Again some protection for real wages, however partial and inadequate, against the impact of runaway Since the abolition of threshold payments in November 1974, very few pay settlements have included cost of living agreements. The Government has given firm instructions to all state employers to stand firm against thresaold deals. Recently Tony Benn warned the Post Office Corporation that if they went ahead with a pay deal which included cost of living increases for every point that the Retail Price Index rose over 10 per cent this year, the Corporation would not receive tinancial assistance from the Government to meet its debts.
The British Steel Corporation is meanwhile standing firm against the steel unions' demand for a new threshold agreement, while local authorities have yet to reply to the demand from NALGO, the 518,000-strong local government workers union, for a 60p increase for every one per cent rise in the cost of living index.
CONSOLIDATED
Even strongly organised sections of the working class like the miners and power workets have only succceded in petting past threshold paymente consoinflation! This 'trime he blamed on the Phase Ill incomes policy of his Tory predecessors.
child family on 130 a week would need a gross wage increase of 80 per cear to produce an increase in net disposuble income of 20 per cent due to loss of entitlement to supplemen tary benetits and free welfare measures. (Hansard, 5.2.75)
As wage increases tend to follow after the effects of inflation have already been felt on incomes, the increase in wage rates announced by the Department of Employment of #dated into the basic rate, with no new 32.5 per cent since March 1974 cost of living agreements being reached. 29 per cent when the three-day week dent on state benefits, grants and tion. For the working class the index, giving automatic wage increases to cover every increase in the interference of any kind of unresold limitation is the most the sliding scale is beginning to be movement. Many unions have inof ail workers, including those depen pensions, aguinst the effects of inflariding scole of wager and berefter tied to a working class cost of living prices on a monthly hasis without indispensable step in this direction.
The relevance of the demand for recognised by large areas of the labour cluded the demand for now threshold igreements in their claims, and last week's Scotrish Trades Union Congress meeting in Aberdeen passed by a clear majority a motion on cost of living safeguards (see box) that took up all the basic elements of the sliding scale of wages and benelits Not unly did the motion call for "nil-norm thresholds', but it pointed out that the 40p allowed for each one per cent increase in the price index under threshold agreements was inadequate because it did not take into account taxation of the payment.
FALL IN EARNINGS
Lahour Retearch (August 1974) calculated that actually to put the ? per cent increases allowed under Phase Ill into the wage packet would have needed gross increases of 9 per cent. Thus before the threshold agroc Tube 3. ment even started to operate, a fal real earnings of at least 1% per cen took place. Then the 40 per cent thresbold was itself reduced to 25g after tax, only compensating for n thirds of a one per cent rise in pri Thus at six "trigger points" (13; cent inflation) loss of earnings amounted to 1h per cent (a wage increase of 7 per cent is only wort 5l4 per cent after tax for a man on average male carnings with a wife a two children plus six times one-th a tolal loss of real earnings of 3% p cent.
To take the example of a marri man with two children under 11, 1l a'as caring ove L33 per week, a 4 gros addition would not cover a o por cent price rise. At L45 gross a net wage of E35-a gross threshold S7p would be needed to give an extra 35p. Al £50 gross- L38 netgross threshold payment of 62p would he needed. At C60-E44 met 72p would be necessary to cover a per cent rise in the cost of living SPUR TO STRUGGLE Sume militants claim that the es lence of nilnor threshold agreet are dangerous because they might workers from militant wages strug The experience of Italy and Belgiu where sading scales are in operatio either in whole or in part, proves t opposite. Fur from acting as a sub tute for wages strugale, they have created the conditions for struggle increase the real value of wages.