British PM: Firms should raise wages to reflect gains from lower oil price

British PM: Firms should raise wages to reflect gains from lower oil price

LONDON - Companies benefiting from lower oil prices should pass on gains to their employees by raising wages, British Prime Minister David Cameron said.

A glut in global oil supplies has caused Brent crude prices to more than halve in little more than six months.

Britain's political parties are competing to try to show they can best help voters benefit from the fall, as a national election looms in May.

Cameron, on a trip to the United States, was asked whether he wanted businesses to pass any higher profits from lower oil prices on to workers. "I want to see companies' success passed through in terms of wage increases," he was quoted as saying by the BBC on Saturday.

"It has to be done in a way that's affordable, and in a way that companies can continue to grow. We need to see productivity increase." Cheaper oil has handed Cameron and his ruling Conservative Party a political gift ahead of the election by helping to lower prices for everything from petrol to food and thereby blunting rival Labour's attack over a "cost of living crisis".

Sliding oil prices have driven down inflation, so that wages are finally rising faster than prices in the UK, but the main opposition Labour Party argues that, in real terms, workers are worse off now than they were five years ago.

Labour had wanted to give energy regulators the power to force utility firms to lower prices when wholesale costs fall, but their bid was rejected in a vote by British lawmakers on Wednesday.

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