British unions yesterday rejected a fourth year of the voluntary pay curbs that have brought down inflation dramatically here.
By an overwhelming show of hands, union chiefs formally spurned Prime Minister James Callaghan's plea to limit pay increases this year to 5 percent. They did, however, call for "responsible collective bargaining" based on "a containment of unit costs."
This careful formula reflected the fact that the unions position is far less aggressive than their rejection of Callaghan's specific limit suggests.
In private, many leaders recognize the crucial link here between pay and prices and fear a return to the nearly runaway inflation of 1974-5.
Many unions, moreover, are reluctant to engage in an open battle with Callaghan's Labor government on what they believe is the eve of a national election campaign. Except for a handful of Communist leaders, the union chiefs are eager to return Labor and Callaghan to office.
Pressure from union members and from shop stewards on factory floors made yesterday's decision at the Trade Union Congress a foregone conclusion, however. Unions had firmly backed government-proposed pay limits for two years and had given qualified support in a third that ran out Aug. 1.
This cooperation cut inflation from more than 30 percent annually to less than 10 percent, a remarkable demonstration of how an incomes policy can work. But it also meant falling standards of living for union members until this past year, when wages finally overtook prives. A restless membership throughout the country was unwilling to take more.
Whether the action signals another wage and price explosion here is far from clear. If Callaghan holds off the election until spring, unions will have a powerful political incentive to make moderate demands. If, as seems more likely, he calls for a vote in October, this restraint will be absent.
Moreover, should the front-running Conservatives win the election, Britain could be plunged, into a wage-price spiral as damaging as that of 1975-5.
The several pulls on the leadership were expressed by Len Murray, the Trades Union Congress general secretary and a milder, less powerful version of George Meany.
Murray gently told the government that the union chiefs were urging it "not to get frozen in a rigid, formalized attitude." At the same time, he warned the union leaders themselves against any belief that inflation could be held under 5 percent if wages went up 15 percent.
Several unions of government workers pressed for a modified form of pay curbs, but they too, were voted down.
The fact is that 30 percent of all British workers draw a government check, either through direct employment or through the nationalized industries in coal, steel, railroads, telephones, ship building, airlines, electric utilities and more. A government willing to take or break strikes can thus exert a powerful influence over the lepel of pay increases.
Even the most militant unions insisted that they would not use their bargaining power recklessly. Lawrence Daly, the general secretary of the Mine-workers, spoke for this view when he said: "I don't want free bargaining without regards for the interests of the collective."
Perhaps the greatest threat to price stability here may come from the unions' insistence on moving from a 40-hour to a 35-hour week. This is seen as an effort to mop up enemployment and is part of a general desire for more leisure time.
The difficulty is that the union chiefs insist hours can be cut without changing take-home pay. That would drive up costs unless an increase in productivity took place.