CONFIDENTIAL
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cleverly handled and had given rise to a widespread " belief that rates would go up by 80 or 100%. Secondly the back-lash against labour legislation, and in particular against holidays with pay and phazed pro- hibition of overtime for 16 and 17-year olds. Prime Minister's statement that we had a 5-year programme of reform, also encouraged the belief that there was a lot more to come which I had not mentioned and proved the last straw.
The
This explains the emphasis in my press conference on relations with UK, rates, and our targets and criteria for labour legislation.
I think some of the heat has now gone out of the situation, and no doubt the Christmas and New Year holidays will help, but it does show that the package of reform to which we are committed is the maximum practicable, and that we can expect the opposition to fight every inch of the way on labour legislation. It also indicates that any hint from the UK that measures here reflect successful UK pressure may knock our legs from under us.
It is a pity that this storm has blown up, because of course the essentials here are all going very well indeed.
Muny