Price-control scheme

Press, Volume CXIII, Issue 33252, 15 June 1973, Page 10

Price-control scheme

A price-control scheme, effective from today, is described in the Budget as flexible, hut laying down conditions designed to present another "wageprice explosion.” Pricing authorities will be told, when looking at a firm’s costs, to disregard wage and salary increases, including the value of fringe benefits, to the extent that they exceed a certain level, which for this year is fixed at 5 per cent. The same rule will apply

I to all goods and services . which , do not now require; approval from the pricing; 1 authorities. . If employers and unions . negotiate wage increases . above the fixed level of increase. the excess must be ’ absorbed by the firm through; an increase in productivity, I or a reduction of profits. ? Wage and salary increases; ■ resulting from an employer’s; 1 obligations under the Equal; ? Pav Act will be recoverable' • in addition to the 5 per cent.j i Increases on account of; ; wages which can be recovered in escalation clauses in con-1 •.tracts will also be limited to!

,5 per cent. This will apply i ■ to both Government and pri- ■ !; vate contracts. i “We are concerned that in- ; dividual employers and unions > recognise their responsiblities• • and their real interests in a : >. situation where there is up-’ i J ward pressure on prices and;' ,|incor. es,” said Mr Rowling. ;■ “Profits and productivity p ; have risen sharply. Employers’] . should, therefore, be in a posi-|i Ntion both to absorb a mode-!’ ■ rate amount of cost and wagep ■increases, and to continue the;! : H I expansion of investment pro-; J grammes without raising ( . prices unduly." i