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One leading firm of London stockbrokers calculated last week that Healey's plan will involve a record reduction in real wages of 4% or 5% over the year for British workers. The government is not committing the mistake of its predecessors in making the guidelines enforceable against individual workers or union leaders. Instead, the government will forbid private firms to pass on in higher prices any wage settlement costs above 10%—in effect, they will have to go along or face bankruptcy. Nationalized firms will be allowed to increase their total wage bill 10%.
"We have got a pistol at our heads," said Alan Fisher, head of the Public Employees Union. "I think we shall see a lot of difficulties in the next few months." The first signs of revolt came from Members of Parliament, who have forgone a pay raise since 1971 to set an example for the rest of the country. The M.P.s get about £5,000 ($11,000) in pay and allowances. Some are so hard-pressed that important votes must be scheduled in midweek because Members cannot afford to stay even in cheap London lodgings for more than three nights a week. A widely leaked government report recently recommended that M.P.s receive a 40% raise of £2,000 ($4,400) and possibly more. After Healey's announcement, 70 Labor backbenchers, fearful that they would be the first ones caught in the 10% net, threatened a boycott of committee meetings if they did not get the raise. Late last week a delegation took the matter to Wilson, pleading that they were a "special case." Wilson, in effect, promised them their money to help clear up "hangovers from the old pay round." Worse hangovers for the nation may be in store if Wilson cannot make the new guidelines stick when the big unions mount challenges to the government's authority in the new bargaining round this fall.