Effects of Government Policy

  • R. B. McKersie
  • L. C. Hunter


We have argued that the rapid spread of productivity bargaining during the period 1967–9 was due largely to the incomes policy in force at the time. Now, let us consider some of the policy’s consequences for productivity bargaining.


Collective Bargaining Total Unit Cost Framework Agreement Income Policy Salary Cost 
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  1. 1.
    Mention should also be made of the efforts of the T.U.C. during this period to operate a ‘vetting’ arrangement for agreements, whereby a special committee of the T.U.C. would be informed of all impending claims. This machinery was set up during the voluntary phase of incomes policy in 1965 and was kept in being after the introduction of legislation. For further discussion, see H. A. Clegg, The System of Industrial Relations in Great Britain (Oxford: Blackwell, 1970), chapter 11.Google Scholar
  2. 2.
    N.B.P.I. Report No. 123, Productivity Agreements, Cmnd 4136 (London: H.M.S.O., 1969) para. 118.Google Scholar
  3. 4.
    This is a union statement of the Post Office argument: P.O.E.U. Bulletin (May 1969) 4.Google Scholar
  4. 18.
    In the later 1960s there was an increasingly common view that changes in the institutional organisation of the labour market, especially as a result of earnings-related unemployment benefit and redundancy payments, were causing a change in the character of unemployment. Such changes could mean that workers were less worried about the financial effect of a spell of unemployment, that workers might even ‘volunteer’ to be made redundant in order to obtain the lump-sum benefit, that employers might be more willing to pay off labour where previously they might have retained it as a contribution to the social good, etc. If this is so, it could help to explain the higher unemployment rate of the last few years, without necessarily implying that the true unemployment situation had worsened. It could mean, for example, an expansion of the short-term unemployed, reflecting the willingness of more workers to register as unemployed and to take longer looking round for a suitable job. For a full discussion of this problem, see J. K. Bowers, P. C. Cheshire and A. E. Webb, ‘The Change in the Relationship between Unemployment and Earnings Increases’, National Institute Economic Review (November 1970).Google Scholar
  5. 19.
    Cf. W. B. Reddaway, Effects of the Selective Employment Tax: The Distributive Trades (London: H.M.S.O., 1970).Google Scholar
  6. R. G. Bodkin, E. P. Bond, G. L. Reuber and T. R. Robinson, ‘Price Stability and High Employment’, Economic Council of Canada, Special Study No. 5 (Ottawa: Economic Council of Canada, 1967)Google Scholar
  7. David C. Smith, ‘Incomes Policy’, in Britain’s Economic Prospects, by R. E. Caves and Associates, a Brookings Institution Study (London: Allen and Unwin, 1968)Google Scholar
  8. R. G. Lipsey and J. M. Parkin, ‘Incomes Policy — A Re-appraisal’, Economica, N.S. Vol. XXXVII (May 1970)Google Scholar
  9. John Corina and A. J. Meyrick, The Performance of Incomes and Prices Policy in the United Kingdom, 1958–68 (Geneva: International Institute for Labour Studies, 1970). The finding of Lipsey and Parkin has to be qualified by their conclusion that when unemployment lay above 1.8 per cent, the use of an incomes policy would tend to increase the rate of inflation above the level that would otherwise have obtained.Google Scholar
  10. 25.
    Quoted in Royal Commission Research Paper No. 4 (on Productivity Bargaining) (London: H.M.S.O., 1967) 8. Cf. also Flanders, who wrote that ‘the value of the introduction of consultants per se was simply that of a catalytic agent: their independent status made it possible to speed up the process of change in managerial attitudes and beliefs’. The Fawley Productivity Agreements (London: Faber & Faber, 1964) 100–1.Google Scholar
  11. 26.
    For an example of the consultants’ approach, see D. T. B. North and G. L. Buckingham, Productivity Agreements and Wage Systems (London: Gower Press, 1969).Google Scholar
  12. 27.
    Cf. for example the conference of January 1968, organised by the E.E.F., and resulting in the publication of a Symposium volume: D. C. Alexander (ed.), A Productivity Bargaining Symposium (London: Engineering Employers’ Federation, 1969).Google Scholar
  13. 28.
    T.U.C. General Council Report 1969, 304.Google Scholar
  14. 30.
    No doubt developed and sharpened by the writings of left-wing commentators such as Tony Cliff, who argued a persuasive if emotive case against productivity bargaining. Cf. T. Cliff, The Employers’ Offensive: Productivity Deals and How to Fight Them (London: Pluto Press, 1970).Google Scholar

Copyright information

© R. B. McKersie and L. C. Hunter 1973

Authors and Affiliations

  • R. B. McKersie
    • 1
  • L. C. Hunter
    • 2
  1. 1.New York State School of Industrial and Labor RelationsCornell UniversityUSA
  2. 2.University of GlasgowUK

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