HC Deb 21 October 1968 vol 770 cc886-92
27. Mr. Carr

asked the Secretary of State for Employment and Productivity whether she will make a statement regarding the dispute in the engineering industry.

Mrs. Castle

With permission, I will now answer Question No. 27.

The House will be glad to know that the strike which was due to begin today is not now taking place. However, the dispute has not been resolved and the situation is to be further considered by a conference of executive representatives of unions affiliated to the Confederation of Shipbuilding and Engineering Unions which is to take place next Friday.

Negotiations continued throughout last week following the meeting of the parties under my chairmanship last Monday. A substantial measure of agreement was achieved, but final agreement at the last stage of the negotiations last Friday was not possible. The unions were unable to accept the terminal minimum rate of fl 3 per week for women included in the employers' final offer.

The employers said that they were unable to make any further increase in the money offered. I invited both sides to consider whether a resolution of the difficulty might be found by some redistribution of the various elements of the package, but no agreement was found possible on these lines.

I greatly regret that arduous negotiations, which had resulted in a wide measure of agreement over important matters including valuable productivity features, were not eventually crowned with success. The House will share my hope that the further consideration of the situation which is now taking place will finally result in a satisfactory agreement.

Mr. Carr

We share the right hon. Lady's pleasure at the postponement of the strike and also share her hope that the further negotiations will finally avert it, and the House will not wish to press points which might make that more difficult.

May I ask her a question on one point, however? Has she given to the two sides, and will she give to the public at large, any indication whether the settlement al present projected falls within the Government's incomes policy? I am sure that she will realise, will she not, that for a voluntary agreement to be reached and then for it to fall foul of the incomes policy would make a very serious position much worse? Is she aware that the proposals, at least as they appeared in the Press, are very different in both scale and scope from the recommendations in the P.I.B. Report?

Mrs. Castle

In so far as it is possible at this stage to cost the proposals in any final form, it would appear that they were broadly in line with the prices and incomes policy, because they contain many important productivity features and, spread over the period of three to four years involved, would be within the ceiling.

Mr. C. Pannell

Will my right hon. Friend take it that we on this side of the House are not insensitive to the efforts which she made during the whole of last week to resolve the difficulty? I hope that all Members of the House extended good will to her at that time. But will she also bear in mind that the strike is only postponed for a fortnight? The engineering industry is the greatest industry in the country and there is need to study in a more leisurely atmosphere the question of differentials, which are, after all, the incentives to the craftsman, and to attempt to get some sort of justice in this complicated industry.

Mrs. Castle

The House should realise that there is not and never has been in existence a decision by the National Committee of the A.E.U. to strike. That is the starting point which I think will encourage us all to believe that the use by the unions concerned of the period ahead, particularly the period lying between now and next Friday when the executive of the unions of the Confederation meet, will produce a satisfactory outcome and an agreement.

Mr. Holland

May I ask whether the difficulty over the women's minimal earnings is due to a request for an exactly proportional increase in women's earnings, or to a request for more than a proportional increase? In other words, would it close the gap between the women's rate and the skilled rate?

Mrs. Castle

The difficulty over the women's rates arises from the fact that the increase in the employers' offer for skilled men to a terminal minimum rate of £19 meant a widening of the differential for the women, because the employers were not prepared to accept the implication of that higher figure for the men's differential. That is the difficulty. But it is true that because the vast majority of women have earnings which are very near their minimum level, whereas the vast majority of men have earnings well above their minimum level, the cash value of the increase to the women is considerable.

Mr. Orme

Does not my right hon. Friend agree that the engineering workers have been extremely tolerant over the many months for which these negotiations have been protracted? Would she not urge the engineering employers to come to terms with the unions in their justified claim? Surely she recognises that this in itself is a very modest claim for such an important industry to the country. Does she not also recognise that it is not high earnings and better conditions which are a barrier to our economy, but that these very factors can lead to an expansion of industry and to much better results?

Mrs. Castle

My purpose during the past week was to bring the two sides together and to see whether, by weighing the problems and the needs of both sides of industry, a settlement could be reached. We got very near it. Very substantial progress was made. Concessions were made by both sides. They were constructive negotiations. I regret that they have foundered on this point. I think that the House will agree that it would be unwise for me, at this delicate stage of negotiations, to go any further into the details at issue.

Mr. Biffen

Is not the reality of the situation that the productivity proposals are a means whereby further increases will be negotiated at local levels in response to local conditions? In that situation, is it not clear that what the settlement proposes is an increase of about 3 per cent. which, for a settlement of this magnitude, means that 3 per cent. now becomes the norm?

Mrs. Castle

No. I would not accept that as being so, because there have been detailed discussions and quite far-reaching agreement on important principles governing plant bargaining. There is no doubt at all that the employers themselves believe that a very important advance has been made in the discussion of such techniques as work measurement and job evaluation, and also in getting the unions to agree that these techniques should form the basis of plant bargaining which in future should be linked closely to productivity.

When the plant bargaining takes place, more money is forthcoming, but, as the employers have pointed out, our concern is to see that instead of an inflationary wages drift at plant bargaining level we get real productivity bargaining.

Dr. Summerskill

Will my right hon. Friend take every step to ensure that during these negotiations nothing is done either to delay or to prejudice the Government's declared policy of implementing equal pay for women?

Mrs. Castle

Certainly. I am sure that my hon. Friend is the first to recognise my concern about the question of equal pay. Indeed, very early in the discussions I urged the unions to consider their priorities in this matter, and I also suggested that we might meet this immediate problem by a redistribution of the mix of concessions in the package. But it is important to those who are concerned about equal pay to recognise that it is not just a question of narrowing the differentials between two different types and grades of work. It is supremely a question of getting away from the whole concept of a woman's rate, which is in itself demeaning to women.

We need to grade work rationally on the basis of job evaluation, regardless of who does it, and I welcome a step in this direction in that the employers, during the negotiations, offered to set up as part of the agreement a joint working party to consider the properly evaluated grading of the work which women do. I still hope and believe that we can make some progress on this subject.

Mr. Lubbock

Is the right hon. Lady aware that we, too, appreciate the efforts which she has made to reach a successful conclusion? Is she also aware that my hon. Friends and I wish her every success and hope that further meetings may be successful in avoiding what would be an extremely damaging dispute to the economic life of the country? Would she accept that part of the responsibility for this situation must rest with the Conservative Party for its violent opposition to any incomes policy whatever and its encouragement of the intransigent attitude on behalf of the unions?

Mrs. Castle

Grateful though I am to the hon. Gentleman for his remarks, I suggest to him that the important thing for us all to remember now is that in this, our most major pay claim of the year, there has been recognition by both sides that the answer must be found through increased productivity, proper wage systems, job evaluation and work measurement. This is a genuine mark of the success of the emphasis which we have been laying on productivity in the prices and incomes policy.

Mr. Atkinson

My right hon. Friend has reported to the House that the employers stated that they could not offer more money—more than the global amount—because the industry could not afford it. She is also reported as having some sympathy with this view. Would she now say how this opinion can be supported if the employers, her Ministry and the trade unions have no idea of the total amount involved in this global sum in the negotiations?

Mrs. Castle

I do not think that I have ever given any indication that we have no idea of the global amount. Assessments have been made by the employers and by others; that the cost of the concessions so far made would be in the region of £160 million a year. I am merely saying now that at this stage there is no agreement before my Ministry, so that we have not had to give our own costing.

Mr. Higgins

Would the right hon. Lady clarify her view of the productivity criteria? Is it her view that if a payment is made under a productivity agreement before productivity has gone up, that is inflationary, while if it is made after productivity has gone up it is not inflationary? Does she regard one as being contrary to the other?

Mrs. Castle

The Prices and Incomes Board has time and again recognised that if, as part of a national negotiation, there can be agreement, and real agreement, on productivity guide lines, then this is worth some money, and that then the detailed application of those productivity guide lines at plant level is worth some more money. This is the basis on which we have been discussing the matter.

Mr. Barnett

Does this not illustrate the unreality of bargaining at national level over matters which have frequently been settled already at local level? What discussions is my right hon. Friend having with a view to settling these matters in future at a more realistic level?

Mrs. Castle

My hon. Friend is drawing attention to one of the themes in the Donovan Report, which the Government have broadly welcomed. It is that there is no doubt that the realistic bargaining takes place, and must take place, at plant level. We have at the moment, however, a problem to solve. We cannot just abandon the national machinery overnight. Even Donovan recognised that there were some matters that were appropriate for agreement at national level. We must, therefore, progress slowly towards the devolution of decision to plant level.

Sir G. Nabarro

Is the Minister aware that if the aggregation of the productivity increase does not reach the total cost of the settlement envisaged—namely, £275 million and not £160 million—all confidence in her prices and incomes policy will be wrecked?

Mrs. Castle

I would only reply to the hon. Gentleman—who, I think, is trying to introduce damaging matters into a delicate situation: I deplore this. I do not accept his figure of £275 million as being the final figure. There is a difference between what it will cost the firms involved in the Federation and what it will cost the industry as a whole. I am not putting any final figure before the House. Apart from the point of disagreement on which the talks broke down, the employers believe that the proposals which they had worked out were very sound and valuable for the industry as a whole.

Mr. Heffer

In discussing this matter, would my right hon. Friend bear two points in mind: first, on the question of women's wages, that the principle of equal pay for equal work does not mean that there should be a lowering of the men's rate, which I understand is being or is likely to be argued; and, secondly, that productivity agreements do not necessarily mean that trade unionists must give up longstanding practices which they have gained over a period of many years?

Mrs. Castle

My hon. Friend is now asking me to do what I asked the House not to ask me to do, namely, to comment on the details in the package. It would be most unwise for me to go into that matter at this delicate moment, while the negotiations are suspended.