ROYAL COMMISSION ON TRADE UNIONS AND EMPLOYERS' ASSOCIATIONS (REPORT)

HC Deb 16 July 1968 vol 768 cc1260-383

Mr. Speaker

Before I call the right hon. Member for Mitcham (Mr. R. Carr), may I remind the House that so far over two dozen hon. Members wish to speak in today's debate. Reasonably brief speeches will enable me to call more speakers.

3.48 p.m.

Mr. Robert Carr (Mitcham)

I beg to move, That this House takes note of the Report of the Royal Commission on Trade Unions and Employers' Associations 1965-1968 (Command Paper No. 3623). Before I embark on my speech on the Motion, I am sure that the whole House would wish to show that it was delighted to hear the hon. Member for Stoke-on-Trent, South (Mr. Ashley) actively participating in our affairs again. [HON. MEMBERS: "Hear, hear."] What he said is something we should bear in mind in this debate. The hon. Member drew our attention to the fact that far from being ahead of the world in our wealth and ability to provide resources to help people who need it, there are uncomfortable signs—I am not making a particular party point here, I assure the House—that over a considerable number of years we have been falling behind other countries in our ability to do this. The system of industrial relations which we are talking about today, although, of course, not the only factor, is one of the main factors in our ability as a country to produce the maximum amount of wealth to use in this and other ways.

I would like, first, to put on record our thanks to Lord Donovan, to the members of his Commission, and to the Commission's staff. I regret that I must also put it on record straight away that, in the Opposition's view, the Commission's recommendations are in toto seriously inadequate to the scale and urgency of the problem.

Nevertheless, although we feel strongly that the Report falls short of what is needed, we agree with the essence of the Report's diagnosis of the problem. We welcome strongly the emphasis which it puts on collective bargaining and the need to develop it at company and factory level. We also welcome a number of its principal recommendations, which are very much in line with some of the main proposals in the Conservative policy document, "Fair Deal at Work". Moreover, whatever one's judgment may be about the value of the Report's recommendations in whole or in part, the Report is undeniably a most substantial work on this difficult and complex subject and provides what will be an invaluable basis on which to frame future policy.

I am sure that it is right that we should debate the Report in this early and preliminary way. Because it is a preliminary debate, the Opposition have deliberately chosen a neutral Motion—to take note of the Report—rather than one requiring any Division to express any particular verdict at this stage in our consideration.

Although we do not expect the Secretary of State today to commit the Government to any final conclusions about the exact nature of the action which they will take, we do expect her— I make this clear at the very beginning —to commit the Government unequivocally to the proposition that urgent action is required. The present state of industrial relations in Britain as disclosed by the facts presented in this Report cannot be allowed to continue unchecked. There has been a standstill for over three years while we have waited for this Report. Now we have got it, the decks are cleared, and the Government must get on with the job.

I therefore put three specific questions to the Secretary of State. Will she undertake to publish a White Paper giving the Government's conclusions and plan of action? Will she submit that White Paper to the House for further debate and approval before drafting legislation? Will she announce target dates for the publication of the White Paper and the introduction of the necessary following legislation? We suggest the end of November for the White Paper and February for the legislation as being the latest dates which the national interest will reasonably allow while, at the same time, providing the Government with a reasonable period for the full consultation and consideration which are necessary.

In pressing the right hon. Lady for speedy action, may I remind her that it is now nearly four years since the Prime Minister told the T.U.C. that he saw no need for a Royal Commission, which would take minutes and waste years, and that the practical problems could not wait for years.

Why is there this urgent need for radical action to reform our industrial relations? In many respects, Britain led the way, and still does, in the development of trade unionism and industrial relations. In terms of working days lost directly through strikes, Britain's record will stand up reasonably well to international comparison. As the Report says, judged by this measure our record has been about average compared with that of other countries.

Why, then, all the fuss? The answer as to why all the fuss is to be found in Chapters III and VII of the Report, which give a pungent analysis of the nature and effects of the strikes and other forms of industrial pressure from which industry suffers. As the Report says in paragraph 410, the tally of working days lost is a "seriously misleading" basis on which to assess the economic effect of the stoppages. For one thing, as the Report further says, days lost at other establishments because of the indirect effects of the stoppage are not included in the statistics, though they may, nevertheless, be substantial.

More important even than that is the fact that the peculiar nature of industrial disputes is particularly damaging to the economy. The Report points out that 95 per cent. of all strikes are unofficial, in the sense that they are not authorised by unions and almost invariably are also unconstitutional, in the sense that they are in breach of agreement. Paragraph 414 says: it is characteristic of unofficial action that it is unpredictable. I want the House to dwell on the word "unpredictable", because predictability is an increasingly important factor in modern technological industry, and the curse of unpredictability which afflicts important sectors of industry is a handicap from which other industrial countries do not in general suffer.

Mr. Stanley Orme (Salford, West)

The point about 95 per cent. of strikes being unofficial is very important, because it is repeated many times in the Report. I and many people I know contest the accuracy of this figure, because many disputes are made official at a later date or, if not made official, dispute benefit is paid. This is a misleading aspect of the Report.

Mr. Carr

The hon. Gentleman will no doubt develop that point, Mr. Speaker, if he succeeds in catching your eye. I think that the House would be foolish not to accept the impartiality of the Donovan Report and the depth of its analysis and to make the most of the facts as they can be obtained.

I was saying that this unpredictability is a curse from which, on the whole, other major industrial countries do not suffer. They have strikes; some, perhaps, even have more strikes, but normally strikes in other countries occur only when fixed-term agreements have expired and there is tough bargaining over negotiating new ones. Very rarely do strikes occur in other countries without warning or in breach of agreement.

Moreover, as the Donovan Commission brings out, whatever may be the absolute figures which the hon. Gentleman contests, the position in Britain is getting worse. Although the number of official strikes remains small and static, the number of the unpredictable and unofficial strikes is on a strong rising trend. The Report shows that in industries other than mining the number of such strikes has risen from 572 in 1956 to 1,384 in 1966 and to the provisional figure of 1,694 in 1967. Moreover, the Report expresses the opinion that the incidence of such strikes is a good deal higher than the official statistics suggest.

On top of this, so many sections of modern industry are interdependent nowadays that a few men stopping work in one place can throw out thousands more elsewhere in a very short time, thus making the curse of unpredictability— and it is a curse—all the greater and more widespread in its damage to our economy. The Report says, in paragraph 415: … the prevalence of unofficial strikes, and their tendency (outside coalmining) to increase, have such serious economic implications that measures to deal with them are urgently necessary. Surely if we can agree about nothing else we can agree that measures to deal with them are urgently necessary. The question is: what measures and with how much urgency? This, in our opinion, is where the Report falls down. This fatal weakness is apparent within the text of the Report itself. People speak of the Donovan Report as if it were a unanimous or cohesive whole, whereas it is nothing of the sort. No fewer than half of the Commission's members, including its chairman, felt it necessary to add supplementary notes or reservations at the end, some of them of a fundamental nature. Moreover, throughout the main Report, far from being unanimous, there are frequent notes of dissent from various members on major issues.

Nearly all these points of dissent centre round a common point of concern, namely, that the measures being recommended by the majority lack the urgency and effectiveness which the Commission unanimously agrees to be necessary in its diagnosis of the disease. I regret that, presumably through a lack of time and resources, this justified concern by so many members of the Commission has not been worked up into a single and powerful minority report.

The important supplementary note by Lord Tangley and the even more fundamental note of reservation by Mr. Andrew Shonfield showed what could and should have been achieved, particularly if the Commission had included at least one member with real down-to-earth experience of collective bargaining in manufacturing industry at home and abroad.

The upshot is that the main Report, as Mr. Shonfield says at the beginning of his note of reservation, barely concerns itself with the long-term problem of accommodating bodies with the kind of concentrated power which is possessed by trade unions to the changing future needs of an advanced industrial society. Because the Report has fudged this long-term issue of principle, the Commission has fudged and inevitably remained divided on the immediate practical measures required to cure the British disease of unofficial, unconstitutional strikes.

This is why we see throughout the Report a substantial minority of the members repeatedly jibbing at what they feel instinctively to be the inadequacy of the remedies proposed. Thus it is that we arrive at the point where the main instrument of change, the urgent change, proposed by the Report is the Industrial Relations Commission unsupported by any formal powers. This simply does not add up to a credible remedy either in its scope or in its sense of urgency for the critical position which the Commission itself unanimously and so sharply defined. This is admitted, in effect, by almost half the members of the Commission in their various notes of dissent and reservation, and it is clear from his addendum that the chairman himself is far from happy.

What, then, should the remedy be? Is it to give the proposed Industrial Relations Commission some real power in one or more of the forms proposed by the dissenting members? This idea should be carefully studied, but my initial reaction is to doubt that it is the proper answer. There is an important rôle to be played by inquiry, education and persuasion, but that process, in our view, is better kept apart from compulsory powers. Just as we oppose giving the Prices and Incomes Board statutory powers to impose its will in individual cases, so we believe that it would be wrong in principle to give statutory interventionist powers to a closely comparable body such as the proposed commission.

In the Conservative policy document, "Fair Deal at Work", we propose to reconstitute the present Prices and Incomes Board as what we call a new Productivity Board. We cannot help noting that some of the functions which we propose for our Productivity Board are similar to and overlap some of those suggested by the Donovan Report for its Industrial Relations Commission, and we wonder, therefore, whether the best hope might be to have a single Productivity Board with somewhat wider functions than we have so far proposed in our document but without statutory powers to enforce its detailed decisions.

This could be very helpful to the progress and improvement of our industrial relations, but, while such a concept may have an important rôle to play in assisting the change which has to be brought about, we believe that it is only a subsidiary rôle. We are convinced that it is not enough on its own and that the fundamental remedy has to be found by bringing industrial relations within a comprehensive framework of civil law, as in other major industrial countries of the free world.

At this point, and without going into detail, I stress that what we are talking about is civil law as opposed to criminal law. So much of the discussion and controversy on this point is bedevilled by that misunderstanding. We are speaking of the civil law, not the criminal law. With that important emphasis, I turn now to some of the arguments which surround this radical and, I realise, controversial proposal in the British context.

First, as I have said, we ought to recognise that what we propose is now the practice in other major industrial countries in the free world. We should note that, under that system, other countries do not suffer from the British disease of unofficial, unconstitutional disputes which the Donovan Report has unanimously identified as the main and growing disease in our industrial relations in Britain which has to be cured as a matter of urgency. It does not happen in those other countries. We should note also that in these other countries the trade unions do not suffer detailed State intervention in collective bargaining such as we now have in increasing intensity under the statutory incomes policy. We should note further that in these other countries real earnings, standards of living and national wealth have been rising significantly faster than they have in Britain.

It is feared, and sincerely feared, I know, by many trade unionists both within and outside the House that such a framework of law as we propose would weaken the trade unions. Even if they accept, as I hope they do, that it would not be our intention to weaken them, they still, I think, genuinely fear that such would be the effect. I ask hon. Members and others who have that fear to look abroad. Experience in practice in other countries shows that, on the contrary, it strengthens responsible constitutional trade union authority.

The majority of trade union leaders in other countries will confirm that that has been their experience, even though, as, for example, in Sweden and the United States, they feared and fought bitterly against the introduction of the legislation in the first place. They may even now wish to see it changed on points of detail, but in principle they accept and support the system because they have found, in practice, that it has enabled them to win better pay and conditions for their members than they would otherwise have been able to do.

Too many people, in discussing this subject, speak as though there were two sharply opposed alternative policies, one the voluntary system, typical of Britain, the other a foreign legalistic system enforced by penal sanctions. But that is fallacious nonsense. Does anyone suggest, for instance, that trade unions in Canada and the United States are not independent bodies conducting voluntary collective bargaining with a great deal of power?

I stress, therefore, that our proposals for a comprehensive framework of civil law do not touch the voluntary nature of collective bargaining. What touches the voluntary nature of collective bargaining, and on an increasing scale, is the Government's statutory incomes policy. The truth is that the so-called voluntary system has always operated under the influence of law, and this law has had a profound effect on the way in which trade unions here have developed and the way in which industrial relations have been conducted. It is simply not true that ours is a voluntary system uninfluenced by law. It is a child of law.

The trouble with our present body of trade union law is that much of it is antiquated and geared to the conditions of the 19th rather than the 20th century, and that it has grown, like Topsy, without any coherent policy or purpose, with the result that, in many ways, it is incomplete and riddled with anomalies.

I stress and underline three times that the main responsibility for progress in these matters must rest just as much in the future as in the past on responsible voluntary action within industry, on management and on trade unions alike, with, we believe, the chief onus for initiative on management. But our point is that bad law can hinder responsible voluntary action and good law can help it. We want to replace the present hotchpotch of law with a single body of law with a coherent purpose, relevant to modern industrial conditions and to the present power and status of trade unions in the second half of the 20th century. We also want, once this system of law is established, that it should be reviewed and brought up to date at regular intervals, just as we do with company law.

We also want to supplement the body of actual law by attaching to it a code of industrial relations practice to emphasise the authority we give to that code. We believe that, provided the code of practice is clear and constructive, it will do much to raise the below average standards and bring the average nearer the best. While not directly enforceable, its provisions would be taken into account by the industrial courts, by arbitrators, by ad hoc boards of inquiry and by the Productivity Board and Government Departments.

I hope that, in considering our proposals, the House will not overlook the importance of the code of industrial relations practice, to which much further thought on detail has yet to be given, which we would propose to attach as a schedule to our industrial relations Act.

The more we have studied tills subject, with the help of people extremely experienced in these matters, the more we have become convinced that the sort of system about which I have been talking would provide a powerful new help and incentive to responsible voluntary action, just as it has done in other countries. We cannot go on resisting change on the ground that in some mysterious way we are so different from everybody else, that remedies which work elsewhere can never be considered here, and that our traditional custom and practice is sacrosanct, no matter how imperfectly or otherwise it has come to work in modern conditions.

I am not suggesting that we can or should import into Britain a complete package of the exact measures used elsewhere. All I am suggesting is that we must be prepared to discard our insularity and be prepared to look and to learn from other countries' experience.

Mr. Eric Moonman (Billericay)

The right hon. Gentleman has mentioned the need to bring the trade unions within the law and has talked about the experience of the United States and other countries. We on this side have a right to demand from the right hon. Gentleman an explanation of what he means by bringing the trade unions within the law. The right hon. Gentleman has said that he is not interested in details. We, and a lot of other people, are. The right hon. Gentleman must not get away with this one.

Mr. Carr

The hon. Gentleman is getting very excited. I thought today we were principally discussing the Donovan Report.

Mr. Moonman

Quite.

Mr. Carr

Because we believe this matter to be so important, because we think it requires fundamental thought and discussion, and because we realise that it is controversial, at the beginning of April we published "Fair Deal at Work", which sets out in remarkably specific detail what we propose. Our proposals are there to be judged. We are prepared for anyone to take the trouble to study those proposals and to judge them in detail. This is on record.

But the problems of human relations in industry cannot, and never will, be solved by constantly taking trade unions—still less thousands of individual strikers—to court. To suggest that this is inherent in our proposals is to misconceive the main purpose of civil law. Remember again that it is civil, not criminal, law that we are talking about.—[Interruption.] It is entirely different. We will go into that in more detail on another occasion.

Certainly, the possibility of civil action for damages is there in the background and may occasionally have to be taken. The law would be meaningless if that was not a possibility. But experience in other countries shows that it is very much the exception and not the rule for such cases to be brought to court. I think it worth noting that the majority of cases which are brought to court are usually brought by unions and employees against employers, not the other way round. There is no reason to imagine that experience would be any different in Britain. The most important purpose of a system of civil law is its influence on the way individuals and organisations approach their responsibilities and do business together. Its main purpose is not to punish breaches of agreement after they have occurred, but to deter their occurrence. We are proposing preventive medicine, and individuals and organisations, on the whole, like to respect the law if they know clearly enough what it is.

Likewise, we are convinced that it is a fallacy to suggest, as some do, that the establishment of a comprehensive framework of law would have the effect of freezing the status quo when the prime need in Britain is to promote change. On the contrary, the effect of law is to influence behaviour and to promote change.

Take the case of the recent breathalyser law, in which I am sure the right hon. Lady will be interested. Would the right hon. Lady, of all people, suggest that this has maintained the status quo, or that its chief purpose has been to punish? Surely the right hon. Lady would agree that the breathalyser law has had a powerful effect in deterring irresponsible behaviour and changing people's habits.

Or, again, take the Donovan Commission's own arguments which lead it to recommend a statutory right of appeal against unjust dismissal. Paragraph 539 says: … legislation has the advantage of making possible an immediate raising of standards". Paragraph 540 says: … statutory machinery … will … reinforce the effect of our other recommendations … and will, therefore, assist the growth of collective bargaining on sound lines. Of course, those arguments are right. But if these arguments are right in relation to raising standards and promoting collective bargaining in this one field of dismissal procedures, do not the same arguments apply with equal force over a much wider field? I am sure that they do.

The truth is that the Donovan Report's arguments about the rôle of law are both unconvincing and inconsistent. Moreover, it admits that the law may become necessary and, most extraordinary of all, it suggests that a system of law might be introduced once all the desirable changes have been produced without it. This is like the right hon. Lady, when Minister of Transport, saying that she would introduce the breathalyser law when all drivers had been persuaded to give up drinking.

Central to all this discussion about the rôle of law is the status of collective agreements. Surely in a situation where, according to the Commission's own diagnosis, the dangerous and growing disease from which we are suffering is strikes in breach of agreement, one of our chief objectives must be to make collective agreements binding on all parties. Yet the Report devotes a whole chapter to discussing and dismissing this proposition, although in another chapter it recommends the repeal of Section 4 of the 1871 Act which has always been believed to be the greatest obstacle to enforcing collective agreements.

Mr. Orme

We believe so, too.

Mr. Carr

The Report, in paragraph 471, states that the … intention and policy that collective bargaining and collective agreements should remain outside the law is one of the characteristic features of our industrial relations … It is deeply rooted in its structure. Those are pregnant words. Perhaps, in view of the unique nature of the trouble from which we suffer in this country, it is about time that this particular feature was uprooted.

The Donovan Report also suggests that it would be wrong to try to make the existing type of agreement binding and that in any case the typical British collective agreement is too loosely worded for this to be possible. But nobody—certainly not the Conservative Party—is proposing any such thing. We do not propose forcing employers and trade unions against their will to make legally binding agreements. What we do say is that we should deliberately create the assumption that a collective agreement should be binding, except to the extent that the parties freely agree otherwise.

This would put the concept of the binding agreement right in the centre of the bargaining table. We are sure that it would be a powerful incentive—not least to employers—to think more closely about what really ought to go into a collective agreement and about communicating its terms and obligations to those whom the agreement affects.

That would lead directly, in our opinion, to the development of the more precise and written type of agreement which the Commission says should be one of the important objectives if we are to cure our troubles. It would also put more bargaining power into the hands of union leaders. As Mr. Andrew Shonfield says in paragraph 40 of his note of reservation: The probability is that those unions which are able to promise reliably to perform their part of a collective agreement will obtain better bargains from employers for their members … ". In other words, the acceptance of the commitment has a real value in the form of hard cash in the pay packet.

To sum up. I have concentrated on the main arguments regarding the basic type of reform needed. The time for dealing with detailed proposals within the main structure will come at the next stage of our debate. We agree with the Donovan Commission in its diagnosis of the British disease in industrial relations. We believe that it is right. We agree with the Commission that it is urgent that action should be taken to remedy this disease. We agree that this action should concentrate on the development of constructive collective bargaining, particularly at plant and company level.

We cannot agree, however, that the sum total of the Commission's recommendations is anything like adequate to achieve the objective which the Commission itself says is so urgent. We are more than ever convinced that our problems cannot and will not be cured sufficiently quickly by detailed intervention on a case by case basis, least of all when that intervention has no power behind it.

We believe that the proper and essential starting point for reform is to provide a general pressure and incentive by means of a comprehensive industrial relations Act, coupled with the code of practice of which I have spoken. We have set out the broad contents of such an Act in our policy document "Fair Deal at Work", and, while we would certainly wish, in the light of discussions, to make additions or amendments on points of detail, we see no reason at all to withdraw in any way from its main purpose and method.

We look around the world and see that Britain today is unique in three things: first, it is unique in having the overwhelming majority of its strikes in unofficial, unconstitutional and unpredictable form; secondly, it is unique among major industrial nations in having intensified State intervention in details of collective bargaining; thirdly, it is unique in not having already a comprehensive system of law such as we propose. We do not say that giving Britain that system is the only thing that needs to be done— far from it. But we do say that, until we have such a system, we shall not be creating the essential conditions and the essential change of climate without which we shall never achieve prosperity.

4.24 p.m.

The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle)

I am glad that the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) began by thanking Lord Donoyan and his colleagues for the penetrating analysis of our system of industrial relations contained in their Report, although the right hon. Gentleman then went on to make the most perfunctory dismissal of all the lessons to be learned of that analysis.

Of course, it is not to be expected that everyone will agree with the Commission's conclusions. Indeed, as the right hon. Gentleman pointed out, the members of the Commission themselves were not unanimous on several important issues, although I think that he was carrying this point a little far in complaining that they did not band together to produce a minority report. Did it not occur to him that perhaps they did not band together because the dissidence was on individual points and not on the main thesis and analysis on which the right hon. Gentleman has directed his attack?

This subject is vast, comprehensive and highly controversial. This is why the Government said, when the Donovan Report was published, that they would consult very widely before outlining their views and proposals for action in a White Paper. The right hon. Gentleman wanted me to commit myself unequivocally to urgent action. I assure him that I have lost no time in launching the consultations. I have already had my first meeting with the T.U.C. and I have asked to meet the C.B.I. But it is interesting, significant, and, I may add, commendable, that the C.B.I. has asked for more time before meeting me because it wishes to discuss the Report. The C.B.I is approaching the Report rather more detachedly and objectively than the right hon. Gentleman and his colleagues want to do. It is not rushing in with the sewn-up conclusions with the print hardly dry on the Donovan Report. In addition, I shall be consulting the nationalised industries and other interested organisations, and it is entirely right that Parliament should have the chance to express its views before the White Paper is produced.

I welcome this debate and will listen very carefully indeed to the views expressed from both sides of the House. The right hon. Gentleman himself put three direct questions to me. First, he asked me if I would undertake to publish a White Paper. I do not think that he needed to repeat that question this afternoon, since I have already made it clear to the House that the Government will publish a White Paper and do so before legislation is presented to the House. I thought that I had made that clear.

Secondly, the right hon. Gentleman asked me for a target date for publication of the White Paper. He suggested November as a reasonable date and I would agree that we should produce it before the end of the year. But I would not wish to commit myself to 30th November or 1st December.

Thirdly, the right hon Gentleman asked me for the exact date of the introduction of legislation. Clearly, the extent to which legislation will be required to implement the recommendations of the Report must depend to a considerable extent on the outcome of the consultations in which I am just about to engage. Until we know how comprehensive the legislation should be, it is clearly impossible for me to give a date for its introduction.

Mr. R. Carr

I am sorry if I did not make myself clear about the White Paper. I was, in fact, seeking an undertaking that, when the Government publish it, we shall have a further chance to debate it. I realise that the right hon. Lady had already promised to publish a White Paper.

Mrs. Castle

The right hon. Gentleman will appreciate that the question of a debate is a matter for the usual channels, and no doubt it will be pursued through them.

Like the right hon. Gentleman, I accept the objectivity and the reliability of the Donovan Report in defining and stressing the problems we have to deal with. I hope that he will, therefore, accept the objectivity and the reliability of the Report which rejects some of the nostrums of hon. Members opposite. He cannot quote the Report in aid quite so selectively.

The right hon. Gentleman gave about the most grudging tribute to the Report which we could have had. There was also a marked lack of detailed and constructive suggestions for dealing with the problem which he so graphically outlined, and he did not answer the interruption of my hon. Friend the Member for Billericay (Mr. Moonman). Here we are left with [...] of ominous uncertainty hanging over us about exactly what it is that the Conservative Party would propose in this context.

I want in a moment to analyse some of the rather sweeping and generalised suggestions for action which the right hon. Gentleman has made, but I want to start by finding a point on which we can agree. We can agree—and the right hon. Gentleman's speech confirmed this, although he dismissed it as a relatively unimportant part of the whole theme—about the Report's insistence on collective bargaining being the best way in which to run industrial relations. That being so, our first concern should be to improve the system of collective bargaining.

This is extremely important, because all the Report's other conclusions and recommendations flow from the practical approach of the Commission's belief that what we need to do if we want stabler industrial relations and constructively to tackle the problem of unofficial strikes is to concentrate on getting better working methods for the negotiation of collective agreements on wages and conditions and for the conduct of employer-worker relationships at the work place.

The Commission finds serious defects in the present system. It believes that some are due to imperfections of the law governing industrial relations, but it goes out of its way time and time again to stress the theme that the main trouble is due to the discrepancies between the formal machinery of industrial relations and the way in which the system actually works. Its central theme, therefore, is not the need for legislative change, but the need for change in collective bargaining, industry wide and at company and plant levels.

The Report points out that today we have two systems of collective bargaining, the formal, based on industry-wide bargaining, and the informal, based on plant bargaining. It points out that the effective level of earnings in many industries is determined largely by negotiations at the work place. But, because of the way in which these negotiations are carried out, we get anomalies in payments, inadequacies in disputes procedure and dissatisfaction with wage payment systems and the general conditions which lead to the very many unofficial strikes with which everybody in the House would like [...]collectively to deal. Therefore, what has happened is that, although at one level we have had the industry-wide agreement which is supposed to be regulating these difficult matters, real authority has passed to the work place, where it is not accompanied by a correspondingly authoritative and comprehensive agreement.

Therefore, all the remedies of the Report are directed towards strengthening the system of collective bargaining. Of course, collective bargaining is not just a private matter. Its conduct is a vital national concern. But what we are asked to accept this afternoon, and I for one accept it and I am sure that my hon. Friends do, is that the national interest will be served only by recognising that collective bargaining is about workers' legitimate rights. It is about wages; it is about conditions; it is about overtime; it is about piece rates; it is about job grading; it is about everything which affects the daily lives of workers. We therefore have to start by accepting the legitimacy of these interests.

But collective bargaining is also about a bargain. Hon. Members opposite sometimes talk as though not only is the worker capable of imposing his will, with a kind of all-embracing monopoly power, but that this is his major preoccupation. That is not the impression which the employers give by their actions under the law, or the reaction of many employers to actual experience in their factories and on the shop floors. The employer has an interest in maintaining good relations and in getting the work done efficiently. The employer has an interest in getting on well, in human terms, with his own people.

Therefore, the national interest is best served not by putting on legal restrictions which do not tally with these realities, but by ensuring that the collective bargains are good bargains and that they are conducted and defined at the level at which they happen and therefore at the level at which they are likely to be accepted and observed. Therefore, the whole aim of the Donovan Report is to work towards the establishment of comprehensive and authoritative company or factory agreements covering all the matters about which the workers have such profound concern, covering overtime and piece rates and job grading and productivity and disputes procedures, all the realities of the work place, all the factors which, if not properly handled, are the cause of the sudden, sporadic strikes which cause the dislocation to which the right hon. Gentleman referred.

Mr. R. Carr

Would not the right hon. Lady agree that all these things, affecting both national interest and personal interest in collective bargaining, are just as true in America, Germany and Sweden and as important to the workers there as to the workers here.

Mrs. Castle

But the legislation overseas is not identical, and overseas legislation does not produce a strike-free country. The right hon. Gentleman himself spoke of the record of days actually lost and showed that we were doing better than other countries. We do not have so much the protracted official strike as the sporadic, unpredictable, unofficial strike. What we should not aim for is getting rid of unofficial strikes and ending by losing more working days through official strikes. Let us see whether we cannot, by analysing what are the causes of unofficial strikes, deal with them without adding to the sum total of working days lost. We have made contributions to industrial relations before, and I hope that we can do so again.

Mr. Russell Kerr (Feltham)

Would my right hon. Friend be good enough to inform the right hon. Member for Mitcham (Mr. R. Carr) that, despite what he says, about five times more strike days are lost in the United States pro rata than in this country?

Mrs. Castle

I am sure that the right hon. Gentleman is not contesting that, because it is in the Report, and he said that he accepted its analysis as being authoritative. But he seems to think that we must adopt procedures which will turn unofficial strikes into official ones. Let us see if we can adopt procedures which so strengthen collective bargaining that we get fewer strikes overall. That is the whole argument of the Donovan Report.

The Report says that the aim should be to strengthen the rôle of both management and unions. I am sure that this is the kernel of the problem. The right hon. Gentleman said, again slightly perfunctorily, that management has a very big responsibility. My heavens! it has. He might have spent a little more time on discussing it. We are all very interested in the contribution by Professor Ulman to the recent Report of the Brookings Institution. He said that it is generally accepted in the United States that management gets the kind of union it deserves. Therefore, there is clearly a very big obligation on management, because it also gets the kind of collective bargain it deserves.

This is very much elaborated in the Donovan Report, where it stresses the responsibility of boards of directors to show greater interest in industrial relations. This is a call that should go out from the House, because I am sure that we all agree that the dislocation of much of our bargaining procedure has been due to the devolution by boards of companies of their responsibilities for shaping good industrial relations.

Mr. Eric S. Heffer (Liverpool, Walton)

May I give a word of warning to my right hon. Friend? We should not go too far with the argument about abolishing national agreements. We must understand that some national agreements are the basis for good factory agreements. Therefore, I urge her not to be carried away too much on this point.

Mrs. Castle

I have never spoken of abolishing national agreements, and the Royal Commission does not advocate that. It says that there is a very specific rôle for national agreements, just as there is for the employers' associations, but it also says that the rôle of the national agreements should be more clearly defined, and that they should not be trying to deal with matters that are of immediate day-to-day interest on the factory floor.

The Report also makes it clear that the responsibility of management is to help develop this comprehensive bargaining machinery. It flows from this approach—and it is very significant that this was not included in the right hon. Gentleman's speech—that one cannot have good collective bargaining without strong trade unions. This is very important, because if we are talking about evolution we are talking about the attitudes of employers as well as trade unions.

There are still employers who are being dragged reluctantly into the realities of the second half of the 20th century. This is reflected in the fact that the Royal Commission has to urge that employers should recognise the rights of workers to be organised in trade unions., and particularly the rights of white-collar workers. Industry has not really accepted this yet.

The Report also calls for a change in the law to remove formal barriers to belonging to a trade union, and speaks of the need for the intelligent employer who can see what is involved in industrial relations to welcome the shop steward, recognising him as a responsible contributor to the collective bargain on the shop floor, and, therefore, providing him with facilities to do his work. I wonder how many hon. Gentlemen opposite were a little taken aback when the Report suggested, for instance, that there should be a deliberate extension of the check-off system, that there should be facilities for voting in union elections and for meetings to be held on the premises.

The Report also rightly calls on the trade unions to adapt their structure and methods. I say categorically, and I believe that my view will be shared by every one of my hon. Friends, that when we say, as we do, that strong trade unions are the foundation of good collective bar- gaining, we also say, of course, that strength carries with it responsibility. Therefore, we have the right to call on the trade unions to adapt their structure and methods to equip themselves for the responsibilities of their new status.

The Report suggested that they should be given corporate status and required to register, but it also called on them to tackle some of the urgent things that need to be tackled on the trade union side, such as the problems of multi-unionism in the work place, and to face up to the need for more full-time officials, to pay them better, train them more, train the shop stewards, and to revise the trade union rules, particularly in relation to membership, appeals procedure and shop stewards. This is an essential quid pro quo if we are to have a really healthy collective bargaining system.

The Report, in proposing an Industrial Relations Bill, makes the central theme of a Bill not further legislative restraints but, first, the compulsory registration with my Department of collective agreements reached by companies above a certain size, and the establishment of the Industrial Relations Commission. I suggest that from now on we call it the C.I.R., as there is already one I.R.C. The Commission, on a reference from my Department, would be able to investigate and report on the problems arising from the registration of collective agreements, and to exercise an influence over them, as well as over the problem of the smaller companies, and to carry out inquiries into the general state of industrial relations in a factory or industry.

Mr. Tom Boardman (Leicester, South-West)

Before we get branded with a C.I.R., will the right hon. Lady bear in mind that it is the abbreviation for the Commissioners of Inland Revenue?

Mrs. Castle

I do not think that they are lovingly referred to around the country as the C.I.R. But there may be a difficulty that we are running out of initials, and perhaps we could have some suggestions during the debate.

All this means that the Royal Commission's proposal is very different from that of right hon. and hon. Gentlemen opposite, and, above all, that of their document of which they are so proud, "Fair Deal at Work". I have said that the right hon. Gentleman accepts the analysis of the Report, but, even when accepting the need for the reform of collective bargaining, "Fair Deal at Work" gives it a much less important place. Hon. Members opposite approach industrial relations less as a system of negotiation of mutual benefit than as a battle of power relationships which should be much more comprehensively controlled by law.

The whole tenor of the right hon. Gentleman's speech was that we must bring industrial relations within the comprehensive framework of civil law. It is suggested that here is some kind of powerful and irresponsible influence that must be contained. The right hon. Gentleman makes great virtue of the suggestion that, unlike the wicked Government, they are interested only in the civil law and not the criminal law. But he is misleading the House when he does not point out that employers already have civil remedies that they do not use. They do not use them for the simple reason that they are much more interested in the mutually important bargain and the process of negotiation. So why is there that emphasis on the comprehensive framework of civil law?

Secondly, as my hon. Friends have pointed out, the suggestion that because it is civil law it will be of a different nature, leading to different outcomes and penalties, is a gross distortion of the facts. I was interested to note in reading the Conservative Party's document—I have studied it from cover to cover— that it faces up to the implications of its own civil penalties. It states: Many people, including both those who oppose making agreements enforceable and those who accept it in principle, but have doubts about its practicability, ask the question, What would be the position if large numbers of employees strike in breach of agreement and reject the most vigorous efforts of their union to get a return to work. It would be impractical, they argue, to fine hundreds of individual strikers and imprison them if they refuse to pay. The document does not go on to say, "There could be no imprisonment under our proposals."

The right hon. Gentleman knows that the ultimate sanction, even for a civil remedy, if the court is defied could be imprisonment. He knows that nobody wants to bring imprisonment into it if he can help it. But this is a distinction without a difference. The right hon. Gentleman says virtuously, "I am all for the civil remedy." He talks about the difference between civil and criminal remedies. We have had a great eulogy about Mr. Shonfield's reservation, and certainly it is a very well-argued and forceful document.

Mr. Orme

Nonsense.

Mrs. Castle

Give the man credit for having put his argument well. I do not accept it, but what does it involve? What is one of the main arguments of Mr. Shonfield when he asks how can we deal with restrictive practices. He says that the Industrial Relations Commission should have its own tribunal which should have power to deal with restrictive practices by forcing the parties to bargain in good faith and, if they fail, exacting a monetary penalty. This would be a criminal offence, because this would be a public authority. Therefore, there is no difference of kind, as the right hon. Gentleman suggests.

Mr. R. Carr

I am not a lawyer any more than the right hon. Lady is and I therefore hesitate to use legal jargon, but is there not this very big difference between the civil and criminal law? If we create a crime and we do not enforce the law, we bring the law into disrepute. If we establish a civil right and an individual or organisation chooses not to seek the last pound of flesh out of his or its civil right, as often happens, no harm is done to anybody.

Mrs. Castle

The right hon. Gentleman cannot have it both ways. He cannot say, "We want a system for the enforcement of collective agreements" and then say, "There will not be any difficulty about it, because in the end the man with the civil right need not exact the penalty". He cannot evade the issue. He cannot say that our industrial relations system will continue in anarchy and chaos unless there is this comprehensive framework of civil law and then say that we need not worry because nobody need carry it out. The Donovan Report says that the civil remedies exist, but they are not exercised.

It is because there is this distinction of emphasis between the Royal Commission and the Opposition that there has been such an outcry by many of their spokesmen against the Report.

Mr. Nicholas Ridley (Cirencester and Tewkesbury) rose—

Mrs. Castle

I must get on; I have given way a lot.

The right hon. Member for Enfield, West (Mr. Iain Macleod) wrote about the Report in the Sunday Telegraph a few days ago. "Blueprint for inaction", he called it. He said: If there has been a worse report in recent years I have not read it. All that I can say is that if there has been a worse article in recent years I have not read that, either. The right hon. Gentleman sums up the complaint against the Report in this way: by far the most important issue which is studied in the main report and in the notes of dissent is the question whether and if so to what extent collective agreements should be legally binding. He says that they should be. He goes on to say: To this end the Tories propose to repeal section 4 of the Trade Union Act…. The Tory proposal is to make all collective agreements, including plant bargains, enforceable to the extent agreed by the parties—and why on earth should they not be? On the face of it, that is completely reasonable. But, unfortunately, it shows a complete misunderstanding of the law, the effect of the repeal of Section 4 of the Trade Union Act, 1871, and of the Royal Commission's attitude, because under the present law, including Section 4, collective agreements between companies and unions could be made legally binding if the parties so wished. The plant bargains to which the right hon. Gentleman referred could be made legally binding at the moment that the parties wanted them to be so, because a company does not come within the legal definition of a trade union with which Section 4 of the 1871 Act deals.

It is, therefore, complete nonsense for the Opposition to say that Section 4 is the greatest obstacle to the enforcement of contracts. The greatest obstacle to company and plant agreements is the unwillingness of the parties to make them legally binding. I gather that the right hon. Gentleman does not suggest that legally binding collective agreements should be imposed, but merely that the parties should be free to do that. They are free to do it. They do not do it because they prefer not to be legally bound. Only agreements between an employers' association and trade unions are prevented by Section 4(4) of the Act, because employers' associations are trade unions as defined in that Section.

If Section 4 were to be repealed, therefore, it would be possible to make national agreements legally binding, just as plant agreements are now. But the right hon. Gentleman says that it is plant agreements in which he is interested. If the parties concerned decide not to make the agreements legally binding, we have not changed anything and we shall be back to exactly where we were. They would almost certainly not agree to make them binding, because that is what they have preferred to do in the case of plant bargains.

I say to my hon. Friends who have been a little concerned about the Royal Commission's references to Section 4 of the 1871 Act that the Royal Commission was not concerned with this point in subsection (4). It was concerned with subsections (1), (2) and (3) of Section 4, which make agreements between union members on such matters as subscription payments or the provision of benefits legally unenforceable. Subsection (4) was not the Royal Commission's prime preoccupation in dealing with this matter.

Mr. Orme

I am glad that my right hon. Friend is spelling out this point, because it is extremely important. Is there not a contradiction between the Report's interpretation and what is in the Conservative Party's pamphlet? That is what is causing the confusion.

Mrs. Castle

After all the tremendous expression of outrage by the Opposition about the Royal Commission's Report, basically there is not very much difference. As I understand, neither of them says that collective agreements should be made legally enforceable, whether the parties want them to be or not. At the moment, plant bargains are legally enforceable if the parties wish them to be. All that the repeal of subsection (4) would do would be to make national agreements legally enforceable, if the parties wish.

The position would still be broadly the same. It would be for the parties to decide. What I am saying to the right hon. Gentleman is that over a large field they have that freedom of decision and they do not use it in the way which he suggests because they prefer to be left with a more flexible and legally non-binding contract.

Mr. R. Carr

There is, I think, genuine confusion in legal advice which has been given over a period of years about the technical effect of certain Statute repeals. I want to make clear what we are trying to do. The proposed technique of doing it may be a little unclear. We agree that under the existing law, agreements can be made binding in certain circumstances. We want to establish the same position as in other forms of contractual activity that when an agreement is entered into, it is binding unless one contracts out of it. There is a difference between contracting in and contracting out.

Mrs. Castle

That is a significant change of emphasis. My reply to the right hon. Gentleman is that we should be dealing not with the theories, but with the realities. The reality of the moment is that it is clearly demonstrated by employers and unions that they do not wish to take advantage of their existing power to make collective agreements legally binding. Therefore, if we tell them that their agreement will be legally binding unless they specifically contract out of it, either they will specifically contract out of it, they will not enter into the collective agreement or they will be much slower to do so.

The whole complaint of the Royal Commission, and certainly of us on this side, about the policy of right hon. and hon. Members opposite is that for three-quarters of the time they are chasing unrealisable myths, instead of getting down to the realities, because they still hold to the attitude that the trade union movement is somehow a licensed conspiracy against society and ought, therefore, to be controlled.

I quote these examples to show how complex and controversial this whole subject is. I repeat that the right hon. Member for Enfield, West praised Mr. Shonfield's brilliant reservation, and yet it contains suggestions that the Conservative Party itself rejects. This proves that there is not one simple and straightforward legal remedy in this complicated subject. That is why the Government insist, and rightly, that there should be the most careful consideration and the fullest consultation with industry on all the suggestions which have been made in the Report for changes in trade union law before we rush into conclusions, White Papers and legislation.

That is not because the Government regard the Report as a "Blueprint for inaction". On the contrary, we are acting on a whole range of matters which the Royal Commission considered to be far more vital than these legal points. While hon. Members opposite yearn for more penalties against strikers which experience shows that employers would never use, we are pressing ahead with the changes which can have real effect— those urgent and practical measures which, the right hon. Gentleman said, were needed to cure the British disease.

We have in the Department of Employment and Productivity a body which is doing the work of the Productivity Board which, the right hon. Gentleman said, his party wanted to set up. With the help of the Department we are stimulating and encouraging the drawing up of those comprehensive and authoritative local collective agreements which can bring greater clarity, stability and productivity into collective bargaining. We are strengthening our industrial relations service and our research, as the Commission recommends.

The industrial training boards are being expanded under the present Government as never before. We are giving new emphasis to women's training and the need for full acceptance of adult trainees in industry. I warmly welcome the Report's recommendation that training board grants should be used to help shop steward training, because this is highly relevant to the reform of collective bargaining and the negotiation of really effective productivity deals.

We have already taken action along the lines suggested by the Commission. Last year my Central Training Council advised boards to include in their grant schemes provision for shop steward training, and a number of them have done so. Again, there is the question of dismissal procedures. It has always seemed wrong to me that the only safeguard which many workers have against unfair dismissal is a very limited protection at common law. A committee of my National Joint Advisory Council considered this matter last year and urged the extension of satisfactory voluntary internal procedures.

The Committee asked my Department to review the position, and particularly the need for statutory provision in the light of the Royal Commission's Report and of the progress made in establishing voluntary procedures. This is linked with the question of the Royal Commission's recommendation for the establishment of labour tribunals with wide jurisdiction over disputes between the employer and the individual employee. The review of these matters is being pressed ahead.

Therefore, while I cannot tell the House when and in what form we will legislate, I can tell hon. Members that the Government have wasted no time in proceeding with the vital elements in the Commission's recommendations and Report. There is a whole range of activities vital to the improvement of our industrial relations on which we are already engaged. I am glad that the Royal Commission has so unequivocally endorsed their necessity. Its Report confirms my belief that the Department of Employment and Productivity, while continuing to exercise all its traditional functions, must develop, and is well equipped to develop, a more positive function of service to industrial efficiency and economic growth.

5.7 p.m.

Mr. Ray Mawby (Totnes)

What the right hon. Lady the Secretary of State said about the question of penal sanctions rather put me in mind of Satan peddling religious tracts, because for the last few weeks we have been arguing about her deliberate action to deal with trade unionists, not in the civil courts, but under the criminal law. Therefore, it comes ill for her to suggest that in our policy we aim to send people to prison.

I have always believed that there were two main reasons for setting up a Royal Commission. The first is the obvious one of ascertaining facts which are not already known. The second is to put off for about three years action which one knows in one's heart should be taken now. I believe that the Royal Commission was set up for the second reason. It is time that the Government started to take action even on the very few recommendations of substance which the Royal Commission makes.

Not many facts which we did not know before emerge even from close scrutiny of the Report, although it is obvious that their detail is much greater than we were aware. One of the main facts which the Royal Commission has emphasised again is that over 95 per cent. of strikes are unofficial. That is a situation which can give no satisfaction to anyone in any part of the House. Outside the House, it certainly gives no satisfaction to national executive committees of trade unions, or, indeed, to national officers or anyone who is working in the service of a trade union, to know that the vast majority of man-hours which are lost in strikes are the result of completely unofficial action.

Mr. James Hamilton (Bothwell)

A great deal has been said by both Front Bench speakers and the hon. Gentleman about unofficial strikes. Is he aware— and I speak as a member of the national executive of a trade union—that in many cases unofficial action is made official by the executive councils of unions? Would he further accept that in many cases employers must bear a share of the responsibility for what has happened, and not merely the men?

Mr. Mawby

The hon. Gentleman is right in saying that the blame should not be laid merely at the door of trade unionists. I was about to say that. Having repeated the Royal Commission's remarks on this issue, I had intended to analyse this state of affairs in an effort to discover why this situation obtains and how it can be changed.

I accept, from my experience, that many unofficial disputes need not have happened had employers or their representatives lower down the scale of management exercised common sense or normal decency. I am not seeking to show that every unofficial strike is necessarily bad or is caused by the men. I accept that one must consider the whole basis on which these things arise. Be that as it may, we have a large number of unofficial strikes.

The hon. Gentleman also makes a valid point in saying that some unofficial strikes begin as unofficial walkouts and then, after being considered by national executives, gain official recognition. The fact remains that the unofficial strike has exactly the same effect as any unofficial action which does not receive official recognition. In other words, the quick walkout of people, the shock to management and the resultant effect on employment must be compared with the normal official action when one has an idea of what is likely to take place and when management has an opportunity to adapt itself to the circumstances that may arise.

The Royal Commission refers to the impact on management of unofficial strikes, and in paragraph 413 makes this important observation: It is in fact only when the impact on managements of unofficial strikes and other forms of unofficial action is taken into account that their gravity becomes apparent. Such action may face a manager with a sudden and acute dilemma. He may be under severe pressure from customers to produce goods or materials by a particular deadline, and in a competitive market such pressure is not easy to resist … But it is not surprising if managers sometimes make unwise concessions which secure peace for the time being at the cost of storing up trouble for the future. This shows that unofficial action has a greater impact on management, plant and those engaged in the industry concerned. It lends emphasis to the fact that we must do something to put this state of affairs right.

The Royal Commission tries to give its solutions to this problem by stating, for example, in paragraph 454: By far the most important part in remedying the problem of unofficial strikes and other forms of unofficial action will, however, be played by reforming the institutions of whose defects they are a symptom. That paragraph goes on: Unofficial strikes are, above all, the result of the inadequate conduct of industrial relations at company and plant level. We accept that. We also accept that if all these institutions were perfect, there would no longer be any need for unofficial or even official action.

The paragraph continues: They will persist so long as companies pay inadequate attention to their pay structures and personnel policies and the methods of negotiation adopted at the workplace remain in their present chaotic state. They will also persist so long as neither employers nor trade unions are willing adequately to recognise, define and control the part played by shop stewards in our collective bargaining system. This is the Commission's solution to this major problem; although it goes on to suggest, for good measure, the estab- lishment of an industrial relations commission. The right hon. Lady suggested that because we are running out of initials, this body should be called the C.I.R., as we already have the I.R.C. I suggest that we already have too many commissions and committees running our lives. Perhaps we should try to reduce their number instead of merely shuffling their initials.

It appears that this industrial relations commission will be given the job of seeking collective agreements among large companies, and then going on to deal with smaller companieis. The difficulty is that the Commission makes it clear that this body should not be able to exert any penalties for non-compliance, and this would mean it being denied most of the point of its inception.

In paragraph 480, the Commission goes into the whole question of the responsibility of a union for its members. This has always been an arguable point, mainly because many people say, "While we are representatives of a trade union and while we meet management from time to time, if groups of our members decide to take even unconstitutional action, it is not really up to us to put ourselves out too much to try to impress on these men the fact that they should go back to work and reduce the damage being caused to the industry concerned or the economy."

The Royal Commission is luke-warm on this point and says that at least the trade unions should guarantee the good behaviour of their members. This interesting observation is made in paragraph 482: Such a measure could be contemplated only if it was likely to result in a rapid diminution in the number of unofficial strikes. Why? We have had unofficial strikes for a long time. Is it not a fact that their number is increasing rather than decreasing? If, by taking this action, we could, at least in the long-term, reduce the number of unofficial strikes, would not such a plan be worth while? Why should one act only if one believes that the result would be an immediate reduction in unofficial action?

I welcome the sections of the Report dealing with work groups and union government. The chapter points to the problems which arise with branches of unions, and suggests that many more branches should be upon a plant basis rather than a residential basis. It also points out that many unions do not formally recognise the position of shop stewards, and lays down a suggested way in which the election, conduct and area of jurisdiction of shop stewards can be properly dealt with.

The carrying out of these suggestions would prevent the growth of groups of shop stewards who become more powerful than their national executive. This was exemplified in the Briggs dispute, some years ago, where a group of men with no responsibility were able to exercise considerable power over their fellow members. Unions would be well advised to ascertain whether or not their rules deal with the points made by the Commission.

In paragraph 698, in pointing out what changes should be made, the Royal Commission says: If rules are to be really satisfactory they much reach a far higher standard than it would be right or practicable to prescribe by law. I question that sentiment. If such rules are thought to be of a reasonably minimum standard, why should not the registrar require as a condition of registration that those rules should be in the rule book of the union? If the registrar were given power to require the union to satisfy him that the rules governing this section and others were such that the union was capable of registration, the necessity of writing specifically into an Act of Parliament the way in which shop stewards shall be elected and how they shall operate would be avoided.

I see no reason why the power of the registrar should not be exercised where the Commission suggests the full registration of trade unions. I disagree with their point about changes in the law. The Royal Commission does not believe that much basic change in the law is necessary. It states, in paragraph 754: We are, however, also much concerned with the need for simplification of the present law and with measures which should be taken to make the law more easily accessible and understandable. This is perfectly legitimate. As the Commission points out, laws have been introduced piecemeal, and often more on a negative than a positive basis. They have been brought in to make certain that trade unionists have not been jeopardised by the common law. The laws affecting trade unions which have been passed over 100 years must need a great deal of attention. There are those who say that trade unions now are in an entirely different position from the position they were in at the turn of the century, or when the 1906 Act gave them special exemptions. My view is that unions should continue to enjoy those exemptions but that, in return, they should accept certain obligations.

The right hon. Lady said that one cannot expect rights unless one is prepared to accept obligations. The fact that they cannot be sued for breach of contract does not give trade unions a licence to damage anyone else. Therefore, there must be a system of registration conditional upon rules and standards of conduct, and any union failing to conform should not enjoy the exemptions. Similarly, small groups of dissidents acting contrary to union policy should also lose their exemption.

The Commission, in paragraph 800, deals with exemptions, and says: A majority of the Commission … think that such immunity is no longer necessary or desirable in such circumstances. In order to avoid a breach of their contracts most employees will need to do no more than give a week's notice of their intention to cease work; and it would not seem unreasonable to us that they should do so. If the persons who are organising the employees feel for some reason that the protection of section 3 is vital to them, they can secure it by framing a constitution for themselves with the requisite objects and rules and register themselves as a trade union. This puts the matter into the right perspective. The Commission is saying that all those engaged in industry, in whichever part of industry they may be engaged, should be prepared to bargain and to keep their part of the bargain; if they do not, or if they take action which is contrary to their union's policy, then they will lose the benefits they enjoy under the 1906 Act. On the other hand, if they disagree with their union executive and still insist that they shall take unofficial action, then they shall give to their employer the notice that they would expect their employer to give to them if he were dispensing with their services. Again, that is a balance, and a proper bargain made and kept.

It cannot be emphasised enough that, if workers have to give that sort of notice, at least the union executive or national officer concerned knows of the dispute and knows that there is likely to be a walk-out before it happens. In so many instances today they do not know until it occurs. Frequently, one hears of a national officer of a trade union having to go in where the men have already walked out, where tempers are high, where conditions have hardened and where, in most cases, the employer will refuse even to discuss the case until the men return to work. A different situation faces a national officer who enters a company's premises when the men have given notice that they intend to strike. That is quite different from a situation in which they have already walked out of the workshop. That is a very important point which must be borne in mind.

There are a great many points in the Report, but I know that other hon. Members want to address the House, so I will content myself with the final comment that I think that the Commission is to be commended on the very close and detailed work which it has done in assessing the problem. Unfortunately, its suggested solution does not begin to meet the problem.

5.30 p.m.

Mr. Charles Pannell (Leeds, West)

I rise to take part in this debate as one who has been a member of a trade union for 50 years this year. I think that in my time I have done most of the things that trade unionists set out to do.

I think that I might best use the time at my disposal in setting out an even broader background than the Commission has done. I think that the right hon. Member for Mitcham (Mr. R. Carr) tended to think that it was possible to compare the British trade union movement with similar movements abroad. But I have looked at trade union movements in various parts of the world. Taking the Swedish movement, for example, authority does not come from the State. It comes from the movement itself. It comes from that country's equivalent to the T.U.C. That body exercises authority. Individual unions cannot take strike action without its permission, and that is well enshrined in their understanding. I have looked at the trade union movement in East Germany, such as it is. As one would expect, it is part of the Communist apparatus. In Spain, where the Syndicates have been developed, one finds the trade unions and employers in one indissoluble movement. They move together. But if one goes to what is comparable to their trades union congress, one hears trade union representatives voicing the same sort of aspirations as we do here. There seems to be almost an international vocabulary.

In the United States of America, everything is done at plant level, as we hear so often. However, that is hardly surprising, in view of the size of the problem there. General Motors, for example, has a complete set-up of its own, as does Fords. When the unions do battle in the United States, they set about one plant. They demand their rises, they get what they want, and immediately they swing round on the next plant and so use one against the other. All this is allied to the Taft-Hartley legislation.

On the other hand, when one looks at the more primitive forms of trade unionism in Africa, again that is all part of the national consciousness.

The British trade union movement is now an estate of the Realm, in so far as an estate of the Realm may be defined as an organisation which can give or withhold supplies. It is as British as anything can be. It is as British in its way as the Conservative Party.

Mr. Richard Wainwright (Colne Valley)

Much more.

Mr. Pannell

That may be so. After all, its necessity springs from the actions of right hon. and hon. Gentlemen opposite. They are the sinners come to repentance. They are the traditional enemies of the trade union movement. We discussed the fate of the Argyll and Sutherland Highlanders yesterday. We would do better to remember that the British trade union movement too has its battle honours. It has Featherstone, Tolpuddle, the dockers' tanner, Tonypandy.

In my lifetime, I can remember a debate—[Interruption.] I do not want the hon. Member for Ormskirk (Sir D. Glover) to come into this, because he knows nothing about anything. I am addressing my remarks to the right hon. Member for Mitcham. If he wants a striking example of how far we have come, may I remind him that in 1923 this House debated the engineers' lockout in which, in the last year of my apprenticeship, my indentures were broken. He will find that the Government of the day, a Conservative Government, opposed intervening in the dispute. It was over what was known as managerial functions, which was merely the idea of deciding which men should man certain machines. As a result, we were locked out for four months. It brought down our wages from £4 12s. to £3 within three months after. If the right hon. Gentleman read the arguments used by the Conservative spokesmen at that time, he would not blush with shame. He would turn white.

The right hon. Gentleman referred to the attitudes of the nineteenth century, but it does not go as far back as that. We are up against the attitudes of the 1930s. When I look at right hon. and hon. Gentlemen opposite and remember some of my earlier life in the trade union movement, I like to be just to them, but I always tinge justice with memory.

We are speaking of the British trade union movement, and it does not advance any study of the Commission's Report to cast round in other countries whose histories are different, who did not have the Industrial Revolution, and who do not know how we grew up.

My own union goes back to about 1780, to the old Millwrights' Society. Then came the Steam Engine Makers, in 1826, followed by the old A.S.E. of 1850. Then came the Amalgamated Engineering Union of 1920, and now we have become linked with the Foundry Workers. So one sees the evolution. Members of the union were known as the natural aristocrats of labour. I may say that we did not give ourselves that title. Now we have taken women into membership and, of course, we believe in the doctrine of equal pay and have pioneered all these ideas.

It is worth while remembering that we grew out of the Industrial Revolution, and may I remind hon. Members that the cradle of the Industrial Revolution geographically has my constituency at its heart. It all began with the district unions, which grew and gradually amalgamated into national unions. As a result, the trade union movement has been in a state of flux and growth ever since.

If one wants to fix the point from which it all began, the great name of Ernest Bevin looms over this assembly today. He was the greatest of all the Ministers of Labour, because he made it an integral part of his Ministry during the last war that men were an end in themselves. He refused to have the Ministry of Labour subordinated to Production. I am not sure that it is altogether a good idea to give the department its new high-faluting title, so getting away from the old ideas, and that is about the only point on which I agree with my right hon. Friend the Member for Southwark (Mr. Gunter). These ideas have gradually impinged upon the relationship and consciousness of right hon. and hon. Gentlemen opposite. This is tinged by the fact that they are making a wider electoral appeal. They boast that they have 4 million trade unionist supporters in the country, though they can only produce one in the House.

Mr. Mawby

Two.

Mr. Pannell

Where is the other one? We have gradually come to this point and we now have a Labour Government back in power.

The right hon. Member for Totnes (Mr. Mawby), at the beginning of his long speech, said that he thought the Royal Commission was set up merely to procrastinate with this problem. I find that rather difficult to believe, because his speech was made up of quotations, as though he was trying to instruct hon. Gentlemen opposite on what it was all about.

I do not want to make a long speech, with so many hon. Members wishing to speak, but I should like to quote one passage from the Report. It will probably set a line of thought with which my hon. Friend the Member for Salford, West (Mr. Orrne) will not necessarily agree, but I think we can agree it is significant. On page 38, under "Signs of Change", the Report states: Several developments in recent years suggest a growing dissatisfaction with the system of industrial relations described in the previous chapter, and a growing desire for change. 157. The first of these is the development of incomes policy. Sooner or later full employment leads to incomes policy. Rising or full employment is almost always accompanied by increases in pay which outstrip any rise in productivity, and therefore lead to higher costs and higher prices. Therefore, this Report must be read and integrated with the general drive that comes from both sides. I do not want to get into difficulties with this side of the House. It is all part of how the national cake is shared out, how people get what they are entitled to and how we resolve our balance of payments.

I am never misled by what the Conservative Party say in opposition. After all, I know the sort of fire and slaughter that they breathed when in Government. They were always threatening to do something to the trade union movement. However mild the right hon. Member for Mitcham might have appeared this afternoon, he knows that it would not be difficult for me to quote a great many of his colleagues on the dire things that would befall the trade union movement if they got the opportunity to deal with it again. I am sorry, but the animal is coo big for them. Their attitude is, "If you cannot lick them, join them", so consequently they want their 4 million trade union vote.

I am glad that we are having this debate today, not because it allows me to make this speech, but because this is one of the subjects which I think can proceed to legislation. One of the great difficulties of new Members of the House is that they often want from this place something it cannot give, which is participation in legislation. I hope when my right hon. Friend considers the consultations that will take place with the C.B.I., which was well represented on the Commission, and the T.U.C., which was also well represented on the Commission she will think it might be a good idea to give full weight to the trade union group of the Parliamentary Labour Party which is, after all, the political expression of the trade union movement. There are 150 on this side as against two on the other side.

The White Paper need not necessarily be the last word. We can argue about that. I had an unhealthy feeling when I listened to the Front Bench speech that this debate had taken place too early— probably before a lot of hon. Members have read the Commission's Report anyway.

The right hon. Member for Mitcham made a great point about 95 per cent. of strikes being unofficial or unpredictable. I do not know which it was. I can only say that the best strikes I have taken part in have always been unofficial strikes. They have been the sort of things which sprung from an instant injustice. Perhaps the management has been arguing quite arbitrarily and there has been a strike there and then. I can think of some strikes which have settled a grievance in a couple of hours.

A lot will be said about the Royal Commission's Report. Some will say that the remedies proposed are completely inadequate. I do not know what remedies are wanted in this kind of business. I have always taken the line, concerning prices and incomes policy, that we cannot lay on the trade unions the job of enforcing an incomes policy. It has to come from the State. I hope that we shall see trade in such a state that prices and incomes policies are unnecessary to be inflicted by the central Government.

The debate this afternoon is a kind of curtain raiser. In considering where we are going, I think that we should remember where we have come from. We are speaking about one of the great movements of the world, a movement that was initiated and pioneered by people in this country associated with some of our greatest names. It is a movement which grew up and waxed strong, despite a great deal of suffering and victimisation. It waxed strong in the teeth of the opposition and even the cruelty to and imprisonment of people whose successors now sit on the benches opposite.

Mr. R. Carr rose—

Mr. Pannell

This is not a matter of evoking anything old. I was glad to note the air of humility with which the right hon. Member for Mitcham came to the Box this afternoon to indicate that we can come together to recognise the trade union movement as it is—one of the great contributory factors to the prosperity and future of this country.

5.47 p.m.

Mr. David Mitchell (Basingstoke)

While I join with the right hon. Member for Leeds, West (Mr. C. Pannell) in his hope that the Government's prices and incomes policies will not have to be enforced in the way he described, I am sure he will understand if I do not follow him in going back to the Tolpuddle Martyrs or to the early experiences of his youth.

I strongly resist the right hon. Gentleman's suggestion that the modern Conservative Party is in any way opposed to the trade union movement. If any proof is needed, let the right hon. Gentleman take the document "Fair Deal at Work", which has been mentioned during the debate, and he will see the truth of what I am saying.

The right hon. Member for Leeds, West dwelt, of course, on the founding of the union of which he is a member. I could equally dwell on and talk about the foundation of the Transport and General Workers Union, of which I was a member for a number of years. However, I will not do so. I do not think that the right hon. Gentleman is at the moment pursuing the manual work with which most of his union colleagues are associated. Perhaps he will understand if I say that I felt it right not to continue to be a member of a manual union when I was no longer engaged in those activities.

First, I should like to add my tribute to those which have been paid to Lord Donovan and the members of the Royal Commission. I do not suppose that the Commission's work has been made any easier by the fact that the protagonists were also members of it. In terms of Royal Commissions, it has been almost unique, because Royal Commissions are usually well above and well away from the arena in which fights take place over the matters being examined.

I cannot cover the whole Report, but I would draw attention to three main causes of lost production and put one or two specific questions to the Minister. The causes of lost production to which I wish to refer are strikes, restrictive practices and accidents at work.

Although it is not part of the Royal Commission's Report, it gives us a sense of proportion when we realise just how much greater is the number of days lost through accidents at work than those lost through industrial disputes. If one needs any reminder of it, a Written Answer on 3rd July brings the point home very forcefully.

Perhaps I might now consider some strikes and their causes, and refer particularly to how much more damaging they are in this country where we are increasingly turning over to assembly line techniques. It is necessary for there to be a strike only in one place which holds up one component for the effect to be felt right the way down the line. The whole basis of production and productivity is thrown out of gear. The bare statistics of the number of days lost do not show the whole picture of just how damaging it is to this country's ability to compete in world markets while there is this unpredictability about when strikes are going to take place. I do not believe that there is any universal panacea to eliminate strikes, but I think it is particularly valuable that the Commission analysed the causes of strikes, and where the causes are different to point out that the solutions to them may also be different.

I should like to mention one or two which seem particularly important. I consider them not in the sequence of the severity of damage which they do, but in what seems to me to be a more natural sequence.

First, there is the question of union recognition. It is an extraordinary fact that this question of union recognition gives rise to 30 per cent. of the cases in which the Ministry of Labour is brought in to conciliate. In my constituency at the firm of Bayham Engineering there has been a strike by the Amalgamated Engineering Union over this question of union recognition. The sequence of events is frequently that the union claims to have a large number of members in a factory and asks the management to recognise it for the purpose of negotiating on behalf of those members.

Mr. Sydney Bidwell (Southall)

Has the hon. Gentleman prevailed on the management in that case to recognise the union concerned?

Mr. Mitchell

The hon. Gentleman has asked a question which is not strictly relevant to the point I was making, but I shall, nevertheless, answer him. I offered to place myself at the disposal of both the union and the management if I could be of any help in finding a solution, but it became clear very rapidly that a solution could not be found. The Ministry of Labour's conciliators, too, were unable to find a solution. That is a good example of the sort of thing about which I am talking.

What happens is that the union claims that it has many members in a factory, the management doubts it, and the matter is then put to issue by a strike. What I am suggestting is that that is the wrong way to set about dealing with the matter. I take the view that in this day and age it should be possible to solve that kind of issue by much more civilised means, by allowing those who work in the factory to have a free vote on whether they wish the union to represent them. I believe that this is the right, modern and civilised way of dealing with such a problem, and I trust that the hon. Member for Southall (Mr. Bidwell) agrees with that view.

The second cause I would mention is that if inter-union demarcation disputes. I believe that the situation could be eased considerably by giving unions corporate status and allowing them to make legally binding agreements between themselves. I shall return to this in a moment.

On page 101 of the Report there is a valuable table showing the causes of industrial disputes. I refer next to working arrangements because, after wages, these are the largest single cause of disputes. More than half these disputes are protests against change. This is significant, because it suggests that there is a lack of understanding, a lack of explanation, a lack of consultation and a failure by the management to discuss changes before they are introduced with those who will be effected by them. I believe that a great deal more can be done by joint consultation to ease this problem.

Dismissals account for about 15 per cent. of strikes. Here, again, surely there is a more modern, more civilised and more sensible way of dealing with the problem of dismissals than by going on strike, and certainly one which is preferable to an instantaneous strike which takes place before union officials have had time to discuss the matter. Surely the answer is to refer the dispute to an independent body which can decide whether the dismissal is just or unjust.

Mr. Heffer

Is the hon. Gentleman not aware that many of these disputes take place because employers, without due notice or discussion with the workers, dismiss a group of men or a shop steward? The reaction of the workers is immediate. They know that the only way in which they can defend their fellow workers is by taking immediate action. I suggest that the remedy lies with the employers stopping that sort of nonsense.

Mr. Mitchell

That is the sort of thing that one can argue across the Floor of the Chamber, and no doubt the hon. Gentleman will make his contribution to the debate shortly. The point I am making is quite simply that there should be a more civilised and proper way in which to settle such an issue other than striking over it.

I am aware that hon. Members, and Members on both sides of industry, are deeply conscious of the fact that once bargains are made they should be stuck to. I have to admit that it was for me a substantial eye-opener when, as a member of the T.G.W.U., I attended its summer school and heard one of the national officials lamming into the men in a way which I would not have believed possible if I had not heard it. He was talking about agreements being made by the union and those agreements not being kept by its members. I am therefore well aware of just how much the unions themselves wish their members to keep agreements once they have been made.

I wish to make two pleas. The first is that we should not dismiss too lightly the suggestion of automatic sanctions about which the Donovan Report talks, because Lord Donovan in his addendum, section 12, suggests that there might be circumstances in which those who breach a contract might set at risk the advantages which they were expecting to get from it. It may be that if there was a limitation on the severity of the loss of fringe benefits involved this would be useful in industrial relations.

Enforceability would not be a solution to all our troubles. Certainly it should not be applied so that all contracts are enforceable, but I see nothing in the Donovan Report which suggests that if the parties to a contract agree it should not be binding. Are agreements enforceable now, or not? The right hon. Lady indicated that although agreements between one union and another are not enforceable, agreements between one union and an employer are.

On the other hand, in its written evidence to the Royal Commission, the Ministry of Labour states, on page 80, section 26: As has been pointed out the contracts entered into between employers' associations and trade unions (and probably the contracts entered into between single employers and trade unions) are not legally enforceable in this country ". That appears to be in direct contradiction to what the Minister said in her opening speech. I therefore ask whatever Minister is to wind up to clarify this plain discrepancy between the indication given by the Minister and the indication in the written evidence of the Ministry of Labour.

The loss of productive power which this country suffers as a result of restrictive practices has been shown by the Donovan Report and other reports to be far too serious to be glossed over as a matter of little or no importance. The Donovan Commission's findings about restriction of entry are immensely valuable. Demarcation disputes may be substantially reduced if trade unions can make binding agreements between each other, so that instead of a dispute having to be settled by a strike or by the employer having to decide how the work should be allocated, and a strike ensuing against his decision, this matter can be decided by more civilised, modern and sensible means.

The question of over-manning and all that goes with it should be held up to the searchlight of a productivity board, or some other independent agency. Looking back to the 1930s, as several hon. Members have done, one can understand how so many restrictive practices grew up. It is possible to understand a person's supporting a practice which prevented a piece of new machinery being installed, thereby depriving a man of a job, in the days when unemployment was between 1 million and 3 million, but in these days it merely holds back the productive power and standard of living of British industrial workers. I hope that this aspect of the Report's spotlight will be picked on by the Minister, and that Government action will follow.

6.3 p.m.

Mr. Ben Ford (Bradford, North)

The hon. Member for Basingstoke (Mr. David Mitchell) will forgive me if I do not follow him. Hon. Members opposite are becoming obsessed with the subject of unofficial strikes. I hope that the debate will not be entirely orientated around this matter because the Report covers a much wider field, which is worthy of discussion. Rather than talking about strikes and their prevention we ought to consider the causes of bad industrial relations.

Much emphasis has been laid on the number of unofficial strikes. I remember examining this subject one year for the purpose of a discussion, and I discovered that in that year, although 3 million working days had been lost as a result of all strikes—official and unofficial—no fewer than 250 million working days had been lost as a result of absence through illness and accident. We would be far better occupied discussing an occupation health service and the cause and prevention of bronchitis than in concerning ourselves with punitive measures against unofficial strikers. Many unofficial strikes are quite justified.

Mention has been made of the policy of the Opposition, as embodied in its purple booklet. I do not know whether the colour is symbolic. I am a trade unionist of some standing—I shall return to that later—and I can tell hon. Members opposite that no matter how modestly, sincerely and gently the series of proposals has been put forward by spokesmen of hon. Members opposite, if, in the remote event of their coming to power in the next few years and attempting to put these into effect they will be heading for the biggest industrial shambles that this country has ever seen. Their proposals will be resisted to the death by the trade union movement.

I generally welcome the Report and I add my voice to that of the right hon. Member for Mitcham (Mr. R. Carr) in regretting that no member of the Royal Commission was representative of the voice of the shop floor. The Royal Commission would have been far better served —and its Report would have been a better document—if there had been such a person on it. Nevertheless, the Report is extremely informative, even if it is not characterised by bold, sweeping and incisive recommendations concerning the future of the trade union movement and the employers' federations. Much painstaking work has been carried out, resulting in a Report which will become a standard work of reference to anybody with the remotest interest in labour relations.

I want to deal with two matters raised in the Report—the question of multi-unionism and the proposal for the establishment of an Industrial Relations Commission. In answer to the suggestion of my right hon. Friend, I wonder whether we might not refer to it as a Permanent Industrial Relations Commission, thus bringing about the initials P.I.R.C, which has obvious connotations in many parts of industry.

I can claim certain qualifications for taking part in this debate, and I must declare an interest. Together with my right hon. Friend, I am a member of an engineering trade union—the A.E.F.—and for about nine years I was a convener of shop stewards and secretary of a shop stewards' committee in a large engineering establishment employing about 10,000 workers. I had an opportunity to study industry and its operation at all levels. I was also a member of one of the dreaded combine committees which have been mentioned. Incidentally, this occupation provides some of the best possible training for a Member of Parliament. If ever anyone wants to learn how to win friends and influence people he should become a convener of shop stewards.

The problem of multi-unionism must be dealt with fairly soon. I agree with the Report that it is virtually impossible for the Government to interfere directly in these matters, but it might be possible to facilitate mergers between unions over and above the provisions of the 1964 Act. I refer to assistance in the form of financial guarantees or subventions in respect of pension funds, especially where, for very good reasons, certain officials choose to retire early. Such payments would be justifiable as, for instance, the assistance given by the Industrial Re-organisation Corporation to engender rationalisation in the structure of industry.

I was fortunate, in so far as that it was the custom of my shop stewards to elect one convenor to represent all unions within the establishment. This was a convenient arrangement, but, in many cases, each group of shop stewards in a factory or on a site elects a convenor or chief steward for each union; this obviously makes for a cumbersome negotiating procedure.

In passing, I would mention that the convenor or chief steward is one of the key men in industry. I would press a very strong claim that the phrase most common in industry, particularly engineering, is, "Send for the convener". Yet in trade union rule books and collective agreements, the overall convener does not exist. This arises in many cases from a reluctance of trade union leaders to delegate powers to the lower levels of the organisation. This must be corrected.

It is increasingly obvious, as the complexity of industrial processes and products increases, that the man on the spot is best able to deal with any situation which arises. The convener is often engaged solely on duties arising from his office, but in most cases he forfeits any prospect of advancement, particularly financially. I would, therefore, urge employers and unions to regularise his position and at the same time strongly endorse the recommendations of the Report in paragraph 696 to 699.

Consideration of the position of shop stewards in industry leads us on to plant bargaining. The conclusions of the Commission in this respect are summarised in paragraphs 1019 to 1026, and cannot be too strongly emphasised nor too quickly implemented. I remember, in about 1962, submitting proposals to my firm which resulted in a complete revision of basic rates, the introduction of a merit rating scheme and incorporating substantial immediate and potential wages increases. The prices and incomes policy is, in this respect, "old hat"; many of us at the grass roots were incorporating productivity into our agreements years ago. In my boundless generosity, I even allowed a payments-by-results scheme to be introduced in the maintenance department—

Mr. Heffer

They do not understand.

Mr. Ford

No, hon. Members opposite would not know; one cannot work a payments-by-results system in a maintenance department.

I had a thick file of agreements upon these and many other matters, which more directly affected wages and conditions than the national agreements, which merely provided a framework within which to operate. This is the context in which I would endorse the Report's recommendations that there should be national agreements. These are very relevant in certain fields, but there should be a devolution to plant bargaining and the shop stewards should be properly incorporated in the bargaining machinery. If necessary, in establishments of a certain size, the senior shop stewards or convenors should be properly organised and perhaps paid half and half with their position guaranteed both by the unions and by the employers.

To achieve our aim of controlled expansion, we must accept some regulation over incomes. If we do not, we do not accept the need for a planned society. One cannot control prices, profits, consumption and so on without controlling incomes. If we are not prepared to face this, then we endorse the laissez-faire system of untrammelled collective bargaining in which the strong benefit at the expense of the weak. I understand that some may purport to identify sinister intentions behind the recommendations to set up an Industrial Relations Commission, and think that it would become an extension of machinery for the control of wages and so on—

Mr. Orme

That is what it says.

Mr. Ford

In my opinion, these are false assumptions, because the Report makes it clear that the primary duty of the Commission would be to promote harmonious industrial relations and provide an independent court of appeal on procedural matters, not forgetting, of course, that these matters often involve the recognition of the right to organise into unions and that it is proposed that the Commission should have power to investigate problems arising out of the non-recognition of unions. The registration of agreements would certainly provide a great deal of information which would enable the relevant agencies to establish fair and common practices covering most workers and to turn the spotlight on those who have not been playing the game.

Despite what I have said, however, I would remind the Under-Secretary of the pledge in the Labour Party's 1964 manifesto. On 12th April, 1964, I put down a Question to the then Minister of Labour asking whether he would …introduce legislation providing for all workers the right to trade union representation and proper safeguards against arbitrary dismissal. The Minister replied: I think the right of trade union representation and safeguards against arbitrary dismissal are both extremely important. I would hope that the first will be one of the subjects considered by the Royal Commission on Trade Unions and Employers' Associations. I am appointing a Committee of my National Joint Advisory Council to study the second. It would not, therefore, be appropriate to introduce legislation now."—[OFFICIAL REPORT. 12th April 1965; Vol. 710, c. 931.] Now, we have the Report of the Royal Commission and the committee of the Advisory Council has had two years to consider its findings on the other matter. I would, therefore, strongly urge my hon. Friend that now is the appropriate time to introduce legislation. I should be most disappointed if this matter is not mentioned in the White Paper, perhaps towards the end of the year.

We have heard very little about employers' organisations. I suppose that all things are perfect in a perfect world on the other side of the House, but some of us have had continuous contact with these organisations over a number of years. I sometimes ask myself, who is the employer these days? It is difficult to identify the entreprêneur standing with his foot on the neck of the worker trying to wring the last drop of sweat and the last halfpenny out of him. I have concluded that, in many cases, the employer is characterised by the director of the association sitting across the negotiating table from us. One must remember that, in this salubrious age, even managing directors and chairmen of companies are hired and fired from time to time.

I suppose that it is in the nature of things that employers' organisations are structurally more up to date than trade unions, but the Report refers specifically to the attitudes of employers which are often embodied in the utterances of their organisations. There is no doubt that many employers are still rabidly antiunion, and one of the greatest divisive factors in industry is the division which is perpetuated between workers and staff and different conditions given to each by employers. I am convinced that this is perpetuated in some cases on the principle "divide and rule". Who can have a happy relationship in industry when a young girl of 15 or 16 can join an organisation and, within six months, be entitled to a number of privileges, such as full sickness pay and so on, to which her father, who has been on the shop floor in the same establishment for 40 years is not entitled? These are some of the things which can be changed and which rest largely in the hands of the employers. If the employers' organisations claim to be progressive, they can do something about this.

I broadly welcome the Report. I think that it will set the style for many years to come and set the pace for discussions on industrial relations. I emphasise that rather than attempt to legislate industrial action out of existence, which seems to be the idea, judging from some utterances from hon. Members opposite, the Report realistically intends to deal with causes. That is what we should do. It is the only sensible course. If we cast our minds back to the strike of the Asturian miners, we remember that even General Franco could not deal with 30,000 miners on strike. There is an object lesson somewhere there. If we approach these matters with good will and with neither side having a chip on its shoulder some very great advances can be made to the benefit of all sections of society.

6.20 p.m.

Mr. Richard Wainwright (Colne Valley)

Perhaps it is because the hon. Member for Bradford, North (Mr. Ford) and I both represent several communities with low wages but very few strikes that I very much agree with him when he says that the Donovan Report should not be discussed mainly or primarily in terms of strikes. What is far more important about a vast improvement in industrial relations is the enormous increase which that would create in take-home pay, job satisfaction, personal health and the rapid growth of our corporate national wealth. It is in that positive sense that I want to join in this debate.

The right hon. Gentleman the Member for Mitchum (Mr. R. Carr), in explaining the Conservative Opposition's choice of this subject for debate, described the debate as preliminary. He would have done well to have described it as premature, because I agree with the right hon. Gentleman the Member for Leeds, West (Mr. C. Pannell) and others who have indicated that in their constituencies there clearly has just not been time for many local trade union branches to apply themselves to this massive Report and make their representations to their own Member of Parliament. It is a pity that we have not waited for that sort of democratic process to get into operation.

I dwell on this point because I have sensed from the Press a real danger that the findings of this extremely painstaking and conscientious Commission may be swept away on a wave of public impatience because they do not provide an easy, semi-automatic answer to a series of extremely troublesome problems. The work of the Commission has produced something highly subtle and extremely detailed, but it has also thrown some much needed light on what has previously been very obscure. I will give only one example of this side of their approach.

It seems to me, for example, that the Commission has cleared up, once and for all, the old bogey about the effect of Section 4 of the Trade Union Act, 1871. With respect, I do not think that even the Minister gave full justice to the clarity of the Commission's findings, because whereas we have often been told that this Section is very largely responsible for the lack of binding force on agreements between employers and unions, the Commission speaks very clearly on what has previously been thought to be a highly intricate legal matter. In paragraph 470, the Report states: There is in fact nothing in the law to prevent employers or their associations and trades unions from giving legal force to their agreements. The paragraph adds: That it does not happen is not, as we have already said, due to the law. It is due to the intention of the parties themselves. So any reforming policy which puts practically at the head of the list the repeal of this Section is dealing with trifles.

The Commission faced a quite appalling task, and a task which should not have been allowed to accumulate during all the years since the war. The appalling state of industrial relations in many parts of British industry is not a case of grave social blight which can only be removed by action of this House. It is not one of those social evils of the type on which we have spent some time debating in the last year or two, where those who are suffering from that particular evil have to look to Parliament for release.

Industrial relations is something that is continually on the move, something that is continually evolving, and it is very largely the responsibility of people quite outside Parliament. But there is a very grave responsibility on Governments, and in any discussion of the mess which the Commission found and which is described so vividly, Governments from either party that has been in power since the war must accept a very large share of the blame. In this connection I refer to paragraph 142, which says: Generally speaking, therefore, the Government's considerable powers of intervention in industrial relations are used to support the system of industrial relations as it has developed in private industry. It also states: One way or another statutory wage fixation and systems of wage settlement in the public services for the most part yield results not very dissimilar from those achieved by collective bargaining elsewhere. There is a very real responsibility on the largest employer in the country to get on and improve its own methods without waiting for an industrial relations committee or any of the rest of the apparatus that is proposed.

What we on this bench most welcome is the clear and emphatic way in which the Report puts the responsibility where it primarily and mainly lies; namely, at the work-place and, in the first instance, in the hands of the employer who, after all, has the responsibility of taking on and organising the employees. I feel rather strongly that if any message goes out from this very early debate it should be that this House will not provide employers and employees with their answer, that they must not look to Parliament for the main source of results, but that the responsibility rests, first of all, with boards of directors and, secondly, with the various levels of union negotiators.

What disappoints us in the Report particularly is that the somewhat tepid description of the way in which it is proposed that the industrial relations commission should work and the standards which it should apply. No one can say that Donovan brings its new Commission on the stage in a really dramatic way, and if Donovan has failed to do that the responsibility will be all the more on Government to make sure, if this body is to be brought into being, for which there is very much to be said, that the ordinary chap at the bench can see that it holds out a real hope for him, and is not just one more piece of complicated bureaucracy.

We appreciate that for a body covering such a vast and highly differentiated field as the C.I.R. will do, if it comes into being, it is impossible for anyone to lay down the precise standards it should adopt, but we should have liked to have seen certain approaches cited in the Report as examples of how the C.I.R. should go about things. In the case of the multi-union workplace, we should have liked to have seen by way of example the Report suggest a compulsory obligation for properly elected works committees which would have the responsibility of work-place bargaining and of seeing that what had been agreed was carried out by the employer. Some hope of participation, some hope that the C.I.R. would bring into being a real means of effective workplace bargaining and participation, would have lit one or two beacons which the present rather dull recitation of platitudinous standards for the Commission will fail to do.

I repeat that we are not governed in this country, thank goodness, by Royal Commissions. It would be an injustice to the hardworking and penetrating Donovan Commission to expect it to propose semi-automatic machinery to deal with this vast and ramified problem. It is a matter for employers and those with whom they negotiate, but so far as bringing the framework into being that is the job of the Government. We look forward not entirely despondently to the early part of next year for some signs that the Labour Government will at least stake their own place in British politics by showing that they can do it.

6.31 p.m.

Mr. Russell Kerr (Feltham)

No one who has read the Report of the Royal Commission can fail to agree that Mr. Justice Donovan and his colleagues have produced a painstaking and thorough document of the kind we have needed for a very long time. Not only does the Report reflect very deep thought on a wide range of industrial problems, but for the most part it resists most of the wilder and more reactionary thinking of employer organisations and their spokesmen on the benches opposite. It need hardly be said that this is a critically important area of policy where mistakes resulting from ignorance of the real situation in industry or from prejudice could have the most calamitous effect on industrial relations in this country.

Despite the attempts which have been made by employers and others to suggest that Britain is a strike-ridden country full of industrial layabouts, judging by the "league tables" of comparison with other industrialised countries, Britain is very near the bottom of the "league" in the number of days lost through strikes. As has often been pointed out, vastly greater loss of production occurs every year through preventable illness than through strikes.

Although I shall have some serious criticisms to make of the Report, nevertheless I start with one or two bouquets to Mr. Justice Donovan and his colleagues. The first is the importance which the Report attaches to white-collar or non-manual trade unionism. This is growing by leaps and bounds, as the recent growth of the National Union of Bank Employees, to give but one example, testifies. It is important that this fact and the reason for it should be well understood by the House. As an executive member of the A.S.T.M.S.— incidentally, the fastest growing union in the Trades Union Congress and the leading technicians' and supervisors' union in the world—I am very relieved that the Commission has done its homework so thoroughly and got its perspective correct in this regard.

Too often in the past, official bodies of this sort have been prepared to concede in full the right of manual workers to organise, but have been extremely reluctant to concede the same right to non-manual or white-collar workers. I quote from the relevant section of the Report on this theme, which seems eminently sensible. Paragraph 231 says: Some employers hold that there is a special relationship between the employer and white-collar staff which is incompatible with their representation by a trade union. This view is becoming increasingly unrealistic and out of date. It fails to recognise the growth of large bodies of white-collar workers in no way involved in management whose hours and conditions of employment cannot be settled by discussion with each individual. Even among managers trade unionism is not necessarily inappropriate, as the experience of the nationalised industries and the civil service show. Though in private industry such persons at present normally prefer to negotiate their own terms and conditions, they nevertheless frequently combine to protect their interests in professional matters. Later the Report says: Employment is increasing in areas which have proved difficult to organise, so that the effect of obstacles to the development and recognition of unions in these areas is assuming greater importance for the future of collective bargaining. The evidence is that if these obstacles are to be surmounted more effective means of dealing with problems of trade union recognition are needed. That is in paragraph 224.

The second bouquet which I give to the Donovan Commission is for its recommendation to set up some kind of industrial relations council to cover matters of union recognition and other industrial issues, a matter on which there may be some disagreement with some of my political nearest and dearest. We could have done with this body some weeks ago when questions about my union and the Clerical Workers' Union came before the British Steel Corporation. It took the threat and the actual commencing of industrial action to cause a committee of inquiry to be appointed to look into these matters. The matter is, of course, sub judice at the moment and, therefore, I cannot comment on the merit of our case, but this incident underlines not only the deplorable state of the Steel Corporation's thinking on industrial matters but also the need for some such body as that now proposed by the Donovan Commission.

The main question here is whether workers are to be allowed to belong to a union of their own choice. In order to make this possible there must be facilities for ascertaining the views of workers concerned and giving effect to that in the shape of recognition. This raises the question whether decisions by the proposed industrial relations commission should have the force of law. My view is that it would be advisable to try voluntary procedure first so that a body of case law could be built up, but I retain an open mind as to whether eventually legal backing might become necessary. The question is whether or not the commission's decisions would have enough weight and effect without legal backing.

There is, of course, ample justification for giving such a body mandatory power, not least in the I.L.O. Convention No. 87 which in Article 2 says: Workers and employers without distinction whatsoever shall have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choice without previous authorisation. Article 3 says: The Public Authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof. These Conventions were ratified by Parliament many years ago. We seem to have a national genius for failing to complete the operation by enacting legislation reflecting Conventions we have ratified.

Returning to the question of white-collar unionism, although the social or snob reasons for white-collar workers not joining unions have begun to disappear, none the less there are still very substantial difficulties inhibiting the growth of unionism in this sector of industry. This is something which the Donovan Commission quite rightly deplores. Particularly among older non-manual employees there is still widespread fear of dismissal and victimisation. Obviously the difficulty of a 50-year old employee finding work is enough to keep large numbers of such people extremely tame in an industrial sense. For this reason I welcome the Donovan proposal to set up labour tribunals to deal with issues arising out of contracts of employment, excluding, of course, injury claims, and also to safeguard employees against unfair dismissal. This means that any worker who feels aggrieved at being sacked would have the right to seek compensation or, if both parties agree, reinstatement.

I am rather unhappy about the recommendation on reinstatement. I hope that further consideration will be given to it before the Government translate the rich red wine of Donovan into the Ribena of a Statute. Reinstatement should not be subject to the agreement of both parties, but should always be a possibility. The reason will be obvious to anyone with much experience of industrial relations. There are many employers who, if given the option of reinstating the dismissed worker or paying compensation, would make the calculation that they were better off by paying up and getting rid of the union leadership within the factory. Therefore, it would be highly unwise for the Government to leave this potentially disruptive possibility in any Bill they may prepare based on the Report. Reinstatement should always be possible.

I turn to another factor which tends to make for industrial trouble, and which has certainly retarded the growth of trade unionism amongst non-manual workers in the past. I refer to the notorious rule of the Foremen and Staff Mutual Benefit Society, the F.S.M.B.S., which prohibits membership of a trade union to its members. This body, heavily backed by many big firms, has proved resistant to all blandishments and suggestions about democratising its rules—so much so, that it has become necessary for my own union, which for many years led the fight against this body, to go to the great trouble and expense of promoting a private Bill to make it impossible for this highly reactionary body to continue to exercise discrimination against trade unions. Naturally, we are very delighted that Lord Donovan and his colleagues have much the same point of view as ours on the matter. No doubt, careful note will be taken of their views when the private legislation comes before the House.

Perhaps I should, in passing, pay tribute to my right hon. Friends the Prime Minister and the Chief Secretatry to the Treasury, as members of the A.S.S.E.T. Parliamentary Committee for many years, led the Parliamentary fight against the F.S.M.B.S., and for whose continued help by way of assisting the necessary legislation we should be most grateful if it were forthcoming.

The extent of the Royal Commission's support for my union's position on this pernicious F.S.M.B.S. rule can be gauged from the reference to it in paragraph 252, which says: In our view it is quite foreign to the purposes of Friendly Society that it should prescribe its rules that no one can be a member and drew benefits if he is a trade unionist. If the State's policy is to encourage collective bargaining through the medium of representative trade unions, since this is in the public interest, then such a rule as rule 7 is contrary to the public interest. The Report later adds: The Commission further considers it contrary to the public interest that an employer should stipulate in a contract of employment that an employee should not belong to a trade union, and recommends that any such stipulation should in law be void and of no effect. Another constructive and useful suggestion in the Report is the selective revival of the right to go to arbitration unilaterally, as happened during the Second World War and the years immediately after. That would bring to heel the humbug employer who is playing for time by confusing the issue and using similar tactics. It would also help to deal with the employer who provides himself with a running defence against effective unionisation by recognising other unions with little or no strength inside the organisation rather than unions genuinely representative of the various grades. A recent example, I suspect, is the decision of the Personnel Director of the British Steel Corporation, a former member of the T.U.C. General Council, to recognise unions that have little or no membership in the clerical and technical grades at the expense of those that have. It is a mistake which has produced a vast amount of industrial trouble that could have been avoided. I hope that this is the last we shall see of this kind of industrial three card trick.

I should like to turn briefly to several other aspects of the Report which I find a little less pleasing, and possibly also ill-considered and impracticable.

Mr. James Tinn (Cleveland)

My hon. Friend mentioned the difficulties with the British Steel Corporation. His references were rather one-sided. Does he accept the principles of the Bridlington Agreement, which for many years has prevented the kind of industrial union trouble which the activities of his organisation and the other concerned seem likely to bring into steel for the first time?

Mr. Kerr

My union is well known as a faithful upholder of the Bridlington Agreement. We have a very impressive list of victories when the matter has come before the T.U.C. Disputes Council.

The first item in the Report that I find a little less pleasing is the recommendation that the protection of Section 3 of the Trades Disputes Act, 1906 be withdrawn from unofficial strikers, those whose industrial action is taken without the formal blessing of their union executive. The effect of the recommendation would be to deprive unofficial strikers of immunity from action for inducing breaches of contract, and expose them to actions for civil conspiracy if they made, and acted on, an agreement to induce or procure a breach of contract. It is noteworthy that a substantial minority of members of the Royal Commission dissented from the recommendation, and several of the dissenters had a very deep knowledge of industrial relations.

Were the right hon. Member for Mitcham (Mr. R. Carr) present I should tell him—here he is. Fools rush in where angels fear to tread. If the Government were so foolish as to carry that recommendation into law—surely a possibility that one can dismiss—such a change would return industrial relations in this country to the dark ages, or at any rate to the 19th century. It would mean not only massive industrial unrest following actions in the courts against unofficial strike leaders, but also, as a trade union colleague recently put it to me, the shifting of the final bargaining to settle issues from St. James's Square to the governor's office of our debtors' prisons.

The recent industrial dispute in the Irish electrical supply industry is a reminder of what could happen here, and a warning against complacency. In any case, this idea is a nonsense. For the benefit of the right hon. Member for Mitcham, the fact is that some 42 per cent. of so-called official strikes start life as unofficial, so the Government would be wise to stick to the present law, which wisely makes no distinction between official and unofficial strikes. If, despite what I say, the Government go ahead, I make the safe prediction that union after union will rightly change its rules so as to make all strikes official, unless the union decides otherwise.

Mr. R. Carr rose—

Mr. Kerr

I am well overdue.

Mr. Speaker

Order. Interventions prolong speeches. Many hon. Members wish to speak.

Mr. Kerr

I am trying to come to my conclusion quickly.

I appeal to the Government not to worsen still further relations with the trade union movement by accepting the recommendation. They have enough on their hands repairing the catastrophic damage done by the Prices and Incomes Act without flying into more trouble.

The other recommendation that is unacceptable to me and is wildly impracticable is the proposal that industrial agreements should be registered. Even though a tiny meatless bone is thrown to the critics by the rider that if employers have no deals to report this may be investigated, on the ground that the firms concerned might not have conceded adequate union recognition, the suggestion is ill-considered and betrays a frightening bias that is happily not evident elsewhere, in that it submits only one section of our economic life to an intolerable degree of bureaucratic surveillance unmatched elsewhere. Before the Government land themselves in this bureaucratic morass, I suggest that they do a little homework.

For example, do the Government have any idea of how many firm and company agreements there are, or how many changes in these agreements are bargained annually? Remembering that this is a Labour Government operating in the shark-infested waters of a so-called free economy, do the Government think it right to vet and investigate all collective agreements, with the inevitable consequence of interfering with agreements to the detriment of the workers? I beg the Government to think and think again before they take such a long step towards the corporate State as would be involved in this proposal.

This brings me—no doubt, much to your relief, Mr. Speaker—to my last point, which I can put very briefly. In all these matters of industrial relations, it is a great mistake to imagine that over any length of time it can benefit the nation or its industry for the Government to attempt to coerce workers into doing things which are utterly distasteful to them. By and large, the mass of workers will reject and render counter- productive any such attempt, as the present unrest and political bloody minded-ness of the workers over the prices and incomes legislation shows quite clearly. I appeal to the Government, therefore, to seek the path of co-operation and agreement with the trade unions and, in so doing, who knows but that they might in time persuade some millions of trade unionists that the Labour Government is their friend and not their enemy, which would be a happy end to the unhappy story which began on 20th July, 1966?

Mr. Speaker

Again I remind the House that many hon. Members wish to speak and that brief speeches will help.

6.51 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

Intervening for the first time in an industrial relations debate in the House, I cannot presume to bring to the subject the breath of knowledge or the deeply informed comment which have been brought to it by so many other speakers. I suggest, however, that, although we have been gently chided by hon. Members opposite for not being members of trade unions, experience in the management side of industrial relations is just as valuable a contribution to the subject as experience on the trade union side. I must tell the hon. Member for Bradford, North (Mr. Ford), who mentioned this matter, that the last thing I did before leaving my previous management job was to institute arrangements whereby young girls of 16 on the staff did not have better conditions of service than had their fathers who had been on the shop floor for 40 years.

My purpose tonight is briefly to examine rather more closely than has been done so far one of the sections of the Donovan Report. We have had many broad and perhaps vague words of praise and censure for the Report, but as yet nobody has gone very deeply into any of its various subjects. The subject with which I should like to deal is that of the definition of a trade dispute which appears in paragraphs 816 to 822 of the Report.

The definition of a trade dispute in the Trade Disputes Act, 1906, which is quoted by the Report is set out as though it were Holy Writ, or something from one of Shakespeare's plays. It is set out in italics and in short lines which look as though they should rhyme, but which, as far as I can see do not—the metre is not entirely apparent to me—but it is set out as though it was something carved in stone many centuries ago and not in any case or in any way to be altered.

The first sentence of the Report after the definition is in fact: We do not think that this definition needs any substantial alteration. The first appendix to the Report shows that none of the 320 questions which the Donovan Commission asked had any connection with the definition of a trade dispute. It did not even ask whether the definition should be changed.

I was intrigued by this and I thought that the arguments in the House in 1906, when this definition of a trade dispute must have been so painfully hammered out, would be instructive and informative for me. In my ignorance, I was sure that hon. Members opposite would know the arguments by heart, but I thought that for my education I should revert to them. As you are very busy, Mr. Speaker, perhaps you have not had time recently to read that debate and it may have slipped your memory exactly what then happened.

In those days there were debates on First Readings but when the Trade Disputes Bill, 1906, was introduced, there was no definition of a trade dispute in the Bill either on First or Second Reading. One or two hon. Members rather desultorily and casually suggested in the course of the debates that to have a definition of a trade dispute might be a good idea. However, the Bill went through its entire Committee stage and still there was no definition of a trade dispute.

But on Report the Attorney-General— this is at col. 232 of the Commons Debates of 5th November—a very suitable date—1906, introduced a definition of a trade dispute into the Bill. That definition was, by and large, the same as that which finally became part of the law and which is quoted with such approbation and respect by the Donovan Report. It was not debated at all. The Attorney-General introduced it and Lord Robert Cecil promptly said that he entirely agreed with it, provided always that the expression should not include any agrarian dispute, or a dispute of a political character, and, with that assurance from the Attorney-General, the debate passed to the next Question.

The Third Reading of the Bill was on 9th November and again this definition went entirely unchallenged, except that it was provided that it should not apply to agrarian disputes in Ireland. Apart from that, there was no comment. I could go on about this for some time but I see, Mr. Speaker, that you are already getting impatient. In the House of Lords the definition was never challenged and it was finally written into the Act as the law of the land.

My point is that this definition, written somewhere in the Attorney-General's office 62 years ago and never challenged in either House of Parliament, has now been said by the Donovan Commission to be unchangeable and unnecessary to be changed. The Commission says that it stands as it did then, that it is wholly perfect and that nothing should be done about it.

It is extremely difficult for me, and I would have thought for the House, after all that lapse of time, with such extraordinarily changed circumstances and such an extraordinary change in the status of our trade unions, to say that the definition of a trade dispute should not at least be looked at, and I recommend the right hon. Lady and her hon. Friend when considering the Report of the Donovan Commission not to take that recommendation without some qualification, perhaps considering whether there might be any chance of changing it for the better in the light of today's circumstances.

For myself, I have one or two suggestions. I would have thought that in today's circumstances the following trade disputes should no longer enjoy the immunity from civil actions for damages which they have enjoyed for 62 years. Sympathetic strikes should no longer enjoy that immunity. Nor should action when the goods of employers other than one's own employer are "blacked" in sympathy with another union which is on strike, or when one's own union at another place is on strike. I suggest that inter-union disputes themselves should not be subject to immunity from damages in civil courts. Finally, I suggest that strikes to enforce a closed or union shop should not enjoy this immunity.

All these industrial actions are taken when the employer is in no way doing anything to damage the interests of the trade union concerned.

Mr. Orme

He is.

Mr. Fortescue

The employer is innocent in this matter, and in those circumstances why should the union which is taking industrial action, which inevitably is again the employer who is innocent in the matter—

Mr. Orme

No.

Mr. Fortescue

If the hon. Gentleman wants to interrupt, I am willing to allow him to do so.

Mr. Orme

I am sorry to have intervened while sitting down. If it is a dispute for trade union recognition within a factory, which the hon. Gentleman mentioned, for a closed shop or for the establishment of full trade union recognition, the employer is involved and is responsible.

Mr. Fortescue

A study of the OFFICIAL REPORT tomorrow will convince the hon. Gentleman, no doubt, that I said nothing about trade union recognition. I am talking about cases where an employer, who has done nothing which could be said to be objectionable to the union, suffers from the coercive action of the union. I suggest that, when the Government are considering the recommendations contained in the Report, they should not automatically accept that no change is necessary in the definition of a trade dispute.

7.0 p.m.

Mr. James Hamilton (Bothwell)

I am glad that I have been called to follow the hon. Member for Liverpool, Garston (Mr. Fortescue), because he referred to unofficial stoppages in pursuit of the right of a trade union to establish a closed shop in a factory. At present, all negotiations in industry are conducted by trade unions. If the majority of employees in a factory are members of a trade union, an unscrupulous employer can use non-trade union members against the interest of organised trade unionists. I speak now with some experience, because this happens in many cases.

I want to be objective, sincere and honest about the question of unofficial stoppages. It has been said—and this is correct—that 52 per cent. of unofficial stoppages are later recognised by the executive councils of the trade unions concerned. The lines of communication between management and workers must be closely examined. It has been my experience and that of my trade union that a walk-out results if employers attempt to foist something on to the workers without giving them the right to discuss it, because this gets the backs of workers up.

Nothing has been said so far about what are often called recalcitrant American employers. I have four of them in my constituency. These four employers have shown leadership of the highest order in the matter of recognising trade unions. Honeywell Controls, with 4,600 workers, holds top-level meetings every week with trade unions. There are discussions with shop stewards, who are told the programme which will be put before the workers for the ensuing month. Every employee is allowed to join a trade union. Some hon. Members opposite have visited the factory. They will know that on a notice board there is a document giving all the necessary information about the trade union movement.

The same applies with the American firms of Euclid, Caterpillar, and Ramco which has a resident convenor in the factory who does nothing but trade union work. He is always there when he is required. This goes a long way towards solving the scourge of unofficial stoppages, which are not in the best interests of the company, are not in the best interests of management and, most important of all, are not in the country's best interests.

I believe that employers are greatly to blame for the prevailing industrial unrest. A few weeks ago I received a letter from a branch secretary in my union telling me that the workers at a factory for which he was responsible wanted to discuss with the management the right to bring in an agreement based on productivity. The management said that it was not prepared to meet the shop stewards to discuss a productivity agreement. The only way in which the union could get the management to meet the shop stewards was by having an unofficial stoppage. This is the sort of situation which prevails. Unless management is prepared to do something about it, we shall always be in this difficult situation.

On the other hand, I condemn trade unions. In the construction industry, one of the trade unions with members working on a particular site will put in an application for increased wages. Once the application has been granted, it permeates throughout the whole site. An employer who is not prepared to recognise that the application is justified—in some instances I would agree with the employer—is faced with an unofficial stoppage.

How is this to be dealt with? Employers on construction sites should recognise the right of trade unions to have a site committee and a site convenor to carry out the negotiations with the acquiescence of all the trade unions involved. This has happened on contracts throughout the country. Once this is recognised, peace prevails and the contract moves to a satisfactory conclusion.

Some employers do not inform trade union members of what their intentions are before entering into negotiations. Once the negotiations reach deadlock, based on the procedural agreement prevailing in the industry concerned, the full-time official is brought in. Often he can make no progress. In some cases, however, he has been away from the site for only a few hours before the employer succumbs to the wishes of the shop stewards. This places the national official in an impossible position. Employers must be prepared to recognise that national officials are the recognised leaders of the union. In most cases, they are elected on a national basis. They are the appropriate persons to conduct negotiations concerning national agreements.

There has been talk ad nauseam in recent months about productivity agreements. Anyone who says that a productivity agreement can be signed and sealed at rational level does not know what he is talking about. All productivity agreements are made at plant or site level. These are the only places where a proper agreement can be arrived at. Once such an agreement has been reached between unions and management at plant level, for the agreement to be signed, sealed and endorsed, it is of paramount importance that it be sent to the union's national executive so that it is fully aware of the agreement that has been entered into at plant level between shop stewards and management. To talk about national agreements in the same way that we talk about local agreements is a complete fallacy.

This is the centenary year of the trade union movement. Unfortunately, the Trades Union Congress at national level is devoid of teeth. In September, it has a Congress when a resolution will come before it from a certain union. Once it has been carried, the unions which do not agree with it can walk out of the conference hall and do as they like about it. The trade union movement must have a reappraisal of the situation. This is one of the big weaknesses of trade union structure. Until such time as we do something about it, we shall not make the desired progress.

The Confederation of Engineering Unions is the most powerful negotiator in the country. It negotiates on behalf of 3¼ million workers. Consequently, it is an organisation which the employers, in the interests of the country, must recognise and pay attention to. We talk about a prices and incomes policy. The Confederation has been negotiating with the employers for exactly 10 months and has not yet reached agreement on the wage application. We had a national stoppage throughout the country to get the employers to take it back for further recognition. Now the employers are prepared to discuss the matter with the unions and I hazard a guess that 14 months will elapse before agreement is reached.

The moral of that story is that there must be a reorganisation of procedural agreements. We must have another look at procedural agreements and give unions and managements the right to settle their problems more speedily. Until we do that, this Report, and any other reports which emanate from whatever source we may mention, will be of no avail.

I congratulate the Opposition on giving us the opportunity of having a preliminary discussion on this very important Report. The branches and national executives of the unions have not had the opportunity of discussing it. I hope that at the end of the day we are all attempting to achieve something which will give us peace in industry, which will give industry the necessary impetus to move forward, which will enable us to increase valuable exports and cut imports—indeed, which will give us the economic stability which is vitally necessary to this country. If that is achieved as a result of this debate, it will have served a very useful purpose.

7.15 p.m

Mr. Edward M. Taylor (Glasgow Cathcart)

It is always a very great pleasure to follow in debate the hon. Member for Bothwell (Mr. James Hamilton). He always deals with the subject in hand in an objective and sincere way. He speaks with the special knowledge of being a senior trade union official. The only small contribution which I can make stems from the fact that in the five years before I became a Member I worked for an employers' organisation. The Donovan Report deals with employers' organisations and trade unions, and not a great deal has been said about the employers' organisations. I was not by any means a senior official in the shipyards of the Clyde, but I had a great deal to do with negotiations at yard and local level.

In spite of what is good and favourable in the Report the references to employers' associations, which are dealt with at some length in Chapter 13, are rather unfair, and the references on pages 41 and 43 to the functions which the Royal Commission sees employers' organisations having are, to my mind, unbelievable. The Royal Commission says that we should move to a system of bargaining. It asks who is in a position to make factory agreements the basis of industrial relations in Britain. It says that the employers' associations cannot do so.

In paragraph 175, the Royal Commission refers to the situation after bargaining comes into existence and says that employers' organisations could have a very useful function to fulfil in represening their members to the Government and Government departments, and provide work study and trained services and circulate information. The concept of industrial relations on this basis is totally out of touch with reality. I fear that the Royal Commission has made the serious mistake of thinking that employers consist of people working in little factories which are apart from the industrial complex of an area.

In the job which I had for an employers' organisation most of my tasks were concerned, not with protecting employers against trade unions, but often with protecting employers against themselves. The easiest thing in the world for any employer to do is to cave in to a situation in which he is under threat and thereby put all his fellow employers in a very difficult position, to filch labour by increasing wages, and so on. To suggest that the trade unions should carry on collectively working for all their members together and using the full might of their unions, whereas in negotiations employers should be concerned only with working on a fair basis, is out of touch with reality.

While plant bargaining may grow— and our experience in recent years has been for national wage agreements to be of a smaller amount in relation to the total wage movement of a year and for bargaining at plant level to be of more significance in general wage movements —it is clear that movements within one firm or factory or shipyard concern all the employers of the district and not just one. Therefore, the employers' associations have a real rôle to perform, and I think that the Royal Commission was wrong in this regard.

If we have any doubt about the need for employers effectively to work together in the same way as unionists have had to band together in their common interest, we need only look at some very recent industrial disputes. There was the famous instance of D.A.T.A. trying to impose its own wages scale by picking on particular employers at the most difficult time for them and thereby trying to get recognition of its own scale of rates. It is wrong to blame it for doing this in a system which is geared to a constant battle which is essential in any semi-capitalist community. On the other hand, it is entirely wrong to suggest that employers should think only of themselves and not appreciate that they have an obligation to industry as well as themselves to work together.

Having seen the effect of a concession of 2d. or 3d. an hour to joiners, electricians or plumbers in one establishment and how it can affect the situation, I think that we are living in cloud-cuckoo-land if we think in terms of plant bargaining without the full authority and direction of an employers' association to fight for industry and not just for an individual firm. However, I agree 100 per cent. with what the hon. Member for Bothwell said about strikes. As was suggested tentatively by the Royal Com-mission, far too often strikes take place simply because strikes pay. How often have I seen a bona fide elected trade union official reasonably push forward his claim under a procedure agreement with all the logical backing in the world, which is turned down, and about two weeks later one or two shop stewards organise an unofficial strike at an important and embarrassing time for the firm and within days the claim is conceded in full.

Trade union recognition does not involve just sitting round a table and having cups of tea with trade union officials. What is more important is that full recognition should be given and any concessions which are to be made should be given to the elected and bona fide trade union officials. We cannot have any grounds for objecting to the irresponsibility of shop stewards and unofficial strikers if we are not prepared to give full backing to trade union officials in their work. Many of the strikes in industry stem simply from weak employers who are irresponsible in themselves and are not prepared to give the proper backing to a trade union official.

A point with which the hon. Member for Bothwell would also agree is that it seems to me from my small experience in industry that the one union which does not exist is a union for trade union officials. It is appalling to discover the wages that are paid to certain trade union officials, the conditions in which they work and the fact that men holding key and responsible jobs in the community often receive less money than the people they represent. Their hours of work are extremely long, bearing in mind that many pressure meetings take place outside normal working hours. There is a case for considering whether the trade union movement, instead of simply fighting for the people whom it is meant to represent, could fight for some of its own full-time officials.

The Report of the Commission mentions in detail the question of the right to trade union recognition and union membership. While I have enjoyed almost all the speeches in the debate, the speech by the hon. Member for Feltham (Mr. Russell Kerr) made me boil a little. He talked about the need for trade union recognition and of everyone to join a union. I asked him to remember that while there is certainly a right to join a union, there is surely also a right not to join a union. The specific instance mentioned by the hon. Member of the Foremen and Staffs Mutual Benefit Society has relevance to this.

Many people in industry consider that one of the great problems of industry has been the growth of what might be called a white-collar bureaucracy in management. Instead of the old system of people working their way through industry and getting to the top, we now find—for, I am sure, logical, sensible reasons—that most top management these days, particularly in the newer, more modern industries, seem to be chartered accountants and university graduates, splendid people who work extremely hard, but many of them are a little out of touch with shop-floor attitudes and problems. In these circumstances, the position of the foreman is even more important than ever before.

One of the biggest problems in industry is the change in attitudes when people leave work on the shop floor to become foremen. Overnight, a foreman might become a member of the management team. He has to have new concepts and ideas. It is difficult for anyone to do this who gains promotion in his own establishment. It is all the more difficult if he retains membership of a union, and of the union of which he was a member.

When pressure was brought to bear by the Boilermakers' Society in the shipyards, people were told on gaining promotion that if on becoming foremen they did not retain membership of the society and join the society's foremen's register, if ever they had to return to their tools things would be difficult for them. I hope that regard will be paid to the pressure which is put on by certain unions.

No one is under any obligation to join the Foremen and Staffs Mutual Benefit Society. Allegations in general have been made in the past, but any specific cases have been shot down in flames whenever they have been brought forward. Many people in industry feel that there is a right for people to join together who do not want to join a trade union. Certainly, for the sake of the management structure in industry, that is a viewpoint which can be supported with reasonableness.

The interesting thing concerning the Foremen and Staffs Mutual Benefit Society is that when the recent decision was taken on the continuation of their rule which causes so much offence to the hon. Member for Feltham, the employees' representatives who voted did so by a very substantial margin for the continuation of this rule. We certainly want the right to trade union recognition, but if we have this the unions must accept responsibility for the conduct of their members on the lines suggested in the interesting document "Fair Deal at Work" put forward by my party.

It is rather a tragedy that although the unions have quite frightening powers of discipline over their members—for example, the power to deprive them of employment or to have them removed from an industry—these powers are not used. Certainly, if the unions demand more and more recognition and the right to negotiate at all levels, they must accept responsibility for at least the industrial conduct of those whom they represent and whose attitudes they support.

I have much to say but must cut short my speech. I have one final point about the giving of legal backing to agreements. It was interesting to hear the Minister say that there was no great pressure from those who have the power to give legal backing to agreements. There is a major difference between contracting out and contracting in. That was the whole point of the change in Clause 4 of the old Bill.

On the other hand, we have seen almost an incentive to go legal in many of the recent agreements. We have seen an increase of 6d. an hour at six-month intervals consequent upon, and subject to, changes in working practice. This is simply another way of giving an agreement legal backing by saying that an increase will be applied only if certain things are done. It is like the practice of establishing an internal legal system to tell workers that they can have 11s. more a week if they turn up for work every day on time. This is another form of giving legal backing to an agreement, because the money is not paid if the obligation is not carried out. In these circumstances, there is a great desire to have legal back- ing for such agreements. I am convinced that if we move to a contracting-out system, we shall find that there are very few industries which do not wish to support this.

All this, however, is subject to a change of attitude in industrial relations. The example which I have mentioned was seen recently in the rail dispute. Men asked for something and were told that as a matter of principle it could not be conceded. Two weeks of industrial unrest followed and then the concession was made. The nationalised industries are not worse than private industry in this regard. That is simply a topical example.

The best way to avoid and stop strikes and to carry out what we want in the Commission is to create the circumstances in which strikes do not pay and concessions are made in every case through the normal procedure of the industry, giving the maximum good will to the authorised trade union officials.

7.28 p.m.

Mr. John Horner (Oldbury and Halesowen)

I am sorry that the right hon. Member for Mitcham (Mr. R. Carr) is not present, because I wanted to say to him how disappointed I was at the burden of his speech. His party have chosen this Supply day to debate the Royal Commission Report. It seemed to me that the right hon. Gentleman's speech was singularly lacking in constructive comment or serious criticism of the Report. It is to the Report that I wish to direct the attention of the House.

I am not very disappointed in the Report, because I did not expect very much from a Royal Commission which had the terms of reference that this Commission had. It was asked to consider relations between managements and employees and the role of trade unions and employers' associations in promoting the interests of their members and in accelerating the social and economic advance of the nation, with particular reference to the law affecting the activities of these bodies; and to report". The Report is a monumental tome and a mine of fact and information that will stand examination for many years. All of us who are concerned with industrial relations are grateful to Lord Donovan and his Commission. What we have from them, however, is not a Report dealing with such matters as accelerating the social and economic advance of the nation or the role of trade unions". The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) spoke of the rather negative way in which the Report deals with the rôle of employers' associations. Nevertheless, we have an invaluable document which describes the way in which industrial relations are conducted and which makes some suggestions about how they might be improved.

I imagine that others were disappointed at the Report for other reasons. The blood and thunder critics of trade unions have been disappointed. In the three years in which the Commission was sitting we witnessed a spate of critical articles, analyses and speeches about the iniquities of trade unions. Many people no doubt anticipated that the Report would produce recommendations carrying penalties for official strikers, let alone unofficial ones. They no doubt expected that shop stewards would be portrayed as mischievous wreckers instead of hard working, co-operative people who, as the Report points out, often have troubles thrust on them rather than looking for them. The Report makes it clear that the economic ills of the nation do not stem from the malpractices of trade unionists. It emphasises that industrial conflict does not stem from the mischievous activities of bloody-minded shop stewards.

One sees from the general perspective of the Report that management is castigated for failing to adapt its procedures and institutions to the changing industrial and technological demands of the second half of this century. Management is condemned for having wholly failed in the past 50 years to initiate progressive change in industrial relations and for leaving the matter entirely to the trade unions and Government to explore. The Report makes it clear that management must shoulder the main burden of leadership and initiative for the necessary reconstruction of industrial relations which, it states, is fundamental to meet the needs of our society in the remaining years of this century.

I have not been persuaded so far in this debate to support those who argue that the Commission is wrong in saying that our present ills and shortcomings do not stem from the voluntary character of British collective bargaining. The right hon. Member for Mitcham said that we should not pride ourselves on the uniquely voluntary character of our collective bargaining system. The Report says that the ills and shortcomings have other causes. It argues, it seems, that to weaken or reject this unique collective bargaining system, with its voluntary character, or to restrict or confine it would be pointless and, I fear, would be most harmful.

The major aspect of the Report, which will be most intensively discussed, is that part which argues against the case made by what I would call the "legalists". The Report sets out brilliantly and with powerful documentation the argument against those who would seek to restrict the voluntary character of the British industrial relations system. I am waiting to hear arguments against that part of the Report which makes it clear that, desirable or not, the legal enforcement of agreements—sanctions against trade unions and trade unionists—simply will not work.

Those who have read Appendix 6 to the Report, presented by Sir Harold Emmerson, Permanent Secretary to the Ministry of Labour during the war, will have been struck by the cogent way in which, without drawing conclusions, he clearly sets out what would happen if one tried to apply legal sanctions against workpeople who were striking officially or unofficially.

I join with my hon. Friend the Member for Feltham (Mr. Russell Kerr) in warning the Government against accepting too lightly the idea that one can distinguish between official and unofficial strikes by some simple means. Recently in my constituency we had a major strike. It was wholly unofficial because it was conducted, led and participated in by strikers who were not members of any trade union. The history of the trade union movement is littered with examples of strikes undertaken by non-unionists.

I recall the famous strike of girls at the A.A. Headquarters in Birmingham. It was unofficial and it was not organised. I also remember the strike that took place at Foyles. That made the headlines for some days, but the strikers were not union members. The right to strike is indivisible. It does not require trade union authority. It therefore cannot be legalised out of existence. That is why I join my hon. Friend the Member for Feltham in warning the Government to be extremely careful in examining this aspect of the Commission's Report.

I readily acknowledge many of the deficiencies, shortcomings and weaknesses in the organisation and administration of trade unions, and particularly those aspects mentioned in the Report as a result of the Commission's investigation. I acknowledge that these matters must be given serious attention by trade unionists. Indeed, it would be cowardly to run away from many of the conclusions, as a result of these trade union weaknesses, which the Commission draws.

When one considers the whole sphere of industrial relations, one must accept that the Commission deals with the realities of the situation and presents the facts, even if they are the facts that one does not necessarily wish to hear. These facts disappoint those who would like to pretend that things are not what they are. On the basis of these facts the Commission reaches conclusions which, in broad outline, I am prepared to accept in this, the first examination of the Report in the House. This is, after all, our first examination of this monumental tome. Generally speaking, if one does not like the facts, one will not like the conclusions. I do not like many of the facts, but I am prepared to accept them, and the conclusions.

There is a brilliant exposition in the Report of what Donovan calls the "two systems". One is the growth, whether or not we like it, of plant bargaining. This is bound to extend ever wider in the ensuing years. I was a member of a trade union which had no plant bargaining facilities. It had a national system of wages, nationally laid down and strictly adhered to. I recognise the changes that have taken place in industry, and Donovan, also recognising them, clearly exposes the weaknesses in trade union negotiations and in the structure of industrial wage agreements which flow from too heavy a reliance on national agreements. These are facts, But facts are chiels that winna ding", if I quote correctly. These are the facts which Lord Donovan and the Commis- sion are asking the trade unions and employers to face.

To conclude, I will refer to the I.R.C., the Industrial Relations Commission. The I.R.C. has a set of obligations. Its duties are hazily sketched in by the Report. The idea of the I.R.C. needs a great deal more study before I would subscribe to it without qualification. The Royal Commission is right to say that, however necessary it is to look to the legal framework within which industrial relations are conducted, it would be a gross mistake to modify that framework by imposing upon trade unions the legal strictures, the inhibitions, which we have heard from the hon. Gentleman opposite. There is a vast gulf between the arguments and philosophy of hon. Gentlemen opposite and the arguments so well presented by the Royal Commission. I stand with the Royal Commission. The "legalists" will have a hard job to argue against the closely documented and brilliantly worded paragraphs of the Royal Commission's Report. Lord Donovan and his colleagues say that it is not possible to impose by law a code of behaviour. If it is sought to make people subscribe to a legal framework which is a pretence and not a reality a great deal of harm will be done to the fabric which has been established and built up over the years and, far from developing a harmonious and more co-operative basis of industrial relations, there will be a danger of importing an element of disharmony.

The trade unions are the greatest voluntary organisations which this country has ever established. They are a great contribution to civilisation. My right hon. Friend the erstwhile Minister of Labour of blessed memory has spoken of the golden age of Ernie Bevin. The golden age of trade unions has never existed. There has never been a time when the trade unions have not been under attack. They have been under attack during the last three years pending the publication of the Donovan Report. The Donovan Report has disappointed many people who thought that a caricature of the trade union movement would be produced. The Royal Commission has done yeomen service to the country by the way in which it has produced a picture of industrial relations, and I hope, in spite of the qualifications which I have mentioned, the Government will pay serious attention to the Report and will act upon it in the not too distant future.

7.44 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The hon. Member for Old-bury and Halesowen (Mr. Homer) has made a speech with which I find myself largely in agreement. I would ask him not to try to widen the gulf on the two sides of the House between the Donovan Report and the Conservative proposals. I do not believe that the gulf is as wide as he is trying to make out. The encouraging thing about the present times is that industrial relations are becoming less and less bedevilled by politics. The recent example of the prices and incomes legislation, when the Tories and the trade unions voted solidly against the Government and the C.B.I., suggests that there is hope that the hitherto partisan and party attitude to industrial relations may be tending at least to become confused.

A touch of this was apparent in the otherwise excellent and interesting article of the right hon. Gentleman the Member for Southwark (Mr. Gunter), to whom tribute should be paid for having set up the Donovan Commission. He said very wise things upon the subject. He said that during his stewardship of the Ministry of Labour he had to a large extent relied upon knowing all the chaps and letting them talk and that this had eased tempers and feelings. He also said that the Tories knew nothing about it, and that, although my right hon. Friend the Member for Mitcham (Mr. R. Carr) had great diligence and had done a great deal of work, he was somehow unsuited to deal with industrial relations because he is a Tory. The idea that Socialists can deal with trade unions and industrial relations and that Tories by definition never can is an idea which would be better dropped. I do not think it is true, and it also makes it very much more difficult to find the right solution.

I start with the origins and the purposes of trade unions which, in a single sentence, were to get a better bargain for their members. The operation of pressure by groups of workpeople led to the maximisation of the return which labour could achieve in a plant, factory or industry. It was an expression of the market value of labour. Just as in some markets value is more easily determined, so in the labour market pressure has to be exerted, and this was especially so in days long ago. It was an essential element in our capitalist system, but times change, and these pressures were overwhelmed by the strength of the combination of employers, and the unions had to match this with combinations of unions. The unfortunate result is that the large national union has made itself liable to takeover by the State or by other organisations in order that it can be used against the interests of its own members. For instance, the Government now put endless pressure on the T.U.C. and on our national unions to exert pressure on their own members to accept prices and incomes disciplines.

The concept of trying to make trade unions put pressure on their own members to accept industrial discipline, to accept agreements which have been negotiated on their behalf or to accept discipline over strikes is totally misplaced. It can lead only to a situation where the ordinary members of a union have to repudiate the leadership of that union, and it puts trade unions in an impossible place if they are to be subject to pressure from above to control a situation when such control is not in the interests of their own members.

This explains the powers of the shop stewards and the weakening of the power of the union at the centre. It explains the preoccupation of many of my hon. Friends with unofficial strikes. The strikes are unofficial only because the union has been to some extent suborned and used against the workers by the forces which are active. What we must do, as almost all hon. Members who have spoken in the debate have said, is to go back to bargaining. We must go back to the bargain being negotiated and executed between the employer and his men. That is what the whole process is about, what the function of the unions originally was and what it should be again.

There is no disagreement about this, but what is wrong in both the Donovan proposals and in the proposals of my own Front Bench is that there is nothing like enough stress on the need to establish a system whereby plant bargaining and the enforcement of such bargains can take place much more readily and easily. Why only 5,000 men plus establishments should be included in the Donovan Report, I fail to understand. Nor do I understand why we should not have much more developed thought and recommendations on how we are to break the power of the central bargain in order to get the local bargain into a much more prominent place.

When I remember what was said in our debates on the Prices and Incomes Bill, I am extremely depressed by the extent to which the Government still seem to think that productivity is something planned for with a team of experts in London. They have not developed their thinking enough of how to coerce people to make more local bargains and to rely more upon them.

The question of enforceability must be tackled, and, at the very beginning of my remarks on enforceability, I want to make one distinction. One can enforce a procedure much more easily than one can enforce something against people's interests. It might be reasonable to enforce ways of doing things and to put people into a straightjacket about the way they proceed to negotiate, but to try in any way to enforce bargains which concern people's interests and their rights and strengths as bargaining agents is something with which I would not agree.

The mistake that we have made in the Prices and Incomes legislation is not by tackling the processes of bargaining in legislation to make a clearly defined legal means by which a determination can be arrived at, but by trying to make unlawful the agreements at the end. I would repudiate any proposals which had the effect of trying to enforce some agreement or some unwanted position on the two parties to an industrial negotiation. The same is true of the Race Relations Bill, and that is why I voted against it. It tried to legislate the ends and not the means. It tried to legislate on what people should do instead of on how they should do it.

We have to think of machinery for achieving plant bargains. It seems extraordinary that no one has yet said that it should be a legal requirement that there is a bargain and a bargaining unit. In the determination of the bargain, we can solve all the problems of non-unionism, which one hon. Member has talked about, and the problems of multi-unionism, where there may be six or as many as 16 unions taking part in the negotiations. The way to do it is to make them elect a team to negotiate. If that becomes a legal requirement, I do not think that anyone can object. It is not the sort of regulation about which anyone can get up any steam because it is clearly not designed to affect the outcome in any way but is solely the means by which things are done.

Then we come to the problem of enforceability. I believe that people can be made to register a bargaining unit. People can be made to come to a bargain, or at least it can be made in their interests that there should be a bargain. Then the huge question which has dominated the debate comes up, which is how the bargain should be enforced.

If I may quote briefly from the Report, in paragraph 1054 on page 268 it gives the reasons why bargains cannot be made enforceable. It is a very concise and clear summary of what I believe to be true. It says: A measure which had the effect of putting on unions a legal obligation to use their best endeavours to secure the observance of procedure agreements would be more likely to lead to internal union disruption than to fewer unofficial strikes. In present circumstances, no proposal to impose legal sanctions on individuals who strike in breach of procedure agreements is practicable if it relies on enforcement by the employer. Experience shows that criminal proceedings would not be successful. An 'automatic' sanction such as loss of statutory rights to notice and to redundancy pay would also not succeed: it would not in fact be automatic but would depend on employer enforcement, and would be ineffective for other reasons as well as being unfair. All types of enforcement are rejected by the Commission. I believe that it is right, because the age-old problem will come up which we have debated over and over again. Hundreds of thousands of men cannot be coerced with the law. Whether it is the employer, the union, the State or some commission who is trying to do it, we know that it is virtually impossible.

My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) mentioned one thing which can be done, and that is to require, invite or encourage people to write into their bargain the same rules about what they will do if it is broken. The great advantage of the local productivity bargain is that there is a price which the unions will give for accepting some sort of discipline by agreement in the terms of the plant bargain that they make.

To quote an over-simplified example, it would be possible for employers to say that certain privileges or rates of pay will be reduced if parts of the bargain which the unions have signed are not kept. That is an agreement which has no legal force and which in any case is unenforceable but which, through the growth of responsibility and the need to bargain fairly, both sides might well accept.

I believe that we need to add to the proposals before us. I do not think that the legal framework is anything about which hon. Gentlemen opposite can quibble. I do not think that the legal framework in the Donovan Report or that in "Fair Deal at Work" are all that much at variance. The basic ground rules in conducting the affairs of men should be acceptable in all walks of life, but I believe that we should move on to define what we mean by hard bargaining, work out how we are to achieve it and what the bargaining unit is to be, and give encouragement to the people up and down the land who are grappling with the problem and trying to achieve bargains which will, we hope, reduce the unfortunate strikes and restrictive practices. That can only be done by a positive and direct incentive to increase the effects of plant bargaining on our system.

7.59 p.m.

Mr. Arthur Blenkinsop (South Shields)

I make only one comment on the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). There are great dangers if we dismiss national agreements altogether, as he apparently wishes to do. If we switch over completely to the idea of plant bargaining and base all our conception upon it, there are very grave dangers of which many of us are conscious.

I want to refer briefly to a section of the Report which has not yet been discussed but which is of real importance. I am somewhat disappointed that no reference has been made to it so far. It is the short and perhaps casual chapter on workers' participation in management. I am not surprised that there is so little reference to it, but at the present time it is of great importance. It seems to me that men and women in industry at all levels, especially perhaps younger people, feel that they are treated merely as pawns in our present-day industrial society.

Major revolutionary changes in industry and enormous changes in management take place, often with co-operation and, indeed, pressure from the Government that they should do so. Takeovers and reorganisation take place; new processes are installed. All these things take place without the men and women engaged in the industry feeling that they have any part to play or that they have been consulted. They are fortunate if some information is given to them at a very late date. But it is not a question of information. It is a feeling which they often have that they are completely isolated from the processes of that industry. In these circumstances, how can they be encouraged to feel any responsibility for the industry concerned?

The main responsibility here lies on management, as many speakers have already mentioned. There have been many criticisms in the past about the lack of proper channels of communication between management and employees and the trade union movement. But it is fair to add that there must be criticisms about the lack of communication between different levels within the trade union movement. It is unfortunately all too frequently true that many on the shop floor are not adequately kept in touch with negotiations which are proceeding and information that is available at top trade union levels. This is one reason why, in discussing workers' participation in management, I am not surprised that the Commission do not feel desperately enthusiastic about the idea of direct representation of the trade union movement, by election of a particular number of representatives, at board and other levels. This gives the whole process such a structural status that it is unlikely to provide the kind of human contact about which we are concerned.

That is why I am more interested, as the Commission appears to to be, in the possibilities that the Ministry, under its new title and Minister, can encourage the trade union movement to play a much bigger part than it has in the past in areas that have often been looked upon as the pure preserve of management as such— matters of efficiency, productivity and so on. I hope and believe that the new Ministry can play an important new rôle in this sphere. That is why I disagree with those who have dismissed the development of the new Ministry and the new Department set up under it. I believe that this is one of the most fruitful and hopeful signs. The new Ministry can play an important rôle if my right hon. Friend takes as vigorous a part as I believe that she can.

There are many examples to stress this point. I find, among trade union branches where I have been discussing some of these matters recently, that there is a great anxiety and desire to argue about ways in which better agreements can be reached through greater efficiency in different services, including, to take a topical case, the municipal busmen. In many towns the busmen are putting forward coherent practical proposals for improving the efficiency of the service that they are running. It would be a deep disappointment to me if they were not able to secure the practical application of these proposals and the benefits to which they are entitled simply because national agreements may stand in their way. I hope that this will not be true. It seems, from the agreement which has been reached with the London busmen, that this is not necessarily so.

This is merely one example of a union where there are real and obvious difficulties, but where many of the members of that union have made it clear that they appreciate the need for change in their areas, have played a considerable part to achieve that change, and have not tied themselves to old approaches and old narrower attitudes of their responsibilities.

I believe that we are here being offered a more hopeful approach towards worker participation in industry, if fully exploited, than in the older concepts. There have been many experiments abroad and, to a minor extent, at home concerning the various forms of election of representatives from the trade union movement on to boards or on to particular local managements. In those cases, it seems that those who are ostensibly representing the trade union movement on the board cease to have effective contact with their members, with the result that there has been a kind of stultification which has caused anxiety in the industries concerned. They may be useful members of the board on their own qualifications, but that is another matter. The question of their providing any useful representation of their membership is extremely doubtful.

Therefore, the prospect of the new Ministry making a useful contribution, through bringing the union membership as near to shop floor level as possible into the actual discussion of the practical issues that affect trade union members, is far more hopeful, and widening the scope rather than concentrating upon the aspects which have been discussed in the past. For that reason, I have the greatest hope that the Ministry will follow this new and more promising line, which may help to some extent to mitigate the frustration which exists and is growing amongst trade unionists, particularly amongst the younger trade unionists, in some cases against their own leadership as well as against management today.

8.8 p.m.

Mr. David Lane (Cambridge)

If anyone takes a bird's-eye view of Britain today, I doubt whether there is any sector of our national life, apart from the machinery of government itself, that is more urgently due for modernisation than industrial relations.

Plainly, there is a need for a shift in view from negative to positive; from a defensive to a more offensive outlook. There is also a need to correct a situation in which too often the general public feel powerless while powerful interests, whether employers or trade unions, are taking decisions that vitally affect millions of people.

I welcome the Donovan Report as a Report that is good as far as it goes. If many on this side feel that it should go further, I hope that we will not be accused by hon. Gentlemen opposite— I am sorry that the right hon. Lady seemed to descend to this level in her opening speech—of wishing in any way to hamstring the trade unions or cut them down to size. I accept what several hon. Members have already said, that the main responsibility for industrial relations has been, is and will remain that of management. If we are dissatisfied for various reasons with the present state of industrial relations, there are plenty of faults on both sides. I would not like to apportion blame in any degree between one and the other, and I am certain that any reform has to bear just as effectively on the employers as on the trade unions

I want to join in the tributes which have been paid to the invaluable work of "the Commission in analysis as well as in the proposals that it makes for reform. There are three things in particular that I welcome. First, there is its emphasis on plant and company bargaining. Here we have had several recent examples of the more positive approach which we all want. I am particularly glad that two of them happened to be in the two industries in which I used to work, the steel industry and the oil industry—the recent announcement of the new productivity agreement at Port Talbot for the old Steel Company of Wales, and some years ago the agreement at the oil refinery at Fawley.

Secondly, I welcome the proposals in the Report which will increase the significance of registration of both employers' associations and trade unions. One or two hon. Members have not liked this, but it seems to me that we shall get out of this the same sort of beneficial effects in industrial relations as we have had in respect of commercial agreements in the last few years since the registration of restrictive trade agreements has been in operation under previous legislation.

The third point I welcome is the suggestion by the Commission that the union structure needs further streamlining. Paragraph 682 of the Report says: We consider that there is scope for many more mergers between unions. In particular, it seems to us that problems caused by a multiplicity of unions organising in individual factories would be considerably eased in a number of important industries if certain groups of craft unions could be induced to amalgamate. This is particularly true of engineering and of construction. I hope that that trend will be given a strong impetus by the Report. I do not think that anyone would go all the way with the hon. Member for Feltham (Mr. Russell Kerr) in what he said about white-collar unions, but even if we do not do that, more recognition and a bigger place have to go to the white-collar unions, and I hope that this ill-timed dispute in the steel industry about white-collar union recognition will soon be settled.

Having picked out those three points which I heartily welcome, perhaps I might mention three or four other points about which I feel disappointed. The first is the lack of urgency, and this was mentioned by my right hon. Friend the Member for Mitcham (Mr. R. Carr). The Donovan Report seems to be saying that the movement towards plant and company bargaining can go along at its own pace, and that when the collective bargaining system has been reformed then will be the time to look again at whether we need stronger legal provisions. This is paying too little attention to the disappointingly slow progress which has been made on both sides in recent years in voluntary ways of bringing up to date our system of industrial relations. There have been good intentions on both the employers' and the trade union side, but we have had precious little action. At the same time as these voluntary changes are made, the external framework of the law needs to be strengthened.

Secondly, I am disappointed at the outright rejection by the Commission of the argument that agreements should be enforceable at law unless the parties decide otherwise. This is a highly controversial and difficult matter. It is hard to be sure whether one is right or wrong, but I do not find the Donovan reasons altogether convincing. There are lessons which we can learn from other countries. My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) made the point about the advantage of moving to a "contracting out" situation in this regard, and perhaps I might quote one other, I hope impartial, witness on this, Lord Beeching. I trust I can call upon him as a witness who has no party political bias, because in the early part of his article he was equally rude about both parties and their efforts at economic management. In the Observer last Sunday he said, among many powerful remarks on the Donovan Report: I believe a new legislative framework would help the unions to serve everybody better, by restoring discipline within their ranks. Meanwhile, in the absence of this sort of thoughtful, sensible restraint, you have to resort in the end to much cruder methods. A third reason why I am disappointed is because of the rather half-baked proposal in the Report for a new Industrial Relations Act. If we are to do this at all, we need to go further. I believe very strongly, as my right hon. Friend said, that it would be valuable to write into any such Act a code of good industrial practice. This could be a helpful influence which could be brought in in particular situations by both employers and trade unions. The Report in paragraph 203 talks about guidance to the Industrial Relations Commission. It lays down nearly a full page of principles of what it has in mind, and I think that we should go further and write some kind of code on these lines into the Industrial Relations Act.

My last point of criticism is that at the end of the Report we seem to be left with an untidy proliferation of bodies which will be active in industrial relations. There are the labour tribunals and the new review body suggested as a means of dealing with disputes between trade unions and their members; there is the new Industrial Relations Commission, or whatever we call it; there is the proposed retention of the present Industrial Court with wider powers; there is the continuing use of the ordinary courts in many other circumstances surrounding industrial disputes; and brooding over them all there is the Department of Employment and Productivity. I think that we shall do better to concentrate the functions in fewer bodies, particularly on the lines of the Industrial Courts which my party has proposed.

To sum up, perhaps I might remind the House of the parallels with the other great problem we recently debated, that of race relations. The law has a part to play in industrial relations, but it must be a subordinate and not a central part. A stronger legal framework is only part of the answer for which we are looking, and I put even more stress, as others have, on the general improvement of human relations in industry day by day in other than legal ways.

Several hon. Members have mentioned the need for better communications. My hon. Friend the Member for Cathcart referred to the need for higher calibre and better paid trade union officials, and I would add higher calibre and better paid people on the management side to deal with the problems, because they must remain management problems first of all.

I am somewhat disappointed with the Donovan Report. I am disappointed, too, with the complacent speech of the right hon. Lady, and I look forward to what the Minister will say when he replies. Now that the two main parties have grasped this nettle, I hope that we shall not be afraid to carry on boldly into action, because in doing so we shall have the public behind us. If this Government fail to do so, it must be left to the next Government to take action.

I hope that this Report and debate are the start of a new chapter. I hope that by the end of it industry will be more productive and more harmonious, and that we shall have taken a big step forward towards the goal which we all wish, a high-efficiency, high-wage economy.

8.18 p.m.

Mr. Michael McGuire (Ince)

I hope that the hon. Member for Cambridge (Mr. Lane) will forgive me if I do not follow him and cover all the ground that he did. I propose to comment only on that part of his speech in which he referred, as did his hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), to the poor rewards which trade union officials at branch, factory, district, and even national level receive for their labours.

I do not know whether this is a good thing or not. It is probably good, in the sense that most trade union officials start at the bottom, and do so without expecting any great rewards at the end of the day. Holding such a job is an honourable thing. Whether they should be paid more on the basis that their members demand better conditions and higher rates of pay is a different matter, but there is some force in the argument that they should.

I start by echoing the sentiments expressed by my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) who said that in many ways what we are doing today in discussing this Report is paying tribute to the ideals, the aspirations, the hopes, and indeed the courage of the pioneers of our great trade union movement. I think that we are, because their dreams have now largely become realities, and I hope that the Report will make them even more real.

I am proud to belong to the National Union of Mineworkers. I am a paid-up member. I must be one of the few paid-up trade unionist Members of Parliament. I am six months in advance.

Mr. Bidwell

I am 12 months in advance.

Mr. McGuire

I concede that my hon. Friend is better than I am in that respect.

My union's history can be said to have been written in blood, sweat, toil, tears and man's inhumanity to man, coupled with the tremendous courage of the pioneer workers. It is worth reflecting that many recommendations in the Report have already been applied in the mining industry—certainly since nationalisation.

According to the Report there are many things which would improve industrial relations, efficiency and our economy if implemented. This comment is justified by the recent history of the National Union of Mineworkers, working with the National Coal Board. If ever in industry had a shocking strike record, a shocking safety record and a shocking industrial relations record—industrial relations were almost non-existent—it was the pre-nationalisation coal industry. We have now moved into a period in which, although many things remain to be done, a great deal has been done.

The Report analyses the election and operations of trade union officers, such as shop stewards, conciliation and dispute procedures, and the gamut of industrial relations. The experience of the mining industry proves that if the recommendations proposed are applied humanely, properly and decently there will be a tremendous reduction in the number of disputes.

I want to be fair to the "grass rooters" on this side of the House, and I shall not speak for much longer. I want to refer, however, to what the Report says about the merits of a national agreement as opposed to a factory agreement. The N.U.M. believes strongly in national agreements. It also believes very strongly that one cause of dispute is the agreement which is open to various interpretations. Variable rates of pay must be made in respect of piece workers. The miners have solved the problem by having a power-loaded agreement. We have a national wage agreement and also a national piece work agreement, with the result that much less production is lost from wages disputes.

In the old days the difficulties were with the piece workers and not with the day workers. With the new system coal losses have fallen in two years from an average of 1½ million tons to only about 300,000 tons. Many people argue that a factory agreement is best, but our experience shows that a good national agreement is something to be envied. That is not to say that productivity agreements cannot be discussed at local level, within the framework of a good national agreement. I am referring only to my experiences in the mining industry.

The important thing about disputes in the pits, for example, is that they should be dealt with quickly. Far too often we have a rosy agreement with lots of details and long-winded arrangements about conciliation going into the dim and distant future. In my experience, it is best to get local disputes solved quickly, and to have good local labour relations. The big disputes can wait a little longer, but most of the unofficial pinpricks need to be settled speedily, on the spot. If they are the number of unofficial strikes is reduced.

The Report largely vindicates the.aspirations, ideals and aims of trade unions. I look forward to debating the White Paper and even more keenly to debating the legislation that will flow from it. If we implement the recommendations in the Report we shall have a much improved industrial relations system—a system to be envied, and one which I hope the Labour Government will be able to say they have created in their lifetime. It will be the envy of the world.

8.27 p.m.

Mr. Tom Boardman (Leicester, South-West)

I go a long way with what has been said by the hon. Member for Ince (Mr. McGuire) on a number of points concerning the need to deal promptly and on the spot with local issues, before they blow up into something big. I am not going to argue with him on the question whether national agreements are always better than factory agreements. What comes out clearly from this informed and constructive debate is that there is room for both types of agreement. We must not be rigid on this matter. There may be a good national framework, and this may be sufficient in the mining industry, but in smaller industries—the boot and shoe industry, for example—the plant agreement, with productivity written in, is most important.

It has been a pleasure to hear so many constructive views put forward by hon. Members on both sides of the House, and in this connection it was most unfortunate that the right hon. Lady the Minister adopted the tone she did at the beginning of her speech. It was not worthy of a debate of this character. I heard her say that my right hon. Friend was rushing in before the ink was dry. That was very unfair.

The hon. Member for Bothwell (Mr. James Hamilton) said how right it was that the Opposition had given up their time today to discuss this matter. The question of industrial relations is at the heart of our economic salvation. The Minister made much play about the civil remedies, to which my right hon. Friend had referred and she had clearly not done her homework in reading "Fair Deal at Work". She did not understand what she was talking about.

Perhaps I can distinguish these civil remedies from those in the Prices and Incomes Bill which we voted against. It may be asked why I was not prepared to impose the penalties and civil remedies in that Bill, yet think that there is a rôle for civil remedies in this context. The distinction is clear. Any civil remedies for breach of an agreement need not be enforced by the employer. If both have made an agreement binding and one breaks it, there may be a remedy for either party but they can seek to enforce it or not. There might be instances of mass breaches when it would not be in the employers' interests to take hundreds of people to court, disturbing industrial relations to get limited damages. But, in the prices and incomes context, the Government are bound to enforce their penalty Clauses; otherwise they lose the incomes policy. This distinction is valid.

I want to confine myself to that part of the Report dealing with procedural and collective agreements, which has been called woolly. It has been said that the recommendations that there should be no change in the law about enforceability of agreements were the unanimous opinion of the Commission, but, as my right hon. Friend said, that is just not so.

The dissenting voices against leaving things completely unchanged were those of Lord Robens, Sir George Pollock, Lord Tangley, Mr. Thomson and Mr. Andrew Shonfield. These were powerful voices, and Lord Donovan himself cast a good deal of doubt upon whether the change should now be made, before finally coming down on the side of the other members of the Commission in saying that a change will be necessary, but not now. I ask, if not now, when? The right hon. Lady said, when the bargaining system has been put right, but which comes first, the cart or the horse?

I start my approach to industrial relations and agreements from the point of what I believe is right in the interests of employees, employers and the whole nation, and not from the history of these transactions and labour relations over the last 100 years. What do we want to do in the interest of these three groups which have a joint interest in harmonious relationships and extra productivity, earnings, profits and exports? There is no real gap and a good deal of common ground between the two sides of the House. Our aims are the same. We must get rid of the Victorian stagecoach attitude. We are trying to fit a jet engine into that coach and we wonder why it does not work. Let us build a modern chassis adapted to today's demands; then we will get progress and the results which the nation needs and deserves.

I am fortunate, because both in my business associations and in my constituency are industries which have had happy labour relations over a long period. Two are the hosiery and footwear industries. They have been more fortunate because they are mainly small units, not vast groupings, so management and the shop floor have always been close. There has been a great personal link. Troubles can be sorted out on the spot. Also, union leadership in both industries has been first class, responsible in its fight for a fair deal for its members, but without jeopardising its industries. There is a sense of mutual trust and confidence which, all hon. Members will agree, is the basis for good industrial relations.

But this happy pattern cannot and does not apply throughout. Bigger groupings mean more remoteness and misunderstanding. Therefore, I support the need for agreements between employers and employees which are clear, which set out the terms of the employment clearly and concisely, which are freely entered into and which both parties can agree to be legally binding. I stress that they should be legally binding only if both parties agree. We do not suggest that the law should make the agreements legally binding, but there would be real advantages if they were binding.

Suppose someone were asking for a quotation to paint his house and one man quoted a price but said, "I may knock off halfway through and not finish unless you pay any price which I then ask", while another man quoted a firm, although higher, price. All hon. Members would immediately take the higher but firm price. Similarly, in industrial collective bargaining, there is much to be gained by both sides from firm bargains which both agree will be binding, so that the employers can offer terms in the certainty that they will be implemented, and the unions can offer terms in the certainty of a higher return.

A good deal is to be gained from this. I would urge that part of my right hon. Friend's excellent proposals in "Fair Deal at Work" as highly commendable. It is in line with the only sensible and constructive part of this Report, the Andrew Shonfield addendum note. To me, this makes a great deal of sense. The rest of the Report is woolly. There are notes of dissent throughout and, at best, so much of it is little more than a compromise. It does not go to the heart of the problem.

Once more I express my regret that the right hon. Lady evaded the issues. She did not try to put before the House a constructive and positive interpretation of how she saw industrial relations going but, instead, tried to attack and distort the policy which has been put forward so constructively by this side.

8.39 p.m.

Mr. Ted Fletcher (Darlington)

I believe that this is the first occasion in my four years' experience here that the House has given a full Parliamentary day to the subject of industrial relations. Hon. Members on both sides will probably agree that this is a question of key importance for our future economic development.

I confess that when the members of the Commission were appointed in 1965 I shared the apprehension of many members of the trade union movement about the outcome. There was a fear, particularly in view of the composition of the Commission, that new restrictions and impediments would be placed on trade union activities. The idea had already been propagated by hon. Members opposite that we would have trouble with the trade unions, and there were even one or two hon. Members on this side who adopted the same point of view.

When the Commission was established, the trade unions thought that they might have another fight on their hands, following the great history of fights to overcome the Osborne judgment, the Taff Vale judgment and the 1927 Trade Disputes and Trade Unions Act. Trade unionists thought that the Commission might very well produce suggestions for anti-trade union legislation.

In view of the climate of hostility in recent years, the trade unions possibly had good grounds for suspecting the outcome of the review. That the Commission has not fallen into this trap has given a good deal of satisfaction to trade unionists. Although there is still much to debate on the detailed application of the recommendations, the Report will, on the whole, be received favourably by members of the trade unions. The Report contains many positive suggestions that will no doubt help them.

The Report suffers, perhaps, from a too academic approach to the subject of workshop relations. It smells a little of Civil Service ink or, perhaps, of the old port of a dons' common room in a university. This may be understandable, because as far as I know not one member of the Commission has had experience of negotiating agreements on the shop floor, but the result is that certain assumptions are made that are not valid for the man who gets his living on the shop floor.

For instance, the Report says: The central defect "— the central defect, be it noted: in British industrial relations is the disorder in factory and workshop relations and pay structures promoted by the conflict between the formal and informal systems. The formal system means national agreements, and the informal system means the workshop agreements. One can see there the tidy mind that wants everything tied up in an agreement, but thousands of agreements are made every day in engineering workshops between rate fixers and operatives, and there are many local agreements based on individual factories. I am extremely doubtful whether that system could go further than it goes now.

Let us take the engineering industry as an example. This industry employs about three million people. About two million of them—operatives and manual workers—are on productive work. Most of them are on piece work or time work or bonus rates, and practically every day thousands of rate fixers are engaged on producing prices based on time or price for the operatives. As a consequence, every year millions of agreements are reached on the factory floor. Those agreements have no legal framework, nor would it be possible to put them in a legal framework. They will never be registered with a Ministry, as the Report suggests. In many cases, they are purely verbal agreements on a price for a particular job affecting an individual or a group of individuals. As a consequence, this debate on the question of national agreements as against factory agreements is rather unreal because there is a place for both. In many factories shop stewards are negotiating on holidays, hourly rates, redundancy and all other items day by day with the management.

The alternative which has been set up by the Commission is rather unreal, but it raises a very interesting question. With the emphasis on factory agreements, the Report says: A factory agreement can assist competent managers—many current industry-wide agreements have become an hindrance to them ". Yet it is work priced and based on national agreements. Rates in the engineering industry are so absurdly low that shop stewards start by pricing a job on time plus 100 per cent., but there has to be a basis of a national agreement to begin timing the job.

If we are to have factory-wide agreements in prosperous industries with assured markets, or in a monopolistic position such as I.C.I., they can afford to pay comparatively high rates as against others which are not so prosperous and in which the wage rates are low. A man who sweeps the floor at the Ford Motor Company works may get £18 a week plus £5 overtime, but a man who sweeps the streets in Newcastle-upon-Tyne may get £10 a week. We ought to demand equal pay for work of equal value. Skilled engineers in Coventry and the South of England are getting £4 or £5 more per week than skilled engineers on Tyneside and Teesside.

The Commission does not deal with these anomalies. A civil servant, town clerk, doctor or a lawyer, wherever he is stationed in the country, gets the rate for the job; yet the anomaly persists that in certain parts of the country in industry rates are very much higher than in other parts of the country. Factory-wide agreements may lead to an extension of this differential. We must recognise that wage rates are determined to some extent by the supply of labour. When skill is in short supply prices tend to be high, and the price of labour tends to be high. If there is an abundance of labour, wage rates tend to be low. As a consequence we see an imbalance in our economy when more emphasis is put on factory agreements and less emphasis on national agreements.

I want to say a word about a matter in which I have an interest as a former official of the Clerical and Administrative Workers Union. We welcome the emphasis that the Report has given to organisation of clerical workers. At last, after many years of agitation, the Report suggests that the notorious Foremen and Staff Mutual Benefit Society should be abolished, or, if not abolished, should not be allowed to restrict its membership to people who are not members of a trade union. This organisation has been deliberately used by employers who pay half the contribution—a free gift of half the contribution—to the foreman or clerical worker who joins the organisation on the stipulation that he must not become a member of a trade union. This was done deliberately with the intention of keeping clerical staff and administrative workers outside the scope of the trade union movement. It is a progressive step that the recommendation has been made.

The general question of recognition must be tackled. The dispute which has occurred in the steel industry is now under discussion by a committee of inquiry. Before the steel industry was nationalised, the employers circulated notices to their staff urging them not to join a trade union. Many high officials in the now nationalised industry signed letters asking staff not to become members of the appropriate trade unions.

If there is to be an intelligent approach to industrial relations, there must be an acceptance by employers that trade unions are here to stay. There must be no restriction on the right of individuals to be represented by a union of their choice. The union must be free to negotiate with management. This comes out clearly from the Report; and we accept it.

I commend the Report. I think that it will be acceptable to the trade union movement as a whole. It has probably been received with a groan by some hon. Members opposite. It may not be received with three cheers by members of the trade union movement. It will certainly be received with two and a half cheers. There is much in the Report to commend itself to the trade union movement. I am glad that we have had an opportunity of discussing industrial relations. I hope that my right hon. Friends agree that this subject is as important as any other economic subject that we discuss in the House and that there will be other opportunities for us to ventilate our views.

8.52 p.m.

Mr. Philip Holland (Carlton)

I, too, am glad that we have had an opportunity to discuss the subject of industrial relations, because it is a most important subject. Perhaps understandably, a number of hon. Members have been preoccupied with industrial unrest rather than with industrial relations. I know that this is a matter which is of great concern to the country and to each one of us, but, there is a large area in industry where in- dustrial unrest is unknown. Many firms and many employees have never experienced a strike. I have had no such experience, although I have served in many different capacities in industry and as recently as from 1964, when I lost my seat, to 1966, when I returned here, I was a personnel manager for an electronics company. Incidentally, I always think that the term "personnel manager" is a misnomer, because one is not a manager. One is a middleman to establish contact between the employee and the board of management.

Industrial relations, with industrial unrest as an unhappy by-product, are concerned mainly with the establishment of good will and understanding on the broad issues. In this context, I regret that Donovan makes no mention of a proposal for the establishment of a code of good industrial relations. I know that some people will ask: what good would this be, if it did not have the force of law? The Highway Code, although it does not make good drivers, is a standard by which driving can be judged. The behaviour of a driver who is taken to court can be judged against the precepts laid down in the Highway Code.

There is a strong case, as we suggest in "Fair Deal at Work", for a code of industrial relations to be formalised and accepted, so that, should any case go to an industrial tribunal, a court of inquiry, or to arbitrators, the activities of those concerned can be judged against the standards laid down in the code. This would have an extremely beneficial effect and I am sorry that the Donovan Report made no mention of it, particularly as the Report insisted that the responsibility for industrial relations rested mainly on the voluntary system. I would have thought that a code of good industrial relations practice would help towards that end and would support the; voluntary system.

A criticism of our own "Fair Deal" proposals is that it lays insufficient emphasis on the voluntary system, but it would be helpful if people reading the two documents, the Donovan Report and "Fair Deal at Work", would remember that they were written from slightly different standpoints. The Donovan Report was prepared on the basis of investigating the activities of trade unions and employers' associations; our document merely tried to spell out what we thought a Government ought to do, and in this context we did not lay much emphasis on the voluntary system, although that does not mean that we do not believe that the nub of the problem lies in the voluntary system, for, of course, it does.

Industrial relations have always been on a voluntary basis, but it is not true that they have always been entirely on a voluntary basis, because there has been a good deal of trade union law. We want not a proliferation of trade union legislation, but a framework of industrial relations, not specifically singling out trade unions, but covering the whole of industrial relations, with minimum requirements, minimum legislation providing a framework within which the voluntary system can work. The purpose is not to weaken but to strengthen the voluntary system within that framework of law, and the main purpose of "Fair Deal at Work" is to strengthen the authority of the constitutional trade union leadership and to weaken the unofficial and irresponsible elements.

I take exception to an earlier remark about irresponsible shop stewards, because in my experience—and I have had some experience of shop stewards— I have found them very responsible. It is mainly the unofficial element which is irresponsible, not those who are formally elected to office. Our purpose in "Fair Deal" is to try to tilt the balance of power in favour of those who want to act responsibly and equally against those who wish to act irresponsibly, and I do not think that anyone would quarrel with that general aim and purpose.

8.57 p.m.

Mr. Sydney Bidwell (Southall)

In my necessarily brief contribution, I want to avoid issues which have already been exhaustively considered. There will be many sensational domestic matters which will come before the House, but none more important than that of race relations—I should have said "industrial relations"; I have been so heavily involved in race relations that the two words have an almost automatic association.

The central disappointment of the Opposition with the Donovan Report must be its brilliant and devastating turn- ing down of the Opposition's proposals for legislation. I am reminded of the arguments under the old Combination Acts when it was said that one employer represented many workers. We now live in a democratic society and we must pin our faith and hope on a democratic involvement and a voluntary system. There have been references to the Prices and Incomes Act and its punitive Clauses, but that legislation has never been advanced as an absolute entity, or as a permanent situation, although some of us, particularly on this side of the House, have said that it seems to have almost a temporary permanency. It is not an ideal situation, however, and it is generally regressive and we hope that we shall rapidly move away from it.

I bring to this debate a background of experience as a trade union education officer and as a full-time organiser of the National Council of Labour Colleges for ten years and, for two years before coming to the House, the T.U.C. regional education officer in the London area when the work of the N.C.L.C. was taken over by the T.U.C. That is why I am particularly disappointed with the aspect of the Report that just hints the educational activities of the trade unions. It does not list them, although I know that a considerable weight of evidence was put before the Commission. I am rather surprised that with the presence of George Woodcock and people like Mr. Clegg, who have been involved in trade union education, far more emphasis was not put on it.

There are widespread educational activities within the unions themselves. In conjunction with the Workers' Educational Association, it was one of my duties before coming to the House to promote shop steward management studies within industry. Sometimes they were done in the employer's time exclusively and sometimes on a 50–50 basis, with one hour of the employer's time and one hour of the worker's. One hopes that in the future this kind of activity will be extended. Sometimes there would be an attitude of mind amongst stewards that they did not want anything to do with such studies. They thought that it was brainwashing by the management and so on. But when they could get a break from the bench and benefit from the education, which was sometimes about the history of the company, including its financial structure, they felt that it was of overall benefit to them as trade union representatives, and having sampled it they became widly enthusiastic about it.

My right hon. Friend, who now commands a Ministry with a new title and a new purpose, which I applaud and support, said at the beginning that she would listen attentively to the debate. For some reason, she has not been here to listen, but I hope that she will give rapt attention to what has been said in this very important debate. Shop stewards are the most important layer of trade union officialdom; it is the shop stewards in the trade union movement that make or mar it, and in the long run make or mar industrial relations and harmonious development in the future.

I said in my General Election address that I supposed that the Labour Government, because of its history, because it stems from the trade union movement, could bring about a much more harmonious relationship, and would bring out a much better voluntary spirit in the trade union movement than the party opposite could. The debate has shown that there is widespread experience on this side of the House which hon. Members opposite do not have. There is considerable experience of industrial management and ownership of industry among them, but on this side of the House there is not only considerable trade union experience, but also considerable managerial experience. Therefore, the major contribution seems to have come from this side of the House.

I commend to the right hon. Member for Mitcham (Mr. R. Carr) the story told in Appendix 6 of the Report about the Betteshanger situation in 1941. If in 1941, when the war had been on for two years, a legislative club could not be wielded, we do lot stand a cat in hell's chance in the present position in modern British industry. There must be voluntary measures whatever régime we have.

I should like to return briefly to the emphasis on shop stewards' training in industry, because the Ministry, particularly under a Labour Government, must have a more; expansive attitude than it has now. Why should not the Ministry of Employment and Productivity have a college where it can not only spend, as it does, State moneys on industrial management but also consider the possibility of spending State moneys on shop stewards, particularly concerning bargaining in industry, because it is on the basis of our productive strength that our country's future relies?

9.5 p.m.

Sir Keith Joseph (Leeds, North-East)

Despite the strictures of the right hon. Lady the Minister that we had asked for this debate somewhat prematurely, a number of hon. Members opposite, and certainly on this side of the House, have welcomed the opportunity to comment on the Donovan Royal Commission. I do not know what the right hon. Lady thought we should do. Did she think that we should have asked for a debate in August or September? If the House was to have any influence on the preparation of the White Paper which is promised for the end of this year, we had to take an early opportunity for a debate. The House must recognise that there is public impatience about this whole interlocking complex of very difficult issues.

My right hon. Friend the Member for Mitcham (Mr. R. Carr) has already welcomed the work of the Royal Commission. There is certainly a great deal in its Report which is valuable by way of analysis and some positive proposals which we can endorse. But before I embark on what are inevitably some of the differences which divide us, I wish to point out—and I am glad that my hon. Friend the Member for Carlton (Mr. Holland) emphasised this—that in practically all the industrial establishments of this country there is, practically all the time, peace and co-operation between management and workers. We are apt to forget that because, naturally, we concentrate on the trouble spots.

I suppose that there are a few hundred or a very few thousands of work places where there are occasionally troubles and a few score of work places where there are frequent troubles. But the point stressed by Mr. Shonfield, in his brilliant reservation at the end of the Report, is valid in considering the impact of these troubles. The growing inter-dependence of different links of industry and commerce makes even occasional troubles very disruptive to the nation and extremely damaging to the housewife, the consumer and the public in general as well as to management and workers.

If there are a few hundred places where there is trouble and a few score of places where there is frequent trouble, we must assume from our general knowledge that there is an unknown number of thousands of work places where there may be peace but where there are also restrictive labour practices which reduce the earnings of the workers and increase the costs of the goods. These restrictive labour practices may exist because management is indifferent to them or because it has not been able to strike the right bargain with the workers to get rid of them, or because the workers are so tough in their defence of them that no management this side of Heaven could eliminate or reduce them. Although there are restrictive labour practices in probably a minority of our work places, their effect on our competitive rôle in the world is very damaging.

Therefore, we have a generally peaceful industrial background with the emphasis of the country, of this House and of the Government naturally focused on the minority of places where there is either frequent or occasional trouble with grave disruptive consequences.

All of us on this side of the House are ready to accept what the hon. Member for Oldbury and Halesowen (Mr. Horner) and other hon. Members were anxious to emphasise—that the prime responsibility for industrial relations, and certainly for eliminating restrictive labour practices, falls on management. There is, of course, a wide range of ability in management just as there is in any classification of human beings.

I agree entirely with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) who, in my judgment absolutely rightly, criticised managements who surrender to unofficial pressures what they have refused to official negotiations. That way lies disaster. The hon. Member for Bothwell (Mr. James Hamilton), in a very objective speech, reminded us, however, that there are a number of excellent managements. He paid tribute to some of them.

I am sorry that because of an unavoidable obligation I missed the speech of my hon. Friend the Member for Tot- nes (Mr. Mawby) who said, I gather, a number of shrewd and wise things about management practices and reminded us that sensible managements will welcome the vigorous work of well-defined shop stewards. There was much in his speech which I shall want to read.

The hon. Member for Colne Valley (Mr. Richard Wainwright) was absolutely right in reminding the Government benches that the Government have a responsibility as manager as well as Government and that judging from the Royal Commission, and more so from Mr. Aubrey Jones and the Prices and Incomes Board, there are many fields of Government management which are not a credit to the Government as employers.

With that introduction, I come to the main points of disagreement. First, we would like to emphasise far more than the Royal Commission does the importance of an attack on restrictive labour practices. We on this side do not go along with Mr. Schonfield's reservation in this respect. We do not think that restrictive labour practices are a factor in which the law can be introduced. There is too much ill-defined subjective judgment. There are too many variations in work practices, even in the best conditions of co-operation. We say that it is the job of the Government to ensure that there is such competition, whether internally or by way of reduced tariffs, if necessary, that management cannot afford to be indifferent to restrictive labour practices.

Once management has had its nose rubbed in the damage that restrictive labour practices do to the earnings of workers, investors and managers and to the costs of consumers, management will be stimulated to bargain away or in some other way reduce the restrictive labour practices.

Sir Cyril Osborne (Louth)

Or be driven bankrupt.

Sir K. Joseph

That is the pressure of competition. That is the ultimate sanction of the competitive situation—a sanction which, alas, is not available to public enterprise. It has no effect on public enterprise.—[Interruption.] I marvel at hon. Members opposite who have not recognised the fact that nationalised industry carries this great burden and that there is no self-correcting mechanism built into it as there is in the private enterprise sector of the economy.

I pass, however, from restrictive labour practices, on which, alas, the Donovan Report has very little of relevance to say, to strikes. Hon. Members opposite have accused this side of the House with being obsessed with strikes. I can only tell hon. Members opposite that if we are obsessed with strikes, so are a large number of the public.

We have to remind the hon. Member for Oldbury and Halesowen that we on this side are making no suggestion whatever to withdraw the right to strike. He spoke as if "Fair Deal at Work" withdraws the basic right to strike. It does no such thing. We are not seeking to withdraw the right to strike.

I say to hon. Members opposite that they do no service to the Government or to the country if they seek to underestimate the damage done by strikes and the threat of strikes. The damage cannot be measured, as the Royal Commission makes clear, merely by the number of man days lost, nor by adding to the direct number of man days lost the additional man days lost as a consequence. It is really economically illiterate to dismiss strikes as unimportant because they account for so many fewer man days lost than the number lost through the common cold.

The fact is that the threat to strike inhibits managers from doing what, in the interests of the workers and the public, they should be doing. The Royal Commission brings this out in paragraph 412, when it says that the threat to strike has a great effect of management's efficiency—[Interruption.] If hon. Gentlemen opposite mean that managers should be stronger in standing up to threats to strike, then I suppose that, in general, I would agree with them.

Let us concede that there may often, or sometimes, be very understandable human reasons for a strike. My hon. Friends and the public ask that the people concerned, perhaps with all their instincts outraged, should go through the agreed dispute procedure and not subject the workplace to unpredictable lightning strikes, the threat of which is so damaging to the country.

Mr. Heffer

Would not the right hon. Gentleman agree that there are circum- stances in any industrial concern which can at any time give rise to action, perhaps resulting from an employer dismissing a shop steward or a group of workers whom he thinks have acted contrary to the interests of the firm? Would he agree that, in those circumstances, the workers might feel that their only possible action would be to take immediate steps to show solidarity with their mates? In those circumstances, the Conservative Party would say that they are breaking their agreements or contracts and are therefore acting illegally. Is that not denying them the right to strike?

Sir K. Joseph

I appreciate that it is understandable that they might wish to take some immediate action. We do not propose that they should be in any way penalised—that is, unless they fail to go through the agreed dispute procedure —agreed in a contract which their union has accepted should be enforceable. I will return to this subject.

The argument is that lightning strikes and disagreements between workers and managers should be eliminated or dealt with by way of agreed dispute procedures. My hon. Friends—and here I agree very much with my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman)—see an increasing place for local and branch bargains in addition to national bargains for those things which make national sense.

The right hon. Lady listed rapidly a string of desirable subjects for bargains, such as dispute procedure, dismissal and redundancy procedures and productivity agreements. There is a whole range of subjects about which to bargain and my hon. Friends want the maximum number of agreed constructive bargains. Indeed, that is what we all want.

We believe that at the moment an increase in the number of such bargains is discouraged and not encouraged by the law. Here I appropriate, with acknowledgements, a comment made by Lord Tangley in his reservations at the end of the Report, in which he says that at present managements are discouraged from making bargains because they are so one-sided. If a management departs from its bargain, then the employees can take action, officially or unofficially. If they wish to do that, there are no restraints on them at the moment. But if the employees break their side of the bargain, there is nothing, short of dismissals, which make matters worse, that a management can usefully do. I accept at once that there are plenty of bargains that are not one-sided because they are honourably obeyed by both sides, but these tend to be not in the turbulent part of industry but in the parts of industry where there is peace and co-operation. What we and the country are worried about is the breaking of bargains, or the lack of bargains, in that sector of the economy, and it is quite a large one—I will not go through the industries, the Royal Commission lists them—where there is a certain amount of turbulence.

We therefore want to get agreements. We think at the moment that agreements are discouraged because they are one-sided. Here we come to the main difference between the two sides of the House. The Royal Commission says that the way to get more bargains is to have an Industrial Relations Commission. I will not venture on different initials for it; we fall into the quicksands there. That is what the Royal Commission recommends, and I share with my hon. Friend the Member for Cambridge (Mr. Lane) some distaste for the proliferation of bodies recommended by the Royal Commission Report. The question that the House has to ask itself and that the Government have to ask themselves is whether the Industrial Relations Commission will provide any guarantee whatsoever that the bargains made under its approval will be observed. Is there any greater likelihood that an agreement which has been approved by the Industrial Relations Commission will be observed than there is now? This is the question that the Government must ask themselves.

The Royal Commission Report is filled with an almost antique amount of exhortation. My party on this side of the House is criticised in the country for having allowed more than a decade of government to go by filled with Ministers of Labour, many of them now adorning this Front Bench, who went in for exhortation, "And", says the country, "a fat lot of good it did". Now we have a Royal Commission of the greatest quality of mind who go in for more exhortation.

Mr. Orme

That is not the trouble with the country at all.

Sir K. Joseph

The hon. Gentleman makes a fair point if I had said that it is the only trouble of the country, but certainly we are criticised for having exhorted and exhorted and for having done nothing more.

In contrast to the proposal of the Royal Commission to have an Industrial Relations Commission, we want to "bring unions within the law", and I quote here my right hon. Friend's phrase. The right hon. Lady the Secretary of State says that the Royal Commission rejected our main proposal of bringing unions within the law, but I agree with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) in that I do not think there is nearly such a gap between the Royal Commission and "Fair Deal at Work" as the right hon. Lady suggests. There are many points of agreement between the Royal Commission and "Fair Deal at work"; but what is more important in this part of the argument is that time and again the Royal Commission says that maybe the law will have to be changed, but not until agreements are more sensible and fair.

We would agree with that. The enforcement of bad agreements would be bad law. We say that the Industrial Relations Commission will not on its own produce the good bargains that it will be fair to enforce if the parties wish them to be enforced. Time and again in the Royal Commission's Report the Commissioners as a whole and the Chairman in his reservation refer to the possibility of changing the law towards enforcement if and when the Industrial Relations Commission has improved the general quality of the branch bargains.

The question we have to ask is: how do we most economically, in the sense of economy of effort, release the flood of good, fair bargains between management and employees that we all want to see? We are all looking for this mechanism. It is unfair to say what the Government have decided, since they have not yet committed themselves, but the Government are advised by the Royal Commission to find this mechanism in the Industrial Relations Commission, which will have no powers.

We on this side of the House believe that the release mechanism required for the country is the voluntary enforceability of agreements by civil process. The enforceability that we want is voluntary because, as we make plain, the parties, either or both of them, can lay it down that the agreement or bargain that they are making shall not be enforceable. It is in their power, either or both, to opt out of enforceability. Up to that stage, therefore, it is a voluntary enforceability. Once they have agreed to its enforceability, there is enforceability for the duration of that bargain, but only by their own choice.

It is an enforceability by civil process; that is to say, an enforceability by way of damages against a management with no limit to the damages, or enforceability against the funds of the union by damages, in this case with a limit to the amount of damages.

As certain hon. Gentlemen opposite have said, it may be that it is legally open to managements and unions—not trade associations and unions, but managements and unions—to enter into an enforceable bargain now. The Royal Commission says that on page 126 of its Report. It is not for me to argue with the Royal Commission's diagnosis of the law. All that I can say is that managements and unions do not understand the law—[Interruption.] I hoped that the Secretary of State would listen to what I am saying. She has had to be absent during a great deal of the debate for reasons which we understand.

It may be, as the Royal Commission says, that the law permits enforceable agreements now between the parties, but that is not how managements and unions understand the law, nor is it how the Ministry of Labour, of blessed memory, itself understood it. On page 76 of its written evidence to the Royal Commission, it says: The common opinion is that a contract between a single employer and a trade union would also not be enforced by the courts though this is not specified by statute. If it is allowed by law, there is no harm in the Government restating the authority firmly by way of statute.

I have explained that the voluntary enforceability which we want to see is one against the unions and not one against the employees. That is why the right hon. Member for Southall (Mr. Bidwell) was wrong in quoting Betteshanger against us. We recognise that employers now have the right to sue employees and that they do not use it because it would do them no good. We do not hang any faith on the right of employers to sue employees. We do not believe that it would do a ha'porth of good.

We suggest that unions which enter voluntarily into an enforceable bargain should have their funds exposed to damages if they cannot show that they have done their best to prevent a breach of the agreement that they have made, and that the same enforceability should lie against managements. I emphasise again that this enforceability shall only bite if both parties so wish it. It is open on either to exclude it from their contract.

It is undeniable that some unions and some officials of some unions already try hard to enforce the bargains that they make—

Mr. Orme

They are very difficult to get, in the first place.

Sir K. Joseph

I am sure that it is very difficult to be an official of a trade union. It is difficult, in many cases, to be a manager. I do not pretend that either is easy.

My hon. Friend the Member for Basingstoke (Mr. David Mitchell) gave us his testimony to the lecture which members of a trade union were subjected to by their officials for having broken a bargain. But Mr. Shonfield in his reservation expresses what we on this side and what many people in the country feel, that some union officials do not do all that they can to prevent breaches of agreements.

We say that there is an immense incentive to management and unions to come to an enforceable agreement. If they agree that a bargain shall be enforceable, management will be able to afford to concede much more to unions because it will be able to count on co-operation at work, on the use of the dispute procedure, no lightning strikes, and a generally much more co-operative attitude in the work place.

On the other hand, the unions will be able to bargain this enforceability against the concessions that they want from management. The hon. Member for Bradford, North (Mr. Ford) listed some of them. There are many things that unions want from management, understandably so. Let them trade the enforceability of a fair, firm and speedy dispute procedure and the other things that management wants against some of the things that the unions want. This way lies a real increase in earnings and efficiency for the whole country.

Enforcement is not a panacea, not a solution to all our problems, and it cannot achieve vast increases overnight in earnings and benefits to the country; but we believe that the prize of peace and co-operation is so great in management's eyes that it will be willing to make bargains of great value and importance to unions and workers. We believe that voluntary enforceability will release a flood of constructive bargaining, even in the trouble spots of the industry of this country.

The Industrial Relations Commission suggested by the Royal Commission, without enforcement, will produce no great benefit to the country, because there will be no removal of the one-sidedness which prevents management from agreeing now to the sort of bargains that we all want. On the other hand, enforceability, because of the prizes that it will unlock for workers, and through workers for unions, will produce the bargains at the work place and nationally on the future peace and co-operation must depend.

In view of the arguments which we, on this side, have put forward both here and in "Fair Deal at Work", the widespread support that they have received, and the latent support that is in favour, even in the Royal Commission's Report, of changes in the law, if not now, in the near future, we beg the Government not to dismiss from their mind the voluntary enforceability that we believe is the real release mechanism for prosperity and peace.

9.33 p.m.

The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley)

The House will recall that at the beginning of the debate my right hon. Friend said that consultations with both sides of industry about the proposals in the Report had now begun. The House will also recall that my right hon. Friend assured the right hon. Member for Mitcham (Mr. R. Carr) that at some point towards the end of the year a White Paper would be presented to the House giving the Government's considered views— considered after those consultations had been completed. The House will realise that, because of the processes which are now under way, it is difficult for me to comment on many of the points made during the debate and it is impossible for me to answer some of the questions. Were I to do that, I would risk the accusation that the consultations are meaningless, that the consideration is over, and that our minds were closed before the talks began. Therefore, some of my hon. Friends in particular, who have raised with my right hon. Friend and me points of the greatest substance, must be content with no more than the assurance that they will be noted. I fear that this is particularly true of the interesting, constructive and imaginative points made by my hon. Friend the Member for Bradford, North (Mr. Ford), who said things about trade union amalgamation, the disadvantages of multi-unionism and the desirability of bringing it to a speedy end, which I know my right hon. Friend will want to weigh very carefully.

Even though I fear that the Government's response to this debate must, by the nature of the occasion, be inadequate, I do not think that any right hon. or hon. Member on either side of the House would regard the debate as conforming to that criterion. After all, we have had the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) urging employers to take note of what the Royal Commission says. On the other hand we had my hon. Friend the Member for Oldbury and Halesowen (Mr. Horner) urging trade unions to take note of what it says. If that combination of enthusiasm and devotion was all that the debate achieved, it would have been justified.

It was not associations of employers on the one hand and trade unions on the other which were the central issue of the debate. There is no doubt about what has been the central issue in the minds and in the speeches of right hon. and hon. Gentlemen opposite. I think that in their judgment of the central issue is where their basic error lies. To them—and this has been clear during this afternoon's debate—the central issue has been the legal status of trade unions and the enforcement of collective agreements.

The Royal Commission took a very different view, not simply about the desirability of legal enforcement, but about the prominence that it should have in our thinking on this entire subject. They were very clear that to concentrate our efforts and our discussions, and to have out deliberations centred round this as: the basic issue of trade union negotiations and improvements in the industrial relations system would divert attention from the underlying causes to the symptoms. By this the Commission means the underlying causes of, or conversely the symptoms of, industrial unrest.

The Royal Commission has no doubt about what the underlying causes are. It says that "the root of the evil lies in our present method of collective bargaining, and especially in our methods of workshop bargaining, and in the absence of speedy, clear, and effective disputes procedures." But, since both right hon. Gentlemen opposite devoted a great deal of their time to what the Royal Commission regarded as an attack on the symptoms, I want to deal with that, at least in part.

On the face of it—and I emphasise on the face of it—what the right hon. Member for Mitcham (Mr. R. Carr) and the right hon. Member for Leeds, North-East (Sir K. Joseph) are advocating is not very revolutionary. If I might quote from "Fair Deal at Work", that remarkable document recommends that collective agreements should be enforceable except in so far as the parties specifically agree that the whole or part of them should not be legally binding. In his equally remarkable article in the Sunday Telegraph the right hon. Member for Enfield, West (Mr. Iain Macleod) put a rather different gloss on the party's proposals—the difference between enforceability with the propect of contracting out, and enforceability if the parties choose to contract in. But I shall not pursue the differences which, in his mind, are perhaps differences of nuance, but which are differences of considerable substance. They are differences which burk the basic issue facing any organisation or any party which urges the enforceability of collective agreements, and they are differences which misunderstand the attitude of much of British industry to potential enforceability.

It has been said several times this afternoon—and I repeat it now—that as the law stands there is nothing which prevents a trade union and an individual employer entering into an agreement which can and should be legally enforceable.

Sir K. Joseph

If that is so, has the law changed in the last two years? Why did the Ministry of Labour state the opposite in its evidence to the Royal Commission?

Mr. Hattersley

I was going to deal with that point, not least because I was asked about it during the right hon. Gentleman's absence. The Ministry of Labour did not state the opposite. What it said was a sophistication of the position with which I shall now have to weary the House. The abolition of Section 4(4) of the Trade Disputes Act simply allows employers' associations to be in the same position as individual companies in making agreements with trade unions. It neither prohibits nor prevents them, but it does not mean that every agreement made between an employers' association and a trade union would be then—or every agreement made between an individual company and a trade union is now—legally enforceable. They are not debarred by law from legal enforceability, but they are often debarred by their nature from legal enforceability.

It is judged that on many occasions courts would hold that the agreement was entered into without the specific decision to make it legally enforceable. Therefore in the same way, I am advised, that courts are often found to refuse to adjudicate in a dispute between members of a family, because for instance, they regard the dispute as inappropriate for legal enforcement, they would refuse to adjudicate in these matters on that basis. That adjudication would be possible only if both parties had stipulated that they intended the agreement to have the force of law.

By altering or removing Section 4(4) of the Trade Disputes Act the right hon. Gentleman's party would do no more than give employers' associations the same opportunities to enter into enforceable agreements that now exist with individual companies. It would mean, first, that there would have to be specific agreement by both parties, or the courts would not believe it to be appropriate for them to deal with the matter. It might also mean that rather different agreements would have to be entered into from those which operate in industry at this moment.

Agreements would have to be a good deal more precise. They would have to define exactly who the parties were with a great deal more precision. They would have to define what the agreement consisted of much more clearly. But if the contract or agreement were to be stipulated by the parties as one which both wished to see made legally enforceable and if, by its character and nature, it could be interpreted by the courts, enforceability is possible now between individual companies and unions and, with the abolition of section 4(4), it would be possible between employer's associations and trade unions.

Mr. Horner

Does not my hon. Friend agree that one of the most unsavoury features of such an agreement is that it would probably have to be drawn up in consultation with lawyers?

Mr. Hattersley

I was going to say that one of the problems to which the right hon. Gentleman did not refer was making sure not only that both parties intended the agreement to be legally enforceable but that when it was drawn up the agreement would be technically enforceable by the courts. The right hon. Gentleman was less than frank in dealing with the confusion that might arise on the technical problems alone, and in coming to conclusions about whether or not management and unions would, in the first place, choose to make their agreements enforceable and, secondly, whether managements would enforce those agreements once the element of enforceability had been included.

All our experience, which stems from those few legal sanctions that employers can now use against trade unionists who strike suddenly and in breach of their contract of employment, suggests that employers would be most reluctant to take the civil remedies that the right hon. Gentleman referred to, even if the ideal situation, according to him, was brought into operation.

The Royal Commission concludes "that no proposal to impose legal sanctions is practical if it assumes that an employer plays an active part in its enforcement." If, subject to contracting out, both parties agree that a contract shall be legally enforceable for three years, and two years after the contract begins the union decides that it wishes to make a major breach in the contract, will the right hon. Gentleman be content if the employer says, "We accept the breach. It is a concession that we make in the interests of future good industrial relations", or do they pursue the logic of their argument and say that the Government should intervene and be given power to make sure that although the employer is reluctant to employ sanctions, the Government should not be?

Mr. R. Carr

No.

Sir K. Joseph

No.

Mr. Hattersley

I am relieved to hear both right hon. Gentlemen say "No", because I have objections to that in principle. But the right hon. Gentlemen must accept the logic of the evidence presented to the Royal Commission and much of the experience of my Ministry, that it is inconceivable that individual employers will operate legal sanctions although they have arranged between themselves and the unions an enforceable agreement.

Mr. Carr

The hon. Gentleman is persisting in a fallacy in insisting that the only effect of the law depends on whether or not a case is taken to court. My experience of life is that people behave differently—more responsibly and more carefully—if they know that they are entering into a binding agreement. When other forms of contract are broken the parties do not always go to court, but that does not invalidate the law.

Mr. Hattersley

Many hon. Members on this side of the House voted for the Race Relations Bill in exactly that spirit —in the belief that the law would itself give some force to the proposals. The difficulty is that on this occasion the employer would have to take the initiative, and all the evidence suggests not only that he would not take the initiative but that the party against whom he would not take the initiative would know that to be so.

There are many other objections in practice to the position which the right hon. Gentleman advocated. One of them appears in the minutes of evidence of the Royal Commission for 15th February, 1966. Mr. George Woodcock was cross-examining a number of employers' representatives about this very point. He took them step by step through what would be involved in such a system and through the process of decision about what was the appropriate trade union. He took them through the situation in which that trade union and the employers came to an enforceable agreement. He took them through the situation in which the agreement was broken and, after the agreement was broken, the offending strikers were prosecuted and then deductions were made from their pay at source.

Then Mr. Woodcock asked the employer's representative, "What would you do if the people struck against deductions from pay?", and the employer's representative gave a very straight answer: "Then we are in trouble." Anyone who has read that evidence must regard it is a very potent argument against the principles which the right hon. Gentleman lays down.

Mr. Tom Boardman

Where has the hon. Gentleman seen the word "prosecution"? There is nothing in the proposition put forward from this side of the House envisaging criminal proceedings. It is entirely a civil remedy.

Mr. Hattersley

I understood that.

Mr. Orme

Would my hon. Friend agree that the Opposition's proposal, which would, in effect, make national agreements liable to legal enforcement, will be used by the employers as a means of refusing to make an agreement unless the unions are prepared to accept it as legally binding and enforceable? That is; the subtle approach which the employers would make. I hope that my hon. Friend takes note of that point.

Mr. Hattersley

I want to do the right hon. Gentleman justice. I understand that he would say that the continuity of the agreement which the unions had for sale—and by selling it this would be an added bargaining counter—had all the virtues that that implies and all the disadvantages which my hon. Friend implies. One must make a judgment between the advantages and the disadvantages.

The hon. Member for Basingstoke (Mr. David Mitchell) said that he was regretful that the Royal Commission had turned its face finally and fully against what the Commission described and what he described as the "automatic" sanctions which, in a sense, avoid some of the difficulties of initiative to which I have referred. There are two problems about automatic sanctions—problems which my right hon. Friend will want to take into account when she considers her final conclusion. The first is that, unfortunately, automatic sanctions are not automatic. Someone must decide how the procedure works. Someone must report an unofficial strike which leads to a reduction in redundancy pay or the abandonment of rights under the Contract of Employment Act. Therefore, all the problems of employer initiative remain.

The other disadvantage is that, by their nature, automatic sanctions—say, removing the right to redundancy pay or rights under the Contract of Employment Act—are the most savage sanctions on a man who has worked for a number of years in one industry and has a long record of continuous employment, who is least likely to be involved in an unofficial strike. But they apply hardly at all to the man who moves from industry to industry and who has no continuity of employment and, therefore, is more likely to be involved in the strike.

But in all these matters which envisage legal sanctions and the enforceability of agreements, the technicalities and the problems of organisation and of administering the system must loom very large in my right hon. Friend's mind when she reaches her final conclusion. My hon. Friends believe that there are matters of principle involved. Those must concern my right hon. Friend, too. It would be wrong of me, in talking about her ultimate decision on points of principle, not to remind the House of the substantial technical disadvantages which stand in the way of operating the sort of system which the right hon. Gentleman advocates. It just will not do to draw rather bogus distinctions between what happens in Britain and what happens in other countries with very different industrial experience, very different organisation and traditions and very different industrial practices. What really needs to be done is, as the Royal Commission says, to attack the cause rather than the symptoms of the problem, and that is certainly the aspect to which my right hon. Friend will turn her mind.

We have been reminded many times today that one of the troubles—perhaps not the basic trouble, but one of the troubles—to which any responsible Government must turn its mind is the problem of unofficial strikes. Let me assure the right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) that I in no way minimise the problems arising from unofficial strikes. I know that in terms of days lost our record is good but that in terms of individual disputes our record by international comparison is not good.

Simply in my capacity as Member of Parliament for one of the Birmingham divisions, and so representing men almost exclusively employed in work connected with the motor industry, I must point out that in the motor industry 100,000 days were lost in 1967 in factories other than those in which the stoppage occurred as a result of both official and unofficial strikes. I would be denying my responsibility to my constituents if I pretended that this was not an important problem.

I also know that it is a problem the solution of which is demanded by the country, and that the cry to do something about unofficial strikes and unofficial strikers is popular. Because of that, I fear that there is a temptation to take a popular and militant stand rather than necessarily solving the problem. What I undertake that this Government will do as they consider the problem of unofficial strikes is to try to solve the underlying endemic difficulties rather than make a play for what I frankly and gladly admit is the popularity that would be given to any Government that made bellicose noises about unofficial strikes.

Looking at the problem of unofficial strikes, the Royal Commission say the final and definitive word on enforceability: The first and most important step to be taken in order to get rid of the unconstitutional strikes is the reform of our collective bargaining system. This is our central recommendation. We cannot recommend anything that may jeopardise its success. Looking at the motor industry in detail in terms of unofficial strikes, the Royal Commission makes four fundamentally important points. The first is that these strikes are not the result of the character of the British people: … Shop stewards in the motor industry, like shop stewards elsewhere, are in general hard-working and responsible people … But, says the Commission, it may be the character of British institutions. It says: The engineering industry's disputes procedure must bear a large share … of the blame for the difficulties. This leads, I think, automatically to the natural remedy for failure to communicate problems of wage structures rather than wage levels, which is to remove problems in the procedure.

In paragraph 454, the Report states: By far the most important part in remedying the problem of unofficial strikes and other forms of unofficial action will however be played by reforming the institutions of whose defects they are a symptom. The House will know very well that the Government have a remarkable record in attempting to reform the institutions in what have come to be called the problem industries. The reorganisation of the docks has as an important subsidiary part of its intention to give the opportunity to men to work in continuity close to official union leaders, and in peace and harmony that has not previously characterised the industry.

Again, the National Joint Industrial Council for the Motor Industry is intended to deal with the basic problems mentioned in that recommendation and the Government's intentions in the shipping and printing industries are meant to do exactly the job which the Royal Commission believes is the most necessary for improvement in industrial relations. That is essentially a remedy to and for the institutional structural problems which have caused far more industrial disputes than the inadequacies of the legal framework.

One of the institutions, and one part of the legal framework, is Section 3 of the Trade Disputes Act, 1906, and perhaps not enough has been said today about rival attitudes towards that Act. The Royal Commission says that the immunity provided by that Act should be available only to the leaders of those unions which will become registered under these provisions. That means that the immunity would not be available to leaders of unofficial strikes. Both the hon. Member for Totnes (Mr. Mawby) and my hon. Friend the Member for Feltham (Mr. Russell Kerr) drew attention to that, my hon. Friend the Member for Feltham drawing our attention to his objection to the suggestion and urging us not to implement that part of the Report. That part of the Report by no means coincides with the recommendations of "Fair Deal at Work", which goes a great deal further in terms of removal of immunity under the Trade Disputes Act. According to "Fair Deal at Work", strikes in sympathy, in an inter-union dispute or to force a closed shop, should be removed from the exemption.

The hon. Member for Liverpool, Garston (Mr. Fortescue) urged that on the House this afternoon. I wonder if in simple pragmatic terms he believes, and if "Fair Deal at Work" believes, that the removal of those exemptions would improve the chance of industrial peace. I promise the House that my right hon. Friend, when she looks at the recommendations, will look at them as great issues of principle, the right of unions to use all their power in the aid of their membership in one sector. I cannot promise on which side my right hon. Friend will eventually come down, but I insist that on whichever side she comes down she will be influenced by the practical considerations of which side is most likely to lead to industrial peace. I cannot believe that the removal of the exemptions in the terms advocated by the document put forward by hon. Members opposite could do more than create disharmony.

What will lead to industrial peace are the sort of collective bargaining arrangements which the Report recommends to meet present needs and which comes face to face with modern realities—the words used by my hon. Friend the Mem- ber for Oldbury and Halesowen (Mr. Horner). This should have been understood by the hon. Member for Cathcart who expressed some regret that the Report had come down so unequivocally on the side of plant bargaining. It is not the Report which has come down on the side of plant bargaining but industry, history and the economy which has increasingly come down on the side of plant bargaining.

The conclusion of the Report as to the structure of the industrial relations system stems from how things have developed at the moment. More and more of the things which affect a man's pay packet and what he takes home at the end of the week or the month are decided at plant level. I think it is sensible, practical and reasonable that this should be organised in a coherent framework of industrial relations practice.

The dichotomy between national and factory agreements has long been accepted by the Department of Employment and Productivity and by its predecessor, the Ministry of Labour. Many of the things which my right hon. Friend has urged on industry by way of productivity agreements, improvement of procedures and negotiating rational bargains right across the board are bargains which are dependent on local rather than national agreement. Certainly we intend to continue the programme of encouragement of productivity agreements and we shall want to encourage all those processes which are likely to make the local bargain more understandable and systematic.

Many other things in the Report are policies and attitudes already held by my Department. As the House has been told, we have already mounted an inquiry into the necessity for statutory proceedings over dismissals. We have urged, as has the T.U.C. and the C.B.I., the acceptance of adult trainees. There is much that the House will wish to commend in the Report and to adopt and which the Government wish to include in the White Paper. Many of the things the Report advocates are for the Government to do but a great deal can be successful if the response does not come from Whitehall but from industry.

The hon. Member for Colne Valley (Mr. Richard Wainwright) made the point properly and cogently that improvements which the Report advocates are improvements about efficiency and, therefore, about people's standards of living. I promise that the Government will respond to the Report. Our hope and belief is that industry will respond as well.

Question put and agreed to.

Resolved, That this House takes note of the Report of the Royal Commission on Trade Unions and Employers Associations 1965–1968 (Command Paper No. 3623).