HC Deb 30 June 1959 vol 608 cc425-34

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

12.25 a.m.

Dr. Donald Johnson (Carlisle)

I am glad to have the opportunity of this Adjournment debate to raise the case of my constituents, the dismissed former public house managers of the Carlisle State Management Scheme. The subject of this debate is essentially a human one and not an ideological one. None the less, I feel unable to raise the matter without being mindful of the fact that only five days ago I was sitting on these benches listening to the debate on the firm of S. G. Brown in which a substantial part of the issues involved were the respective merits of the position of employees as between nationalised and capitalist industries, and each side of the House had its point of view.

On this side we argued that employees of capitalist industry were better off and on the other side the argument was the reverse, in favour of nationalised industry. It is very cold comfort to me that in the circumstances of this debate I have to demonstrate that the fate and treatment of these men is conclusive proof of our contention from this side of the House and one might almost say a classic instance of how poorly employees can fare at the hands of nationalised industry.

My first duty is to state the basic facts of the case and to put them on record at the risk of telling my hon. Friend facts with which he is familiar. These managers were employees of the Carlisle State Management Scheme. They were employed on a contract basis, but none the less, they were civil servants and members of the Civil Service Union which has stood by them very staunchly indeed in the troubles I am about to recount.

The history of the case starts over a period of years during which the contention of the managers and their union is that undue pressure was brought to bear on them by the administration of the scheme that they should produce surplus profit over and above that profit of the normal wholesale-retail margin. It was as a result of this agitation and the pressure of the union and others— partly, I seem to remember, myself — that the Home Office set up an inquiry which was conducted by Mr. Cyril Burt Q.C., in 1957. We regarded it as unfortunate that that inquiry was held in private and not in public as was requested at the time. However, it was held and Mr. Burt reported in May, 1957. His Report was published by the Stationery Office as Command Paper 168.

His conclusions in this instance were that the case put forward by the union and the managers had not been proved. He concluded that no pressure such as was suggested had been brought to bear on the managers in regard to surplus profits. It should be stated that these conclusions were unacceptable to the managers and their union. I have been asked to state that before and after the publication of Mr. Burt's findings the Home Office has refused the opportunity to discuss with the union and with the managers any matter relating to this so-called surplus profit and, in particular, no indication was given to the managers what profit should be achieved by their respective houses. No figures of stocktaking results have been placed at their disposal.

We come to the next stage of the story, and in this we have clearly to differentiate two separate issues. Shortly after the Burt Report, police investigations started, and after eight months of the attention of Scotland Yard a number of managers were convicted of minor defalcations before the Carlisle magistrates' court. I wish to make it clear that this is an entirely separate group of managers from those we are discussing tonight. They are clearly differentiated from the men whose case I am bringing forward.

The group whose case I am bringing forward were almost simultaneously the subject of a separate disciplinary action by the Home Office. This was brought against seven of them, who are members of the Civil Service Union. As a consequence, five of them were dismissed and two were severely reprimanded.

It has apparently been made clear to the managers and their union that there is no question of alleged dishonesty in their case and that it is entirely a matter of alleged inefficiency. That was the reason for their dismissal. My hon. and learned Friend would help in the situation considerably if in his reply he would confirm that, in view of a number of misconceptions which seem to exist on this subject.

These seven managers whom we are discussing are all employees of long standing. They include the branch secretary, the branch treasurer, the assistant branch secretary and a national executive committee member of the local branch of the Civil Service Union.

The first charge put to them was that for a fifteen-month period during 1957–58 the results disclosed that the surpluses returned had fallen far below what could reasonably be expected, having regard to the nature of the trade and the surpluses returned by other public houses in the Carlisle district. At no time did the Home Office produce any evidence in respect of the results which were returned by other public houses in Carlisle so that the accuracy of that statement could be directly checked. I asked a Question on this subject in November, 1958, but unfortunately was not given a reply which in any respect was informative in this connection.

Later, following, I understand, pressure from the union, the charges were revised and the men were told how far short of a reasonable minimum their surpluses had fallen. There is a list, which is known to those of us who have been concerned with the case, which shows that they had to some extent fallen short of the 5 per cent. net surplus profit on the sale of beer which was expected. The figures vary from Mr. White, at The Friar's Tavern, who produced only 1.7 per cent. surplus, to Mr. Quinn, at the Cumberland Inn, who produced a surplus of 3 per cent., and Mr. Baxter, at the Inglewood Forest, who produced a surplus of 3.29 per cent. These were compared with the 5 per cent. surplus which they were apparently expected to produce. However, one has to make it quite clear that, unless my hon. and learned Friend can show to the contrary, that 5 per cent. is purely notional, and we are unable to get any figures from other public houses that would in any way substantiate it.

I maintain that in the action taken of dismissing this group of managers there was, despite what was said by Mr. Burt in his Report, undue pressure brought on managers of the scheme to produce surplus profits, and on that count the Burt inquiry has, in effect, been rendered null and void. A case exists for a public inquiry into the running of the scheme as a whole and, certainly, an inquiry into the circumstances of the dismissal of these men, so that we can have more facts than are at present available.

It is the view of those of us who put forward these men's case that such an inquiry would not only support these allegations of undue pressure, but would also indicate inevitably, in view of their long service, that there must have been some laxity in not allowing these questions to be brought out sooner or, alternatively, this having been left so long, that there must have been some animosity or ill-feeling towards the men that may have dictated this decision.

This is, above all, a human problem. These men are all over 50 years of age. They have given years of faithful service to the scheme. Mr. Quinn has given 27 years, and Mr. Baxter 24 years. If some measure of inefficiency—which we do not, of course, admit, failing production of further facts—had been detected, I understand that there is a procedure available under the Superannuation Act for premature retirement in honourable circumstances, with full pension rights and so on.

Instead of that, they have had the harsh treatment which I have detailed. They have been abruptly dismissed. They are left jobless, and without the appropriate character references needed to get another job. In the circumstances, they are unable to find other, similar jobs in Carlisle, because the State scheme is a monopoly there. Only this morning I received a letter from Mr. Quinn telling me that he has applied for numerous jobs but has been completely unable to find one.

Constitutionally, it seems that these men fall between two stools. They have not had the security of tenure of the civil servant but they have no had the benefit of being employees of private industry either. Perhaps the Home Office may have felt that this was contractual employment and that it could act as a private employer might act by dismissing an employee on contract. With that in mind, not being an employer of labour myself, I asked the printer who prints my books what would happen were he, as a private employer, to take similar action in respect of one of his men who had served him for 27 years and had been secretary of a union. His reply was to the effect that not only would such action bring all the men out in his works, but that he would run the risk—and I would mention that I raised this question with him six months ago—of bringing the entire printing industry out in the country.

It is fortunate that the union in question is not able to bring out the entire Civil Service on behalf of these men, and it is no part of their principles that they should do so. But we have this debate in which to put these men's case forward, and I hope that my hon. and learned Friend will be able to look at this matter, first as a human problem of fair play, and secondly in the light of the working of the scheme for the future as well as the position of the present managers who are working in the scheme under this shadow. There is great concern about these men not only in Carlisle but throughout the licensing trade in general, and in union circles. I hope my hon. and learned Friend will be able to give me some reassurance.

12.41 a.m.

The Joint Under-Secretary of State for the Home Department (Mr. David Renton)

I welcome this opportunity of putting into proper perspective the dismissal of the Carlisle public house managers. Since their dismissal last year the matter has been given a good deal of publicity and has been much distorted, but when the facts are looked at objectively I think hon. Members will feel, as anyone who has considered the matter feels, that it was manifestly in the public interest that these men should be dismissed from the service of the Crown.

There are 163 public houses and hotels in the Carlisle State management district. Each has its own manager. As my hon. Friend the Member for Carlisle (Dr. D. Johnson) has pointed out, ten of these were convicted of fraud and they were dismissed following their convictions. As a separate batch, there were eight other managers against whom disciplinary action was taken, which I will describe. Of them two were severely reprimanded and down-graded and six were dismissed. I think I should mention that it is only in the case of those two batches—the ten convicted of fraud and the eight against whom disciplinary action was taken—that there has had to be action taken, and that so far as the remainder of the 160 or so managers are concerned there has been, so far as I know, no complaint among them, and no complaint by authority, of their activity.

To deal first with the suggestion that there has been some injustice in the dismissal of the five people to whom my hon. Friend referred, these managers were, of course, civil servants. There is in the Civil Service a recognised disciplinary procedure which is agreed with the Staff Side, and, incidentally, the Staff Side includes the Civil Service Union which is the staff association representing these managers. That procedure ensures that in the case of a civil servant a decision to dismiss is not made unfairly or hastily or without due consideration of the civil servant's point of view.

Briefly the procedure is this. When a disciplinary charge is made against an officer he is given in advance a written statement defining the charge and setting out the particulars of the facts relied upon to support it. He has to submit a written reply to the charge, but where there is a conflict between the charge and the written reply, the civil servant may put his case orally before a suitable senior officer in his own department, other than his immediate superior. He may have the assistance of a friend or colleague who can be a representative of the association when putting his case orally.

This procedure was scrupulously complied with in the Carlisle case. Indeed, it was more than fully complied with, if I may put it in that way. It was thought appropriate in the circumstances to appoint a disciplinary board, which is a part of the procedure, to hear them. This board consisted of senior officers from London and not from the Carlisle management.

Moreover, as the Civil Service Union had suggested that these particular managers were being victimised by the Home Office, it was thought appropriate that two members of the board, including the chairman, should be chosen from outside the Home Office and that there should be only one Home Office member. Accordingly the members of the Board comprised the Controller-General of the Stationery Office, the Principal Establishment Officer of the Home Office and a senior official of the Customs and Excise Department. This, I would point out to my hon. Friend, goes beyond the normal practice. In addition, the Home Office agreed at once to the union's request that two of the union's headquarters officers, and not one as prescribed by normal procedure, should foe allowed to assist the managers in the presentation of their cases to the board.

Contrary to what my hon. Friend has suggested, and at the request of the union and the managers, a great deal of supplementary information about the trading returns of the public houses was supplied to the managers from confidential official records to help them with their defence.

The disciplinary board was charged with the task of hearing the managers' oral answers to the charges made against them and the charges were in all cases that, following repeated warnings of unsatisfactory trading returns, the managers had failed by a substantial amount and over a considerable period to produce for payment into Exchequer funds the money which could reasonably have been expected from the sales of liquor at the public houses which it was their duty to manage. Large sums of money were in involved and the losses to the Exchequer were many times more than those involved in the cases of the second batch of managers who were dismissed at about the same time.

The board sat in Carlisle for about three days and heard the explanation of the managers. The board also allowed the union representatives full scope for dealing not only with the indivdiual cases of the managers, but also with more general points which they wished to advance, and which my hon. Friend has mentioned this evening. In the course of the lengthy proceedings, all sorts of detailed points—for example, control arrangements and staff supervision—and indeed every conceivable reason for the losses, were exhaustively examined. At the conclusion of the proceedings, the union representatives went out of their way to thank the board for the fair hearing given to the managers and their representatives.

The decision to dismiss the managers was taken by my right hon. Friend the Secretary of State, personally, in the light of the board's report, which included a full record of the managers' replies and the points made on their behalf by the union representatives. This decision was taken after the fullest possible consideration of all these matters, and I would like here to stress the fact the proceedings before a disciplinary board are not in the nature of a trial or an inquiry. The purpose is simply to give an employee a full opportunity to explain his conduct to representatives of his employer. It follows that they are of a private character and it would be inappropriate and contrary to accepted practice to publish a report of them.

Although the Civil Service disciplinary procedure does not provide for any appeal against a decision to dismiss, the Home Secretary stated that he was prepared to consider any further written representations which the managers might wish to make. They made such representations, and the Home Secretary also considered further representations made on their behalf by the union and by my hon. Friend the Member for Carlisle. After very careful consideration of these further representations, the Home Secretary came to the conclusion that there was no ground for varying the original decision and he so informed the managers and the union.

There is no doubt in my right hon. Friend's mind that the charges against the managers were established up to the hilt and that in view of their serious nature and the heavy losses to the Exchequer for which these men were responsible, amounting to well over £1,000, dismissal with all its consequences was the only appropriate penalty. There has been ample confirmation of his decision from our experience since those dismissals. Each one of the public houses in question is now regularly producing results as good as, and mostly better than, the standard by which the dismissed managers were judged and of which they fell short. It would be a slander on the successors to those managers and on the many managers of the other public houses in the scheme who produce reasonable results to suggest that this improvement is due to short measure.

On that issue, having listened to my hon. Friend tonight, I must say that nothing has happened to invalidate the findings of Mr. Burt, Q.C., who held the inquiry of a more general nature before these disciplinary proceedings were taken.

My hon. Friend invited me to comment on his statement that no dishonesty was involved concerning the managers to whom he referred. It is true to say that they were dismissed for inefficiency and only the managers themselves can say how the bad results were arrived at.

It is right that I should add that my right hon. Friend is convinced that justice has been done. He is not prepared to reopen the cases of the managers, nor is he prepared to order any further inquiry, in public or in private.

In conclusion, I should, perhaps, say a word about some more specific points that were mentioned by my hon. Friend. I deal with the question of the surplus. The existence of a natural surplus on the sale of beer is well known generally throughout the trade, but whatever may or may not happen in privately-owned public houses, we know from experience in the Carlisle State management district that a natural surplus is an inevitable result of the sale of drink. It might almost be said to be one of the facts of life in the drink trade and it occurs without any resort to any practice which smacks of dishonest trading.

The existence of this natural surplus in the course of ordinary trading was referred to by Mr. Burt in his report. He also drew attention in that report to an admission by the Civil Service Union representative who gave evidence before him of the inevitability of this natural surplus.

As Mr. Burt found, there is no question of pressure being placed on managers to give short measure or to make undue profits. If, however, the trading returns of a public house fall consistently short of expectation, there is something wrong which calls for explanation. Explanation was called for in this case and it was not satisfactorily forthcoming.

Question put and agreed to.

Adjourned accordingly at six minutes to One o'clock.