U.K. wage talks fail; Govt action likely

Press, Volume CXII, Issue 33065, 4 November 1972, Page 16

U.K. wage talks fail; Govt action likely

(NJ. Press Association—Copyright) LONDON, November 3. The British Government is expected to decide today to introduce a statutory prices and incomes policy as a matter of urgency after the total collapse of talks with industry and union leaders, aimed at harnessing inflation.

The marathon tripartite discussions —they had struggled on for more than 40 hours, over 10 sessions, since last week ended in failure late last night.

The Prime Minister (Mr Heath) and business leaders accused the union representatives of being unwilling to make concessions.

Although the Trades Union] Congress, representing 10 million workers, alleged that] it was the Government that was too rigid, it seemed that neither Government nor. unions moved from their prepared stances. The T.U.C. adhered to its insistence on legal controls for prices only, leaving wages to be governed by em-ployer-union bargaining and market conditions.

' Mr Heath insisted either that both must be statutorily controlled, or completely left | to voluntary restrictions. Monday statement Today, obviously disappointed, he said that his Cabinet would meet today to decide what action to take. But it is almost certain that the Government will now act unilaterally and announce either statutory prices and pay controls, or a complete :prices-and-incomes freeze for | a limited period. ] “The Government has a I unique responsibility,” said : Mr Heath today. “It fully accepts its responsibilities and the Cabinet will decide the action to be taken.” The Government has a prices and incomes package ready to launch swiftly. In fact, rapid action is needed to save sterling from

another buffeting in world money markets. Unchecked inflation has been a main cause of the currency’s decline in the last week. International speculators are said to be anxious that unless inflation is controlled, the British economy will plunge into another crisis.

It is unlikely, however, that any announcement will be made after today’s Cabinet deliberations; more likely Mr Heath will unveil his plans before Parliament on Monday.

Prospects bleak

The breakdown of the talks opened up the vista of a winter of discontent for industry in Britain. The dashing of hopes for an across-the-board voluntary agreement against inflation raises the prospect that the Government may have to battle to impose its will on a rebellious body of workers. There are risks of bitter strikes, with a possibility that rank-and-file workers may defy the incomes-policy laws as they did the Government’s industrial-relations laws, aimed at curbing strikes.

There is also the possibility of a reaction from industry, particularly from the 600 larger companies which have voluntarily held price rises to 5 per cent for more than a year. There is a danger that they will try to rush through big compensatory price rises before the government has time to act.

Power now over

The Government’s anti-in-flation proposal which failed to prevail during the tripartite talks is the one likely to be given force of law. It provides for flat-rate increases in wages of £2 a week and price increases on manufactured goods being held within a 4 per cent limit.

There was one glimpse of light in the general gloom shrouding Britain this morning. More than 105,000 power workers yesterday accepted a pay offer from the Staterun electricity industry, ending the threat of blackouts this winter.