HC Deb 11 December 1961 vol 651 cc178-86

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.8 p.m.

Mr. W. E. Padley (Ogmore)

There stands on the Order Paper a Motion, in my name and the names of 74 of my hon. Friends, strongly condemning the action of the Minister of Labour in postponing the operation of the Laundry Wages Council Order until the day after All-Fools Day, 1962. I appreciate that this action of the Minister of Labour is linked with the statement of the Chancellor of the Exchequer on 25th July and that it is part of the iniquitous pay pause which is being breached almost every day.

I regard this action of the Government as particularly wicked. The present weekly rates under the Laundry Wages Council are £7 7s. 10d. for an adult male and £5 7s. 6d. for an adult female. Yet, acting in accordance with the general policy of the Government, the Minister of Labour postponed for 4½ months the meagre increase of roughly 5s. a week to women employed in laundries.

Let us look at the history of this case. The last increase in wages under the Laundry Wages Council was in March, 1960. The meeting which recommended this meagre increase to the women employed in the laundries took place on 7th September last. Between March, 1960, and September, 1961, the Interim Index of Retail Prices rose from 110 to 115. That is a rise of 4.5 per cent.

The Wages Council by a majority vote, the independent members voting with the employers, taking note of a letter from the Minister of Labour conveying the content of the Chancellor's statement of 25th July, declined to recommend any increase on a male rate of £7 7s. 10d. which means that following the lead of the Chancellor and the Minister of Labour, the independent members decided that men on a minimum rate of that kind should suffer a reduction of nearly 5 per cent. in their pay.

But even the independent members who could do that decided that rate of £5 7s. 6d. for adult women employed in the laundries was so scandalous that, although they took note of the Minister's letter and of the Chancellor's statement, they recommended this meagre increase of 5s. 4½d. Yet the Minister of Labour, instead of signing the Order for immediate operation, postponed it until 2nd April, 1962.

I am not concerned only with what has happened between the last increase in March, 1960, and the present time. As everyone knows, laundries came within the scope of the old trade boards established to eradicate sweated labour. They are now under the Wages Council. The Wages Council was established by this House to cover those industries where, without some statutory regulation, reasonable minimum standards of life and leisure would not be achieved. Yet if one takes the period 1947 to 1961 we find that wages fixed under the Laundry Wages Council have lagged very much behind the general rise in wage rates.

In that period of fourteen years average wage rates have risen by 95.12 per cent. In laundries the male rate has increased by only 64.25 per cent. and the female rate by only 79.16 per cent. If one takes the figures for average earnings, the position is almost as bad. When one realises that longer hours are worked in laundries than in many industries, a comparison of hourly rates reveals an even worse position. At the time the Wages Council met, the latest official figures from the Ministry showed that laundries ranked 93rd in a list of 103 industries so far as wage rates are concerned.

Some will say that these are only minimum rates, that there are bonus schemes, that overtime is worked, and so on. But on the Ministry's own figures in October, 1960, 22 per cent. of the male workers in the industry received less than £10 a week and 45 per cent. of the women received less than £6 a week. It is those women who are being refused for 4½ months this meagre increase of 5s. 4½d. a week. That is one side of the picture.

Since the Chancellor pretends that this is a question of incomes and not a question of wages, let us look at some of the large laundry undertakings in Britain. If one takes Advance Laundries, Ltd. with a capital of more than £2 million, what does one find? One finds that profit after tax has risen from £206,000 in 1958 to £325,000 in 1960; dividends have been increased from 12 per cent. to 15 per cent., and the Financial Times of 15th May, reported the chairman as predicting that dividends in 1961 will be even higher. I could go on quoting many of the facts about the big laundries of this country. There is Laundry Services, Limited, a concern with a capital of nearly £¾ million, whose profit between 1958 and 1960, after tax, rose from £96,000 to £144,000, while the dividend increased from 17½ per cent. to 21 per cent.

I will not weary the House by quoting further figures. The truth is that, because of mechanisation and new methods, productivity in this industry has risen remarkably; but these miserable rates of pay continue to be given. This class of worker is singled out for a particularly mean application of the pay pause policy. Does the Chancellor, or the Government as a whole, really believe that an adult male wage of £7 7s. 10d. or a female adult wage of £5 12s. 10½d. is the cause of inflation in Great Britain? Does the Chancellor believe that the use of the Draconic power of the Minister of Labour to sign or not to sign the Order for an increase in these miserable, meagre rates, will make any contribution, one way or the other, to Britain's balance of payments problem? If so, the Government will stand convicted of economic lunacy and moral turpitude.

11.17 p.m.

Mr. Edward J. Milne (Blyth)

I should like to add a few remarks about this Laundry Wages Council Order because, in reply to Questions put by my hon. Friend the Member for Ogmore (Mr. Padley) and myself last week, we were told of a few reasons why the Minister thought it was necessary for him to take the action that has taken. The right hon. Gentleman said that while the duty of the Wages Council was to come to a decision on wages, it was his duty to determine the operative date. Nobody argues on that point. The argument and criticism directed at the Minister is made because he believes that the date, 2nd April, 1962, which is so far in advance of the actual fixing of new wage rates for female employees only, at this particular time, is right. The Minister also said that the question of holding back wages because of the pay pause had been laid down by the Chancellor; but that, in this case, is really attacking the wages of the lower paid workers.

Furthermore, I should like to hear, in the reply which we are to have tonight, just how these circumstances can be related. When the last wage increase, under a Wages Council Order, was granted in 1960, I was an official of my union in Scotland. I do not want to weary the House with a lot of figures, but we had put forward then the same type of arguments against any increase. There were the same arguments from the Government and the employers, but the time between the granting of the increase and the signing of the Order was considerably less than in the present case. I expect that tonight we shall be told that the Chancellor has laid down the principles of a pay pause. If so, all right, but if there is to be a pay pause, then let it be uniform in character.

The Government have stood aside on a number of occasions and watched breaches in the pay pause wall being made in both public and private industry. The laundry industry, as my hon. Friend has demonstrated, can well afford to pay the present rates; in fact, it is only ten places away from the worst-paid industry in the scales drawn up by the Ministry.

There is nothing more deplorable in the actions of the Government in the weeks that have passed since the pay pause policy was pronounced than their action in dealing with lower paid workers in this fashion after negotiations, after the independents and trade union side had decided, against the employers side, that there should be an increase. It is deplorable for the Minister to use a sledge hammer in this way and to hold back until 2nd April next year increases which ought rightly to have been paid by now.

11.21 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. Alan Green)

The hon. Members for Ogmore (Mr. Padley) and Blyth (Mr. Milne) have spoken with knowledge of this matter, and I think that in the circumstances they have spoken with some restraint.

In view of what has been said, I must, for the sake of the record at least, make it clear that rates of pay and hours of work in industries covered by Wages Council Orders are neither proposed nor determined by the Government. The Councils consist of representatives of employers and workers and of independent members. Previous Ministers of Labour have on occasion felt it right to draw the attention of Wages Councils to the general economic circumstances of the day, and I am sure that nobody would suggest that that is an improper action on the part of any Minister.

The proceedings of the Councils are, of course, confidential and are not disclosed to my right hon. Friend unless a Council itself expressly wishes to do so. Nonetheless, I have no doubt that the Council in this case carefully considered all relevant factors, including the Chancellor's statement of 25th July.

When a Wages Council wishes to fix new minimum rates, it submits proposals to my right hon. Friend. He has no power to add to or to subtract from those proposals. We must be clear about this. He can refer the proposals hack for reconsideration, and this has been done under both Labour and Conservative Administrations. If no reference back is made, the Minister has no alternative but to make an Order implementing the minimum rates proposed by the Council.

The Minister has only one responsibility in respect of the content of a Wages Council Order. He has to decide the operative date. He has no responsibility whatever for the actual content of an Order in terms of rates or hours. We must be clear about this, because the accusation which was made was twofold: first, that the rates themselves were far too low, and, second, that being too low, it was doubly bad to defer the operative date of the Order. I hope that I have made it quite clear that my right hon. Friend has no direct responsibility other than for the date. Therefore, we are back to the date.

Perhaps I might first make one comment on the content—the wage rates and the hours of work. They are, of course, minimum rates, as the hon. Members for Ogmore and Blyth pointed out. Average earnings in this industry for men in April this year were £5 a week above the minimum and average earnings for women £1 a week above the minimum. It is perfectly reasonable to argue that these average earnings, let alone the minimum rates, are, in fact, too low, but it is not an argument really that can be applied directly to my right hon. Friend, because I have shown that he has no direct responsibility for what these rates are.

We are therefore back to the date. It was asked—I wrote the question down—is this single act to solve the whole economic problem? I think those were the terms in which the hon. Member for Ogmore put it to me. Of course, no single act will solve a complex economic problem. One cannot argue in that sense from the particular to the general and no Government would do so. All income increases are relevant to Government policy whichever Government it is. I am sure that no one would deny that, least of all those who claim to believe in a planned economy. These increases are relevant both in the amount of the increase and in the operative date.

Having shown, as I hope that I have shown, that my right hon. Friend's responsibility is limited to the date, I must now seek to show that the action he took—distasteful to him as to any other member of the Government—was in fact done with the interests of the whole economy in mind. Included in those interests are the interests of everybody in this country. He has acted within the limits of his powers, which are related only to the date, with the purpose of helping to check the course of increases generally. If those increases had continued at the rate at which they were going in the first half of this year, they would have been bound to lead to inflation and serious damage to the economy.

I think we can perhaps all agree, whatever else we may disagree on, that, if inflation persists, those who will lose most by it are those who most need protection from it. This means particularly those who have the smallest incomes, either fixed from savings or the smallest by earnings. Those who have the smallest incomes from earnings are generally those covered by Wages Councils. In seeking to extend a general protection against inflation, my right hon. Friend and his right hon. Friends must have these lowest paid workers particularly in mind.

Of course, if one argues from the particular to the general, I and everyone else must have great sympathy with what both hon. Members have said. If Governments simply argued from the particular to the general there would be no course of action they could take in the effort to halt inflation. So they are forced to do what at the moment in particular instances may be distasteful to them, but it is done on the grounds of true general interest including the interests of those directly affected by Orders such as this.

Hon. Members opposite are quite entitled to say that if they had power they would pursue this objective by totally different means. They are quite entitled to say that, but I think they accept that the objective is to stop inflation. There is no doubt that many of us have different ideas about the method of achieving the objective. This is a matter of opinion and judgment. I should be a little surprised, however, if those who say that they disapprove of the consequences of inflation should condemn the action by my right hon. Friend to do what he can within his necessarily limited powers to help to check it. The answer will no doubt again come back. "But not in this case", and the argument will, again, be made from the particular to the general.

The Government have to act in general. They must act within the powers which they have. No action could be taken, and I do not believe that it would be right to take it, on the ground of the size of the increase recommended. It is a small increase and the rates are still pretty small. If they were not small this industry would not need to be covered by a Wages Council. What is in question is not the rate. That is not the direct responsibility of my right hon. Friend. What is in question is the timing of the Order. The Minister has put this timing on the Order because this is one of the few direct areas in which the Government can help to slow down inflation, which has particularly undesirable effects on those with small incomes. He has done this not because he wants to do it in this particular case but because he believes that in the general case—which is the only way he can tackle it—this is a protective thing to do for all, including those with small earnings.

Mr. Charles A. Howell (Birmingham, Perry Barr)

Does not the Minister agree that in the main the date of the application of an award is based on the submission of the trade union that it should be applied from the date of the application for an increase and the submission of the employers' side of the Wages Council invariably saying that the date should be the date of the agreement? Where does the Minister come into deciding the date? Can the Minister quote any instances before the pay pause in which a Minister has post-dated the application of the award so far into the future? What must we tell these people who are receiving less than seven guineas a week when the Minister does nothing about profits?

Mr. Green

The first point may be less valid than the hon. Member thinks. Other Ministers of Labour, including one in a Labour Government, have referred proposals back to the Council.

Mr. Howell

But they were sent back again by the Council.

Mr. Green

That is one way of achieving delay. Any reference back must produce delay, and such a course was open to my right hon. Friend. But he took the view that it was better to put a date to the Order. This is a matter of judgment, but I make the point that a reference back is inserting delay and that that has been done before. In this case my right hon. Friend chose a specific period of delay. One could choose either a reference back or a specific later date and argue that one was better than the other, but it is not right to say that delays have not been introduced before.

I was asked how this could be done in view of the figures of profits which were given.

Mr. Howell

I asked what we can tell these people with such low incomes when they are sacrified to help the country's economy without anything being done to freeze these increased profits.

Mr. Green

I have no doubt that just as one can find certain workers in the laundry industry who are getting substantially more than the average rates—this is always the case with average rates—so one can find certain laundry companies which are making good profits. The two generally go together. But I can only assure the hon. Member that profits have in general shown a downward trend this year. The difficulty about proving any such matter is that companies tend to return the figures of their profits a year afterwards, and in nearly every case the profit figures one gets this year are in fact the profits made last year—which was a period of incipient inflation which my right hon. and learned Friend hopes he is now helping to check.

I repeat what I have already said—that, when the individual person knows himself or herself to be particularly affected, it is difficult for him or her to accept the general argument. It is exceedingly difficult and distasteful for the Minister to have to take this action. But, if this is not done, all hope of having any kind of general Government policy is destroyed, because every individual or section of the people, by himself or by themselves, can always put forward a very good particular case—not merely the workers in the laundries but the workers in almost any sphere of activity.

Every particular case can always be brought against the general argument, and the only argument the Government can make back—and the only one, I believe, that hon. Members opposite would make if they were in power—is the general case, that they are exercising their judgment in what they believe to be the general interest of the country.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes to Twelve o'clock.