HIS DOCUMENT I S
THE PROPERTY OP H I S BRITANNIC M A J E S T Y ' S
S E C R E T
C P . (48)
GOVERNMENT)
COPY NO.
38
30th January,
1948.
i
CABINET
. STATEMENT ON PERSONAL INCOMES. COSTS AND P R I C E S
N o t e "by t h e L o r d
President
of
the
Council
At t h e i r m e e t i n g on ' 2 9 t h J a n u a r y ( C M . ( 4 8 ) 8 t h
C o n c l u s i o n s , M i n u t e 7 ) , t h e C a b i n e t i n v i t e d me t o e x a m i n e ,
i n c o n s u l t a t i o n w i t h t h e C h a n c e l l o r of t h e E x c h e q u e r and
t h e M i n i s t e r of L a b o u r , t h e r e v i s e d d r a f t of t h e p r o p o s e d
s t a t e m e n t on p e r s o n a l i n c o m e s , c o s t s a n d p r i c e s ,
copies
o f w h i c h h a d "been h a n d e d t o t h e m d u r i n g t h e c o u r s e o f
their
discussion.
We h a v e a g r e e d o n c e r t a i n m i n o r a m e n d m e n t s a n d
t h e d r a f t , a s r e v i s e d , i s now c i r c u l a t e d f o r t h e a p p r o v a l
of t h e C a b i n e t .
H.M.
Office
of
the Lord P r e s i d e n t
30th January,
of
19U8.
the Council,
S.W. 1 .
ANNEX
DRAFT STATEMENT-ON PERSONAL INCOMES,
AND P R I C E S
1.
The
its
success
necessary
keep
our
vital
the
to
t o buy
the
imports
we n e e d
to
feed
Our c o s t s
of
production
and
which
and wages.
going.
industry
These
the
total
quantity
of
they
in
situation
is
different
occupations.
in
"Statement
Relations
between
1914-7, w i t h
Council,
rise
us
in
to
of
that
"if
3.
The
the
But
danger
the
costs
to
the
development
is
ever
of
our
factor
in
people
It
is
essential
it
it
a balance
of
in
averting
therefore
the
a corresponding
the
Increase
we
the
the
duty
danger.
to
situation.
will
the
reduce
the
market.
there
should be
personal
in
for
need".
accentuated by
home
of
prices
impossible
already
which
that
level
Advisory
inflationary
be
out
January,
therefore
steps
payments,
on
in
imports
part
available
increase, in
the
is
and w i l l
in
affecting
it
it
a dangerous
the
consequence
may moke
many
to
was p o i n t e d
in
on
incomes
incomes
Joint
all
of
salaries
issued
and
and
extent
affecting
and
taken
are
relation
personal
for
exports
individual
available
and buy
present
goods
least
the
profits,
the National
her
of
of
at
form
prices,
has
volume
without
in
production
or
total
general
of
largely
considerable
and W o r k e r s "
world
to
further
sell
production,
0 result
his
a
between
of
of
world
as
and
Economic C o n s i d e r a t i o n s
drive
1+.
money
Employers
play
achieve
the
A further
Government
prevent
the
on
suffer
everyone t o
to
in
costs
o u r way i n
all
pay
endorsement
relation
pay
We s h a l l
the
has
relationship
As r e g a r d s
the
to
of
goods.
the
depend
turn
volume
moke
depends
ability
industry
2.
policy
our
importance
affect
economic
upon
amount
the
Government's
COSTS
the
no
incomes
volume
of
production.
Unless
we s h a l l
find
ourselves
owing to
the
rising
rise
prices
5*
in
personal
incomes
the
amount
the
rate
of
interest
purchase
of
the
of
in
those
danger
from
profits
inflation
The
regards
lower
P.A.Y.E.
tax
this
to
has
State
the
available
paid
to
upon
principal
7.
sod
conclusive
to
if
incomes
are
be
away b y
increased
Experience
run,
personal
so
the
holders
the
lower
by t h e
of
them
in
a
amount
greater
checking
incomes
the
derived
of
certain
applied
introduction
indirect
that
of
all
income
against
the
as
of
taxation,
though
continuance
commodities,
their
to
any
swallowed
has
inflation
personal
evade
personal
long
the
the
shareholders
has been
countered by
cases
of no b e n e f i t
and
influence
incomes
been
is
prices
giving
for
profits.
increase
s:; a s
8.
reduce
formerly
personal
curtail
issued
will
course
taxation
Similarly
securities
of
continuously
taken
of
to
spending.
respect
these measures
be
obviously
in
of
notably
foodstuffs.
But
themselves
task
direct
profits
assistance
earned
the
for
high
of
the
tendency
"be r e f l e c t e d
are
extent
in
export
taken by
the
restraining
and by
subsidies
our
also
who w e r e
though
in
scale
some
will
industries
those
rents
same
this
fulfil
h a v e "been
These measures
6.
check
market.
nationalised
investments,
to
and upon d i s t r i b u t e d
undertakings,
of
to
which
home
annually
security.
unable
steps
on
prepared
costs
on t h e
Already
distributed
we a r e
incomes
cannot.in
are
corrective
influence.
one
increases
up b y
if
the
to
rise
It
in
rising
prices
or
have
in
race between
to
taxation.
shown
that,
the
incomes,
prices
will
conditions
become
progressively
personal
incomes
classes..
allowed
but
always win
in
the
worse
particularly
rising
for
for
9.
It
dangers
that
is
and e v i l s
take
place
10.
relationships
which
hove
bear
to
historiol
needs
of
development
income
must,
better
to
income
levels
labour
to
in
for
the
conform
to
must
those
some
In
regard
of
incomes
relevance
another
economic
have
to
of
the
the
be
such
as
to
of
today
old
it
is
cases
still
do,
by
urgent
and
with
relationships
survival,
be
of
altered
the
Relative
encourage
where
they
determined
interest.
industries
personal
world
our
national
conditions
the
very
the
be
occupations,
by
these
of
customary
but
difficulties
movements
different
longer
past,
the
economic
or
in
of
incomes.
different
changed
sake
the
present-day
which
must no
to
personal
traditional
relation
t h e moment.
present
as
one
any c o n s i d e r a t i o n
particular
personal
The
in
scale
century
developed
between
to
general
last
necessities.
this
not,
the
the
essential
inflation
have no n e c e s s a r y
incomes
our
of
in
Over
considerations
and
therefore
t h e movement
most
tempt
needed,
it
in
of
and
a
should
contrary
direction.
11.
feel
In
bound
following
to
of
( a )
circumstances
take
general
deliberations
amount
the
and
personal
It
is
the
actions
possible
to
incomes
to
according
determined.
nor
to
the
directly
with
regulate
what
has
a field
free
contract
of
the
income
by t a x a t i o n .
and
scale
would be
whose
the
the
assess
This
those
for
Government
some
the
source.
the
to
out
settlement
desirable
than
Government
all
that
into
organisations.
to
the
setting
whatever
Government
of
of
a guide
otherwise
w o u l d mean
itself
as
interfere
individuals
forced
from
above
step
contribute
incomes,
neither
further
be
exceptional
considerations
Government
of
detailed
To
would
all
on i n c u r s i o n
between
been
be
personal
which would
hitherto
go
have
by
the
regarded
individuals
to
and
as
In
the
view
of
the
there
should be
terms
of
it
of
to
take
regord
to
place
interest.
conditions
by
constitute
system of
to
grave
assumption
that
be
the
In
and
present
individual
which
Unless
and
for
any
so
drive
can
and
to
a
up
prices,
and
substantial
of
benefits,
increase
t h e money
cost
so
their
make
it
almost
and
there
will
goods
inflationary
of
our
and by b l a c k
impossible
in
affect
social
to
is
of
make more
increase
recipients
highly
principle.
increase
adversely
soleability
too
increase
on
its
and
home m a r k e t ,
only
of
agreements
goods
cannot
to
the
this
an
but
for
upon
more
Such
lead
and
system
stress
to
and o t h e r
pressure
the
cannot
the
the
salaries
employers
children
reduce
of
general
collective
general
have
to
rest
all
incomes.
inevitably
a n d may w e l l
attach
for
public
justification
and u n t i l
production
related
would
by
they
available
of
of
Government
money
costs
available
it
loyally
justification
raise
terms
agreed
stability
of
time
with
the
the
will
wages
and t h e
conditions,
are
in
to
and
whether
this
is
salary
from
the
and
present
the
the
importance
services
no
the
observed
workers,
to
The v a l u e
bargaining
and
employers,
main
bargaining
opposed
concerns,
increases
at
will
as
the
the
o r d e r l y manner
bargaining,
maintenance
wage
that
to
One of
bargaining,
inflation.
collective
an
danger
collective
unjustifiable
adherence
Departure
private
competitive
serious
in
essential
collective
that
individual
or
a
of
general
individual
authorities
is
agreements.
ensure
the
it
strictest
a system
tends
movements
due
the
collective
advantages
that
Government
effect.
production,
pensioners,
services
exports
market
operate
the
and
controls
of
( a )
It
necessary
supplies
does
all
in
as
justified
example
v t o
clear
a
that
it
only
be
claim
of
If
there
the
12.
is
incomes
in
one of
in
should be
of
and
observed
justification
profits,
salaries
order
or
depart
in
In
the
from
to be
in
avoid
present
other
the
existing
must
them.
asked
clearly
it
is
attract
that
incomes
must
as
on
the
between
of
understood
remuneration do
living
a
result
as
standard
principles
of
that
any
rise
in
sources
and
that
rises
for
agreed
and
necessity
free
upon
in
will
it
in
itself
observe
directly
if,
increased
in
on i n c r e a s e
before
is
and
engaged
firmly
Government
that,
for
negotiation
those
result
which
the
which
of
for
all
principles
The S t a t e
cost
above.
upon
which might
circumstances
and
however,
the
time
like
methods
in
interest
and not
decent
undesirable
press
these
a
above
cases mentioned
keep
considerations,
the
only be
any n e g o t i a t i o n s
these
industry
incomes
provide
the
or
should
to
to
at
rent,
decisions
incomes
national
personal
rise
personal
to
for
industries,
a marked
those
"be
would
view,
does mean,
increase
stabilise
wages w i l l
from
negotiations
these
in
be
will
the
it
the
undermanned
It
occupations
Government
and wish
on
in
of
relativity
contract
1Jd.
essential
an i n c r e a s e
an
point
to
salaries
a farmer
exceptional
principles
is
or
maintaining
with
to
wages
merits
interference
not
in
reconsideration.
In
personal
T h e r e may w e l l
would need
or
13*
today.
living
no
the
right
national
level
scarcity
would he
inadequate
from
wages
continuing
became
It
there
the
its
different
( e )
for
of
a national
labour.
considered
basis
stand
particular
the necessary
each
it
increases
from
where
man u p
that
they
which
view
manpower,
follow
incomes
cases
be
not
and
in
have
in
them,
and
these
concerned.
decided
notwithstanding
in
any
class
of
employment,
authority,
been
the
future
whether
there
can
practice
be
charges
taken
action.
its
in
15*
or
no-one
take
can
Each
operator;
the
dislocation
short,
place
obtain
agreement
by
a serious
and
accompanied
if
rest
the
by
people
prolonged
financial
to
has
act
low
us
together
in
our
standard
costs
in
considered
upon
endure
of
money
market
the
either
sound
economic
on
available,
accompanies
are
in
above.
individual
the block
to
will
prices,
enunciated
except
now b e f o r e
have
requiring
to be
inevitably
set-back
a persistent
matters
have
community
public
controlled
goods b e i n g made
benefit
a
resulting
increases
more
under
w h a t e v e r may
principles
which
alternatives
the
the
or
settling
general
real
of
in
the
without
any
that
case will
to
and h a r d s h i p
the
past,
other
relation
industry
presumption,
account
To sum u p ,
incomes
In
the
into
Government
private
be no
in
or margins
merits
in
a
inflation.
general
lines
or
reconstruction
living.