HC Deb 18 December 1968 vol 775 cc1385-91
The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle)

With permission, Mr. Speaker, I should like to make a statement on building pay.

The National Joint Council for the Building Industry and the Civil Engineering Construction Conciliation Board reached agreements yesterday establishing new pay rates Id. less than those fixed in the agreements of 24th October and 22nd October.

When these agreements were reported to me I said that the Government would revoke the direction applying to the October agreements and withdraw the reference to the National Board for Prices and Incomes. This will be done by notice published in tomorrow's issue of the London Gazette.

The unions have said that they would like to meet me at an early date and I shall welcome the opportunity to discuss with them and also with the employers the measures needed to improve productivity and provide a sound basis for further progress in the industries.

I am glad that yesterday's decisions have paved the way for such talks and it is in that spirit that I welcome the decisions which I am happy to report to the House.

Mr. R. Carr

The principle that agreements once made should be honoured is of overriding importance. We therefore welcome the fact that the unions have kept the promise which they made to the right hon. Lady on 15th November, or whatever the date was, but is she aware that in our opinion, and, I think, the opinion of many others, the dilatory and deplorable way in which the Government have handled this affair over the last 12 months—not just over the last few weeks—has been a slap in the face for responsible trade union leadership and has been a serious setback to the development of responsible collective bargaining, and that we shall probably want to return to this issue in due course?

Will the right hon. Lady give the House two specific pieces of information? First, what steps will she be taking to discover whether, as a result of her intervention, the actual future earnings in the industry will really be at the rate of Id. an hour less than they would otherwise have been? Secondly, has the arrangement just come to in any way affected the agreement of the unions to give up the automatic cost of living sliding scale agreement?

Mrs. Castle

Hon. and right hon. Members opposite have two stock words: one is "dilatory" and the other is "highhanded". They alternate their use, whatever the result of an activity, to end with a condemnation of the Government. I have no apologies to make for the time we have spent all through this business in consulting and seeking to get the best possible results from the Prices and Incomes Board study of these industries.

I do not, of course, pretend to exercise surveillance over all building sites in the country, but if the right hon. Gentleman is trying to imply that the actions of the National Joint Council and the Conciliation Board are of no significance I say to him emphatically that that is not my view nor the view of responsible leaders on both sides of both industries.

The surrender of the cost-of-living bonus was, of course, part of the previous three-year agreement and is in no way affected.

Mr. Heffer

Does not my right hon. Friend agree that at no time did the building trade union leaders decide to go back on their word in relation to the Id. and that they put forward a constitutional amendment to the National Joint Council prior to the Order being imposed on them which did precisely that?

Based upon that fact, does my right hon. Friend agree that the Order was totally unnecessary and that the matter could have been settled by discussion, in view of the sensible attitude adopted by the building trade unions?

Will my right hon. Friend give a pledge that she will fully support the building trade unions in their desire that incentive bonus schemes should operate throughout the entire building industry and not merely to the 30 per cent., as they have done up to now?

Mrs. Castle

I think that my hon. Friend is well aware that the resolution that the unions passed about the acceptance of their undertaking was a conditional one. This is why it was necessary for me to give notice of the direction. I said all along that, if and when the unions fully implemented their undertaking, I should be only too happy to withdraw the direction. This is what I am now doing.

I want to pay tribute to the unions for honouring their agreement with me and say that I think that this enables us now to go forward with the constructive discussions which I know my hon. Friend and I are certainly anxious should take place. This is why I have readily expressed my agreement to meeting the unions as soon as possible, so that we can explore these possibilities in talks.

Mr. John Page

To make the position absolutely clear to both sides of the industry, will the right hon. Lady confirm that there is no time limit on this new 2d. and 2½d. agreement and that it is not supposed to last specifically for 12 months?

Mrs. Castle

The 2½d., as the interim settlement now approved, is for the period of 12 months; but I want to make it clear that, if the industries make more rapid progress than the National Board expected they would in the discussion of productivity agreements, the Government will be ready to consider the results of those discussions on their merits. We shall consider the facts and circumstances as they exist, without making any prejudgment about the nature and timing of any future settlements.

Mr. Arthur Lewis

In this and similar cases affecting lower-paid industrial workers, why is it that my right hon. Friend can and does take immediate action, whereas in the case of higher-paid executives and company directors who have increases of 10 to 20 per cent. on salaries of £5,000 to £50,000 a year in succeeding years she refuses to take any action? Details of such cases have been supplied to her on numerous occasions. Cannot she treat them all alike?

Mrs. Castle

My hon. Friend has raised this point before, and I have answered it. As I have pointed out to my hon. Friend on more than one occasion, we have referred top salaries to the Prices and Incomes Board and are expecting its report shortly.

Dr. Winstanley

I welcome the Secretary of State's statement. Does she agree that, if the Government were able to freeze prices effectively there would be little need to interfere with agreements freely reached between employers and employees? In these welcome consultations which are to take place will she concentrate not so much on how much people are paid as on the more vital matter of how much they earn?

Mrs. Castle

The hon. Gentleman is over-simplifying the position. As I have explained to the House before, during past months we have been more successful in holding prices down to the target that was fixed than in holding earnings down. Even if prices were frozen, there is no guarantee that it would not be necessary to intervene to secure that wage settlements were linked to productivity and were not purely inflationary.

Mr. Crawshaw

Is my right hon. Friend aware that I and other hon. Gentlemen admire her resolution in supporting the prices and incomes policy and will continue to support her whilst she continues to show such resolution? Is she also aware that this support would be much wider on this side of the House if she could show positively that salaries, dividends and profits are receiving the same treatment as wages?

Mrs. Castle

I am very grateful to my hon. Friend for that expression of support. It is my desire to ensure that the prices and incomes policy is applied with equity. The Treasury has answered in detail on the operation of the dividends side of the policy. This afternoon I have reiterated that, taking into account the inevitable consequences on prices of devaluation and the Budget, we have operated the prices side of the policy extremely successfully.

Mr. Biffen

Has not this whole conflict between the Secretary of State and the employers and the unions in the industry a very unwholesome air of unreality about it, to the extent that earnings in the industry are very largely determined outside nationally negotiated rates? This afternoon the right hon. Lady said that she could not possibly supervise all local sites, whereas on Friday afternoon she said that any genuinely costed productivity agreement … will have to be properly costed."—[OFFICIAL REPORT, 13th December, 1968; Vol. 775, c. 837.] How can the right hon. Lady reconcile her claim to omniscience on Friday with her suddenly shatering air of realism this afternoon?

Mrs. Castle

If this has been an unreal battle, why has it created so much fury on both sides of the House? I do not understand why the hon. Gentleman is getting so excited about something which he thinks is unreal. It is not unreal. The decisions that have been taken have profound significance and we are now going forward in talks with both sides of the industry to the working out of the sort of productivity deal to which the Prices and Incomes Board referred.

Mr. J. T. Price

Is my right hon. Friend aware that the important statement she has made this afternoon will be received with great relief and satisfaction in most parts of the House and that it is the best Christmas present the building trade workers and their advisers could have given the House and the nation? Is she also aware that it is a tribute to the tenacity which she and her advisers have shown, to the ultimate good sense of the trade union leadership, and, I hope, to the ultimate good sense of everybody who is affected by the matter?

Mrs. Castle

I am grateful to my hon. Friend. I know that the whole House will share my pleasure that we have reached such a constructive outcome. I lay emphasis on "constructive". It was not a question of anyone trying to triumph over anybody else. It has been a question of getting this issue out of the way so that we can now go forward with the discussion of the genuine productivity deals for which there is such a long overdue need in the industry.

Mr. Ridley

What steps does the Secretary of State intend to take to ensure that the Id. is not paid on individual sites in the guise of longer working hours or incentive bonus or higher piece-rate schemes over which she will have no control whatsoever?

Mrs. Castle

We know that the unions themselves have raised the issue of incentive bonus schemes. They raised it in their recent resolution, and they attach importance to it, as does the Prices and Incomes Board. Paragraph 191 of the Board's Report No. 92, on Pay and Conditions in the Building Industry, points Out the ways in which incentive bonus schemes in the industry could be made more realistic and be more genuinely related to productivity. This is the work On which we must now go forward; indeed, the unions and employers themselves are already going forward.

I am glad to tell the House that the building employers and the unions will be having a joint conference in January to discuss productivity and work study. No doubt incentive bonus scheme improvements will form part of their discussion.

Mr. Orme

Is my right hon. Friend aware that some of the euphoria which has been expressed in the House about this agreement might not be so readily encountered on the building sites this morning, where workers are having to take a 1d. an hour reduction after having freely negotiated a collective agreement, agreed by both the employers and the trade unions? Is it not time that this House got out of these negotiations and allowed the collective agreements to go ahead?

Mrs. Castle

First, they will not be getting a 1d. less this morning. The reduction of the Id. will operate from 30th December. I wish to correct my hon. Friend on that point of fact.

I do not agree for a moment that it is in the interest of workers in the building industry that the present chaotic wage systems should continue. Anyone who reads the Reports of the National Board for Prices and Incomes will realise that there are reforms here long overdue. I remain profoundly convinced that it is the operation of the prices and incomes policy which enables us to concentrate attention on these reforms, to the benefit of the workers, the industry and the nation.

Several Hon. Members


Mr. Speaker

Order. I must protect the business of the House.