Wilson Wins Fight For Freeze Plan

Press, Volume CVI, Issue 31124, 29 July 1966, Page 13

Wilson Wins Fight For Freeze Plan

(N.Z.P.A. Reuter—Copyright)

LONDON, July 28.

The British Government last night won a vote of confidence in the House of Commons for its voluntary wage and prices freeze, defeating an Opposition charge of incompetence by a majority of 79.

The vote of 325 to 246 came at the end of a two-day debate in the course of which Mr Wilson announced qualified approval of the Labour Government’s deflationary measures by the 8.5 million-strong Trade Union Congress.

Mr lain Macleod, the Opposition Conservative spokesman on finance, said the Government’s plan for phased economic growth with voluntary checks on prices and incomes was now dead. He claimed that the Labour Party leaders were guilty of mismanaging the nation's affairs. During the debate, Mr George Brown, Deputy Prime Minister and Secretary for Economic Affairs, made his

first speech In Parliament since his resignation threat. He admitted that the plans for a 25 per cent economic expansion by 1970 were no longer possible. But, he insisted, if Britain hoped to expand exports and join the European Common Market, then a prices and incomes policy was inescapable. Sterling strengthened on the foreign exchange markets yesterday, with a closing rate of 2.7916 against the United

States dollar, compared with the previous night’s close of 2.7905. Dealers said the decision by the Trades Union Congress to back the Government’s call for a six-month voluntary wage freeze came too late to affect dealings, and a further rise might be recorded today. Brunt Taken Mr Wilson claimed during the debate in Parliament that the flight from the British pound resulted partly because it took some of the brunt of an attack aimed against the American dollar. He also hinted at another major cause while defending in the Commons the Government’s economic policies. Importers throughout the sterling area—made up of chiefly Commonwealth countries which peg their currencies to the pound—were spreading payments for their goods because they feared an imminent devaluation, he said. Britain serves as banker to the sterling area, and the cost to Britain's reserves of a one week speed-up of the whole area's import payments was £l5O million, Mr Wilson estimated. De Gaulle’s Aim He did not identify those attacking the dollar, but informants said he is convinced President de Gaulle means to carry out his campaign to have gold, rather than the pound or the dollar, accepted universally as backing for international trade and financing. This, in his view, is why the French are hoarding gold and, as he sees it, spreading suggestions that the British must devalue if they want to join the European Common Market. The pound and dollar finance more than two-thirds of world trade and Mr Wilson is convinced that a cutback in sterling’s value would drag the dollar down too. Fight Continued The former Minister of Technology, Mr Frank Cousins, who resigned his Cabinet post in protest against the Government’s economic measures on wages, has announced that he does not Intend to stand again for Parliament. Mr Cousins, the general secretary of the powerful Transport and General Workers’ Union, and an ordinary back-bencher, is still leading the fight against Labour’s wage freeze as a part answer to Britain’s sterling crisis. It was impossible for him to do both jobs well and his loyalty lay with his union, he said.