Campbell Adamson - Prices and Incomes Policy

Prices and Incomes Policy

During the 1970 general election campaign, Adamson presented a "hastily-prepared" paper on wage settlements to the CBI council, and issued a warning to the major political parties that the new Government must do something to restrain wage increases, including a new prices and incomes policy if needed. Late in the campaign, Adamson held talks with Trades Union Congress general secretary Victor Feather to negotiate a voluntary productivity, prices and incomes policy. Adamson felt that the CBI ought to be fundamentally engaged in attempts to secure industrial peace.

After the Conservatives took power, Adamson welcomed the abolition of the Prices and Incomes Board and the requirement for companies to give "early warning" of pay and price increases. Adamson generally welcomed the Government's policy of non-intervention in industry, but made Ministers (including his predecessor John Davies, who had become Minister of Technology) aware that there would still be a role for the Industrial Reorganisation Corporation and that investment grants should not be altered too speedily for industry to adjust.

Throughout 1971, Adamson worked with CBI members to persuade them to restrain pay rises; it was revealed in April 1971 that he had talked personally with Vic Feather of the TUC about an agreement between them, which Adamson thought "much nearer than it was before". The TUC wanted the agreement to include prices and dividends, which the CBI accepted in principle. Adamson worked to get agreement on prices, and on 8 September 176 of the 201 largest member companies in the CBI signed an undertaking to hold prices stable (or at least restrict rises to no more than 5%) for 12 months. The agreement was held to be binding on all 900 members of the CBI. Adamson was later to cite the agreement by industry to restrain prices over 1971-72 as his greatest achievement; it allowed the Government's prices policy to half the rate of inflation.