No CrossRef data available.
Article contents
Chapter II. The Home Economy in 1977 and 1978
Published online by Cambridge University Press: 26 March 2020
Extract
The critical assumption for this forecast is that relating to pay policy when Stage Two expires in July. At the time of writing (early February), formal negotiations have not yet begun. Preliminary positions have, however, been taken up, and it seems clear that the gap between the hopes of the Government and the aims of the trade unions is much wider than at the comparable point in the Stage Two negotiations. Both the Labour Party conference and the Trade Union Congress last autumn passed motions which called for priority to be given, when Stage Two ended, to four factors in the next stage. These were the restoration of satisfactory differentials and the correction of anomalies and inequities, an emphasis on the improvement of the position of the low-paid, the consolidation of Stage One and Two increases into basic rates for the calculation of overtime, piece-work and shift payments, and provision for productivity agreements. Almost independently of the agreed basic norm, a liberal interpretation of these demands could lead to rises in average earnings in excess of 20 per cent. On the other hand, the majority of trade unionists seem to accept the need for continued restraint, though stressing that there is an imperative need for greater flexibility in Stage Three.
- Type
- Articles
- Information
- Copyright
- Copyright © 1977 National Institute of Economic and Social Research
References
(1) Throughout the Review, ‘during 1976’ (for example) should be taken, unless otherwise defined, to mean ‘between the fourth quarters of 1975 and 1976’.
(1) In April 1978, the new State pension scheme is scheduled to come into effect. Since ‘contracting out’ will be allowed, there will be a fall in public sector revenue and a rise in the PSBR which we very tentatively estimate as being of the order of £1bn in 1978/9. Because of national income accounting conventions, employees' national insurance contributions are treated as a tax, but their contributions to private schemes are treated as saving. Thus to the extent that contracting out takes place there will be, in the personal income and expenditure account, an illusory rise in personal disposable income and associated rise in personal saving (and thus in the measured saving ratio). To avoid confusion, we have not built this in to our forecast tables, since consumers' behaviour is not affected, though we have taken account of the effect on the PSBR in 1978/9.