LABOUR RELATIONS

HC Deb 18 April 1957 vol 568 cc2113-28

12.32 p.m.

Mr. A. E. Cooper (Ilford, South)

Recent strikes in the shipbuilding and engineering industries have shocked all thinking people. How could it happen that men in good jobs and with a secure future could deliberately jeopardise their future? How could it happen that leaders of great industries should be prepared to see their works brought to a standstill?

For here we are, 50 million people crowded together in this little Island, our prosperity—indeed, our whole future—depending on a high level of productivity and. above all, on the prompt execution of our export orders. Any slowing down of production, from whatever cause, endangers the livelihood not only of the workers directly affected, but of all of us. How, then, do these things happen, and what can be done to limit them?

Let us not imagine that our industrial difficulties are worse than those of other nations—they are not. In fact, our record is much better than that of any other country. Nevertheless, strikes are of greater seriousness to us because our economy is so finely balanced. Given good management and proper labour relations, combined with effective Government budgetary and monetary policies, no possibility of unemployment in this country within the foreseeable future is possible. Indeed, with an expanding economy, coupled with an expanding world trade, our problems in the future will be to find the labour we need. No country has greater need for its people to work together as a team and such working together can only be done by co-operation and not by compulsion.

It is impossible, in the short time for a debate of this character, to deal with all the aspects of this complex problem. Therefore, I propose to deal with one or two specific points only. First, I should like to deal with those strikes for which Government action is almost impossible to find any real solution—that is, strikes and troubles which are deliberately fomented by Communists and others whose real objective is the destruction of our society, or, at least, the paralysis of its power.

No improvement in labour relations will alter the purpose of these mischief-makers. We have seen in the Report of Lord Cameron on the Briggs dispute how a small coterie of Communists, having no desire whatsoever to secure any sort of good relationship with the management or for the betterment of the men in the works, have as their sole objective the distruction of the Briggs organisation.

We have heard in this House evidence presented by the hon. Member for Rotherham (Mr. Jack Jones) of the same sort of activity in other parts of the country and there was the quite disgraceful television broadcast this week, when one of the shop stewards, Mr. McGree, of the Cammell Laird Company, stated quite categorically that it did not matter to him whether Cammell Laird's went bankrupt or not. To what extent actions of this character are indictable must be left to the Director of Public Prosecutions, but at least we must not hesitate to give the strongest possible publicity to the disruptive powers which this small band of Communists in this country possesses at the present time.

I want also to deal with the question of shop stewards. The term "shop steward" has in recent years had a connotation which has been not altogether desirable. Many shop stewards up and down the country are honest, decent men who have been elected by their fellow workers as being men who can genuinely and sincerely look after their interests. Many shop stewards, however, are nothing more or less than militant Communists, whom I once described in this House as the fifth column in British industry.

By education and propaganda we must try to persuade trade unionists to take a greater interest in the affairs of their unions and to ensure that these Communist elements are not elected to positions of power where they can carry on their disruptive work.

It has, perhaps, been forgotten that the original position of the shop steward in industry was not to act as the liaison between management and the man on the floor, but he was the link between the man on the floor and the union. During the war, however, it was, naturally, convenient for management to have some close liaison with the workers and the power of the shop steward gradually grew.

After the war, the shop steward was not slow to take advantage of this newfound position and the unions themselves were very backward in putting any brake on the power of the shop stewards. And so we have today built up in British industry a shop steward movement which is now exercising a quite intolerable pressure upon industry and which, I am sure, responsible trade unions would like to see broken. This, however, is a matter with which the trade union leaders themselves can deal and is not a matter for Government action.

I want now to touch upon the annual wage claim, for that is what it has now become. Almost throughout the whole of British industry, once a year various industries put forward their application for a new wage claim. It has become part of the pattern of British industry.

This sort of thing cannot go on indefinitely without very serious consequences to the economy as a whole. In my judgment, we have reached a situation in which any further increases in wages must be linked directly to increased productivity or efficiency. There is nothing revolutionary in this suggestion, and it is not novel in this country, but let us, first, consider what goes on in America. Hon. Members may have listened to a very interesting broadcast recently on the Third Programme on this subject of the annual wage claim, a broadcast by Geoffrey Goodman, and I am indebted to him for some of the figures I am going to quote.

The kind of long-term contract linking any increases in pay to the cost of living and to increased productivity, which, I am suggesting, should form part of the pattern of British industry, has for some time been a feature of American economic life. A recent survey made by the United States Bureau of Labour Statistics shows that 65 per cent. of American collective bargaining agreements are now for two years or more.

Those agreements generally have two prongs to them. The first is an escalator clause which moves up and down according to the cost of living. Obviously, if a man's wages are to move up and down simply as the cost of living moves up and down he has no incentive to do any better and the company has very little incentive to try to improve its own position, but if the workman has a vested interest in the efficiency of his company there is more likelihood of ensuring that, in due course, it will become more efficient. Therefore, there is a second prong to these agreements, and that relates entirely to productivity and is known as the "annual improvement factor", and is embodied in most of these long-term agreements.

In this country there are already agreements having a cost of living clause, notably for the building workers, in the steel industries, and in the boot and shoe and printing trades, and about 3 million workers are covered by agreements of this character. Ever since 1920 the boot and shoe industry has had national agreements lasting for two years, with a built-in cost of living sliding scale.

It is not without significance that in those very industries in this country there is to be found a record of industrial harmony with which there is nothing in any other of our industries to compare. That seems to show that the experience is a good one and would be beneficial to industry as a whole.

Mr. Marcus Lipton (Brixton)

While the hon. Gentleman is on the subject of the building workers, may I ask whether he is aware that despite that provision the building workers still find it necessary to put in for wage increases to cover the rising cost of living?

Mr. Cooper

These agreements are meant to cover just that situation, as the cost of living moves. They take care of just these things.

I come now to what I think is possibly the most important aspect of the present situation and that is nation-wide bargaining that is to say, the combining of unions to deal on a national basis with the wage interests of a vast number of people employed by a number of undertakings in an industry, in this case the engineering industry.

It is interesting to note that the Confederation of Shipbuilding and Engineering Unions negotiate the wage rates of no fewer than 3 million workpeople employed in 20,000 firms. One has only to give that last figure to show just how unreal it is to expect a confederation of unions to negotiate arrangements which will work properly and equitably amongst 20,000 firms engaged in an industry.

In this case, the unions demanded a 10 per cent. increase and were to be satisfied with nothing else. The employers then said they could not give anything at all. It is possible that, considering the industry firm by firm and comparing one part of the industry with another, some firms could have provided that 10 per cent. increase. It is equally probable that the 10 per cent. demand could well-nigh cripple sonic firms and possibly put them out of business.

This is a sort of situation which obviously cannot be tolerated any longer. We have to remember the background of how these great confederations of unions were built up. It was during the pre-war years, in times of widespread unemployment, when it was a good thing, from the workers' point of view, to deal with the situation on a national basis.

In arguing, as I am attempting to do, that the national basis is not the way to deal with this matter, I exclude certain industries, notably the coal and electricity industries and probably the railways, which are more homogeneous and can, perhaps, be dealt with more efficiently on a national basis. However, we have to persuade the unions and the managements to give up part of their sovereignty. We have to persuade them to deal with this industry in particular on a much smaller basis than the national basis, almost, indeed, on the basis of firm by firm, rather than on this unrealistic national basis.

I have come to the conclusion that we have reached in our nation what, perhaps, may be described as the crossroads in labour relations. We in the Conservative Party, some years ago, produced a booklet which, we hoped, would point the way to the future of industry in this country, a booklet which we called "The Industrial Charter." I make no excuse for the fact that we have not been able as yet to see all the recommendations which we put forward in that document carried through. Indeed, we have not made very much progress with it, but it is the sort of document which, I believe, points the way we ought to go in the future. I do not believe that at this stage one political party producing a document of that sort is likely to get full support for it. The Conservative Party is not likely to get the support of the trade unions, and were the Labour Party to produce such a document it would not be likely to get the support of the employers' organisations.

Consequently, I believe that, as the situation is so serious to our whole future, the Government have to consider setting up a Select Committee which could inquire into the whole question of labour relations. I rule out a Royal Commission, because the time taken by a Royal Commission is generally much too long, and I do not believe that time is on our side. The Select Committee should see how we can fit the arrangements which we have at present to the times in which we live. I hope that it will be possible for something along these lines to be done very soon.

We must recognise throughout the country that we must work together for the common good. There is a belief in some quarters that the world owes us a living. The world does not owe us a living, but there is a very bright future for all of us if we can rid ourselves of the prejudices that blind our vision.

12.50 p.m.

Mr. Ray Mawby (Totnes)

I shall detain the House only a few minutes to make one or two comments on this problem, particularly with reference to the Report of the Court of Inquiry into the dispute at Briggs Motor Bodies Ltd., Dagenham, and some of the points made by Lord Cameron in that Report.

The most glaring thing throughout the Report, which should cause us most concern, is the greater emphasis than ever on the problem of particular groups of people obtaining power without responsibility. We in this country have always recognised that if we are to enjoy power we must also accept responsibility.

The Report shows the great danger of a group of men who, apparently, enjoy power without any organisation being able to exert any control over them. It is left to them alone to carry out the necessary responsibility that comes with the power given to them.

This is the basis of the problem about which many trade unionists have been worrying for a considerable time. I have suggested from time to time that this is something which should be tackled. The crux of the problem is the fact that the normal branch membership of a trade union is on a geographical basis. It has been so for many years. That has much to commend it, because it means that workers can go to a branch meeting held within a reasonable distance of their homes. Therefore, one is certain that if members want to attend a branch meeting they will make the effort.

In recent years, however, more and more people have tended to travel considerable distances to their place of employment. Large organisations, such as Briggs Motor Bodies, draw their workers from many places in the surrounding district. This fact is emphasised in the Cameron Report.

Many men employed in the same department may belong to the same union but, at the same time, they may belong to as many as 10 or 12 different branches. That means that these people in the shop freely elect one person to represent them as shop steward. The elected shop steward is not under the jurisdiction of any one branch. It would he impossible for him to report regularly to 10 or 12 branches and therefore, naturally, he reports to none. Normally, throughout industry the shop steward tries to carry out his job and to observe the rules of his union, but the difficulty is that all shop stewards do not behave in that way.

Men over whom no control is exercised by one particular branch are elected as shop stewards, with the result that a new structure of power is building itself up and there is what is known as the national shop stewards' movement for the motor car industry and other industries, which exerts a terrific amount of power without apparent responsibility to anyone.

This is a problem which trade unions themselves have to solve. Some have recognised it and have based their branch membership not on a geographical basis, but on the basis of an industry. But they have come up against problems here and there with employers, because if branch membership is set up on an industrial basis it means that the members are no longer able to attend branch meetings.

In a number of cases the employers, realising the problem and knowing that trade unions are trying to put the matter right, have offered the use of a room in the works or canteen so that branch meetings can be held immediately work ends, whether once a fortnight or once a month. In this way members have greater opportunity to attend branch meetings than would be the case if the branch were on a geographical basis.

It means, in these circumstances, that not only can the normal business of the branch be carried out but the election of shop stewards can be proved to have been a fair one and the majority of members can freely elect their representative. Once that representative was elected he would know where his responsibility lay and the branch would have a considerable amount of control over him. Therefore, there would be no longer any need for him to join his fellow shop stewards to form a shop stewards' movement.

This is one of the ways in which stoppages of work could be prevented not only in the factory to which I have referred, but in many other works. I would warn those who feel that by legislative action we could make it necessary to have a strike ballot. When strikes were illegal under Socialist legislation, a huge number of man-hours were lost because union members then took part in unofficial strikes. We must recognise the changed circumstances and, whether as employers or employees, we must realise the problems and try and work out a solution together.

Wherever members of trade unions are fairly treated in this respect by their employer, they will be as happy as anyone else to make certain that they are properly represented and that their representations will be made by a person who is within their control. If that is ensured, I am sure that we shall be able to solve a great number of industrial problems. Not only will industry not suffer loss of man-hours through strike action but trade unionists, by not taking part in strikes, will enjoy a better standard of living. Make no mistake, when a trade unionist takes part in a fortnight's strike to bring about a rise in wages, the money lost during that fortnight is far more than any rise obtained in wages over probably the next 12 or 18 months.

There are many lessons to be learned if we can forget our fixed ideas. We should forget the general idea that certain people say they are "anti" this or anti "that. Instead, we should all be "pro happy" industrial relations. If we work on that basis, we can look forward to a more peaceful future in industry and, what is far more important, to becoming a more prosperous nation.

1.1 p.m.

The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Robert Carr)

My right hon. Friend the Minister of Labour said during the course of the recent strikes that when the dust had settled we would want to consider what lessons could be drawn from those disputes. Obviously, it is too early to do that properly yet, because the Courts of Inquiry which are looking into the two disputes have not yet reported. Nevertheless, I am sure it is valuable to have a discussion such as we have had this morning, short as it is, and I thank my hon. Friends for raising it and contributing to it.

I was particularly glad that my hon. Friend the Member for Ilford, South (Mr. Cooper) drew attention to the good record which this country enjoys in labour relations compared with almost every other industrial country, because we do ourselves no good, either in our own eyes or in the eyes of the world, if we exaggerate the troubles we have. Nevertheless, as my hon. Friend said, we can afford less than any other country to suffer disputes in this way. I am also glad that my hon. Friend made so clear his belief that compulsion is not the way out of our difficulties. I am sure he is right, and I was glad he made that point at the outset.

There is a small minority—the wreckers, to whom my hon. Friend referred—who have an effect out of all proportion to their numbers. Those who work in industry object to their activities as much as anybody else in the country. There is no doubt that the only way to deal with them is by getting greater activity on the part of the rank and file of those workers in industry who object to them. If only this majority of the rank and file would attend branch meetings, and play an active part in their affairs, I am sure that the trouble would quickly be overcome. I must say frankly that I can see no other way of overcoming it.

Since the war, we have been trying to do in this country what has never been done before, namely, to achieve at one and the same time a combination of full employment, free collective bargaining as the method of fixing wages, and stability in the value of money. It is comparatively easy to have any two of these three things at the same time, but it is extremely difficult to have all three of them at once. In practice, we have succeeded in keeping full employment and free collective bargaining, but we have to admit that we have not achieved the third, namely, stability in the value of our money.

This country has not been alone either in facing this problem or in failing to solve it, and in an attempt to find the answer many people, both here and in other countries, have suggested that the system of free collective bargaining should be replaced, or at least substantially modified. There have been advocates of various forms of a national wages policy, which involves a greater or less degree of Government intervention in the process of wage fixing.

Some countries have actually tried to operate a national wages policy. I think it is interesting to see how they have got on. Holland and Sweden are perhaps the most talked of examples, but when we look at the statistics we find that in recent years the inflationary trends in those countries have been no more restrained than they have in ours.

So, whatever our difficulties may be, the experience available suggests that the systems tried in countries such as Holland and Sweden work no better than the system of free collective bargaining to which we are accustomed and which, I think, reflects our natural way of thought and our belief in free institutions. Nevertheless—and this is why I am sure that my hon. Friend was right in raising this question today—the fact that we have pride in, and think it right to hold on to, our system of free collective bargaining does not mean that we should be complacent about the way our system works, or imagine that it could not be looked at and improved. If we adopt that attitude, the system will decay rather than continue to grow, and one cannot doubt that there is growing concern in the country at the moment about the way our industrial relations system is working.

Some of those who express this concern, and perhaps do so most loudly, advocate tackling the problem by legislation, whether it be for compulsory secret ballots or other devices. I am glad that both my hon. Friends this morning objected to that kind of policy. I do not think that such proposed remedies would in practice be effective and, moreover, I believe them to be wrong because they are superficial. To put it this way, they are trying to rub out the measle spots rather than curing the measles. They fail to take account of the real problems, and the real values, of a free industrial society.

We must be clear, however, that we would be making a great mistake if we were to assume that the present concern is limited to people who want to take that kind of action. We should pay heed to the fact that a growing number of people, who most genuinely believe in, and wish for the success of, our system of free collective bargaining are worried by recent developments.

It seems to me that the concern which is being felt is of two kinds, and I do not think that we ought to get them confused. First, there is the feeling that in the second half of this twentieth century we ought to be able to settle these matters peacefully and by negotiation, without resort to strikes or lockouts, which usually result in loss to everyone and must, in the end, be settled by agreement.

Secondly, there is growing dismay about our apparent inability to escape from the wage price spiral, under which those who have increases in wages only benefit in real terms for a short time, whilst other members of the community are actually made worse off. There is also a growing feeling that we must find a way of containing wages increases within the bounds of extra production and efficiency, so that the real value of wage increases is maintained for those who get them, so that prices remain stable, and no damage is done to other sections of the community, particularly those who depend on pensions and fixed incomes.

It is genuine concerns such as these which are making thoughtful people of good will in these affairs more and more ask the kind of questions which my hon. Friend has asked today, namely, is it possible to find satisfactory ways of linking wage increases to productivity while not forgetting the rights and needs of workers—this is important—who, by the nature of their occupation, cannot have their pay directly based on output?

Again, is it possible, as is done in some countries, to make wage settlements operative for longer periods, perhaps, as my hon. Friend suggested, by introducing escalator clauses to take account of changes not only in the cost of living but also in productivity—what he called the annual improvement factor. Is it possible that in some cases the area of negotiation is too wide? Should we, for example, treat the engineering industry as a single unit when, as my hon. Friend said, there are within it such widely different types of production and such great differences in prosperity between one part of the industry and another?

And why is it that in some industries industrial relations work smoothly, so that there are practically no threats of strikes and the affairs of those industries hardly ever hit the headlines, whereas others are repeatedly in the news, with threats of yet another dispute? Is it the machinery which makes the difference between one industry and another, or is it a matter of the personalities involved?

These are the kind of questions which I cannot pretend to answer this morning, but which I am sure we are right to be talking about publicly and getting public opinion to concentrate upon. We should be mistaken to be dogmatic about the answers, or to imagine that the same answers can apply over all industry. We have to look at them separately and seriously.

In a system of free industrial relations the answers must, in the end, be agreed by the two sides of industry, and we have a right to expect that the leaders of the two sides will get busy seeking to put right any defects which they can find. I, of course, speak for the Government, and people are saying to the Government, "You should do something about this." While, in the end, we must depend on the actions of the leaders of industry, I agree that the Government also have a responsibility, which they must, and will, accept.

The Government can neither direct nor compel in this matter, but, through the Ministry of Labour, they can, and should, try to guide. The question is how should this be done? My hon. Friend suggested this morning that there should be a comprehensive independent inquiry. He suggested a Select Committee—that may not be the only way he had in mind—and rejected a Royal Commission; but his main point was that, in whatever way it was done, there should be a comprehensive independent inquiry into the working of our industrial relations system.

I am sure that my hon. Friend will not expect me to comment immediately on his suggestion. I do not need to tell him that my right lion, Friend the Minister of Labour will, of course, give it the most careful consideration. A good deal of our present machinery for industrial relations owes its origin to the Whitley Committee, which was appointed in 1916. That is forty years ago, and forty years is a long time to go without a new inquiry in the light of modern conditions. I repeat that my right hon. Friend will consider the suggestion which has been made.

But, of course, quite apart from any question of a new inquiry, it should be realised that the Ministry of Labour is doing its best all the time to bring together the two sides of industry. The effect of that should not be underestimated. From its earliest years the Ministry of Labour has tried to encourage a better general understanding through Whitley Councils or other joint machinery, and for many years employers and workers' representatives have sat together on the Ministry's local and national advisory committees. At the highest level, our National Joint Advisory Council has sat regularly since the war years to consult and advise on general labour questions.

Lately, the N.J.A.C. has taken a new initiative. Last summer, the Minister of Labour initiated, through the N.J.A.C., an inquiry, industry by industry, into the efficient use of manpower. Each industry has been asked whether it has problems of this kind and, if so, to set up machinery to deal with them. So far, replies have been received from industries which represent about four-fifths of the labour force of the country. I am glad to report that many of those industries say that they have no problems of this sort. Others say that they have the machinery for settling them if they arise, or are in the process of setting up such machinery, and others say that they are actively considering doing so. Replies are still being sought from the remaining industries and those which have not yet got appropriate machinery are being asked to report again in due course.

This action of the National Joint Advisory Council represents a new approach to this problem which has never been made before. I am sure that it is the most practical way to get results, because this question of efficiency of output is part and parcel of the wages question which my hon. Friend raised this morning. It is certain that there is no room in modern conditions for restrictive practices on either side of industry. I think, however, that we must be clear about this. There is a big difference between restrictive labour practices and the restrictive practices of trade associations. The latter are concerned with the prices and conditions of the supply of goods and can be effectively dealt with by legislation. The former affect the working conditions of human beings.

Some of them are, indeed, reasonable arrangements, arising from genuine considerations of health and safety. Others are unreasonable and provide harmful impediments to production. It is, therefore, difficult to draw a dividing line between the reasonable and the unreasonable and it is certainly impossible to generalise. So each practice has to be looked at on its merits.

To do this we have to know a great deal about the technicalities and condi- tions of the industry concerned. Therefore, the problem can only be tackled through the industry itself by people on a local level who really know the technicalities of the individual industry and practice. I wanted to put on record the stage that we had reached because, as I have said, it represents a new approach and because I think this is important. Not only is the subject important, but this inquiry is doing something else which I believe to be important, namely, getting the two sides of industry into the habit of talking and meeting together about problems other than wages. That is a very valuable thing to do. because I believe that industries, where that habit grows, will develop better industrial relations as the years go on.

Both my hon. Friends referred to the position of shop stewards. There is no doubt that shop stewards have in some cases succeeded in establishing themselves in, shall I say, an unduly strong position and this has had bad results. I think that what my hon. Friend the Member for Totnes (Mr. Mawby) had to say about the effect of the basis of union organisation in this matter, the geographical basis of organisation as opposed to the plant basis, was extremely interesting.

I believe that, as he said, the unions—whose business this must be—are thinking about these problems. But while there is no doubt that shop stewards have, in some cases, got into an unduly strong position, we must not leap to the conclusion that the shop steward system is wrong. Indeed, as my hon. Friend said, there are many factories which have responsible shop stewards and benefit from it. We must not allow the bad example to lead us into condemning the whole system.

The Report of the recent inquiry into the trouble at Messrs. Briggs illustrates another way in which the powers and machinery of the Ministry of Labour can and do guide the development of industrial relations. In our Industrial Court and our Industrial Disputes Tribunal, and in the highly experienced and responsible people we are able to call upon for Courts of Inquiry, we have a valuable resource of skill and wisdom which is helpful when it is brought to bear on problems about which the two sides of industry fail to agree. Moreover, long before disputes get to the stage which need treatment of this kind, the Ministry's own conciliation officers are constantly assisting in bringing the two sides together and smoothing out troubles.

In the final resort, and, indeed, all the time, it is upon voluntary agreement in industry that we must depend for good industrial relations. Our own experience and that of other countries all goes to show that good relations cannot be enforced by laws and pains and penalties. Like everything best in this country, they must grow and become a tradition, and that takes time.

Perhaps the most important thing to realise is that this growth of good relations must start at the level of the individual factory. At this level, too, the Ministry of Labour is able to assist by its advice on problems of personnel management and labour relations through our Personnel Management Advisory Service. We have also taken the lead in urging a proper training of foremen in management techniques—another very important point in good relations—by our Training Within Industry Service, and in other ways.

Although we can and do help on a factory level, the real responsibility for leadership in the factory must inevitably rest with the management of each undertaking. I think that it is noteworthy that where the management of a company has, over a long period, made a conscious effort to inform and consult its workers about the why and wherefore of what is going on, responsible and good industrial relations are developed; and in the industries where the majority of firms pursue these policies, good leaders are thrown up and the industrial relations at national level in the industry work more constructively and smoothly.

That is the note on which I should like to end. I am sure that whatever inquiries we have and whatever changes may be instituted in the machinery of conducting our relations or in the scope of agreement—all important things—it is in the growth of good relations and good practices in each individual factory that the real way to progress lies.

If this debate, apart from all its other purposes, can provide one more opportunity for saying to each company in this country, "Do make a conscious effort to develop these good and responsible relations," it will have been well worth while.