CAB128-94_A1b — Page 90

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Monopolies and Mergers Commission would greatly increase competition in the brewing industry but were not as yet in effect.

C.

ONFIDENTIAL

It was unfortunate that parcels staff employed by the Royal Mail had been said to have received a pay increase of 10 per cent. In fact they had had an increase of 7.5 per cent on basic pay, with an additional 2.25 per cent which was self-financing and conditional on a number of important gains for management including the abolition of a number of allowances and additional flexibility in regional pay and

rking practices.

The tactics of London Underground management in offering 5 per cent in talks that day without any guarantee that it would be accepted were unwise. However, the management believed that there was a chance that such an offer would be accepted and wished to avoid pitching their offer too low in case precipitated a walk-out by the rail unions. The revised

was subject to acceptance by the unions of conditions, including that they should call ke action. While the timing of the meeting before a sect had been reached in the BR dispute was also questio

three import

off future

previously.

Underground was

it had been arranged some time ntinued strike action on the

the London contemplated, there were worse times to face it than August. But at the end of the day, while the Government could make its reservations known to London Underground Ltd, it got direct them without intervening in the dispute, contrahits overall policy of leaving the handling of such disputeshe management of the industries concerned.

THE PRIME MINISTER, summing up

TIA

discussion, said that, while

progress had been made in resop a number of industrial disputes, there were a number of hers in which the situation remained difficult, with a prospect of further disputes emerging over the coming months. While settlements in all the disputes were desirable, it was essential that inflationary pay end everything

settlements should be avoided and to possible must be done to avoid the 8 per cent BR offer becoming the basis for settlements in other sutes. In that context, a number of reservations had been expressed about the decision of London Underground Ltd to make a posed offer of 8.5 per cent to the rail unions that day without that it would be accepted. The Secretary of State

guarantee

Transport

should make these reservations known to London Underground management. Both BR and London Regional Transport should understand that there would be no increases in public subby to meet the cost of inflationary pay awards.

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