U.K. Govt. Split On Freeze Issue

Press, Volume CVI, Issue 31269, 16 January 1967, Page 13

U.K. Govt. Split On Freeze Issue

(N.Z.P.A.-Reuter—Copyright) LONDON, January 15. Britain’s Labour Government is deeply split over whether to take permanent powers controlling wages and prices after its emergency laws end this summer, say London political sources.

The administration’s decision on this politically-explo-sive issue could spark a confrontation with its traditional supporters in the trade unions, but the sources said the Government now seemed willing to take this risk.

The Prime Minister, Mr Wilson, has yet to commit himself on this crucial question, but he is known to be

determined to break the nation’s cycle of balance of payment crises which partly stem from wage inflation. One powerful group of Cabinet Ministers is already pressing hard for an early decision to maintain at least some of the controls imposed last year to enforce Mr Wilson’s year-long freeze on wages, prices and dividends.

But the sources said another faction, believed to include the Foreign Secretary, Mr George Brown—who formerly headed the Economic Affairs Department is against permanent direct Government interference in the traditional pattern of collec'ive wage bargaining. The existing controls, the most severe held by any British Government in peacetime, were ordered as a vital part of Mr Wilson’s austerity programme last July to bolster sterling and the nation’s economy.