HC Deb 01 May 1974 vol 872 cc1156-62
The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore)

With permission, I should like to make a statement about the Government's initial views on the recommendations in the Fifth Report of the Expenditure Committee on the wages and conditions of African workers employed by British firms in South Africa.

This was a somewhat unusual field of inquiry for a Select Committee. The whole House will wish to congratulate my hon. Friend the Member for Stockton (Mr. Rodgers) and his colleagues on the Trade and Industry Sub-Committee on the thoroughness of this inquiry and the admirable report which they have produced.

We accept the main recommendation that the Government should issue amplified guidance to British firms on the wages and working conditions of African workers. The report contains an admirably full and clear statement of recommended practices which, if implemented conscientiously, could lead to very real improvements.

As recommended by the Committee, I am now arranging to give the Code of Practice wide publicity. I shall write personally to those British firms with South African interests. My letter and the text will be issued to the Press, as will the list of those to whom I am writing. Naturally we also accept that the guidances should be up-dated when necessary.

Key recommendations in the guidelines are that no British firm in South Africa should pay adult male African employees wages below the appropriate poverty datum level, and that all firms should aim within a set timetable to pay minimum wages equal to the minimum earnings level broadly equivalent to poverty datum level plus 50 per cent. Elsewhere the report rightly stresses the responsibility of parent firms for the employment practices of South African affiliates. These are the basic lessons of the inquiry and it is now for industry to put them into practice.

The report contained a number of other recommendations on informing and advising firms on overseas industrial relations and on monitoring their performance. These proposals are being given urgent and careful study by the Departments concerned as well as consultation with both sides of industry. I shall inform the House of the outcome in due course.

Mr. Heseltine

I wish first to ask the right hon. Gentleman a general question. Does he not consider that it would be helpful to British companies trading in South Africa, and in other countries of whose internal policies the Government disapprove, if there were a comprehensive statement outlining the terms on which the commercial interests of British companies will be allowed to continue to develop in the future? However many doubts the Government may have about the internal policies of some nations' governments, it surely cannot be right for the commercial activities of our companies to be continually interrupted by political statements at home.

Next I have three detailed questions. First, do the Government intend to instruct the staff of the British Embassy in South Africa to seek out British subsidiaries to persuade them to follow the proposed guidelines? Secondly, what steps are intended to get those subsidiary companies to produce and publish reports of the way in which they have conformed to the guidelines? Thirdly, what time-scale has the Minister within which he hopes to report to the House on the other considerations?

Mr. Shore

The hon. Gentleman was not over-forthcoming in his reception of a report which deserves the support of both sides of the House—and I think and hope has the support of both sides of the House.

Mr. John Ellis

Has it?

Mr. Shore

I hope so. As for a comprehensive statement of Government policy on their commercial relationships with various countries, that was alluded to earlier in Foreign and Commonwealth Affairs Questions, and I shall draw it to the attention of my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.

Having issued the guidelines, I must clearly have consultations with the firms concerned and consider, as I am conidering, how we can up-date information and what means we have of monitoring the whole performance of British firms in South Africa. We are determined to keep pressure on firms, although I am glad to say that initially at any rate, to judge from what firms have said already, there has been a very good response to the report.

Mr. Mark Hughes

As a member of the committee, I warmly thank my right hon. Friend for the speed with which he has promulgated the code as part of Government practice. I also warmly thank him for bringing an element of moral judgment into the performance of this Government in overseas affairs. Will my right hon. Friend consider extending the process to look at the performance of British companies in parts of the world other than South Africa, where there is rather disturbing prima facie evidence?

Mr. Shore

I thank my hon. Friend for his remarks. Certainly there has to be some element of moral judgment in these matters. We have to get the right balance. We shall give further thought to his interesting suggestion that this kind of inquiry might be extended to British firms in other countries. The South African situation is almost unique. It has special feautures. Although the poverty problem is general in the rest of the world, the particular mix of elements that makes the South African situation so intractable—to many of us so unacceptable—is peculiar to South Africa.

Mr. David Steel

It now seems to be more than a formality, in view of what the official Opposition spokesman said, to say that we on the Liberal benches welcome the report, the work put into it and its findings. The Secretary of State said that it was a somewhat unusual field of inquiry. Will he not also pay tribute to the investigations of the British Press in this matter which led to the setting up of the Committee. Does he not agree—certainly I believe this to be so from my own observations 18 months ago in South Africa—that British industry on the whole tended to lay too much stress on its good record of fringe benefits and not enough on making real efforts to raise the basic living standards so that there was a more equal pay situation between the races?

Mr. Shore

I agree with the last point made by the hon. Gentleman. I think that perhaps too much emphasis has been laid on fringe benefits, as he puts it, instead of on the raising of basic living standards. I thank him for his welcome of the Government's response to the report. I gladly associate myself with his tribute to the Press. The Press does not always earn bouquets—it does not always deserve them—but in this case I think that The Guardian deserves the thanks of us all.

Mr. Charles Morrison

Would the right hon. Gentleman not agree that the inquiry has already had the effect of creating a considerable improvement in many employment practices in South Africa? Does he not further agree that it is much more important to continue encouraging good employment practices which operate to the advantage of black African workers rather than to have a withdrawal of investment, which would cause hardship and unemployment? With reference to paragraph 190 and what the right hon. Gentleman said about monitoring and future publicity, may I ask him to ensure that, if publicity is to be given in future to employment practices, it is given just as much to good practices which set high standards as it is to bad practices which need to be improved?

Mr. Shore

The hon. Gentleman has made a contribution to this report and I take particular note of the suggestion he made. He has a fair point. Where good practices are being followed it will be helpful for them to be more widely disseminated for the benefit of other British firms at work in South Africa. I entirely agree with what he said about the importance of employment practices. There is an enormous amount that can be done, even within the restrictive laws of South Africa. There are some good employment practices which promote opportunities for the advancement of black Africans in British firms.

Mr. John Ellis

Will my right hon. Friend rebut the point made by the Opposition Front Bench spokesman that this is political interference? Is he aware that for many of us on this side of the House it is rather a moral question? Is he further aware that we feel strongly that while firms—the interests of which seem dear to some Tory Members—are making profits in South Africa, these steps should be taken? Does he realise that my hon. Friends are prepared to take this view even though it may affect trade unionists who have jobs with these firms in this country and that we are prepared to go out into the country and explain that? Is it not particularly unhappy that this statement, which has been so well received on the whole, should be treated in this niggardly way by the Opposition?

Mr. Shore

My hon. Friend is right to emphasise that this requires a moral as well as a political judgment. This was an all-party report and it has done a service for us all. I welcome the report warmly because it has given an opportunity to do something practical to help the millions of under-privileged and exploited black people in South Africa. It lies within the power of British firms to improve the living standards and opportunities of these people. In producing its report and recommendations the committee has, I hope, done a service to the people of South Africa as well as to British firms here.

Mr. Goodhew

The right hon. Gentleman said that he would use pressure on British companies operating in South Africa. Does this mean that he will pressurise the boards of companies to act against the interests of their owners, the shareholders—[Hors. MEMBERS: "Yes"] —which might well be the pension funds of trade unionists? Does he not think it dangerous for the Government to start using pressure to prevent companies from acting normally within the law of this country or of the country in which they are operating?

Mr. Shore

I do not think that the hon. Gentleman is speaking for very many people in the House. At least, I hope he is not. In undertaking the inquiry and publishing its report the committee is exerting some moral pressure on British firms. I shall certainly add to that pressure.

Mr. James Johnson

Is my right hon. Friend aware that his honest, humane and civilised words will echo and re-echo throughout the English-speaking world? Will he turn his attention next to that dependent territory of the Commonwealth. Hong Kong, where workers in their millions, with yellow skins, not black skins are working under equally bad conditions? Is he aware that they do not have a legal framework within which collectively to bargain and increase their wages?

Mr. Shore

I thank my hon. Friend for his generous remarks. I can assure him that I shall look carefully at what he said about the conditions of workers in Hong Kong.

Mr. Evelyn King

However desirable this reform may be—and probably it is desirable—may I ask the right hon. Gentleman to accept that there is a point of principle involved which should be watched? He referred, as a Minister, to bringing pressure to bear upon British citizens. It may well be that he ought to do it. If he is to do that—and it may go wider than South Africa—ought he not to seek legislative sanction to give him the power to do it? If once we assume that a Minister in one area can, without legislative sanction pressurise British citizens, it goes far wider than South Africa.

Mr. Shore

If the pressure of publicity as a moral argument needs to be reinforced in the light of experience, it will be up to me or my successor to come to the House and ask for powers.

Mr. Heseltine

May I clarify a point? Everyone in this House understands that the Government of which I was a member had clearly made it obvious to everyone that they, too, had guidelines to which British exporters were expected to conform when dealing with South Africa. There is no issue of principle involved. The issue on which I sought to draw the Minister is that raised by his hon. Friends—namely, that if there is to be a continuation of announcements of this sort, would it not be better to deal with the matter in one clear policy statement so that exporters could know where they have a clear commercial future? It is this uncertainty element to which I sought to refer.

Mr. Shore

I think the hon. Gentleman has got this very confused. This statement and the report is about how British firms with subsidiaries in South Africa should conduct their affairs. I am not aware of a mass of other such reports—although some of my hon. Friends would like them—dealing with other countries. I suggest that the hon. Gentleman studies the report again. When he has done so, I hope he will find it a little more welcome than he appeared to find it a few minutes ago.