POST OFFICE CONTRACTS (FAIR WAGES CLAUSE). (Hansard, 10 April 1935)

§ Mr. MANDER
I desire to raise a question about which I have given notice concerning the interpretation placed by the Post Office on the Fair Wages Resolution of this House and the recognition which is to be given to decisions jointly agreed to by the National Joint Industrial Council in any particular industry. The facts about this case are that contracts have recently been given to a firm in Burslem which is paying a rate of wages of Is. an hour, whereas the rate fixed as a result of joint negotiations by the National Joint Industrial Council of the cooperage industry of this country is Ls. 5d. an hour. As a result of this, certain firms all over the country, and in particular in Wolverhampton, have been losing contracts which they previously had with the Post Office because they are undercut by the lower rate of wages paid by these employers, who are not paying the standard rate, although they are recognised by the Post Office.
The Post Office say that the rate in Burslem is only 1s., that the employers there do not recognise the National Joint Industrial Council, and that a good employer is entitled to pay only is. in that part of the country. What are the facts? The National Joint Industrial Council in this industry claims to represent upwards of 90 per cent. of the whole industry, with the exception of the Scottish cooperage industry, where there is a separate organisation altogether; and to show how widespread is the representation on this council from different parts of the country, I will point out that there are representatives sitting on it from the following towns, namely, Edinburgh, London, Glasgow, Liverpool, Man 1298 chester, Leeds, Burton-on-Trent, Bristol, Hull, Aberdeen, Stockport, and Birmingham. In addition, there are seven district councils operating and functioning normally. Furthermore, when these councils hold their meetings in London they are provided by the Ministry of Labour with a room at Montagu House, a representative of the Ministry of Labour is present at the meetings, and the minutes are typed by the Ministry.
I should have thought that as a model employer, as all Government Departments ought to be, it was up to the Post Office to insist on the payment of the nationally agreed-upon rate of 1s. 5d., and not to encourage bad employers who will not stand loyally alongside their colleagues and agree to pay the terms which are nationally settled. The position is even stronger than I have indicated because, although the Post Office are attempting to ride off by saying that in Burslem and North Staffordshire the rate is only 1s., I am prepared to supply the names of five firms in the potteries employing coopers who pay 1s. 5d. Furthermore, all the brewers in the potteries pay the 1s. 5d. rate. In spite of all that, in spite of the national agreement, and in spite of what I have said in regard to the rates paid locally, the Post Office say that, according to their interpretation, a good employer in Burslem is one who pays 5d. less than the national rate, and 5d. less than what his own colleagues are paying in the same part of the country. The attitude of the Post Office is deplorable. They are encouraging the bad employers and are subsidising sweating to some extent. Their attitude is really, from an industrial point of view, a disgraceful one. They ought to desire to uphold the standard of wages and not degrade them.

Lieut.-Colonel SANDEMAN ALLEN
On a point of Order. May I ask if there is a quorum present?

§ Mr. MANDER
The Assistant-Postmaster-General said they were merely doing what other Governments had done. Is it the ambition of the present Government to set up the standard of the late Labour Government? I should have thought that they had higher ambitions than that. I would ask my hon. Friend, in view of the fact—possibly the new fact—which I have brought to his attention, to say that he will be good enough 1299 to reconsider the question and to look into the case I have mentioned with a view to abandoning the position which, in the light of what I have said, is not defensible and not in accordance with the views of the House of Commons when they passed the Fair Wages Resolution.

§ Mr. TINKER
May I ask what the hon. Member means by his reference to living up to the Labour Government?

§ Mr. MANDER
When the Assistant-Postmaster-General answered the question yesterday he said that all previous Governments, including the Labour Government, were doing what he said. That was my point.

§ The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett)
We can all sympathise with the motive which underlies the speech of the hon. Member for East Wolverhampton (Mr. Mander), for in all sections of the House there is a real desire that the wages and conditions of our working men and women shall be fair and adequate. In fact, the Fair Wages Resolution has, from the moment of its inception in 1929, been generally accepted as an indication of this desire. There was an earlier Fair Wages Resolution in 1891. The Post Office in dealing with this question of Burslem was in every way acting in accordance with the terms of the Resolution passed by the House of Commons. There was an earlier Resolution as far back as 1891, at a time when trade unionism was still a comparatively puny growth in this country. Later on, in 1909, when the existing Resolution was passed, trade unionism had become a very considerable factor in our body politic and the resolution in question, which was moved in that year by Mr. Sidney Buxton, the then Postmaster-General, was accepted by the representatives of trade unionism, including my old friend, Mr. John Hodge. Since that date, the fair wages clause has worked very smoothly in the Post Office and very few complaints have been received from those concerned in its working. That is a very significant fact in view of the complex and extensive contract work carried out by my Department. The hon. Member for East Wolverhampton, I gather, now proposes to replace the existing fair wages clause by the proviso that rates of 1300 wages fixed by national agreement shall prevail universally in the same industry even in localities where no such agreed wages have been hitherto recognised.

§ Mr. MANDER
That is so, and I would point out here that the local rate is 1s. 5d. an hour.

§ Sir E. BENNETT
There is no agreed rate in this locality in the ordinary sense of the word.

§ Mr. MANDER
It is paid by good employers in Burslem.

§ Sir E. BENNETT
That is not the case so far as our information goes.

§ Mr. MANDER
I have the names here.

§ Sir E. BENNETT
In any case, it would not necessarily compel us to accept a particular contract at that rate. The hon. Member is now suggesting rescinding the fair wages clause.

§ Mr. MANDER
No.

§ Sir E. BENNETT
It must be rescinded if we are to have something different. This would, of course, mean the introduction of an entirely new principle, and would create a number of difficulties which the hon. Member has, perhaps, overlooked. The suggested new principle is based upon the existence of an agree-merit somewhere, and takes no account of the actual facts of the case in any particular place. There is a danger of agreements being produced that have no real authority behind them, and are the work of a body unrepresentative of one or both side of the industry.

§ Mr. MANDER
Does the hon. and gallant Gentleman suggest that that applies in this case?

§ Sir E. BENNETT
Yes, I do. An indeterminate liability would also be imposed on non-federated contractors or potential contractors who would not be associated with the making or amendment of agreements. It is indeed very difficult to justify the proposed change. Machinery already exists for the determination of fair wages and conditions in industry through the machinery of the Joint Industrial Council, and I should, personally, deprecate the imposition on the Post Office of the responsibility for enforcing wage rates in localities to which they may not 1301 be appropriate; and I cannot think that the trade unions who are ably represented in this House would welcome the interference by any Government Department in work which they claim as peculiarly their own.

§ Mr. T. SMITH
In regard to this particular case, has the hon. and gallant Gentleman made inquiries with regard to the locality where 1s. an hour is paid and where 1s. 5d. is paid?

§ Sir E. BENNETT
Certainly, inquiries have been made. One inquiry produced the fact that the shilling rate does not exist, that it is more than a shilling. There are, no doubt, many industries in which no rates exist which have been fixed by national agreements, but if those concerned in the fixing of wages are unable or unwilling or too indifferent to secure such national agreements one can hardly expect the Post Office to decree the payment of joint industrial council rates of wages in localities where these do not exist. I would like to disabuse the hon. Member's mind of any idea that Post Office contracts are settled primarily on the ground of the rates of wages paid.

§ Mr. LOGAN
On a point of Order. Is it in order for the hon. Member to read his speech, and the Minister being present, should not the Minister give the answer?

§ Mr. SPEAKER
I do not see where the point of Order arises.

§ Sir E. BENNETT
Although we do not publish the details of tenders, I can assure the hon. Member that many other factors besides wages enter into the subject-matter of such contracts. I will give him one example which may be of interest to him. Some time ago a Birmingham cooperage contract was allotted to a London firm, which was actually paying 1s. 6d. an hour, a penny an hour more than the Wolverhampton rate. As far as I am advised at present, I can see no reason for any change in the fair wages resolution, which has been accepted by every Government since 1909 and has on the whole worked well and smoothly.

§ Mr. RHYS DAVIES
We must thank the hon. Member for East Wolverhampton (Mr. Mander) for raising this very important point, and I hope the 1302 hon. Gentleman opposite will not be offended if I say that his was the most feeble official reply I have ever heard put from that Box. When he appealed to the trade unions—because that is what he did—did he think that the trade unions would not have objected if they knew the facts? I suppose that if these people were in a trade union they would get 1s. 5d. anyhow, and the objection, so far as I can see, is that the Post Office, by giving this contract to this firm, are not only blacklegging the best employers but are blacklegging the trade union movement as well by supporting a firm in which trade unionism does not apparently exist. I do not think this matter can be left where it is. We shall have to get the problem dealt with when we come to the Vote of the Postmaster-General. I saw him sitting in the House just now. As a rule, we regard him as a very courageous man, but he ran away as soon as he saw his hon. Friend in difficulty, and he will have to fight another day, in spite of the fact that he ran away just now. What is most amazing of all is that we have an hon. Gentleman representing the Post Office decrying the work of the Joint Industrial Council, because that is what it means.

§ Sir E. BENNETT
No.

§ Mr. DAVIES
If the Post Office does not take note of the decision of a Joint. Industrial Council, I tell the hon. Gentleman that we shall have the spectacle of one Government Department giving offence to another Government Department. It is an amazing anomaly that it is only last week that we had the Ministry of Labour issuing on Order under an Act of Parliament, covering the whole of the cotton textile industry of Lancashire, which compelled both the good and the bad employers to pay certain wages even though the employers and the workpeople might be outside their several organisations. That is a classic example of what one Government Department does and what another Government Department does not do.
Let me come to the last point. This Government, whenever they are in a difficulty, whenever they do a dirty trick, say "The Labour Government did it too." That is an amazing state of affairs. This Government came into power in 1931; it is now 1935. Because a Government in 1929 or 1303 in 1920 did a certain thing it does not follow that when a Government in 1935 do the same thing they are doing the right thing. I remember doing certain things in my boyhood days which I thought were right then, but I think them silly now. If everybody were as honest as I am, they would probably say the same thing. Once again, I say that we cannot accept the answer of the Post Office on this issue as final. I hope I am not offending the hon. Gentleman when I say that it was pretty obvious that that was the official answer of the Post Office. We say, therefore, although he declared in order to get out of his difficulty that wages are not the only consideration when they give a contract, that so far as we understand the problem we have always understood that wages were the first consideration. You may give a man a 40-hour week and set him to work in a palace, but if you only pay him two pence a day he will not be satisfied with the other conditions. Consequently, whatever other considerations enter into a contract, the first qualification to the workman is the wages that are to be paid for the job.
I hope that the Joint Industrial Council, who are involved here, will take note of the reply of the Post Office. I belong to a trade union, and I imagine that we have representatives on a large number of joint industrial councils. If the Post Office gave a contract to a firm outside the industry paying less wages than are recognised by any of those Joint Industrial Councils, the Minister of Labour would get to know about it, and I am certain that the Post Office would also get to know about it, not only through the hon. Member for East Wolverhampton (Mr. Mander) or myself, but from the Joint Industrial Council concerned. I trust that what we are saying here will reach tile ears not only of the Joint Industrial Council affected but of the trade unions and of the Trade Union Congress. I can assure the hon. Gentleman that this business cannot remain exactly where it has been left to-night.

§ Mr. PALING
I want to ask the Assistant Postmaster-General whether this matter is to stop where it is. He 1304 argued that these wages were according to the fair wages clause. In his statement, if he did not actually say so, he indicated that there was a fair wages clause which had probably been agreed upon by the trade unions of the district. I do not know whether that is so or not.

§ Mr. MANDER
No.

§ Mr. PALING
The wages exist throughout the length and breadth of the country, and it is unlikely that any trade union should agree, even in the remotest part of the country, to 1s. when 1s. 5d. is paid elsewhere, as the hon. Member for East Wolverhampton (Mr. Mander) says. If that be so, I cannot imagine that the fair wages clause is in operation where the Is. per hour is being paid. I hope that the Postmaster-General will make an inquiry into this business in order to see where the enormous difference of these wages comes in. The Postmaster-General takes credit for having run his Department more efficiently than most people and for having lifted wages, and I cannot imagine that he would agree to a thing like this if he knew it was going on. I hope that the hon. Gentleman himself will make inquiries without further pressure. I will join with everyone else in making as big a row as possible in order to see that justice is done in this connection.
Whenever anything done now is questioned, the excuse is always made that it was done by the Labour Government; but I am sure that if a case like this had been brought to the notice of the Labour Government, that Government's own supporters would have seen to it that it was dealt with. I ask the hon. Gentleman not to wait for the Post Office Vote, but, in face of the vast difference between 1s. 5d. and 1s., to make inquiry and, if there is any suspicion that the wage paid is not the right one, to stop the contract and give it to someone else.

§ Sir E. BENNETT
It is a little hypocritical for the Labour party to attack the Government when they themselves carried out this principle and practice of the Fair Wages Resolution.

§ Mr. PALING
Not the 1s.

§ Sir E. BENNETT
Since I have been at the Post Office, and for a long time past, we have had no complaints what 1305 ever from the men who were concerned with the working of the Fair Wages Clause, from the Joint Industrial Council, or from anyone else. The situation will continue as long as the Resolution stands and we are obliged to carry it out.

§ Mr. T. SMITH
Does the hon. Member suggest that the matter was discussed in this House during the lifetime of the Labour Government?

§ Sir E. BENNETT
It was certainly brought before the notice of the Labour Government.

§ Mr. CURRY
I was very much concerned when I heard the hon. Gentleman suggesting that my hon. Friend the Member for East Wolverhampton (Mr. Mander) was making a request that the Fair Wages Clause should in some degree or other be repealed or altered. There was nothing of that kind contained in the speech of my hon. Friend.
The point he brought before the House was, How was a Government Department 1306 to know what a fair wage was? I would respectfully submit that the only safe guide is to take the highest wage which has been agreed by the appropriate authorities. How else can you find out what is a fair wage to be paid? I am even more surprised at the attitude which the hon. Gentleman has taken up. We are really concerned, when we hear of a case like this, where employers who are tendering for Government contracts on what they know to be labour costs as between the negotiating parties in the industry find that those contracts are going past them because somebody is under-cutting. We are on the edge of a very retrograde process in this country which is very likely to lead to an enormous amount of unrest, suspicion and discontent. I hope that the hon. Gentleman will take note of what has been said here to-night, and will ensure that his Department will look again at this contract and at the circumstances surrounding it.