HC Deb 20 May 1969 vol 784 cc241-50
The Minister of Public Building and Works (Mr. John Silkin)

With permission, Mr. Speaker, I would like to make a statement about the use of directly employed labour (D.E.L.) within my Department.

The House will recall that, in 1963, the works organisations of the Service Departments were merged with the Ministry of Public Building and Works. This involved the rationalisation of many aspects of my Department's work, including the management control of D.E.L. The use and employment of this merged labour force has been subjected to the closest and most careful investigation. As a result, I am now in a position to state the conclusions that I have reached concerning the use of D.E.L. on maintenance work by my Ministry at home.

I have no doubt that the retention of a permanent D.E.L. is completely justified; and my aim is to ensure that the men I employ are given the opportunity to demonstrate that their efficiency can stand objective comparison with any other labour force in the country.

Briefly, I intend to employ D.E.L. in three sets of circumstances. The first will be on operating basic services such as running boilers and operating sewerage works. My D.E.L. has years of accumulated experience and expertise in tackling the Ministry's requirements in this field and it would be unrealistic to consider the possibility of any other agency providing these services.

The second circumstance will be where the client Department's special requirements, such as interrupted working or the need for on-call staff, demand a particular type of service which D.E.L. can provide in an eminently suitable manner.

The third will be where the requirements of the work can most effectively and economically be met by the use of D.E.L. In this third field, cost is a very important element and local comparisons with the cost of employing contractors will be made.

I am glad to say that agreement has been reached with the trade unions on the measures required for determining the use of directly employed labour on maintanence work in my Ministry. Their agreement is subject, of course, to continuing consultation in the normal way during the process of putting these measures which I have announced into effect. I am grateful to the unions for their constructive attitude and help throughout the discussions with them.

The total numbers involved, excluding supervisors and apprentices are about 29,000 men employed in over 300 different depots. About 18,000 of these men will be needed for operating basic services and meeting client Departments' special requirements. For the rest, it will be necessary to determine at each depot the extent to which D.E.L. or contractors are likely to give the more effective and economic results. I intend to issue early instructions both in general and also on the methods of undertaking cost comparisons. The results should begin to show in the depots in the autumn.

I have made it clear to the trade unions that the application of these criteria will, in my view, make some reduction in the size of the labour force inevitable, but maximum use will be made of natural wastage to ease the problem. At this stage, however, it is not possible to estimate either the extent of these reductions or the areas likely to be most affected; the outcome will depend on the results of cost comparisons.

If reductions in staff, other than through natural wastage, are necessary they will be made with as much understanding as possible in accordance with the redundancy procedures already agreed with the unions, in close consultations with the unions at all levels and with those Departments closely concerned with development areas, in particular that of my right hon. Friend the Secretary of State for Economic Affairs.

My Department has for some time been pursuing measures aimed at increasing the effectiveness of all my D.E.L. by improving its organisation and management, and further such measures will be introduced later this year. I am currently engaged in an examination of the feasibility of introducing a productivity agreement for the men which will form part of my general plan for ensuring that my D.E.L. force is as efficient and productive as I can make it.

I am certain that all these steps will lead to a better organised, more efficient and stable labour force, one of which the Department can justly continue to be proud.

Mr. Chichester-Clark

I congratulate the right hon. Gentleman on his first appearance at the Dispatch Box in his new job.

The right hon. Gentleman's statement is somewhat long and will require a good deal of study. That study would have been easier if the House had not been kept in the dark about the contents of the second and third Mann Reports. Will the right hon. Gentleman now belatedly publish those reports, together with his conclusions, so that the House may be able to reach a judgment on the matter? Is he aware that, at the moment, it is only able to judge on the basis of leaks through the Daily Express and Tribune?

Will the right hon. Gentleman also take the House into his confidence on the results of his comparative studies between the efficacy of private enterprise and the D.E.L. in the depots?

Finally, in view of the record of other direct labour departments generally, will he take this opportunity to refute the suggestion that he is thinking of setting up a State building corporation?

Mr. Silkin

I thank the hon. Gentleman for his kind remarks at the beginning of his questions.

I know that he is aware that certain of the information given to the Mann Committee was on the basis that there would be no publication, and I am sure he will agree that that part of any report simply must not be published, as it would be a breach of faith.

I decided not to publish the second and third reports of the Mann Committee because, having examined them, I concluded that they would be somewhat misleading. This is because they concentrated on a very small sample of depots—under 6 per cent. and not statistically significant, in my view. Furthermore, they concentrated on one simple form of contract and not the general range of contracts. Therefore, to have published them would have been rather like taking a signpost out of its hole and presenting that. It is the destination that we are concerned with.

On the question of comparison between my D.E.L. and private contractors, I would remind the hon. Gentleman that this is the purpose of the exercise. I hope to be in position to be able to deal more effectively with this question in a few months' time, probably towards the autumn.

The hon. Gentleman's third question concerned the setting up of a State building corporation. I do not think that that comes within the scope of a statement on the use of maintenance by my Department at home.

Mr. Speaker

Order. I know that this is the Minister's maiden appearance at the Dispatch Box, but answers must be reasonably brief.

Mr. C. Pannell

On a point of order. Mr. Speaker. This is a highly technical matter, which has been considered by five successive Ministers of Public Building and Works, including a right hon. and learned Gentleman opposite. Surely it is only a simple-minded person who thinks that one can give simple answers to such involved questions as this.

Mr. Speaker

I am aware of the circumstances and of the experience of the right hon. Member for Leeds, West (Mr. C. Pannell) in this field.

Mr. Heffer

Can my right hon. Friend give us a further outline of the discussions which have taken place and the agreement reached with the trade unions? Secondly, would not he agree that, when there is cost comparability with private enterprise, it must be taken into consideration that all public enterprise in the building industry starts off at a disadvantage of 20 per cent. overheads because, first, it pays sickness benefits which do not apply in private enterprise, and, secondly, it gives full payment for building operatives in bad weather which also does not apply in private enterprise?

Mr. Silkin

I know that my hon. Friend has great expertise and interest in this subject. The procedure adopted in discussions with the trade unions was quite different in the Ministry's procedure from the Mann Committee procedure because the Mann Committee did not have the benefit of discussions with the trade unions, whereas we have.

The trade unions were brought in during exploratory work in our Bournemouth depot and on a large number of occasions at both headquarters and regional levels, and, finally, in the Whitley Council and local working parties. We have worked with the trade unions right the way through and I intend to see that we continue to do so.

I want to make it perfectly clear that the cost comparisons will be as fair in every possible sense of the word as we can make them.

Sir J. Rodgers

I commiserate with the right hon. Gentleman on being translated from Chief Whip to Minister of Public Building and Works. Will he state his explicit reasons for refusing to publish the second and third Mann Reports in view of the extensive and, I fear, inspired leaks which appeared in Tribune and the Daily Express as long ago as August, 1968?

Secondly, is it not the case that there is a difference of at least 25 per cent. between the productivity of D.E.L. and that of private contractors?

Mr. Silkin

I thank the hon. Gentleman for the kind words that he used, although I am not sure that I need his commiseration. Indeed, perhaps I need his congratulations.

The answer to his first question is that I have gone quite deeply into the matter of the publication of the Mann Reports. I know of no leaks in which what was in those Reports has reached the general public, although I will certainly have the matter investigated. In any event, the idea of reporting as a result of leaks is a novel theory to me.

The answer to the hon. Gentleman's second question is, "No, Sir".

Mr. Ashton

Is my right hon. Friend aware that local authorities also have direct labour forces employed on maintenance work? Will he consider working in conjunction with those forces where co-operation of this kind is possible?

Mr. Silkin

As my hon. Friend has great experience of local authority work, I regard any suggestion that comes from him as both interesting and needing to be taken extremely seriously. I would like to go into his idea; and perhaps I might consider raising it with my right hon. Friend the Minister of Housing and Local Government to ensure that his suggestion receives the consideration which it deserves.

Mr. Lubbock

Is the right hon. Gentleman aware that my Liberal colleagues and I wish him all the best in his new job? We are happy to hear his voice, although we are sorry that he has not been able to continue in his former post, in which we enjoyed excellent relationships with him. Would—[Interruption.]

Mr. Speaker

Order. Mr. Lubbock.

Mr. Lubbock

Will the right hon. Gentleman clarify—

Mr. Burden

On a point of order. Is it in order for the Leader of the Liberal Party, the right hon. Member for Devon, North (Mr. Thorpe), to call Conservative hon. Members "mean bastards"?

Hon. Members

Shame. Withdraw.

Mr. Speaker

I did not hear the right hon. Gentleman make that remark.

Hon. Members

We did.

Mr. Speaker

I hope, if the right hon. Gentleman did use that expression, that he will withdraw it; although one of my predecessors in the Chair once ruled that the word was a term of endearment.

Mr. Lubbock

I was about to ask the right hon. Gentleman two questions.

Hon. Members

Withdraw.

Mr. Speaker

Order. I said that I hoped that the right hon. Member for Devon, North (Mr. Thorpe) would withdraw the remark.

Mr. Thorpe

If it may in any way be thought that I used the expression as a term of endearment towards the Conservative Party. I unequivocally withdraw it.

Hon. Members

Oh.

Mr. Speaker

Order. I take it that the right hon. Gentleman has literally, if not spiritually, withdrawn it.

Mr. Thorpe

indicated assent.

Mr. Lubbock

Would the right hon. Gentleman, first, clarify whether or not he will publish the comparisons of cost between the D.E.L. and private contractors in the spheres of work to which he referred?

Secondly, what is the machinery by which he will consult the trade union movement concerning the mechanism of this change-over? Will the trade unions be brought into consultation on detailed matters and, if so, how will this be done?

Mr. Silkin

I appreciate the remarks of the hon. Gentleman about my new appointment, although I like to think that the good relations that I had extended to other parts of the House, too.

The answer to his first question is that I do not intend publication, certainly at this stage. Publication would not be opportune, in any event. The answer to his second question—he wondered how the trade unions would come into this—is that I propose that this should occur right down the line, from headquarters to each depot.

Mr. Arnold Shaw

Is my right hon. Friend aware that the majority of hon. Members on this side of the House will have every confidence in the D.E.L. provided, of course, that there is the right sort of management and that it always competes with contract labour? Has he any plans for improving the management of D.E.L., along with the possibility of expansion in this sphere?

Mr. Silkin

My hon. Friend will be relieved to hear that steps were taken as early as 1968 to introduce vast new training schemes for depot superintendents and other supervisors. We intend to go on with this on as large a scale as we can. In addition, we are, in the Bristol area, conducting a comprehensive management survey. This may take a little longer to achieve results, but we believe that it will be effective in creating efficient and stable management.

Mr. Costain

Does the right hon. Gentleman appreciate that private contractors doing maintenance work pay S.E.T. and that this is a great imposition on the industry? Will he persuade his right hon. Friend the Chancellor of the Exchequer to withdraw this tax?

Mr. Silkin

I do not think that that question arises out of my statement. In any event, my understanding is that we, too, pay S.E.T.

Mr. Judd

While thanking my right hon. Friend for his extremely clear statement, may I ask whether he is aware of the serious misgivings among his D.E.L. force about the hidden subsidies in private contracting, such as the use of the facilities and equipment of his Ministry by contractors and the problem of "labour only" sub-contracting, and the falling standard that is introduced thereby, in addition to the possibility of tax evasion and various other problems? Will he also bear in mind the problem of the possibility of the direct labour force being used to right inadequate workmanship by contractors?

Mr. Silkin

I said in reply to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) that the cost comparisons would be as fair as I could possibly make them. I intend that that shall be so.

If the unions were to give me illustrations of contractors who were endeavouring to obtain our contracts through bad workmanship or bad labour conditions—I do not think that this would arise; I mention it lest it should—then that would, of course, be a very pertinent point to be borne in mind in the whole cost comparison question.

Earl of Dalkeith

While appreciating that running sewerage works must be a welcome change from running the Parliamentary Labour Party, may I ask the right hon. Gentleman whether his statement applies to Scotland, in view of the recent transfer of most of the functions of his Ministry to the Secretary of State for Scotland?

Mr. Silkin

Yes, Sir.

Mr. Tinn

Bearing in mind that there may be cases in which my right hon. Friend's Department, or sections of it, compare unfavourably with private contractors because in certain circumstances there is not sufficient scope for his operatives to be fully utilised in the public service, will he consider the possibility of contracting-out for private work so that the comparison may be as fair as he hopes to make it?

Mr. Silkin

That is an interesting question which, I suppose, is based on the proposition that if private contractors are more efficient in certain cases than is my direct labour force in others, my force should be more efficient than private contractors. If I were to consider my hon. Friend's suggestion—I assure him that it is worthy of consideration—I would need to get my D.E.L. into as efficient a form as possible. As that will not be so for some time, I do not think that his question arises immediately.

Mr. Chichester-Clark

Further to the question asked by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain), is the right hon. Gentleman aware, unless I totally misheard his reply, that he was utterly wrong when he referred to the payment of S.E.T. by direct labour employees? If he was wrong, will he take an early opportunity to correct the matter in the House?

Mr. Silkin

As far as I understand it, no employee pays S.E.T., except as a self-employed person.