The Pause That Depresses

In a valiant attempt to improve Britain's competitive position in world markets, the Conservative government last July declared its intention of keeping pay raises in line with the nation's 2.5% increase in productivity. The Pay Pause, as it was christened, saved British industry the equivalent of one year's round of wage boosts, giving Britain an immediate edge over leading European competitors such as West Germany, which has been hit with a heavy increase in labor costs over the past year.

From the start, however, labor unions and the Labor Party have bitterly opposed the Pay Pause as an "inequitable" policy that made no attempt to apply similar restraints, such as a capital gains tax, to employers. Labor unrest mounted so sharply that strikes cost British industry more man-hours (more than 4,000,000) in the first quarter of 1962 than in all of 1961 or 1960. Biggest test for the government came last month, when dock workers at Britain's 25 ports demanded a considerably fattened pay package. The dockers are members of the country's biggest and most militant union, the Transport and General Workers, whose battling, left-wing General Secretary Frank Cousins proclaimed that the Pay Pause was a case of "capitalism showing its teeth against us." Last week, threatened with the first major, nationwide dock strike in 36 years, Labor Minister John Hare backed down and approved a settlement that, with fringe benefits, amounted to a thumping 9% increase for some 105,000 workers.

The government, which was still defying public opinion by resisting a 2.5% pay raise for the nation's nurses (many earn only $20 weekly), was lambasted on all sides. Cried the Sunday Telegraph: "This is weakness that will not be readily forgotten or forgiven." By week's end, openly rebellious Conservative backbenchers were charging that pay inequities were directly responsible for the Tories' sweeping electoral setbacks over the past six months. Smarting from their defeats, many demanded that Prime Minister Harold Macmillan fire Party Chairman Iain Macleod--even though it was he who mapped the strategy that swept the Conservatives back into office in 1959 with the slogan: "You Never Had It So Good." For Harold Macmillan, it had seldom looked so bad.

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