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Wage Settlements

Volume 973: debated on Thursday 8 November 1979

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asked the Chancellor of the Exchequer whether he is satisfied that the present level of high wage settlements will not have adverse inflationary consequences.

In the short run, excessive pay increases will slow the rate at which the Government's policies bring down the rate of inflation. However, in the long run, pay increases which are not matched by improvements in productivity or efficiency must inevitably result in lost jobs and bankruptcies.