Bonus Schemes (Hansard, 20 February 1967)

§ 34. Mr. Spriggs
asked the Minister of Labour if he will take steps to publicise to employers the fact that production bonus schemes are not affected by the standstill and that any such bonuses earned may be honoured.

§ Mr. Gunter
Increases in pay resulting directly from increased output under a scheme established before 20th July, 1966, are not subject to the standstill. A productivity scheme providing for increased pay established after 20th July, 1966 must satisfy the criteria relating to productivity and efficiency for the period of severe restraint. This follows from the White Papers on the Standstill and Period of Severe Restraint, and is well understood by employers' organisations and trade unions. Employers may obtain advice on the application of the incomes policy from any local or regional office of my Department or from my headquarters.

§ Mr. Spriggs
What action does my right hon. Friend propose to take against employers who break such agreements?

§ Mr. Gunter
I have no information at the moment about employers who have broken such agreements.

§ Mr. Ridley
Would the Minister confirm that no one may pay a productivity increase during this period unless he has obtained the consent of his Ministry, which is rather different from what he said in his original Answer?

§ Mr. Gunter
That is true. We are now dealing with 284 of these productivity agreements. As the hon. Gentleman will be aware, our biggest problem with productivity agreements, not only since 20th July but before, has been that they were not productivity agreements at all but disguised wage increases. That is why we are giving the most careful attention to each productivity agreement, for we wish to ensure that productivity and efficiency are there.

§ 44. Mr. Christopher Price
asked the Minister of Labour if he will now allow established schemes for payment of skilled tradesmen's grading bonuses to operate during the period of severe restraint.

§ Mr. Gunter
It would not be in accordance with the criteria for pay increases during that period that discretionary payments should be increased.

§ Mr. Price
Is my right hon. Friend aware that most of these discretionary bonus schemes are in the wage sector rather than the salary sector and the effect of banning these schemes which are exactly analogous to ordinary salary increments in the salary sector is to discriminate against wage earners as compared with salary earners? Will he look at the matter in this light?

§ Mr. Gunter
I have looked very carefully into the matter, which is of great importance in the metal industries. The difficulty, as my hon. Friend has said, is that because of the nature of the wage structure here there is an element of discretionary increase. It was decided that, during the standstill and period of severe restraint, if we permitted discretionary increases that might lead to widespread evasion, quite apart from the effect that it would have had on workers who had had agreed increases which were to be deferred. The general question of merit increases and discretionary payments is being considered in the development of the incomes policy following the period of severe restraint.