HC Deb 15 November 1968 vol 773 cc761-8

11.4 a.m.

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

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

Since my right hon. Friend the Minister of Public Building and Works made his statement to the House on 6th November about the Government's decision to refer to the National Board for Prices and Incomes the interim pay settlements reached in the building and civil engineering industries, I have had discussions with representatives of both sides of both industries.

At a meeting with representatives of the National Council for the Building Industry on 12th November I explained the reasons why the Government felt unable to accept the interim increases which had been negotiated. I offered, however, to approve a settlement providing increases of 2½ d. for craftsmen and 2d. for labourers which, together with the 1d. cost of living bonus already paid in March, would conform to the ceiling.

This proposal was considered on the following day by the executives of the unions concerned. It was not found acceptable and the unions sought a further meeting with me which was held yesterday.

On 13th November I saw representatives of the Conciliation Board for the Construction Engineering Industry. They urged acceptance of the interim increases and were not prepared to accept my proposal to approve a reduced settlement.

At my meeting with the union representatives yesterday they explained that the main reason why my earlier proposal had been rejected was their strong conviction that the Government was wrongly interpreting the White Paper in taking into account in assessing the interim increases due to them the final payment in March, 1968, of a 1d. cost of living increase.

After prolonged discussion the unions finally agreed that the N.B.P.I. should be asked to arbitrate on this issue in their report due at the end of this month; that both parties would undertake to accept the Board's ruling on this point for immediate application in the pay packet and that in the meantime interim increases of 3½ d. an hour for craftsmen and 3d. an hour for general workers should remain in payment.

The unions undertook to recommend this agreement to a conference of union executives which will be meeting on Sunday. The building and civil engineering employers have been informed of the proposal.

Mr. R. Carr

While welcoming the right hon. Lady's climb-down so far as it goes, may I ask a number of specific questions on what this means?

If the Prices and Incomes Board finds that the 1d. should be removed, does this mean that the unions have agreed to recommend to the executives that their members should accept a reduction of a 1d. an hour from their wages from the time the P.I.B. report is published?

Is the right hon. Lady satisfied that the unions have authority to procure the acceptance of such a cut-back in wages for their members on the building sites and engineering sites throughout the country?

In view of the extraordinary fact that the employers were not consulted before her statement was issued last night, is the right hon. Lady satisfied that the employers are prepared in those circumstances, to impose a cut of 1d. an hour on their employees?

Finally, is this a precedent? Does this mean that in future an award or settlement will not be frozen while the P.I.B. is looking at it?

Mrs. Castle

I am glad that the right hon. Gentleman recognises, in his use of the provocative phrase, "climb-down", that I have genuinely tried to meet the unions half way on this matter. He is correct in his assumption that this means that if the Board, in arbitrating on the issue of the 1d. cost-of-living bonus, says that it should be included in the calculations of the 3½ per cent. ceiling, the unions will accept that the 1d. then comes off.

The right hon. Gentleman asked whether they are satisfied that they can secure acceptance of this. Of course, this is the whole point of their meeting with their executives on Sunday. The employers were contacted before the statement was issued last night.

Mr. Heffer

Is my right hon. Friend aware that many hon. Members on this side will welcome the fact that at last the Government have taken into consideration back-bench opinion in the House?

Is my right hon. Friend also aware that the leaders of the building and civil engineering unions have been extremely reasonable and helpful in trying to reach a settlement of this question? Will she consider again the question of the National Board for Prices and Incomes now being transformed into an arbitration board? Is not this a serious and disturbing feature of the outcome of these negotiations?

Can my right hon. Friend give us an assurance that this is not to be the pattern for future industrial relations and negotiations, otherwise we shall find that the trade unions will be transformed into mere ciphers rather than do the job that they are supposed to do?

Mrs. Castle

My hon. Friend's first point was an unnecessary gibe. The Government always pay attention to backbench opinion, even if they are not always able to agree with it.

I endorse what my hon. Friend said about the co-operative attitude of the unions and, indeed, of the employers. It is because they genuinely thought that they had concluded an interim settlement within the ceiling that we were able to reach this final solution and agree that this point should be decided by the National Board for Prices and Incomes.

On my hon. Friend's wider points, I suggest to the House that we are still in a crucial stage of the discussions leading to a settlement. In view of the outcry from both sides of the House on 6th November, I should have thought that the prime concern of all hon. Members at the moment was to get a settlement. Therefore, while appreciating how patient the House has been in waiting for a statement from me, which is why I volunteered it this morning, I feel entitled to ask hon. Members, at this stage, not to develop general arguments which could exacerbate the atmosphere and cheat us of the agreement which is clearly in sight.

Mr. Maudling

May I ask the right hon. Lady a point of clarification of the Government's attitude? Are they saying that in calculating whether an increase coming from a new negotiation is within the ceiling they should take into account automatic benefits flowing from a previous agreement, If so, how can this be defended in logic, any more than taking into account automatic salary increments for example?

Mrs. Castle

The right hon. Gentleman must appreciate that in studying this interim settlement we have strictly followed the practice we follow in all cases. We have not differentiated here, because under the White Paper the ceiling is calculated on a per annum basis from the date of the last general increase and payments made during that period must be taken into account and have been taken into account in other claims and settlements which we have been vetting.

The right hon. Gentleman thinks that we were incorrect in taking into account the cost-of-living bonus awarded in March. This is the very point on which we are agreed to ask the Prices and Incomes Board to rule. Therefore, I would not wish to pursue this any further, except to say that I am prepared, and the Government are prepared to accept the Board's interpretation on this point.

Mr. Arthur Lewis

Can my right hon. Friend explain why the Government can always act expeditiously when it is a question of industrial workers on lower incomes, whereas I have sent to her a number of cases where company directors have had as much as £5,000 per year extra on £17,500 and no action is taken and action is refused? On the day that my right hon. Friend announced this trouble, a firm making "one-armed bandits," pin-tables, and the like, paid an increased dividend of 17½ per cent. on 42½ per cent.; and again no action is taken. If it is the lower-paid workers, my right hon. Friend can get cracking on it. If it is a top-paid executive, no action is taken. Why the difference?

Mrs. Castle

My hon. Friend is incorrect. The House is perfectly well aware that we have referred to the Prices and Incomes Board the question of top salaries.

Mr. Arthur Lewis

They are still getting the money.

Mrs. Castle

My hon. Friend will have full opportunity of expressing his views on this policy when we have the Board's report. Dividend increases are as strictly controlled under the White Paper as incomes are. In putting forward individual cases at this stage my hon. Friend is not helping matters—[Interruption.]—because I am confident that, if this is examined, I am sure that the Treasury will be prepared to examine any particular case and give an answer—[Interruption.]—My hon. Friend will find that there has not been any breach of policy with regard to dividends.

Mr. Speaker

Order. The hon. Member for West Ham, North (Mr. Arthur Lewis) must listen to the answers.

Mr. Lubbock

I do not wish to embarrass the right hon. Lady—in fact, we congratulate her on reaching this amicable settlement in the case of the building workers—but may I ask her this question? Should not the principle be that the Government are responsible for determining policy on prices and incomes and that, if ambiguities have arisen on the interpretation of a previous White Paper, it should be the Government and not the Prices and Incomes Board who are responsible for clearing them up?

Mrs. Castle

The Government are responsible for the operation of the prices and incomes policy, but in this case the unions themselves welcomed the opportunity of having the Board rule on this matter.

I am not criticising the hon. Gentleman; in fact, I am grateful for what he said about myself, but I suggest to the House that, having had this great storm on 6th November about the possibility of industrial unrest in this industry, it would be most inconsistent for the House now to pursue matters which could endanger the settlement.

Mr. Gardner

Will my right hon. Friend accept that her statement will be very welcome in an industry, where the trade union leadership has always been very responsible? Can she give an assurance that in future where a long-term agreement of the kind which is negotiated in the building industry is under review, and where the Board has been asked to look at such an agreement, the Board will be asked to report before the old agreement runs out?

Mrs. Castle

I entirely accept that point. There is no doubt that difficulties were created here by the fact that the Board had not been able to report before the 4th November date which had been written into the previous agreement as the date when a new one would be operable. I recognise and have very much in mind the importance of what my hon. Friend says.

Mr. Costain

Following on the right hon. Lady's last point, can she assure the House that, now that she appreciates that this problem has arisen because of the firms' taking action, in future cases if she decides to bring in the Board it will be brought in at the appropriate time so that action can be taken?

Mrs. Castle

This is a very important point in this whole situation. It is because I recognise that and because I want to pay a tribute here to both sides of the industry and to the tone in which our discussions have taken place that I have made the appeal I have. Contrary to the assumptions of some hon. Members, they have been very constructive discussions in which a sense of responsibility has been shown by both sides; and I would be the first to want to place that on record.

Mr. McNamara

I appreciate what my right hon. Friend said about not wishing to exacerbate the present situation, and I agree that all on this side of the House are very happy that this settlement has been reached. Nevertheless, it seems that a precedent has been established by referring this decision for arbitration and final decision to the Board. It seems to be an unhappy precedent—

Mr. Speaker

Order. The hon. Gentleman must come to his question.

Mr. McNamara

Does not my right hon. Friend agree that before this sort of decision is taken again it would be better to think out very carefully what the logic of the matter will be if the Board is not only to make recommendations, but is to become the final arbiter?

Mrs. Castle

I cannot for a moment accept that this is an unhappy precedent. It is a happy solution, and I repeat that it is a solution which the unions themselves welcome. Therefore, it cannot be a question of rough-riding over their needs and their interest. They welcomed it. Indeed, at the conclusion of our talks yesterday, the union leaders expressed the view, as Mr. Leslie Kemp did, that it was a victory for common-sense. For heaven's sake, if the unions involved can say that, why cannot the House?

Mr. John Page

In view of the difficulty of accepting the credibility of some aspects of the compromise which has been suggested, will the right hon. Lady promise that there will be a debate immediately on publication of the relevant Prices and Incomes Board report?

Mrs. Castle

The hon. Gentleman knows that that is a matter not for me, but for the usual channels.

Mr. Ellis

Will my right hon. Friend accept that we on this side regard this as a victory for common sense and appreciate the hard work which she has put in on it, realising, furthermore, that she would have been accused of being stubborn if she had come with a different statement today so that, in the eyes of hon. Members opposite, she could not win?

On the question of the Board being used for arbitration, will my right hon. Friend, before she makes up her mind to use this procedure again, consult the leaders of the unions, since I, for one, feel that some of them might have grave reservations about a body which publishes findings and is, therefore, in a committed position also acting as arbiter? Will she consult the leaders of the unions before she uses this method again?

Mrs. Castle

I am grateful to my hon. Friend for his opening remarks, but I must remind him that this is not something which I am imposing; it is voluntarily accepted by the union leaders concerned. I should have thought that our prime consideration this morning would be to hope that the settlement is accepted by the executives of the unions tomorrow, and to express that hope. We can discuss wider matters on other occasions in the future.

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