways the central problem of the 1960s.
And the Committee may be interested to know that some of our competitors are now having to face it, too.
The Government have produced the White Paper on Incomes Policy as guidance for 1962. I would add two points. First, that we cannot afford to have a second general round of increases in the later months of 1962. Secondly, although I hope that we shall be able to deal with some of the anomalies which undoubtedly exist, it would be an illusion to think that in 1963 or thereafter, whatever our rate of growth, we 967 can afford to return to a system of indiscriminate increases in personal incomes.