HC Deb 15 January 1975 vol 884 cc464-74

4.7 p.m.

Mr. Giles Radice (Chester-le-Street)

I beg to move, That leave be given to bring in a Bill to amend the Companies Act 1967 and to make further provision, in regard to companies and nationalised industries, for trade union representation on supervisory boards. What I and my supporters are seeking to do is to give legislative form to the pledges on industrial democracy made in Labour Party manifestos at both the 1974 elections. I believe that there is now a considerable body of support for an extension of industrial democracy amongst workers and their representatives at shop floor level, amongst national trade unions and in the TUC itself. The ideas behind the Bill are largely drawn from the TUC's report to last year's congress.

I believe that there is a growing recognition that it is no longer enough to negotiate wages and conditions and to leave the rest to management. Decisions on closures, mergers, the location of plant and the whole shape of future corporate strategy are so important that they largely determine the living standards and working conditions of most employees. No wonder that workers and their representatives are now demanding a say in management.

Workers and their representatives want more control over the key decisions that affect their working lives, and they are asking for action by the present Government. There was no mention of industrial democracy in the Queen's Speech, and it is because of that omission that I and my supporters, who are from many wings and sections of the Parliamentary Labour Party, are bringing the Bill before the House.

Perhaps the most important and most immediately realisable objective of the Bill is to ensure that 50 per cent. of the members of the boards of nationalised industries are employed representatives elected through trade union machinery. At the moment there are trade unionists on the boards of nationalised industries, but they are there in their own right and not as representatives. We believe that if this Bill becomes law it will be possible to move very quickly in the public sector.

However, in the private sector the situation is far more complicated. The Bill would first change the Companies Act 1967 so that the directors of a company would be legally obliged to take account of the interests and the point of view of employees. It would also change company structure, initially only for those companies employing more than 2,000 workers, by setting up a two-tier board system with a supreme supervisory board over a smaller executive body. Over half the members of the supervisory board would be employee representatives elected through trade union machinery. The supervisory board would have the final say on such major questions as large-scale investment, closures and mergers, plant location, redeployment, the appointment of the executive board, and so on. It would be right for employees in the private sector to be able to choose whether they wanted a two-tier board system and their own representatives on the supervisory boards.

In non-union firms the choice would be supervised by the Conciliation and Arbitration Service. In organised firms it would be conducted through trade union machinery. A non-mandatory system in the private sector, such as I have just described, would, I believe, satisfy those trade unions which expressed reservations at last year's TUC conference, including the AUEW and the National Union of General and Municipal Workers, of which I am a sponsored Member of Parliament.

The possibility of choice would go a long way towards satisfying those who, though in favour of industrial democracy, believe that it would be wrong to impose any one system. We do not believe, as some fear, that employee representation on boards would lead to the emasculation of the trade union movement. On the contrary, the effect of the proposals contained in the Bill, such as employee-directors as representatives, the 50 per cent. parity representation, the election through trade union machinery, is to extend collective bargaining into the boardroom, the only difference from normal bargaining being that employee-directors would be putting forward their side of the argument in a wider context and would be concerned with the higher level of decision making.

I understand that the CBI is hostile to the ideas on which this Bill is based. No doubt the CBI view has influenced the attitude of the major Opposition party, although only a year ago the Conservative Government promised in the Queen's Speech a White Paper on industrial democracy.

I should like to make it clear that efficient, up-to-date management will have nothing to fear from this Bill. It will have to justify its actions not by reference to a sterile, out-dated managerial prerogative but in terms of relevance and effectiveness. Only managements living in the past will have to change, and rightly so.

To those who claim that only management has the right to manage, we say that workers who play such an essential part in the success of an enterprise should have a right to their say. Of those who argue that only managers have the necessary skills, we ask "Why is management so eager to promote shop stewards and to attract trade union officials to join their ranks?" To those who fear trade union independence, we point out that normal collective bargaining already involves participation. What is at stake is not the principle but the form of the participation.

The Industrial Democracy Bill is the natural follow-up to the Trade Union and Labour Relations Act and to the proposed Employment Protection Bill. If the Government will commit themselves quickly to their own Bill, we shall be delighted to withdraw this Bill at a later stage. However, in the absence of that commitment, I ask leave of the House to bring in this Bill.

4.15 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)


Mr. Deputy Speaker (Mr. George Thomas)

Order. Unnecessary as it may seem, I am obliged to ask the hon. Member whether he is seeking to oppose the Bill?

Mr. Ridley

Yes, Mr. Deputy Speaker. As you have already stated, it is my intention to suggest that leave be not given to bring in the Bill.

The hon. Member for Chester-le-Street (Mr. Radice) has made his intention clear before today. In a recent newspaper article, I read a report saying that his purpose was to force the Government to make clear their position. The report continued: Supporters of the Bill believe that the Secretary for Employment, Mr. Foot, is in favour of legislation, but that the Secretary for Industry, Mr. Benn the other Minister most affected, is much cooler. I do not believe that the House is the right place in which to smoke out the controversial and difficult figures on the Treasury Bench who are at loggerheads, nor do I believe that the House is in any mood to digest any more legislation. We have had a veritable avalanche of Bills already. We have just heard that we are to have another Bill, concerning aviation. In his statement about that, the Secretary of State for Industry went out of his way to say that industrial democracy should develop organically and should not be legislated upon. The conflicts in the Labour Party should not be resolved in the House of Commons, especially when we have already plenty to do to supervise the legislation which has been produced by a profligate administration who are spending our money faster than they should.

Starting with the substance of the Bill, the hon. Gentleman surprised me by making a speech on the subject without once mentioning the words "industrial efficiency". He must agree that we face in our industrial history a period of grave crisis, that we have clear illiquidity in many companies, that we are not as competitive in the world as we should be, that we are losing our share of the market, and that imports are often cheaper than home-produced goods. He must be aware that we have a very serious situation, due, if I may now be more controversial, to our failure to use modern machinery and to make sufficient investments in that modern machinery to increase productivity per man.

Will the hon. Gentleman's proposals be more likely to increase our industrial efficiency and the use of machinery and research than if those proposals are not put into effect? When I hear him speaking about the rights of employees, the rights of trade unions and what people would like to see happen, I am, to say the least, suspicious. So often I have heard the demands of trade unions, repeated this afternoon by the Secretary of State for Industry and by the hon. Gentleman, to the effect that trade unions should have control over whether certain plants should close down when they become out of date and inefficient, whether new machinery should be manned properly or over-manned, and whether the major strategic industrial decisions should be taken by those who are responsible for the proper husbanding of the capital resources employed or by those who are responsible for the working of the machinery.

It is the natural and proper job of a trade union to force the maximum out of the employers and to cause the minimum of disturbance to their members. Naturally, they fight to preserve many jobs and to preserve old-fashioned techniques which affect employment in industry. I have every sympathy with them and with those who are displaced by modern techniques. However, if the hon. Gentleman is seriously suggesting that we should now set up a system whereby half the members serving on the supervisory boards in private industry and the nationalised boards should be the directly appointed representatives of those same trade unions, he is making a plea for greater industrial inefficiency.

This is a matter that the trade unions have yet to prove. They have yet to prove that they can rid our industry of over-manning, restrictive practices and encumbrances upon the use of the most modern techniques and of the minimum number of people to work modern machinery. For them to seek to go into this kind of industrial democracy before they have proved that is to seek to retard still further our recovery as an industrial nation.

The hon. Member for Chester-le-Street was at least honest about what he wanted his Bill to do. He wanted a two-tier board system for companies with more than 2,000 employees, and he wanted half the supervisory board composed of workers who were appointed by the relevant trade unions. "Elected" is a word which I did not hear during the hon. Gentleman's remarks. If he meant that, I am at least encouraged to hear it. But if we are to have a system of this kind, why should not we have the workers themselves in the plant or industry elect the directors? Why does it have to be the trade unions which are in command of this? It puts the trade unions in a very difficult position. The trade unions exist to further the interests of the work force. If the trade unions are to appoint directors, how can they decide "Yes, we are sorry, but this plant must be closed, and this machine must be manned by only two men rather than six."? How can trade unions be put in a position where they have two duties, the one contrary to the other?

This is one reason why the hon. Member for Chester-le-Street has got into trouble with his own trade union, the National Union of General and Municipal Workers. According to the same newspaper article, The AUEW and the NUGMW have expressed on this score objections to what the hon. Gentleman proposes. It is, of course, quite wrong to mix up the function of a trade union, which is to protect and increase the wages of the work force, with that of management, which is to earn those wages by the proper stewardship of capital.

If we take the examples that we have in the nationalised industries, especially in the British Steel Corporation where something along these lines has been tried, the evidence is not that it leads to greater mobility of labour and greater efficiency in the use of capital resources. The evidence is that more and more people find it a convenient way of earning a perpetual living, ignoring industrial logic and the need for change.

In our industry we need a more adventurous spirit from managers, trade unions and work people. It is a spirit which involves moving from one industry to another as one grows and another declines. It involves manning machines to the minimum required, as was done during the three-day working week without much drop in production. It is a spirit which will not shackle our industry in the strait jacket of procedures such as those proposed by the hon. Member for Chester-le-Street.

It is very important to bring together the entire work force of the country, along with management, in the activities of their firms or their nationalised industries. I support entirely that part of the hon. Gentleman's objective. But, like the Secretary of State for Industry, I believe that it is better done organically. It is better left to each concern to evolve the way that it can do it best, be it through works councils, worker directors, some form of participation, or even perhaps the two-tier board system. For us to seek to lay further burdens on already hard-pressed management by legislating some firm pattern in matters like this would retard and eventually stop industrial development itself.

I ask the House to deny leave to the hon. Member for Chester-le-Street to bring in his Bill.

Question put pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 250, Noes 124.

Division No. 52.] AYES [4.23 p.m.
Allaun, Frank Brown, Hugh D. (Provan) Cryer, Bob
Archer, Peter Brown, Robert C. (Newcastle W) Cunningham, Dr J. (Whiteh)
Atkins, Ronald (Preston N) Buchan, Norman Dalyell, Tam
Atkinson, Norman Buchanan, Richard Davidson, Arthur
Bagier, Gordon A. T. Butler, Mrs Joyce (Wood Green) Davies, Ifor (Gower)
Barnett, Guy (Greenwich) Callaghan, Jim (Middleton & P) Deakins, Eric
Barnett, Rt Hon Joel Campbell, Ian Delargy, Hugh
Bates, Alf Canavan, Dennis Dempsey, James
Bean, R. E. Carmichael, Neil Doig, Peter
Beith, A. J. Carter, Ray Dormand, J. D.
Bennett, Andrew (Stockport N) Carter-Jones, Lewis Douglas-Mann, Bruce
Bidwell, Sydney Cartwright, John Duffy, A. E. P.
Biggs-Davison, John Clemitson, Ivor Dunlop, John
Bishop, E. S. Cocks, Michael (Bristol S) Dunwoody, Mrs Gwyneth
Blenkinsop, Arthur Cohen, Stanley Eadle, Alex
Booth, Albert Coleman, Donald Edelman, Maurice
Boothroyd, Miss Betty Colquhoun, Mrs Maureen Edge, Geoff
Bottomley, Rt Hon Arthur Cook, Robin F. (Edin C) Edwards, Robert (Wolv SE)
Boyden, James (Bish Auck) Cox, Thomas (Tooting) Ellis, John (Brigg & Scun)
Bradley, Tom Craigen, J. M. (Maryhill) Ellis, Tom (Wrexham)
Broughton, Sir Alfred Cronin, John English, Michael
Ennals, David Lamborn, Harry Rooker, J. W.
Evans, Gwynfor (Carmarthen) Lamond, James Roper, John
Evans, Ioan (Aberdare) Leadbitter, Ted Ross, Stephen (Isle of Wight)
Evans, John (Newton) Lewis, Arthur (Newham N) Ross, Rt Hon W. (Kilmarnock)
Ewing, Harry (Stirling) Lewis, Ron (Carlisle) Rowlands, Ted
Fernyhough, Rt Hon E. Lipton, Marcus Sedgemore, Brian
Fitch, Alan (Wigan) Litterick, Tom Selby, Harry
Fitt, Gerard (Belfast W) Loyden, Eddie Shaw, Arnold (Ilford South)
Flannery, Martin Luard, Evan Sheldon, Robert (Ashton-u-Lyne)
Fletcher, Raymond (Ilkeston) Lyon, Alexander (York) Silverman, Julius
Fletcher, Ted (Darlington) Lyons, Edward (Bradford W) Skinner, Dennis
Forrester, John Mabon, Dr J. Dickson Small, William
Fowler, Gerald (The Wrekin) McCartney, Hugh Smith, John (N Lanarkshire)
Freeson, Reginald McElhone, Frank Snape, Peter
Freud, Clement MacFarquhar, Roderick Spearing, Nigel
Garrett, John (Norwich S) Mackenzie, Gregor Spriggs, Leslie
Garrett, W. E. (Wallsend) McMillan, Tom (Glasgow C) Stallard, A. W.
George, Bruce Madden, Max Steel, David (Roxburgh)
Gilbert, Dr John Magee, Bryan Stewart, Rt Hn M. (Fulham)
Ginsburg, David Mahon, Simon Stoddart, David
Golding, John Marks, Kenneth Stott, Roger
Gould, Bryan Marquand, David Strang, Gavin
Gourlay, Harry Marshall, Dr Edmund (Goole) Summerskill, Hon Dr Shirley
Graham, Ted Marshall, Jim (Leicester S) Swain, Thomas
Grant, George (Morpeth) Meacher, Michael Taylor, Mrs Ann (Bolton W)
Grant, John (Islington C) Mellish, Rt Hon Robert Thomas, Dafydd (Merioneth)
Grimond, Rt Hon J. Mendelson, John Thomas, Ron (Bristol NW)
Grocott, Bruce Mikardo, Ian Thorne, Stan (Preston South)
Hamilton, James (Bothwell) Millan, Bruce Tierney, Sydney
Hamilton, W. W. (Central Fife) Miller, Dr M. S. (E Kilbride) Tinn, James
Hamling, William Miller, Mrs Millie (Ilford N) Tomlinson, John
Hardy, Peter Mitchell, R. C. (Soton, Itchen) Torney, Tom
Harper Joseph Molloy, William Tuck, Raphael
Harrison, Walter (Wakefield) Moonman, Eric Urwin, T. W.
Hatton, Frank Morris, Alfred (Wythenshawe) Varley, Rt Hon Eric G.
Hayman, Mrs Helene Morris, Charles R. (Openshaw) Wainwright, Edwin (Dearne V)
Hooley, Frank Morris, Rt Hon J. (Aberavon) Wainwright, Richard (Colne V)
Hooson, Emlyn Mulley, Rt Hon Frederick Walden, Brian (B'ham, L'dyw'd)
Horam, John Murray, Ronald King Walker, Terry (Kingswood)
Howells, Geraint (Cardigan) Newens, Stanley Watkins, David
Hoyle, Douglas (Nelson) Noble, Mike Watkinson, John
Huckfield, Les Oakes, Gordon Weetch, Ken
Hughes, Rt Hon C. (Anglesey) Orbach, Maurice Weitzman, David
Hughes, Mark (Durham) Orme, Rt Hon Stanley Wellbeloved, James
Hughes, Robert (Aberdeen N) Ovenden, John White, Frank R. (Bury)
Hughes, Roy (Newport) Owen, Dr David White, James (Pollok)
Hunter, Adam Padley, Walter Whitehead, Phillip
Irvine, Rt Hon Sir A. (Edge Hill) Pardoe, John Whitlock, William
Jackson, Miss Margaret (Lincoln) Park, George Wigley, Dafydd
Janner, Greville Parker, John Willey, Rt Hon Frederick
Jay, Rt Hon Douglas Parry, Robert Williams, Alan Lee (Hornch'ch)
Jenkins, Hugh (Putney) Pavitt, Laurie Williams, W. T. (Warrington)
John, Brynmor Peart, Rt Hon Fred Wilson, Alexander (Hamilton)
Johnson, James (Hull West) Phipps, Dr Colin Wilson, William (Coventry SE)
Johnson, Walter (Derby S) Prescott, John Wise, Mrs Audrey
Jones, Alec (Rhondda) Price, William (Rugby) Woodall, Alec
Jones, Barry (East Flint) Radice, Giles Woof, Robert
Jones, Dan (Burnley) Rees, Rt Hon Merlyn (Leeds S) Wrigglesworth, Ian
Kaufman, Gerald Richardson, Miss Jo Young, David (Bolton E)
Kelley, Richard Roberts, Albert (Normanton)
Kerr, Russell Roberts, Gwilym (Cannock) TELLERS FOR THE AYES:
Kilroy-Silk, Robert Robertson, John (Paisley) Mr. Ernest G. Perry and
Kinnock Neil Roderick, Caerwyn Mr. James Sillars.
Lambie, David Rodgers, George (Chorley)
Adley, Robert Cockcroft, John Grieve, Percy
Alison, Michael Dodsworth, Geoffrey Grist, Ian
Baker, Kenneth Drayson, Burnaby Hall, Sir John
Banks, Robert Durant, Tony Hamilton, Michael (Salisbury)
Bennett, Dr Reginald (Fareham) Edwards, Nicholas (Pembroke) Hannam, John
Benyon, W. Elliott, Sir William Harvie Anderson, Rt Hon Miss
Berry, Hon Anthony Finsberg, Geoffrey Hawkins, Paul
Biffen, John Fookes, Miss Janet Hordern, Peter
Body, Richard Fox, Marcus Irving, Charles (Cheltenham)
Boscawen, Hon Robert Fraser, Rt Hon H. (Stafford & St) Jenkin, Rt Hon P. (Wanst'd & W'df'd)
Bowden, A. (Brighton, Kemptown) Gardiner, George (Reigate) Kellett-Bowman, Mrs Elaine
Boyson, Dr Rhodes (Brent) Gilmour, Rt Hon Ian (Chesham) Kimball, Marcus
Brown, Sir Edward (Bath) Godber, Rt Hon Joseph King, Tom (Bridgwater)
Budgen, Nick Goodhart, Philip Knight, Mrs Jill
Burden, F. A. Goodhew, Victor Lamont, Norman
Carlisle, Mark Gow, Ian (Eastbourne) Lane, David
Churchill, W. S. Gower, Sir Raymond (Barry) Lawrence, Ivan
Le Merchant, Spencer Osborn, John Speed, Keith
Lester, Jim (Beeston) Page, Rt Hon R. Graham (Crosby) Spence, John
Lewis, Kenneth (Rutland) Parkinson, Cecil Spicer, Jim (W Dorset)
Lloyd, Ian Pattie, Geoffrey Spicer, Michael (S Worcester)
McAdden, Sir Stephen Peyton, Rt Hon John Stainton, Keith
McCrindle, Robert Pink, R. Bonner Stanbrook, Ivor
Macfarlane, Neil Powell, Rt Hon J. Enoch Stanley, John
McNair-Wilson, P. (New Forest) Pym, Rt Hon Francis Steen, Anthony (Wavertree)
Marten, Neil Raison, Timothy Stokes, John
Mates, Michael Rathbone, Tim Stradling Thomas, J.
Mather, Carol Rees, Peter (Dover & Deal) Thomas, Rt Hon P. (Hendon S)
Maude, Angus Rees-Davies, W. R. Townsend, Cyril D.
Mawby, Ray Renton, Rt Hon Sir D. (Hunts) Wakeham, John
Meyer, Sir Anthony Ridsdale, Julian Walters, Dennis
Miller, Hal (Bromsgrove) Roberts, Michael (Cardiff NW) Warren, Kenneth
Mills, Peter Rodgers, Sir John (Sevenoaks) Weatherill, Bernard
Mitchell, David (Basingstoke) Rossl Hugh (Hornsey) Wells, John
Montgomery, Fergus Rost, Peter (SE Derbyshire) Wiggin, Jerry
Morgan-Giles, Rear-Admiral Royle, Sir Anthony Winterton, Nicholas
Morris, Michael (Northampton S) Scott, Nicholas Younger, Hon George
Morrison, Charles (Devizes) Shaw, Giles (Pudsey)
Morrison, Peter (Chester) Shepherd, Colin
Neave, Airey Shersby, Michael TELLERS FOR THE NOES:
Nelson, Anthony Sims, Roger Mr. Patrick Cormack and
Neubert, Michael Sinclair, Sir George Mr. Nicholas Ridley.
Onslow, Cranley Skeet, T. H. H.

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Giles Radice, Mr. Jack Ashley, Mr. T. W. Urwin, Mr. Neil Kinnock, Mr. John Horam, Mr. Phillip Whitehead, Mr. James Sillars, Dr. John A. Cunningham, Mr. David Watkins, Mr. A. E. P. Duffy, Mr. Jeffrey Rooker, and Mr. Michael English.