Britons await curb on pay increases

Press, Volume CXII, Issue 33066, 6 November 1972, Page 17

Britons await curb on pay increases

(N.Z.P.A.-Reuter—Copyright) LONDON, November 5. The measure against inflation expected to be imposed by the British Prime Minister (Mr Heath) and his Cabinet tomorrow may include a virtual freeze on wage and price increases for the next three to six months.

Members of Parliament say that the steps to be taken will have to be tough to have any hope of putting an effective brake on Britain’s inflationary spiral.

If Mr Heath does adopt the policy of a virtual freeze, a second phase is likely to follow, restricting rises in prices and incomes in accordance with levels to be set by the Government. Mr Heath, who won Cabinet agreement for his measures on Friday, is spending the week-end at Chequers, putting the final touches to the announcement he will make to the House of Commons tomorrow.

No official details have been released, but the steps generally are expected to be in line with the proposals to combat inflation he put to trade union and industrial leaders in the long series of talks that finally broke down on Thursday. Among these proposals were a £2-a-week limit on pay increases, coupled with a 5 per cent ceiling on price increases.

According to economic observers, Mr Heath’s main objects are: to limit, by law, excessive rises in commodity prices, pay and salaries; to protect the lower-paid wageearners, pensioners, and others “caught in the poverty trap,” and to keep industrial expansion at a rate of 5 per cent.

The Prime Minister also wants to restore confidence in sterling, which has been hard hit on the London and international foreign - exchange markets in the last few weeks. Present claims It is estimated that about three million workers are now making pay claims or framing fresh demands. A pay rise freeze would be first felt by the 95,000 local authority manual workers whose pay negotiations were postponed pending the Downing Street talks.

I Also in the wages queue, are hospital ancillary workers, miners, railwaymen, Lon-. don dockers, postmen. Ford workers. London busmen. | senior electricity supply engineers, Government industrial workers and white-collar workers. The Opposition Labour Party’s chief spokesman on economic and financial affairs, Mr Denis Healey, gave this warning in a speech yesterday: “Mr Heath cannot expect ordinary people to accept rigid limits on their wage increases if they see the rich racing ever faster ahead of them.” Mr Healey suggested that, the Government intended to give away £3oom in tax benefits to large salary-earners next April.

!| Mr Heath said last night: i"I am determined to go on [giving every opportunity to I| those who sat round the .(table for more than three (months to work jointly with I us in the future.” | The general secretary of the Trades Union Congress, Mr Vic Feather, who was one of the key union representatives at the talks, said that inflation could be solved only by collective effort. "This is not the time for provocation," Mr Feather said. “The unions will act responsibly, and will not go looking for trouble. The talks intended to solve the econoImic situation have run into i sand for the time being, but this does not dispose of the ; problem, or of the need for a joint solution.”