HC Deb 28 March 1969 vol 780 cc1954-90

Order for Second Reading read.

11.36 a.m.

Mr. Eric Moonman (Billericay)

I beg to move, That the Bill be now read a Second time.

The scale and significance of company takeovers and mergers in the last four years is unprecedented. The 4,500 mergers which took place last year can be seen as arising from four main sources. The first is the essential shake up and reorganisation of certain industries. The second is the influence of the American-based company in Britain. The third is the failure of traditional British firms to keep themselves in the big technological league. The fourth is Government intervention through the I.R.C.

Before this recent build-up of reorganisation, the rate of spending on acquisitions nearly trebled between the mid-1950s and early 1960s; yet that rise will be insignificant when we have complete figures for 1968 and when this year is through. Nevertheless, on the sketchy information that we have, the figures are impressive. In the middle 1950s, about £100 million was spent on merging. In the early 1960s, it reached £300 million. In 1967, it was £1,000 million. In 1968, the figure reached £3,000 million. Recently, the C.B.I. said that even this great increase will look like a jogtrot over the next 30 years because of the scale at which it is likely to develop.

I can touch only lightly on the national picture, because the figures still remain obscure. It is ludicrous that there is no systematic way of assessing the type and number of takeovers. A takeover of a company in the same industry group may represent "horizontal" integration in the same product field. It may also be concerned with widening the product range.

Nor do we know anything about the follow-up to take-overs and mergers. There is no method or system of Government to check on the original reason for merging and whether it is better or worse afterwards. Then again, there is no way of assessing the form that the rationalisation has taken. The whole subject is shrouded in mystery. In that connection, I welcome two inquiries which have been announced recently. The C.B.I. has decided to look into rationalisation, and then there is the Government inquiry which has been set up under the chairmanship of Professor Dennis Swann.

The Bill is concerned with security against this background of rationalisation and mergers.

One can think of employees' security under three heads. They are financial support at a time of redundancy, job choice, and information about company policy and intentions.

On the first point, the Redundancy Payments Act has made an important contribution to providing financial support. On the choice of job and alternative employment, stimulation has been provided by Department of Employment and Productivity policies offering easier mobility and retraining.

On the third, the Bill deals with extending systems of information so that real communication between management and employees takes place. It is the one area in employee security where there has been most weakness. I think, therefore, that we should take note of the pamphlet produced by the D.E.P. dealing with redundancies. While this may be of help to some companies and to some trade unions, it is merely advisory. It is a series of tips on what might be done at a time of redundancy. It goes nowhere near solving the real problems of establishing a commitment from management at a time of critical change within the organisation.

The Bill establishes a responsibility to formalise the informational processes so that communication begins to operate in industry. No one can speak with any certainty of knowing the answers to industrial relations problems, but research and experience can guide us.

On research, we in this country know that since 1945 there has been a greater appreciation of using the social scientists' methods to examine all manner of conflicts. Within industry, the classic studies were produced at the University of Liverpool with a study of "Joint Consultation—in three firms", "Industrial Leadership" and "Joint Consultation". We then had a further study dealing with the problems of consultation called "The Dock Worker" concerned with problems of organisational life in that industry. We also know from the United States that social scientists have made available a great deal of material about the way in which decisions are made in industry and how other countries can learn from this examination. From the point of view of the analysis and the research we are much wiser today than in 1945. I say "wiser", but we have not always learned from this knowledge. Nevertheless, it is available.

We have had many reports—for instance, the P.E.P. report on the structure of British trade unions in 1964. One of its conclusions was: Whatever reforms the unions make in their own structure and administration, they cannot solve their organisational problems in the plant unless employers and management are also prepared to act. … The main initiative for change within the workplace must in the nature of things lie with management … A great deal has been heard over the last few years about the responsibilities of trade unions and the need for them to become much more co-operative and diplomatic. But if we are dealing with changes in the work environment the initiative must come from management. We can chart many courses. We can set up major legislation, but if management is not encouraged or required to take some positive action there can be serious difficulties and omissions. Therefore, a structure of consultation must be created. This is what the Bill is about.

More recently, a research paper by the Royal Commission on Trade Unions on "The rôle of shop stewards" also argued the case for more formal agreements. It said: It is unwise to have total reliance on informal agreements and understandings at shop floor level. It can cause confusion and uncertainty which might be removed if more agreements were written down. I shall examine this matter in a moment. So much for the research study of this highly complex area of consultation and negotiation.

The second area which I think ought to be able to guide us in trying to solve these problems is experience. There has been a considerable amount of experience of mergers and their ramifications. If we take at random the figures and the impact made on certain industries in 1968, by looking at the value of the new groups which have been created, we can get some indication of the scale of mergers. For instance, in 1968 we had mergers as distinct from take-overs, in the electrical industry involving a group of £900 million: G.E.C.-A.E.I.-English Electric. There was another involving £400 million in the motor car industry: B.M.C.-Leyland Motors. There was another of over £100 million in computers involving I.C.I., part of English Electric and part of Plessey. In the construction industry there was another merger of £98 million involving Tarmac-Derbyshire Stone-William Briggs. In textiles we had one of £68 million between English Sewing and Calico Printers.

I will not list all the takeovers, but I will select some of the biggest which took place in 1968. Even on the basis of the five mergers which I have mentioned, we can see the enormous strengthening which this has meant to industry. I am not trying in the course of the debate or in the Bill to say that rationalisation in industry is not necessary. In certain cases it is essential. I am trying to argue that, alongside the critical decisions made on the ground of rationalisation, real human responsibilities have to be met.

Four major takeovers took place in 1968. One was in television, £155 million, involving Thorn Electrical and Radio Rentals. Another was in the general drinks industry which concerned Allied Breweries and Showerings, involving £100 million. Another, involving £60 million, concerned Rank Hovis and Cerebos. In the mining industry, involving Rio Tinto Zinc and Borax, the sum involved was £60 million. There are 15 others ranging down to the smaller takeovers. I wish to stress that in every case this has meant organisational change and major decision making.

One merger which created most interest was A.E.I.-G.E.C, where a staff of 5,500 at Woolwich was cut to 900 and the factory is to be dismantled by mid-May. We all recognise the anxiety in Chelmsford, without the merger taking place, about similar circumstances arising.

To sum up, we have sufficient practical experience and research knowledge to recognise the critical nature of company reorganisation to the staff required. That was appreciated by the Labour Party in a policy document last year, "Industrial Democracy", in which it said: There is a need to increase the protection afforded to workers, to shield them from the consequences of mergers and rationalisation … going far beyond the right to compensation for redundancy under the Redundancy Payments Act. This might be met by a Redundancy Procedures Act. I suggest that the Board of Trade should use its scrutiny powers to ensure adequate warning to workers. It does not do so at the moment.

May I say what the Bill is not about. I make no claims that this is a cunning device by myself and other sponsors of the Bill to introduce worker control. The Bill is about participation, a subject which we in the Labour Party have emphasised at annual conferences, but then have the extraordinary tendency to forget all about between conferences.

Traditional workers' councils are all too often inadequate. The stimulus given by the Whitley Committee in 1917 to a number of firms was never seriously translated into meaningful meetings, or on any scale. The last war encouraged the establishment of more joint meetings, with the joint production committee meetings, but these and many of the works councils have never made the impact which was hoped for or met the needs of workers and management because of lack of serious subject matter. The subject matter was often related to minor domestic issues such as the quality of tea. They may well have met the requirements of a particular meeting, but they did nothing to enhance the serious nature of what the meetings should have been.

Nor was there any attempt to report back properly in many cases. One factor which contributed to the failure of works councils was the failure to build in proper reporting-back systems. One works council's representatives were prevented by the management from taking off 15 minutes after the meeting to explain what had taken place. The real value of reporting back was not taken up. Another failure of such meetings was the poor preparation by chairmen and secretaries.

The Bill does not attempt to alter the key managerial rôle in the enterprise. No committee can be a substitute for effective management. The intelligent, sensitive manager will be prepared to work with such committees proposed in the Bill, because the views and experience of employees, at all levels, can be a resource. In my experience both of running and participating in such industrial meetings, there is a tremendous pay-off if the management takes account of both the subject matter and the employees attending.

It was with great concern that one read the comments of the right hon. Member for Wolverhampton, South-West (Mr. Powell) on the need for a change in the collective bargaining structure in the Esso Petroleum Company. He was eventually told off for his intervention. There is no short-cut to industrial relations. Industrial relations are no place for the amateur or the academic anarchist.

The third thing which the Bill does not do is to upset any existing management—trade union balance. Jack Jones, now the General Secretary of the T.G.W.U., said: I wish it could be understood that workers will usually respect a law, but one that merely seems to tip the balance of advantage in the direction of the employer, who has already got great power, will never seem to them to be fair law. This Bill is not an attempt to upset the existing balance between management and trade unions.

Two further comments may be made. First, and this is perhaps a reflection on hon. Members' inadequacy in drawing up the Bill, although the Title refers to a security fund, hon. Members will have seen, perhaps with some amusement, but I hope with interest, that there is no reference to a security fund in the Bill. The sponsors and I felt that we should concentrate on the smaller area of consultation, and therefore much that follows is directed to that. If we are successful today, in Committee such considerations will demand attention.

We have in Clause 1 the requirement and obligation on every employer to inform the Secretary of State at the Department of Employment and Productivity about organisational changes in consequence of industrial mergers. We are not talking about small organisational changes. It would be absurd to require the Department to be informed about these, and we are not suggesting that. What we have in mind are organisational changes consequent on mergers.

In Clause 2 there is a reference to advising both employers and employees' representatives about the consultative processes, and also a reference to the involvement of the Department of Employment and Productivity. This would mean that the Department would be required to attend meetings arising from mergers and to encourage the companies to set up machinery which would provide for discussions between management and employees. We see this not simply as a two-way arrangement but that there should be other levels of management and supervisory staffs attending the meeting.

Clause 3 deals with frequency and method, without laying down any specific reference to the number of meetings that might take place. This would have to depend on agreement between the parties concerned.

Finally, we say that where agreement has been reached for the establishment of consultative machinery a copy of the agreement shall be deposited with the Department of Employment and Productivity, and a register of agreements so deposited shall be available for anyone, be it an employer or any other person, to see. This is an essential requirement, because it will enable the company to feel that it is engaging in consultation, and it will at the same time provide for a complete statement which will be deposited with the Department.

If the new Committees are to be taken seriously, they must have, and be seen to have a serious purpose. A secretariat on the lines of the intelligence department of a local authority should be available to supply background material between meetings so that all participants would be properly briefed. Items on the agenda should include long-term and short-term forecasts, the financial position of the company arising from the nature of the merger, the order book with reference to work competed for, gained and lost, with causes examined—in some mergers the failure to obtain orders is a key factor in another company showing interest and want to take over the firm—comparative figures for firms merging in the group, plans and techniques for dealing with staff career development, and pay schedules.

Some employers will argue that because business statistics are confidential it is unwise to make them available to employees. They could be misunderstood or misused, but this risk is much less than the danger of not making available clear and frank statements at the time of organisational crisis.

The other view which is relevant in setting up such committees is that employees do not care, that although they may want to express their anxiety and demonstrate they are not inclined to take part in an agreement to run down the plant. I do not think that that is true. Indeed, in a research project which I conducted in 1965 in Lancashire on worker's attitudes to mergers in the textile industry which was very much affected by mergers, we found that in spite of strain arising from mergers and takeovers, employees were very anxious to play a positive part in the company's activities. What they appreciated was that the company was prepared to treat them as adults and give them information, that it was prepared to discuss with them how best to deal with the question of redundancy procedures and payments. I think, therefore, that the committees should include specialist staffs as well as line management. There is often the same sort of misunderstanding and anxiety at this level as one finds between the line managers and the operative, so that all sections of an organisation need to be represented at the time of a merger.

Despite the worries and suspicions at a time of merger and organisational change, I believe that it is possible for all sides of a business to work out a basis for co-operation, yet if this is not possible then the State has a responsibility. Legislation and State involvement cannot be ruled out. The State is now a major partner in industrial relations, and whilst there are hon. Members on both sides who would see this as a minimum, I am drawn to this conclusion because attempts by certain companies to handle the problems of consultation at a time of organisational change depend very much on the company's philosophy.

In some cases the system works extremely well, but the general pattern is too uncertain, and I feel that one cannot leave the problems of human relations at a time of organisational change to the individual whims of some managers and some trade unions. One therefore has to build into this system something which recognises in a civilised way that the State has a part to play. There is no doubt that, having established this, it does not necessarily change the attitude to authority within the organisation. Attitudes to authority and about authority are deep-rooted and conditioned by experience of abuse and neglect which is not easily forgotten.

The approach of the Bill is neither a neat package solution nor a straitjacket for industry, but a modest attempt to improve human relations at a time of organisational crisis.

11.58 a.m.

Mr. John Wells (Maidstone)

I congratulate the hon. Member for Billericay (Mr. Moonman) on having got his Bill so far, and I hope that he gets it to Committee and makes further progress with it. There are one or two points that I wish to make about it, and I look forward to hearing the Under-Secretary of State's answer because I feel that we shall get some guidance from him.

The hon. Member for Billericay rightly said that industrial relations are no place for the amateur, and therefore I tread somewhat delicately in following the hon. Gentleman. He made one important statement when he said that clear and frank statements to employees were needed at a time of crisis within a firm. British management, particularly at some lower levels, has been less than frank with its employees, and therefore greater consultation that is really understood is needed.

The hon. Gentleman was perfectly reasonable about his Bill. He said that giving facts and figures to employees might be misunderstood and misused, and therefore people were chary of doing so, but I think that we need a new look, not as a nation, but as a series of companies, at our trust in regular employees, both long service and comparatively short service.

It is for this reason that I have certain slight doubts about the Bill. Besides this lack of frank consultation with employees, one of our other weaknesses, as an industrial nation is that we are fossilised in our attitude to our jobs. I recollect working in an industrial firm in Coventry about 10 years after the trams were removed from that city. I inquired of a man who was very bad at his job what his passion in life was and he said, "I am a tram driver, and that is what I like doing". That was 10 years after the trams had been taken away. He should have become acclimatised to something else by then. He was thinking backwards. This fossilised attitude to our little, individualistic speciality can become too developed. We need a greater mobility of labour not only from place to place but across the frontiers of jobs.

Many unskilled and semi-skilled jobs can be picked up after a few days if there is good will and enthusiasm. We need to create an attitude among people which will not lead them to say, 10 years after the trams have gone, "I am a tram driver." It is too silly. I rather fear that by formalising working attitudes still further the hon. Member's Bill may cause greater fossilisation rather than the reverse. I know that the hon. Member is aiming at greater consultation but I fear the possibility of fossilisation.

Secondly, Clause 1 states that: It shall be an obligation on every employer … The hon. Member gave examples of the vast mergers that have taken place in the last few months, but I would point out that there are many small mergers in respect of which it is desirable that people should change their activities. If the Bill goes to Committee I hope that we shall be able to insert a kind of de minimis proviso in Clause 1 or some other suitable part of the Bill to the effect that only those employers who employ 100 workers or more—or whatever figure the Department may recommend—shall have this obligation placed upon them.

I am rather anxious about this extra Government interference with industry. The hon. Member attacked what he called "Powellism". He may make his attacks as he pleases, but I and many of my hon. Friends—and, I suspect, some hon. Members opposite—are just a little hesitant about the possibility of greater Government interference with industry.

Clause 4(2) provides that regulations may be annulled by the negative procedure. As the hon. Member knows, the queue of Prayers at the end of business is already too great, and we really ought not to have greater pressure upon Parliamentary time. Thank goodness the hon. Member has opted for the negative rather than the affirmative procedure. I should have preferred some other form of public control, if such a form could be found. I appreciate the hon. Member's good intentions in seeking Parliamentary control but I hope that he will consult his right hon. Friend the Leader of the House before creating a system under which the cases of individual firms are put before the House—because that is what it could mean.

Clause 6 contains the financial provisions. I see a risk of greater taxation. I do not know whether the hon. Member has any estimate of what the Bill will cost. Before the Bill is considered in Committee, I hope that he will have consulted the Department, so that we may be given some idea of the burden that we may be imposing upon the taxpayer. By this time hon. Members on both sides of the House are becoming chary of advocating any legislation—especially private Members' legislation—which will in any way increase taxation.

I welcome what the hon. Member has said about the Bill and its aims, but until I have heard the Minister I am not quite sure that I welcome all the provisions. Nevertheless, I look forward to the Bill going to the Committee and making progress.

12.04 p.m.

Mr. Alex Eadie (Midlothian)

I congratulate my hon. Friend the Member for Billericay (Mr. Moonman) on being successful in the Ballot and having the opportunity to introduce this Bill. I hope that the opinion of most hon. Members will be such that the Bill will be sent to Committee. One of the factors that prompts me to support my hon. Friend is my long experience in handling reorganisations, especially in the mining industry. I have played a leading part in the reorganisation of jobs of hundreds if not thousands of men. My experience is not applicable to the point of view which my hon. Friend was arguing, however, because the mining industry happens to have a better system of industrial relations and consultation. In that respect the trade union movement and the National Coal Board are to be congratulated.

The hon. Member for Maidstone (Mr. John Wells) said that we must be careful not to involve the taxpayer when we introduce legislation. While my hon. Friend was speaking a thought occurred to me. Last Friday, as a member of the Scottish Parliamentary Group's Industry and Employment Committee, I went to the West of Scotland to take part in a discussion arising out of a problem of reorganisation. The matter is still in the hands of the trade unions and I do not want to comment on it. The reorganisation in question involved asking the men concerned to travel many miles from an existing factory to another factory. They were querying whether the reorganisation should take place.

The strange point was that there would probably have been no redundancies. The reorganisation, as a result of a merger, was nevertheless raising serious problems. When I spoke to the men I was impressed by the fact that they were not obsessed by their own problems as work people. They were asking our opinion, and asking us for guidance because organisations and mergers often mean that since many people have to leave the district in which they have been living there is often a vast expenditure of social capital which otherwise might not have been spent. The men were referring to expenditure on housing, roads, health and schools.

These questions concern the nation, and not merely the employees of the firms concerned. A tremendous amount of capital is involved, and this factor requires to be taken into account. Moreover, the social pressures that may result from the mergers and reorganisations may seriously embarrass local authorities, who may have to impose an extra rate for the purpose.

In Scotland the question of mergers occupies much of the discussion that takes place. Recently, the Scottish Council (Development and Industry) expressed great anxiety at the fact that the mergers taking place were creating difficulty because they brought about a great degree of centralisation. The Council argued that this made it more difficult for people with aspirations to achieve positions in higher management without leaving Scotland. This shows that we should be indebted to my hon. Friend, because there is a host of problems. I have always favoured industrial training. It would be inappropriate for me to try to show that the nation only started to gain strength through this means, but I am in favour of the T.U.C. being given more power in this respect. If we had more industrial trade unionism to deal with mergers, work people and the nation would benefit.

I am pleased that Clause 3 grasps the nettle of consultation. Far too often, when negotiating with management, we in the trade unions wanted to be helpful but were sometimes not as candid as we should have liked. When we pressed for answers about work conditions we were politely reminded that consultation did not mean management. I have had experience of negotiation in private as well as public enterprise and I always thought that this was an attempt by management to absolve itself of responsibility and that it did not show the concern for employees whose livelihood we were discussing.

This is not an individual problem: it concerns the whole nation. I never liked it when workpeople involved in mergers said, "We are becoming industrial Arabs, moving from one reorganisation to another. People do not understand the problems it creates for our families in education and housing." I hope that the Bill goes to Committee, where we can have a profitable discussion, because it would benefit not only workpeople but the whole nation.

12.14 p.m.

Mr. Albert Booth (Barrow-in-Furness)

I also congratulate my hon. Friend the Member for Billericay (Mr. Moonman) on the introduction of this Bill, which faces up to a growing modern problem which legislation can help to solve. The House should be particularly concerned with this issue, mainly because of the cost of mergers to the public. The I.R.C. grants to facilitate mergers are a direct charge upon the Exchequer, which proves that our concept of the relationship between industry and Government has changed fundamentally this century from the idea that it was for the investor and entrepreneur to finance reconstruction to the idea that it is a legitimate rôle of public expenditure to restructure and create production facilities.

Our social attitudes to industry must change in a comparable way. We should set in the table of costs to the public of mergers not only I.R.C. grants but redundancy payments and resettlement grants, as well as wage-related unemployment benefits, when mergers bring unemployment. If this public cost is justified, we should consider the effect upon the economy of mergers, especially in the regions where we want a far higher rate of industrial development. In these areas, in particular, workers are not likely to be soothed by political phrases like "restructuring of industry" or "shake-out", if they see a Government-aided merger threatening their jobs. The Bill is very valuable because it will create machinery by which workers can become involved in decision taking which affects their work.

For far too long, we have tolerated a growing public expenditure in industry without creating the machinery by which those members of the public most directly-affected can be consulted. The Bill will enable some questionable decisions along these lines to be challenged. It is debatable whether they are, in the long term, in the public interest. Many of the mergers of the past few years are more likely to have been in the interests of a higher short-term return on capital than in the broad economic interest of seeing our production capacity increased. It is important that these decisions should be challenged by those who can most effectively challenge them.

My experience of a wide range of contacts with members of other unions since I entered the House is that those who are best qualified to make this challenge are often those who from their experience in the various levels of lower management, on the shop floor and in certain phases of production, can predict accurately the results of mergers and reorganisation.

These are people who often go unconsulted. In trying to research on this subject I have been appalled at the lack of available statistics. There are no comprehensive statistics to show the extent of redundancies due to mergers, as far as I know. All that we know is based upon the redundancy payments that have been made. In 1967 there were 230,000 such payments. We could not contend that these were all the result of mergers. In the first six months of 1968, 134,000 payments were made at a cost to the Exchequer of £30 million. When one tries to break this down to find out how many redundancies were due to mergers or changes in industry one finds that from 6th December, 1965, when redundancy payments came into force until 30th September, 1967, 42,672 redundancy payments were made in respect of workers in the electrical goods and engineering industries alone.

There were 22,000 redundancy payments made to those leaving the vehicle-building industry. In total, over the period there were over 318,000 redundancy payments. This shows that a tremendous number of people have been forced, for various reasons, to be declared redundant. We could be a little less concerned if we had any reason to believe that this initially high level of redundancy payments was tapering off rapidly. Such evidence as I can find leads me to believe that this is anything but the case. The latest figures I have show that from 1st October to 31st December, 1968, there were 11,800 redundancy payments made in respect of the engineering and electrical goods workers, and 8,700 in the construction and engineering industry. These figures tend to show that there are probably more people becoming redundant, rather than less, as mergers take place.

Mr. Moonman

Would my hon. Friend agree that a further criticism of the present situation, where there is this lack of information, is that there is no special occupational breakdown, so that one can go along to a particular sector of employment where one is most needed? There is no occupational, managerial grouping.

Mr. Booth

I agree. If we had a breakdown on an occupational basis, as opposed to an industrial basis, it would probably give us a very good guide and enable the Government to take this factor into account when deciding whether an industrial change or merger should be aided by public funds. In the absence of this information it must be difficult to make a decision as to whether an industrial change should be aided from public funds, without any real regard for the social consequences.

The social consequence of redundancy is not dependent upon the number of people employed. It is dependent very largely on the skills and qualifications of those people. Throughout the country one can find a pattern of redundancy showing that a large number of skilled workers will find new jobs relatively quickly, but that certain branches of semi-skilled and unskilled workers have little or no opportunity of obtaining re-employment. This leads us to one of the essential features of the Bill, insofar as it challenges the old concept that it was a management function, or prerogative, to decide what industrial changes should take place, and that it was for the employees not regarded as management to accept the consequences without question. In this respect the Bill is very much to be welcomed.

It will go some way to dealing with the problem of social hardship resulting from industrial changes. It is fair that Government spokesmen should claim that the majority of mergers which have taken place aided by public funds have not created redundancies in the development areas. That is not a total defence of the policy, although I appreciate the claim. I would set against it the fact that the Government cannot produce statistics to show how many people have been made redundant by mergers in development areas. This is crucial to our policy in these areas and needs investigation.

The social hardship of being made redundant in a development area is much higher than in the non-development areas. There has been a change of attitude among workers towards these redundancies. This has been very noticeable over the last 18 months. Workers generally, and engineering workers in particular, are fighting back against this kind of redundancy. Whereas 18 months or two years ago, upon hearing that an industrial change which would render them redundant was to take place, they might have asked about redundancy pay, wage-related benefit and resettlement grant if they could move elsewhere, they are now digging in their heels and saying that they do not want to discuss those sort of things until they have first discussed whether the change is necessary, whether there are other ways in which it can be made, whether there are other products that can be made or other markets found.

In so far as the Bill gives them the ability to do this it is to be welcomed, because through this machinery we will find, not that industrial change will halt, but that better changes will come about. There will be fewer cases of workers being made redundant, because there will be more cases of workers showing that, through their knowledge of the industry, through their representatives in consultation with management, they can work out a far more satisfactory solution, which will increase the productive capacity of the country. To that extent the Bill will aid our progress and the House should give it a very warm welcome.

12.29 p.m.

Mr. Nicholas Scott (Paddington, South)

I do not intend to delay the House for long, but it would be wrong to let a Bill which raises such important and interesting issues go by without a contribution from this bench. Like other speakers, I congratulate the hon. Member for Billericay (Mr. Moonman) on bringing his Bill thus far. He proclaimed that it was a Bill about participation. Well, we are all participators today. It is a common slogan in all political parties and in all areas. I suppose that even the Home Secretary can be said to be participating in the Government at the moment, or even in the realm of industrial relations in the rôle that he is playing.

The Second Reading of a Bill of this kind might represent an attack on the whole principle of mergers and a resistance to industrial change, but, basically, I agree with the underlying principle that the hon. Member has tried to bring forward, which is the need for more consultation, and for more information to be given to those who will be affected by industrial change of all types. In so far as the Bill is an attempt to mitigate the impact of mergers on employees, I believe that an improved policy for industrial training and an improved and coherent policy for mobility of labour would probably be of more importance, but I do not say that, in its own particular sphere, the Bill may not have a contribution to make.

I am sure that we need an improved framework for consultation. Those hon. Members who have read "Fair Deal at Work", which has been discussed recently at some length in another context, will know that it proposes a code of industrial behaviour. Provision for consultative machinery should play an important part in any such code of industrial behaviour for both management and trade unions. Perhaps we need to think of some legal requirement for permanent consultative machinery in industry on a real basis.

I have two complaints to make about the Bill. The first is that it represents a temporary provision narrowly linked to the question of mergers. There are many types of industrial change which are just as profound in their impact upon employees as are mergers, and if one is to build any sort of consultative machinery it seems wrong that it should be drawn as narrowly as the hon. Gentleman does here.

Further, I think that in practice there would be great difficulty in establishing when the direct effects of a merger had come to an end. For instance, have we yet come to the end of the results of the merger 16 years ago of the Austin and the Morris motor car companies? The recent merger of B.M.C. and Leyland was almost a direct following-on of that earlier merger.

Is it intended that we should have civil servants sitting year after year on the committees envisaged in the Bill? One cannot but regret that though two years ago the previous Minister of Labour said that he hoped to reduce the number of civil servants in what is now the Department of Employment and Productivity, we have heard recently that the number is to go up by several hundreds in the coming months. Any provision requiring the employment of more civil servants should be looked at carefully.

My second major complaint against the Bill is that it goes on with a general interventionist philosophy. Like the hon. Member for Barrow-in-Furness (Mr. Booth), we all recognise that the relationship between Government and industry has changed dramatically, not only in the last 60 years but in the last 10 years. Much of this was inevitable, and much of it was no doubt desirable, but my approach is that whereas the law may have a considerable rôle to play in industrial relations and in the establishment of this sort of machinery, the less we can leave to the discretion of the political heads of Ministries the better it is.

The real rôle of Parliament is to establish a basic framework within which both sides of the industry can get on with their job, negotiate, and achieve the best possible result for industry as a whole. The idea of the man from the Department of Employment and Productivity sitting in and holding the hands of employers and employees does not seem to me to be realistic or desirable, even if, in the light of the operation of the prices and incomes policy, the employees felt that the Department was particularly to be regarded as the guardian of their interests. As I say, the law has a rôle to play in establishing a basic framework, but those who have to do the work and operate the system should then be left to come to their own decisions.

The hon. Gentleman the Member for Midlothian (Mr. Eadie) spoke of industrial trade unionism, the need for mergers of trade unions, in order to get a more rational union structure, and the Government, in their White Paper, have suggested that the Secretary of State might have power to make orders regarding recognition in order to achieve this end. In this field, as in that covered by the Bill, it seems better that such decisions should be left to those who will be affected; and that the approach of having a bargaining agent by means of which the workers themselves decided would be a very much better approach in both cases.

We on this side are in sympathy with the basic need for more information to be given earlier. We are agreed that the simple provision of early information is not enough, but that there should be real consultation in industry about decisions which affect the livelihood and lives of employees as well as of employers. That consultation is due to move away from complaints about the sausage rolls in the canteen to the real, basic decisions mentioned by the hon. Member for Barrow-in-Furness.

I believe that any such move forward will need some lead by the Government and by Parliament, but I am not sure that the precise provisions of this Bill are what are needed. If we could cut down the rôle of the Secretary of State in this respect, if we could cut down the wide scope of regulations to be made by the Secretary of State, and if we could cut down the direct personal intervention of what I think would become hundreds of civil servants sitting on these committees, the Bill might provide a starting point for the sort of discussions we need in order to provide a proper system of consultation in industry.

I repeat my view that the duty of Parliament is to provide a basic framework; to decide what sort of consultation it wants industry to set up and to provide for it by law, and then to leave those directly involved to get on with the job and work the system, and not to have continual direct intervention by civil servants from the Department in the detailed negotiations, discussions and consultations.

12.39 p.m.

Mr. Roland Moyle (Lewisham, North)

First, I should like to apologise to the hon. Member for Paddington, South (Mr. Scott) for not following the convention in these matters. I hope that he will accept my assurance that it was not done with a view to outflanking him in any way.

Secondly, I congratulate my hon. Friend the Member for Billericay (Mr. Moonman) on his good fortune in the Ballot, and on his acumen in selecting this topic as the subject of his Bill. A Bill of this sort, promoted either by a private Member or by the Government, is essential for the continued successful operation of the Government's regional development policy. It is not without significance that my hon. Friend represents a South-Eastern constituency, and that when we debated the same subject on a Private Member's Motion a few weeks ago that Motion was moved by my hon. Friend the Member for Epping (Mr. Newens), who also represents a constituency in the South-Eastern part of the country. If I may say so, we are at the sharp end of the Government's regional development policy, which I support entirely. It is sensible, and I hope that it goes forward successfully. But to some extent it requires some sacrifice in the short run from people who live in the Midlands and the South-East.

This may be a rather odd doctrine to my hon. Friend the Member for Midlothian (Mr. Eadie), who comes from one of the development areas, but in looking at the South-East we should not be mesmerised by the general air of affluence. There are all sorts of complicated problems under the surface which are not apparent.

Along the South London river, we have an industrial belt within the general affluence of the region whose structure was created largely by our Victorian forefathers and it is ripe for renewal. This process of renewal is going on and has been stimulated by the Government's regional policies. We are thus having a tremendous number of changes, in some cases with detrimental effects on earnings and status of individuals in the South-East London area. We want to try to minimise these effects as much as possible.

As a South-East London Member, my general criticism of the Government's regional policy is that, whereas they have thought very much about directing Government aid, Government leadership and Government support into development areas, they have handed over implementation of their policy in so far as it affects the better-off areas of the country to the unregulated decisions of private enterprise, and I think that we must bring that situation to a close.

Only 12 months ago I was in the thick of one of these situations. Following the G.E.C.—A.E.I. merger in November, 1967, G.E.C. decided that the A.E.I. factories in South-East London would have to be closed and moved to a development area. I have spoken to the top management of G.E.C. and they impressed me with their desire to see this operation going forward with the minimum damage to the people living in the South-East London area. But what distressed me from my ringside seat was the great gap between the ambitions of the G.E.C. management and their achievement in practice, because the reorganisation situation in the earlier stages was almost a monument on how the operation should not have been carried out.

The A.E.I. factories in South-East London numbered three. The largest was at Woolwich and employed 5,500 people. There were two smaller establishments in the Lewisham area, a research laboratory with about 100 people, and the other a small factory employing about 450 people. First of all, the shop stewards at the Woolwich factory were summoned to meet the management one Friday afternoon. They were handed a couple of quarto sheets in which the closure of their factory and of the other two was announced to them. The quarto sheets were not so much a statement of the case as a statement of management intention with no supporting information as to why the decision was necessary.

The action removed all sense of trust that the shop stewards had in the management. This sort of thing is not good enough. The problem was further compounded by the fact that the 5,500 employees at the Woolwich factory learnt that they were to be sacked from a perfunctory announcement over the Tannoy system, which cannot be supported as good management practice. It ran to this effect, "We are sorry to announce that the A.E.I. factory at Lewisham will be shut. We are sorry to announce that the laboratory in Blackheath will be shut, and we are also sorry to announce that this particular factory is also to be shut." That was the first news which the employees of the old A.E.I. company had of the fact that their place of work was to be shut and moved to another part of the country.

The Members of Parliament for the area and the local councillors also got no more than a couple of quarto sheets which the management had handed to the shop stewards. This again gave no indication of the case for the closures or about what was to happen to the employees in detail or even in broad principle. It was just a statement of management intention. Following these two events, as can be expected, for the next few weeks in Woolwich and Lewisham there was a situation akin to panic at the thought of 6,000 people being thrown out on to the employment market within a short period.

The preparatory work which the Company had done for the closure was almost wholly inadequate,—and here I should like to commend Clause 3 (c) of my hon. Friend's Bill. The consultations which are required and which the Department of Employment and Productivity should promote are not only consultations with the employees of the firms concerned or with the employment exchanges. Consultations are necessary also with a number of other bodies. I come back to my example.

It is intended in the South-East London area of Thamesmead to erect a new town of 60,000 people. If these people are not going to overload the already creaking Southern Region transport system by travelling from Thamesmead to the centre of London to work, they will have to be given jobs in the locality, and the early pre-planning of Thamesmead was based on the assumption that a certain proportion of the Thamesmead dwellers would work locally. This in turn was based on the assumption that the A.E.I. factory would continue in the area and provide work. There was no consultation between the G.E.C. management or any of the planning authorities or with the G.L.C., the sponsoring body for Thamesmead, on the basis that the factory was to be closed and that other provisions would have to be made for local employment.

Of course, there had also been no consultation between the management and the South-East Economic Planning Council. The result was that people had a very limited idea at that time as to what sort of employment opportunities existed in the London area for these 6,000 employees who were to be thrown out of work. This again did not add to the community's sense of security. Thus, it is not only consultation with employees that we wish to see in these circumstances. There would have to be consultations with the planning authorities as well, so that the whole operation could be properly worked out and the contribution which planning authorities can make to the sense of security of the employees properly appreciated and brought into discussion at an early stage.

My hon. Friend therefore was on a very important point when he insists that the maximum information should be made available to all parties concerned—employees, local authorities, Members of Parliament, and so forth. One of the things I found was that, whereas the management were prepared to state their intention with regard to redeployment, they were not prepared to say what they would do in terms of compensating the employees in the firms. They were not prepared to give a really detailed case backed by facts and figures to support their contention that this was the only possibility which the company had for reorganising its operations successfully so as to make them profitable.

Other statements which the management made in the ultimate had to be taken on trust, and it was just this element of trust which the management had destroyed in the area by the way in which they had announced the reorganisation to the employees. There was a tremendous upheaval in the area. There were strikes and mass meetings and processions. Writs for libel and slander were flying around. People were worried sick about their future and this situation lasted for three weeks.

One of the things which G.E.C. did before introducing the reorganisation was to sack A.E.I.s top three personnel managers as a preparation for this major reorganisation. I am prepared to accept that as between the General Electric Co. and myself there is a difference of view on this matter. The General Electric Co. believes that the personnel manager is properly located at the factory, that that is all that his function requires, and that he can handle individual factory reorganisations from that point of view. I argue with the General Electric Co. management that reorganisation should take place within the context of an overall company policy and that a proper reorganisation cannot be effected without such a policy.

In any case, whether one takes one side of the argument or the other, I do not believe that three of the leading personnel managers of Associated Electrical Industries, who had a tremendous amount of experience of the way in which the company ran and of the context in which it ran, could not have made a significant contribution to the planning of the redundancy had they been retained on G.E.C.s payroll. We must get away from the idea that a massive reorganisation of this sort can be prepared for by sacking the three top personnel managers to start with.

What was the ultimate outcome? Three weeks after the announcement of the reorganisation and the redundancies and the ensuing panic the South-East Economic Planning Council was able to gather its forces together and announce that there was a considerable surplus of employment opportunities in London over the number of people available to fill them, that as a result of the economic situation in our part of the country there was a substantial amount of empty factory space which could not be utilised because there was not the labour to fill the vacancies. How much more appropriate that statement would have been if the General Electric Co. could have consulted the Planning Council before announcing its reorganisation, and how much more suitable it would have been if the announcement of the reorganisation could have been accompanied by a statement from the Planning Council outlining the job opportunities which there were for people who were to leave A.E.I. Much of the distress which is always caused when redundancy and reorganisation take place would have been avoided.

It is that sort of consultation and joint action which the Bill is calling for. The Government must have regard to this aspect of the affair. If people are to be continually thrown into a state of chaos when reorganisation is announced—a state of despair, perhaps, about their future—the Government's regional policy will be undermined gradually and surely in the Midlands and the South-East and a great national policy upon which this Government has embarked and which I think has tremendous opportunities for the future will, in the end, have to be cast aside because the necessary electoral support will not be forthcoming.

I believe that such a decision would in the ultimate redound to the disadvantage of my constituents, because we would have the same press of employment in our area, the same ever-lengthening lists of people waiting for council houses, the same over-loaded public transport system, the same continual pressure on our social services to keep running at top speed so as to stay in the same place. If the Government's regional policy goes forward, that type of problem for my constituents can be alleviated and solved. The Government must remember that in the short term the impact on our people in the South-East is, or could be thought to be, harsh. Unless they take steps such as those proposed in the Bill to alleviate matters, the very adventurous and daring policy of regional development upon which they have embarked will be in continual jeopardy.

I give my wholehearted support to the proposals in the Bill. I hope the Government will see their way either to supporting the Bill or to introducing a similar and possibly more comprehensive Measure in the not-too-distant future.

12.55 p.m.

Mr. W. Howie (Luton)

I want to support the Bill. I shall do so with the maximum brevity. The Long Title says that it is A Bill to Establish machinery for the regular supply of information by employers on all matters affecting or likely to affect employment". This is an important and desirable aim. However, I am not sure that the Bill deals with "all matters". I do not greatly blame the sponsors of the Bill for this. My hon. Friend the Member for Lewisham, North (Mr. Moyle) spoke eloquently of the need for consultation and for the supply of information after a merger has occurred. He pointed out the problems which arose on a merger and the fears to which a merger gives rise. I do not want to add anything to what my hon. Friend said. I merely underwrite what he said and support him.

The supply of information about mergers is important, not only after the merger has occurred, but also before it occurs. There are difficulties about this, because we appreciate that in the negotiations leading up to a merger there may well be matters which cannot be bandied about in public. However, it is wrong that a merger can go through quietly, on tiptoes, secretly, without those who are mainly concerned in the firm being brought into the discussions.

We know that the top management are concerned in the discussions over a merger. We know that the shareholders, who have a substantial say in whether a merger will go through and who often profit from a merger, are taken into the confidence of those concerned. But the employees, who may number many thousands, are bystanders. They merely see the negotiations taking place in front of them, outside their control—through a glass darkly, it might be said. It is more important to them as employees, because their livelihood is bound up in the firm, than it is to the shareholders.

The employees' right to be involved at some stage in consultations on a proposed merger, even if in the end the merger does not take place, is clear and should be provided for in the Bill. I want to illustrate my contention by reference to Skefko, a firm in my constituency. Skefko is an important Scandinavian firm, one of the leading manufacturers in the world of ball bearings and roller bearings. It is a firm of key importance in supplying components of a high standard to many manufacturing industries in Britain, including what is perhaps its main customer—the motor manufacturing industry.

Skefko has been extremely good to Britain. In expanding its processes in Britain it did not fight against the Government's regional policy but expanded in Ayrshire, thus helping to promote development in that part of the world. The firm has taken a British attitude towards its responsibilities and activities. About a year ago Skefko attempted to merge with a British concern. Perhaps it would be unfair to say that this other concern was not so well known, but it was a British firm. In terms of the efficiency of this important component industry, I should have thought that this merger should have gone ahead. Unfortunately the I.R.C.—presumably with the approval of the D.E.A.—took a chauvinistic attitude, and the merger was stopped.

I have made a number of attempts to obtain from the D.E.A. the reasons for that decision. I will go no further than to say that I have been dissatisfied with the answers given to me. I can only get the Department to say, in effect, "The reasons were reasonable". I will decide, if I ever learn the reason, whether they were reasonable. At present I believe that they were unreasonable and it is up to the D.E.A. to convince me that I am wrong. Hon. Members will agree, from my attitude in other matters, that I am always open to conviction.

We must consider that the D.E.A. has made a mistake in this respect when we remember that industry is becoming more and more internationalised. The real competition between firms is not between companies in, say, Luton or even England, but across frontiers in an effort to gain world markets. The motor industry exports almost half of its production, which means that almost half of its entire output is sold in competition with foreign manufacturers. To meet this competition, the correct response is to internationalise concerns. This is happening throughout the world. It is happening in the Common Market; and the merger between Agfa and Gaevert in the photographic industry has been a recent example.

The ball bearing and roller bearing industry is of crucial importance to the prosperity of our engineering industry, which is an international industry. There must be international mergers across frontiers between firms. The chauvinistic attitude of the I.R.C., the activities of which I have supported in the past, particularly in connection with the George Kent-Cambridge Instruments merger, must lead one to conclude that it has taken a narrow attitude in this matter. It grieves me to be critical of the I.R.C. in view of its past record. There must be consultation with employees, and the Bill would be strengthened if it allowed for consultation to take place before, as well as after, mergers.

1.4 p.m.

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

In his excellent speech, my hon. Friend the Member for Billericay (Mr. Moonman) accepted that the processes of rationalisation, reorganisation and amalgamation must go on. It is essential for the Government to echo that sentiment and to repeat that these are processes which we accept not merely as being simply inevitable or tolerable, but because we are actively promoting and encouraging them.

In many cases these processes are necessary for the long-term economic well-being of the nation. As my hon. Friend the Member for Lewisham, North (Mr. Moyle) made clear, they are the sort of processes which underlie the problems to which the Bill seeks to offer some solutions. They are essential if the Government's regional policy—the policy of the relocation of industry from the South-East and Midlands to the development areas—is to succeed.

The necessity of rationalisation, reorganisation and amalgamation—these processes are increasing and are being encouraged by the Government—does not absolve anybody from the duty of cushioning the blow which sometimes falls on employees. It does not absolve us from the duty of allaying the anxieties which are bound to be caused by such a situation and of mitigating the hardships which may arise. The Government's commitment to the relocation of industry and the encouragement of mergers places on us an increasing duty to meet the needs and to do what we can to allay these anxieties.

The history of the last four years shows that the anxiety has occasionally been greater than the facts warrant and the evidence justifies. It is real, nevertheless, and on some occasions the literal hardship may be equally real; for example, the problem of finding a new job and perhaps having to take one with lower wages, the problem of adjusting to a new industrial environment which may be difficult for a man who has done the same job for 30 or 40 years, and the problem of accepting a necessary period of retraining. The Government understand these difficulties and have done what they can to reduce to a minimum both the hardship and the anxiety.

There has, for example, been an acceleration of the training and retraining programme. We have introduced the Redundancy Payments Scheme. Short-term wage-related unemployment benefits have been introduced and there has been the unspectacular but vital expansion of my Department's placing service. In addition to these positive matters, the Government have done what they can in terms of influence and example in an attempt to ensure that when redundancies are necessary, they occur in a way which is not arbitrary, inconsiderate, reckless or capricious. The avoidance of those errors is essential and is underlined in the message contained in my Department's booklet "Dealing With Redundancies". That booklet asks for substantial forward planning and for consultation between management and unions about the processes of redundancy.

The Government have great sympathy with the principle of the Bill. Appreciating the sinking feeling that that sort of remark engenders in a private Member who is presenting a Bill, I am happy to offer my hon. Friend a little more than the Government's sympathy. We see the objects of the Bill as part of a wider policy; the policy outlined in the White Paper "In Place of Strife", paragraph 16 of which stated: Too often employees have felt that major decisions directly concerning them were being taken at such a high level that the decision-makers were out of reach and unable to understand the human consequences of their actions. Decisions have been taken to close down plants without consultation and with inadequate forewarning to the employees. I am sure that that echoes the feelings which motivated my hon. Friend and his fellow sponsors in introducing the Bill.

The problem to which my hon. Friend referred is essentially part of a wider problem, the solution of which must include management's duty to take intiatives in making proposals to improve the general machinery of collective bargaining. As part of those proposals, there must be negotiation for a formal, comprehensive and consistent system of collective agreements. The C.B.I. and T.U.C. initiative of 23rd October I believe represents the kind of approach welcomed in paragraph 28 of the White Paper. As a part of these formal, comprehensive, consistent collective agreements we would expect there to be some procedures laid down to cover all the major issues affecting the working lives of the employees. These must include a policy for redundancy. That means redundancy in all situations, including certainly mergers, and closures, but also contraction. Looking, as we do today at the problem as it affects the individual man and woman, we need to remember that whilst the redundancy which comes from mergers and amalgamations receives more Press headlines, to the individual made redundant it is no consolation for him to know that he is one of a few in, let us say, a Scottish company, as opposed to one of hundreds or thousands in the South-East or the Midlands.

Perhaps we overestimate the incidence of redundancy which comes about through mergers and amalgamations and their results as opposed to the results attributable to other sorts of action. The hon. Gentleman opposite asked for how long a merger and amalgamations might be said to affect redundancies in what is now called British Leyland. I cannot go back to make any judgment over the 14 years since that process began, but when one considers the history of those companies over the last five years it is, at least, I think, debatable whether more men were made redundant as a result of rationalisation which did not take the form of a merger or amalgamation than were made redundant as the result of two or more companies coming together.

Therefore, we certainly think that any system of redundancy procedures, any system by which redundancies are managed in a more effective and more humane way, should cover all situations. That was made very clear in paragraphs 39 to 41 of the White Paper in which we say that undertakings will initially be invited and eventually required to register their agreements with the Department". We then say, and we intend to make sure, that the D.E.P. will find opportunity to advise undertakings on how their agreements can be improved. Paragraph 35 of the White Paper, in dealing with what may happen when the D.E.P. refers agreements to the Commission on Industrial relations, says: Consultations and discussions between the company and the C.I.R. will be concerned with ways of improving arrangements, for example … how to encourage effective and fair redundacy procedures. … Our belief, and my suggestion to my hon. Friend, is that that process, coming, as it will, in the Industrial Relations Bill foreshadowed in the White Paper, will meet one of the principal objects of this Bill today.

But we intend, too, to meet other suggestions which he has put before the House. The obligation of employers to provide information to the trade unions is, I would have thought, an essential feature of a modern system of collective bargaining. If we are calling on trade unions, as we are every day, to encourage more rational bargaining determined by a realistic understanding of the problems of firms and the needs of industries, then it is essential that the trade unions be provided with the sort of information which will enable them to make rational judgments. Clause 4(1) of the Bill provides for information to be made available to trade unions. Paragraphs 47 and 48 of the White Paper assure the House and the country that we intend to provide for that information to be made available in the same way. There are other areas in which the Bill and the White Paper overlap. Enforcement of the recommendations of the Commission on Industrial Relations, in so far as they affect trade union recognition and bargaining rights dealt with in paragraphs 57, 58 and 59, are central to the intentions of this Bill.

I hope, therefore, not only as the result of what I have said this morning but as the result of what we have said in the White Paper and on other occasions, that the hon. Member will take as very genuine and very well meant, our sympathy with the aims and principles of his Bill.

There are points of difference between us which it would be wrong of me not to draw to the attention of the House I have already dealt with our desire to have a system of redundancy arrangements and procedures which is common to redundancies whether arising from mergers or not.

Secondly, the Bill is, in our view, insufficiently precise about the way consultations should take place. In this field it is very difficult sometimes to distinguish between consultations and negotiations and whether consultations should be about the fact of redundancy or about the arrangements for redundancy. I am equally doubtful about the rôle the Bill would give to the Department of Employment and Productivity or at least my Department's representative. Several hon. Gentlemen, including the sponsor of the Bill himself, emphasised the need to place the initiative for good industrial relations in the hands of management.

I am by no means convinced that the new participation of the D.E.P. and civil servants on such occasions would encourage that initiative or develop the right sort of management policy. If I may take an example—it is, perhaps, not central to the Bill, but circumstances make it impossible for me to avoid—Clause 4 of the Bill which gives my right hon. Friend the Secretary of State certain regulatory powers, is not sufficiently well defined or easily interpreted as to allow one to know exactly what powers she would possess. Certainly that is so since at no place in the Bill is there any reference to sanctions to back up those powers, and it is my suspicion that Bills which give powers but do not specify sanctions by which those powers can be enforced are not likely to work.

But having said that I want to emphasise again that the main objects and the main purpose of the Bill are objects of which we all approve.

Let me summarise what we can promise for consideration. We can promise—of course, statements have already been made and hardly need re-emphasising by me since the White Paper was debated in the House three weeks ago—that the White Paper is to be converted into an Industrial Relations Bill to be presented to the House. I can add to that that it is part of that Bill that there will eventually be required of employers the registration of procedure agreements, which will include the principle of Clause 5 of the Bill.

Secondly, I can promise that, as part of that Bill, there will be an obligation on managements to supply information to employees, as recommended in Clause 3(b) of the Bill. Whilst making this promise I believe I can go a little further.

Clause 1 would give the Government power to require advance notice of redundancy and reorganisation beyond that which we already possess as a result of the provisions of the Redundancy Payments Act. I find the provisions of Clause 1 highly attractive, and so does my right hon. Friend and, therefore, I could certainly undertake today that, whilst giving a promise to include the major provisions eventually in the industrial relations Bill, I promise that we will consult the Confederation of British Industry and the Trades Union Congress about including in the general Bill the powers outlined in Clause 1.

I must say to my hon. Friend, admiring, as I do, both the intention of his Bill and the way in which he presented it, that I hope that, in the knowledge of those two promises and one assurance, he will feel it possible to withdraw his Motion. I say that because I know well the difficulties which beset very many private Members in drafting Bills. The intentions my hon. Friend has specified so clearly in his speech do not, in our view, appear equally precisely in the Bill. These are almost insuperable difficulties facing private Members drafting Bills of this degree of complication. My hon. Friend was generous enough to acknowledge and recognise the fact that the contents of the Bill have only a passing acquaintance with the Long Title. These are the sort of difficulties which we have all faced in our time and which virtually none of us has overcome.

In the knowledge that we accept that the intentions of the Bill are in all ways desirable, and that we offer as categorical an assurance as we can on the parts of the Bill which we intend to implement as part of our comprehensive Industrial Relations Bill, I hope that my hon. Friend will feel able to withdraw the Bill, knowing that he has achieved a great deal of what he has suggested.

He has achieved, first, an important debate in the House of Commons about a problem which affects many thousands of workpeople and perplexes many Members of Parliament whose constituents have faced these problems. He has done more than draw attention to the problems; he has made a substantial and material suggestion for the improvement of the comprehensive Industrial Relations Bill, and it is the hope of the Secretary of State and myself that his improvement to our proposals can be incorporated in the Bill when it becomes law.

1.21 p.m.

Mr. Moonman

May I seek the leave of the House to speak a second time?

This has been an interesting debate in which hon. Members have called on their experience as well as on what they have read in periodicals and newspapers to give us their practical opinions. My hon. Friends the Members for Barrow-in-Furness (Mr. Booth) and Midlothian (Mr. Eadie) have referred to the social cost of mergers and organisational change, and I hope that my right hon. Friend will take full account of this.

In many debates on the economic structure and the problems of industry, the social cost has not always been treated as a major item in areas of decision-making. Enlightened companies recognise its importance, but we have been speaking today not only of the enlightened companies, progressive management and progressive trade unions, but about those companies where the circumstances are less happy and where there are considerable areas of anxiety.

My hon. Friend the Member for Lewisham, North (Mr. Moyle) has emphasised what may appear to be the harshness of some Government regional policies affecting the South-East, and, as he comes from that area, it is particularly significant that he should have raised this matter. He also emphasised something which I mentioned briefly, the importance of having an appreciation of all levels, operative, management and supervisory, which are affected by a merger. He referred to the sacking of personnel managers. The purpose of the Bill is to ensure that at a time of merger or organisational change the concern felt is not confined merely to the shop floor. We are here talking about individuals at every level in the organisation. Although a person may have job security and know that his future within an organisation is certain, he nevertheless feels anxious and wonders whether he should make a move. My hon. Friend spoke also of the need for discussion with planning authorities, and I am sure that account will be taken of this.

My hon. Friend the Member for Luton (Mr. Howie) referred to the necessity for information being available before mergers take place. This is a difficult point, but emphasis should be placed on joint consultative meetings, and the dissemination of private information, as part of a wider range of consultation within the company.

In considering the Bill, we have isolated mergers from other things which may happen within a company. In doing this the point has been dramatised. We have not exaggerated, but have tried to pinpoint our discussion on a particular area of anxiety. If there is value in management meeting employees at all levels at a time of crisis, this should be part of a continuing dialogue through all aspects of the company.

The hon. Member for Paddington, South (Mr. Scott) questioned whether this was a narrow, limited area, and asked when the discussion would come to an end. I have partly answered this, and I hope it would not mean that a Government representative would be there all the time. This is the last thing which I would want. In setting up a communications system, management and employees would decide when the crisis had passed. The representative would come into the organisation to ensure that there was a system that worked. Although a company might argue that everything was all right and that there was a works council, the system might be defective; it might be phoney. During the seven years which I spent with the British Institute of Management I visited many companies, and one comment which I always took with a certain amount of scepticism was when I was told, "We are one big happy family here"; and within a fortnight there could be anything from a strike to a major dispute. It is necessary to assess the quality of the consultative procedures within the company.

My right hon. Friend the Parliamentary Secretary paid tribute to what the Government have done, and hon. Members on both sides recognised this. We have gone a long way towards job security, redundancy payments and relocation and training. As the hon. Member for Barrow-in-Furness said, information about trends and the way in which men can be allocated to jobs, represent a tremendously searching area for future development.

To come to the crucial point of the right hon. Gentleman's remarks concerning what the Government will accept from the Bill, he has not offered just tea and sympathy; at times it was rather like Irish coffee. Having known him personally for many years, this is the sort of drink I shall still want to examine in a few days' time. My job will be to keep reminding him of the commitments which he has given.

I recognise that there are practical difficulties in the Bill, but I also appreciate the imagination that he has shown, as is his way, in dealing with a problem raised by a back bencher. Acceptance of Clause 5 and Clause 1 is crucial. The need for the Department to have a register of agreements between management and employees is absolutely essential. This would be more than a piece of paper. It would establish a commitment.

In conclusion, managements who aid their employees need not fear what is in the Bill, and what my right hon. Friend has suggested. We are talking about industry in a general way and are saying that communication and consultation are matters of common sense, but communication and consultation must be organised. In offering a return drink of the Irish coffee, may I say that I hope that the Bill, to which we look forward anxiously, will deal more with the level of consultation and the working together of both sides of industry than with the punitive measures which are suggested in the White Paper and by other quarters. In this way the Labour Party, both as a party and in Government, will make a real return from some things which have happened overnight which may have distressed some people, and give an impetus towards bringing about the policies which are so necessary.

In view of the undertakings given by my right hon. Friend, I beg to ask leave to withdraw the Bill.

Motion, by leave, withdrawn.

Bill withdrawn.