HC Deb 26 March 1970 vol 798 cc1636-43
68. Mr. Edward M. Taylor

asked the Minister for the Civil Service if he will take steps to ensure that future adjustments in the salaries of the chairmen and board members of state-controlled industries will be related to the financial performance of these industries and the extent to which they improve their service to the consumer.

Hon. Members

Where is the Minister?

Mr. Taylor

On a point of order. The Minister is not here. This is a very important Question, and I understand that an announcement is expected.

The Minister of Housing and Local Government (Mr. Anthony Greenwood)

This clearly is a most important Question. It is one that my right hon. Friend the Minister responsible for the Civil Service is considering. No doubt he will communicate with the hon. Gentleman at the earliest opportunity.

Mr. Peyton

On a point of order. We are interested to hear any comments that the right hon. Gentleman the Minister of Housing and Local Government may have to make. We welcome and are deeply grateful to him for his assurance that his colleague is considering this Question. But, Mr. Speaker, would you think it fitting to remind the right hon. Gentleman that notice is given on the Order Paper of Questions in order to give Ministers adequate opportunities beforehand to think up answers and that they are also under notice to arrive at the proper time? Not even the urbanity of the right hon. Gentleman is sufficient to excuse the gross negligence, discourtesy and lack of regard for the House which the Government are once again showing.

Several Hon. Members rose

—

Mr. Speaker

Order. I will deal with only one point of order at a time. The House will note what the hon. Gentleman has said.

Mr. William Hamilton

In looking at the Order Paper I find that 11 Tory Members who had Questions down are absent, although the House is still sitting. [HON. MEMBERS: "Oh".] In fact I met one who was going off for a week in Malta, starting last night. It is shocking behaviour towards this House.

Mr. Speaker

Again the House will note what the hon. Gentleman has said.

Mr. Higgins

On a point of order. Are we still to be given this extremely unsatisfactory answer? The other Minister intervened and said that his right hon. Friend, who has now arrived, was considering the matter. Has the right hon. Gentleman considered the matter or not and are we to be given a satisfactory answer?

Mr. Speaker

Order. I shall call on the Minister to answer the Question.

The Minister without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore)

Thank you very much, Mr. Speaker. With the leave of the House and with sincere apologies for the unintended discourtesy, I should like to reply to Question No. 68. I do not believe that this would be a practicable course.

Mr. Taylor

Although I fully accept the Government's policy that there should be adequate salaries in the nationalised industries, salaries which are comparable with those paid by private corporations, may I ask whether the Minister feels that it would help the public enterprises if we put the salaries of State board chairmen under the normal disciplines of the private enterprise system, whereby salaries were related to a financial target set by the Government? Would this not bring some incentive into the State boards, help the country in general and enable the Government to pay these chairmen the salaries they richly deserve?

Mr. Shore

As the hon. Gentleman knows, the nationalised industries have financial targets laid down in the White Paper published in 1967. But, that apart, I do not think it is universal practice in large private firms to relate the pay and rewards and emoluments of their own top management necessarily to performance. Although this may be an interesting suggestion, it cannot easily be applied over the great range of industries with very different circumstances.

Mr. John Fraser

Is it not the case that salaries of chairmen of nationalised industries compare fairly poorly with those of chairmen of private enterprise concerns? If one compares the scale of responsibilities of the chairman of Marley Tiles with that of a chairman of a nationalised industry, the salary in the nationalised industry in relation to performance is very much lower than that obtaining in private enterprise. Is it not also true that nationalised industries serve social purposes and are not related solely to profit-making activities?

Mr. Shore

My hon. Friend makes a justifiable point. The House has recognised, as has the N.B.P.I. Report, that there was an enormous gap between the top rewards in the public sector—indeed it is often difficult to find comparable institutions in the private sector—and that, unless this was dealt with, a gap would emerge of a kind which would be damaging to the future performance of the nationalised industries.

Mr. Boyd-Carpenter

Will the right hon. Gentleman consider resuming the practice that existed under the previous Government of issuing quarterly a White Paper setting out the names of the holders and their salaries?

Mr. Shore

I will certainly consider that suggestion. I had thought that practice to be an annual one.

Mr. Edwin Wainwright

Would not my right hon. Friend agree that it would be unfair to the nationalised industries to be compared with private industries since many of the activities of the nationalised industries are related to public service more than anything else? When one takes into account what happened in the National Coal Board last year after a 10 per cent. increase and little profit, how would he pay the Chairman of the Coal Board in view of such an increase? If this policy had obtained throughout the whole of industry, perhaps we would not need to bother about the balance of payments in the years ahead.

Mr. Shore

My hon. Friend is right. It is too crude a yardstick to apply to the determination of rewards at the top of the public sector simply the question of profitability. We know that certain nationalised industries, for understandable reasons, not only under this Government but their predecessors, have not been able in the conventional way to balance their books.

Mr. Higgins

Is the right hon. Gentleman aware that, before he arrived, his right hon. Friend the Minister of Housing said that he was considering the answer to this Question? Is it not clear from the fact that he has read the answer, that he had already considered the matter. Is it not unfortunate that one Minister stands up and stonewalls for another?

Mr. Shore

I am most grateful to my right hon. Friend. It would have been improper for him to have said that I had reached a conclusion when I had not stated my conclusion and he had no reason to believe that I had reached it.

Mr. R. W. Brown

Is my right hon. Friend able to say how he compares these salaries with their counterparts in the E.E.C., since he has a wide knowledge of this matter?

Mr. Shore

That adds a dimension to the Question which I was not expecting The question of comparability between public sector rewards and those in the private sector in other countries is a matter of which so far we have not taken notice.

Mr. Lane

In regard to the salary of the Chairman of the National Coal Board, has the right hon. Gentleman's attention been drawn to the recent serious allegations made by the Chairman about failures in co-ordination over the application of clean-air policy? Could he assure the House that he will take up this matter with the Chairman of the National Coal Board?

Mr. Shore

That is not a matter for me to take up with the Chairman of the National Coal Board, but my right hon. Friend the Paymaster-General had an opportunity not long ago, given to him by the Opposition, to make clear the Governments' concern—not only their concern, but their energetic action to overcome what I hope will be a temporary failure of supply to meet demand.

Mr. Bidwell

On a point of order. As I just missed my Question Nos. 20 and 21 to the Secretary of State for the Department of Employment and Productivity by the skin of my teeth, due to abnormal traffic hold-ups and domestic circumstances arising from the birth of my fourth grandchild, may I ask, in view of the continued presence of the Minister concerned, that my Question may now be dealt with, in view of the fact that there are still six or seven minutes to go before the Prime Minister is due to answer his Questions?

Mr. Speaker

Order. On behalf of the House I congratulate the hon. Gentleman on his grandparenthood. I cannot go back.

Mr. Peyton

Would I be in order to say on behalf of this side of the House how glad we are that at least one hon. Gentleman on the other side of the House has achieved something?

Mr. William Hamilton

Would my right hon. Friend consider the possibility of publishing in the OFFICIAL REPORT a table showing the salaries of the individual chairmen mentioned in this Question alongside the increased annual productivity of the respective industries, because the productivity of the nationalised industries compares extremely favourably with that of private enterprise? Would he also care to put in the same table the salary of the official Leader of the Oppocition alongside any increase in his productivity since he has taken over?

Mr. Shore

My hon. Friend will realise that it would be difficult to bring together all the relevant comparisons and to publish them in a single convenient form. On the matter of productivity we would be in some difficulty as to how best to measure—I am not thinking just of the Leader of the Opposition—the productivity of the nationalised industries.

Mr. Kenneth Baker

Does the right hon. Gentleman know that his right hon. Friend who filled in for him is, I understand, to join a nationalised industry in the not-too-distant future? Does the right hon. Gentleman think that his right hon. Friend's joining this nationalised industry would be accelerated if the right hon. Gentleman announced an adjustment of salary levels in the public sector?

Mr. Shore

That is a hypothetical question. I am not aware of the matter to which the hon. Gentleman is referring.

Mr. Peter Archer

Does my hon. Friend agree that most of the industries which are at present nationalised had a pretty poor financial performance before they were nationalised? Will he consider the arguments in favour of bringing into public ownership private industries whose financial performance is based upon exorbitant profits?

Mr. Shore

That does not arise on this Question. I think that forward public ownership policy is a matter best discussed outside this House.

Mr. Tom Boardman

In making a comparison between the public and private sectors, will the right hon. Gentleman acknowledge that our achievements in exports are attributable to the private sector and hardly at all to the nationalised industries?

Mr. Shore

That is not the whole truth but, to the extent that it is true, it is for the simple reason that manufacturing industry accounts overwhelmingly for our exports. There is a small public sector in manufacturing industry and, whenever the public sector engages in manu- facturing industry, it exports successfully.

Mr. Molloy

Does my right hon. Friend know of any special criteria which exist for the payment of heads of firms in the private sector? Will he explain why it is that, when some of these big industries in the private sector crash, collapse and go bankrupt, so often it seems that those at the top are pretty well cushioned and never seem to suffer?

Mr. Shore

The plain truth is that we do not know enough about the criteria which are used in the boards of large companies in determining the level of rewards for their top management. When one looks at this, one is always struck by the variation in practice. Some appear to be high, and others to be quite modest. There are no consistent criteria. This is a matter for the private sector.

The answer to my hon. Friend's second point is simple. In so many of our large firms, we have at the moment a substantial separation of ownership and management. In a sense, the top managements of large private firms are like salaried employees and get paid even when the firms over which they preside collapse. In that case, it is the shareholders who carry the loss.

Mr. R. Carr

Since the right hon. Gentleman is talking about inconsistency in criteria in settling pay in the private sector, and since he used to be an expert and, indeed, was responsible for these matters, can he say the sort of criteria that the Government are applying in their incomes policy at the moment?

Mr. Shore

Again, that is a different question and not one for me. As for the consistency of criteria in private firms, the important matter is to get the necessary information first in order that there can be informed public discussion. In the provisions of the Companies Acts, we have made it possible to collect more information about rewards at the top than was possible previously.

Mr. Edward M. Taylor

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of those replies, I beg to give notice that I shall seek an opportunity to raise the matter on the Adjournment.

Several Hon. Members rose

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Mr. Speaker

Order. An hon. Member announcing his intention to raise the matter on the Adjournment stymies further supplementary questions.

Mr. Raphael Tuck

Apropos the interesting suggestion of the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor), does he know—

Mr. Speaker

Order. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has given notice that, in view of the unsatisfactory nature of the replies, he will seek to raise the matter on the Adjournment. That finishes questions on the matter.

Mr. Heffer

On a point of order, Mr. Speaker. May I assume that the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has taken this line in order to avoid the next two questions being reached, which are in the name of one of his hon. Friends?

Mr. Raphael Tuck

No. He has done it because he does not like me.

Mr. Speaker

Order. I am never interested in motives.