For six months wage increases have been dropping steadily behind price increases. The process really got under way in January when prices went up by 2.6 per cent compared to a 1.0 per cent increase in wages. In February, wages held a lead before tax of 0.1 per cent, but the March figure of a 1.9 per cent increase in prices as against 1.45 per cent in wages soon wiped that out. Since then there have been the record increases in the cost of living for April and May, totalling 3.9 and 4.2 with the abolition of threshold payments by the Labour Government last November the low paid are being particularly hit. A recent survey in the Low Pay Bulletin No. 2 of 82 major national agreements for workers earning less than £30 a week during the period 1 March 1974 to 28 February 1975 showed that threshold payments did give some protection, however inadequate, to the low paid.
*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.' However, without threshold payments only 43 of the 82 settlements would have given above average percentage increases (see Table).
On top of this, Healey's budget policies are beginning to bite with a vengeance. Higher rents, higher rates, higher transport costs, bigger electricity bills and rises in the costs of coal and gas are all part of deliberate Government policy.
But this is only the beginning. Vast cuts are being planned in public expenditure - semi-official estimates put them at around £2-3 billion. They include reductions on food subsidies - with the aim of abolishing them altogether. Subsidies will be further slashed in the nationalised industries - leading to even bigger fares, fuel and rent increases.
Capitalism can only keep afloat by increasing the exploitation of the working class. Driven by the fear of State bankruptey, the capitalist class has to further drive down real wages and cut Government spending. This is why Healey is insisting that money needed for rescuing 'ailing firms is taken out of money allocated to the public sector.
All pretence about the Social Contract maintaining living standards is being dropped. The boss of the Confederation of British Industry, Campbell Adamson, simply refuses even to talk about any policy of keeping prices in check The ruling class know full well that the Labour leaders are determined to support their pol icies. As the Economist commented, 'the pace of the crisis is fast', and desperate measures are needed.
PATHETIC ATTEMPTS
Despite the prostration of the trade union leaders before the offensive of the employers and their pathetic attempts to hang on to Wilson's coat-tails, the working class movement remains undefeated. The concessions made by the Government to the rail workers show that. And there is no doubt that if the strike had gone ahead even bigger concessions could have been won Inside the trade unions, workers are insisting on a more determined fight over wages. Enthusiasm for 'moderate' increases is running low. Millions of workers and their families know from first-hand experience just how hard inflation is hitting their living standards. Never has the