HC Deb 24 January 1974 vol 867 cc1898-903
The Secretary of State for Employment (Mr. William Whitelaw)

With permission, Mr. Speaker, I wish to make a statement on the advisory report of the Pay Board on problems of pay relativities. The report of the Pay Board has been published today as a Command Paper. Copies are now available in the Vote Office.

This report fulfils the second part of the terms of reference given to the board last March. Its first report—on anomalies arising from the standstill—was published last September. The present report concerns procedures for considering questions of wider pay relativities thrown up by the normal processes of pay determination.

In the course of its study the board has received a great amount and variety of evidence, some of it rather late in the day, and the Government are grateful to the board for proceeding as quickly as possible with its analysis of the fundamental problems involved.

The board has come to the conclusion that there is a need for a procedure, within a counter-inflation policy, for resolving relativity problems in the interests of some groups while ensuring that others do not thereafter secure the same benefit. The board does not believe it possible to define self-implementing criteria for the resolution of such problems, such as could be embodied in the Price and Pay Code subject to the approval of Parliament. It therefore outlines the following possible procedure.

First, a means of undertaking a preliminary sifting of cases for further examination. This would be undertaken by the Government with advice from the CBI and the TUC in accordance with guiding principles and procedures to be worked out in consultation with them.

Secondly, cases so selected would be examined in depth and in public by or on behalf of a standing examining authority, possibly the Pay Board itself.

Thirdly, the examining body would make a recommendation to the Government, with whom would lie the final decision, for which the Government would of course be answerable directly to this House.

The Government welcome the report as a valuable basis for consultation with industry. The next step is to consult the TUC and CBI on the recommendations, and I have today sent copies of the report to them for their views on the board's proposals. The Government would like to hold discussions with the TUC and CBI as soon as they are ready.

Mr. Prentice

The Secretary of State concluded his statement by saying that the Government welcomed the report as a basis for consultation. Against the background of today's meeting of the National Union of Mineworkers' executive, that statement simply will not do. The House wants to know the answer to one urgent question: will the Government use the opportunity given to them by this important report to find a way out of the crisis in the mining industry?

Is not the position that the Government's Pay Board has recommended to them that in future an incomes policy can effectively operate only if there is provision for identifying and dealing with special cases? Further, if the Pay Board had been able to keep to the Government's original timetable, would not the report have been available to Ministers before the end of 1973 and, therefore, available in the last few critical weeks?

Against that background the Government should reach three conclusions immediately. First, to accept in principle the advice of the Pay Board that there must be provision for special cases to be dealt with outside the Price and Pay Code limits. Secondly, if that is so, even if the Government need time to develop the criteria and rules for dealing with cases generally, is it not clear that the miners' claim is a special case and will be defined as a special case, whatever those criteria may be? Thirdly, if that is so, the Government should announce today that they will negotiate, or authorise the National Coal Board to negotiate, a settlement outside the phase 3 limits.

The report has given the Government a further chance, if they want a chance—and that is the crucial question—to reach a settlement and save the country from the effects of a totally unnecessary escalation of the crisis.

Mr. Whitelaw

The right hon. Gentleman has raised the question of applying the report to a specific case—the mining industry. Right hon. and hon. Members on both sides of the House will not have had time to read the report in full, but in view of what the right hon. Gentleman said, it is only right that I should quote one sentence from paragraph 44 of the report: The procedure would work most effectively if cases were not put forward in a situation of crisis ; it would therefore be most desirable that this selection be on a continuing basis. That passage is included in the report, and anything we do has to be considered against that background.

The right hon. Gentleman said that the miners would be made a special case on any criteria established by a body that was set up after consultation. Surely the right hon. Gentleman will recognise that in the offer made to them the miners are already recognised as a special case. I think that the right hon. Gentleman will also accept that the offer made to the miners by the Government of immediate discussions on pay restructuring, pensions and health hazards if the present offer is accepted underlines that the miners in that regard also are a special case and have been recognised as such.

Mr. Powell

Is my right hon. Friend aware that all these procedures for attempting to determine relativities as part of a counter-inflationary policy are and will continue to be inherently futile? Does he agree that the report which he has just received proves how right the Conservative Party was at the last General Election to reject utterly the philosophy of a statutory wage control?

Mr. Whitelaw

The Pay Board has produced two reports—first, the anomalies report, the implementation of which has worked extremely well, and, secondly, the relativities report. Whatever the philosophy may be about prices and incomes, I should have thought that my right hon. Friend would accept that the problem of relativities between one group and another is absolutely vital to pay determination of any sort.

Mr. Kelley

Is the right hon. Gentleman aware that certain decisions have been made this morning which may drag the nation into the most terrible calamity it has faced since 1940? Does not this report on relativities give the Government the opportunity to recognise that the health of the miners is being eroded during every shift they work, whether or not there is an overtime ban? Is it not time that the Government became a little more flexible in their attitude to this problem?

Mr. Whitelaw

I do not accept that the report is required to do what the hon. Gentleman suggests. I strongly maintain that what has already been offered by the National Coal Board, and what the Government have added to that offer in the discussions, are very important factors which must be fairly considered, particularly in the context of what has been proposed this morning.

Mr. David Price

Does my right hon. Friend agree that relativities go to the guts of many of our industrial disputes? Does he also agree that whatever improved machinery is produced for consultation, the question of authority remains? I refer to the question of who, at the end of the day, says "No" and who accepts it—and that is either the market or a machinery, which has agreed authority behind it, to say that "No" means "No". We cannot go on in a state of neo-anarchy.

Mr. Whitelaw

I certainly accept what my hon. Friend says, namely that relativities lie at the heart of many of our problems. I also accept that no problem of relativities, considered properly, as I believe it should be, and as this report suggests, can possibly be considered against a background in which industrial power can, has been and sometimes is being used to distort relativities—not necessarily now, but in many different cases in the past.

Mr. Pardoe

Does the Secretary of State accept that the report recommends resurrection of a body remarkably resembling the National Board for Prices and Incomes? It is a question of "Come back Aubrey Jones, all is forgiven". Is it not obvious that this is yet another nail—indeed the last nail—in the coffin of stage 3—that it is no longer time for discussion, but time to have a new prices and incomes policy which enables these recommendations in the report to be applied to the most obvious special cases before we reach 1st March and chaos?

Mr. Whitelaw

On the first point, I believe that the question of setting up a body as proposed in the report should be discussed with the TUC and CBI. It would be a new body to deal with a particular problem which everybody in the House knows lies at the heart of many of our pay difficulties. I have already answered the second part of the hon. Gentleman's question.

Sir D. Walker-Smith

Does my right hon. Friend feel that these procedures will deal adequately with the case of those workers in our society whose work cannot be measured by economic output——

Mr. Skinner

The lawyers?

Sir D. Walker-Smith

—who wield no industrial power in the public sector? I refer to nurses, teachers and the like. Does he, in particular, appreciate in this context that the criterion specified in paragraph 41 of the report seems to concentrate on relativities in increases in earnings and does not therefore appear to have regard to people who may start below the proper level.

Mr. Whitelaw

My right hon. and learned Friend raises an important factor about some of the other cases where workers, as he says, perhaps lack industrial power and where relativities are important and should be considered. This is why I believe it right for the House to consider the report and its proposals most carefully. As for the point about increases in earnings, certainly that is what the report proposes. We should consider the matter carefully, in consultation with both sides of industry, to see how best the report can be followed up and on what principles we should act.

Mr. Palmer

Will the right hon. Gentleman explain what will happen to a union which represents a group of employees and which now has a grievance over differentials or relativities? Under these proposals where will that matter go first?

Mr. Whitelaw

The answer to that must in the first instance lie in the consultations which the Government will have with the TUC and CBI as to the form of the body before which such unions should appear.