Grim warning on U.K. austerity

Press, Volume CXIV, Issue 33435, 17 January 1974, Page 1

Grim warning on U.K. austerity

(N.Z.P.A -Reuter—Copyright i LONDON, January 16. Trade union leaders will meet today to decide whether to endorse a last-ditch proposal for industrial peace as pressure mounts on the Prime Minister (Mr Edward Heath) to call a General Election.

The move comes amid the gloomiest forecasts yet on the future of the British economy and a plunge by sterling to its lowest level against the United States dollar.

Yesterday, the Governor of the Bank of England (Mr Gordon Richardson), gave a grim warning of years of economic austerity until Britain’s present huge balance-of-payments deficit was corrected.

Sterling down Speculation about an early election in the face of militant unions dragged down the pound by more than four cents yesterday to a record low point of $U52.1850. Heads of the member unions of the Trades Union Congress (T.U.C.) will decide today whether they can pledge that if the Government makes a “special case” of coalminers, whose crippling wage dispute has pushed Britain on to a threeday work week, they will not use this as a springboard for their own claims. The miner’s pay claim exceeds the Government’s antiinflation pay limits and Mr Heath argues that, if he gives into the miners’ demands, this will open floodgates to a

wave of inflationary wage deals.

Answering a Parliamentary question put yesterday by the Opposition Labour Party leader (Mr Harold Wilson), the Prime Minister promised to meet T.U.C. leaders again on the coal dispute.

Special iheeting Observers believed that it would be pointless for him to see them until after today’s special meeting of the T.U.C., which represents some 10 million British workers. It was thought that he would not make up his mind about an election until after seeing how much support from member unions the T.U.C. peace plan received. But opinion was largely united among politicians, journalists and bookmakers —that the Prime Minister intended to hold a crisis election early next month, some 18 months before his Government’s term of office expires. Meanwhile Britons have been given a chilling warning that unless a greater effort

was made to save electricity, [the Government might pass! (laws allowing them to light, and heat only one room in their homes. The Government and the( T.U.C. spent nearly six hours; on Monday discussing the; unions’ formula aimed at' breaking the wage deadlock which has caused the pitmen to ban overtime since November 13. The resulting production re. duction—in conjunction with the oil crisis—left the nation’s electric power stations too short of fuel to; 1 support industry on ” normal full-time basis, acc ng to Government estima Britons jammed t.,c country’s roads for the homeward crawl last night. Traffic clogged roads within a ten-mile ; radius of all major cities as a < 24-hour rail strike in re- ; taliation to a breakdown of talks on drivers’ pay recon- I struction scheme—crippled ’ the country’s rail services. ' (Communism and U.K. unions. Page 15.)