The Wilson Government and the trade union bureaucracy are preparing to tighten the screws on the social contract and turn it into a hard-line incomes policy. Now Jack Jones, head of the Transport and General Workers Union, has produced his own wage-cut plans.
and linked to average earnings-are accepted by the trade union movement, then all workers, low paid as well as higher paid, will suffer a cut in their living standards.
Over the last three months prices have been going up at an annual rate of nearly 35 per cent, while wages even before tax and National Insurance-have been rising at an annual rate of only 30 per cent.
The core of Jones' plan is to further reduce the level of wage settlements to 20 per cent-well below the increase in prices. But the effect of his proposals on aving standaras would be even more se vere than these bare figures suggest.
They do not take into account increased нханол. ocnson and insurance contrio utions as earnings rise.
Furthermore, compensation for increases i tre costor ums would be calculated on me global increase in Ine Ketall trice Index, which underestimates the rate of inflation on working class items of consumption. Even ASTMS leader, Clive Jenkins, who is putting forward similar proposals to Jones, wants such increases based on an index more strictly related to the increases in price or essental rems or working class spending.
••TAX FIDDLE •• Not surprisingly, Chancellor Healey has welcomed Jones' initiative. After all, he is an expert on how the tax fiddle works. In his budget he claimed to have removed an additional 400,000 workers from the tax net. What he didn't point out was that over the previous year another 1½ million had started paying tax because of increases in money wages gained to defend the real vamue of existing wages against inflation. If Jones' plans-for flat-rate wage increases tied to the Retail Price Index In ApnI 1914 ine tax tnresnold tor a married couple with two children was £24.87. The Budget raised it to £26.09, in money terms. But in terms of the real value of wages, taking into account an annual rate of inflation of 20 per cent in the year up to Healey's budget, £26.09 was worth only £21.74 by April 1975. Thus the tax threshold fell by £3 over one year.
Jones plan is "Healeyism' on a grand scale. Many low paid workers would get money increases slightly bigger than the ones they are winning at the moment under the leadership of unions like Jones T&GWU. But this would immediately bring them into the tax net. For them and all other workers, up to one third of any increase would go straight back in tax and COntrIDULIOnS.
• •BOSSES' TRICK•• Jones' plan is just another version of the old bosses' trick of turning low paid against high paid, promising bigger increases for the worst off if only the relatively better off will desist. This is another fraud. If Jack Jones really cares about the low paid why did he put up no opposition to the abolition of threshold payments by the Labour Government last November? However inadequate these payments were, wey ma give some protechon to tne real value of all workers' wages, and particularly the low paid.
This at least is recognised by the bosses rate of wage increases as threshold payJAMES DRAKE ments disappear from the system. And a recent survey* of 82 major national agreements for workers earning less than £30 a week-during the period I March 1974 to 28 February showed that 62 of the 82 settlements gave workers on the basic rate below £30 a week a percentage increase greater than the 27.5 per cent increase in basic weekly wage rates for all workers. Howevcl. witnour turesnola bavents onw 4sol the 82 settlements would have given above average percentage increases The lessons of this are clear. Firstly, any flat rate increases, which can unify workers' struggles on a class-wide basis, must be based on the highest rates. At the Ryton plant of Chrysler, Coventry, the convenors are now calling for a 30 per cent increase across the board based on the present top rate for production workers, worth about £16 a week.
••'NIL-NORM'•• Secondly, it is necessary to fight to defend all working class living standards against the effects of inflation by campaigning for 'nil-norm' thresholds, based on a working class cost-of-living index, which give automatic and complete protection to working class Incomes It is by unifying the workers movement on this basis that the strongest position from which to defend the low paid and defend jobs will be gained-not by sacrificing living standards on the altar of the capitalist crisis in the mistaken belief that the bosses will sack fewer later. Jack Jones' proposals must be rejected by the working class. *Frank Field and Chris Pond in Low Pay Bulletin No. 2. Price 35p post free available from Low Pay Unit, 9 Poland Street, London W.1. Exit Benn