EXTENSION OF TERMS AND CONDITIONS (Hansard, 29 October 1975)

§ Mr. Booth

I beg to move, That this House doth disagree with the Lords in the said amendment.

The effect of this amendment would be that, where there were no recognised terms and conditions, claims for improvements under the provisions of Part I of Schedule 11 would be limited to those cases in which the terms and conditions were substantially less favourable than the general level.

There are three serious objections to this Lords amendment. The first is that to introduce the word "substantially" in this context creates considerable uncertainty. At best, what would be a substantial difference in terms and conditions as between one establishment and another is a matter of judgment, and it could be a matter of considerable argument. That would not, I think, matter to a great extent were we not providing, within Schedule 11, a means of redress which, in the final analysis, will cause terms and conditions to be settled by the Central Arbitration Committee.

What we hope to achieve by Part I of the schedule is a general observance of the aims of the Bill, just as the House did many years ago when it passed the fair wages resolution in the hope that those employers who received Government contracts would, without any legal machinery being brought to bear, ensure that their employees were employed on fair terms and conditions.

Therefore, to introduce into this part of the Bill a substantial degree of doubt may well result in many more rather than fewer cases going to the Central Arbitration Committee. Thus, instead of having provided a means of influencing matters 1700 in the way we wish them to go, we should have opened up a means of creating a large area open to litigation—using that term in its broad sense.

The second objection is that under paragraph 9 of Schedule 11 the Central Arbitration Committee has to take a broad view when it compares wages, terms and conditions in an establishment with the general level in the district. I am sure that hon. Members who have studied these matters will agree that a comparison of that kind may, in the absence of the term "substantially", as proposed in the Lords amendment, result in the CAC's taking the view that although the wages difference on which a claim is based would show a small but significant basis, other terms and conditions attached to the establishment are substantially better, and therefore, taking a general and broad view, turning down a claim.

On the other hand, they may observe a small wages gap in circumstances in which the other terms and conditions are substantially worse. On a general broad view they would say that the terms and conditions were worse, and they would make the award even though it was based on the wages element. However, to have to show that there is a substantial difference in the elements which one is claiming could militate against that form of consideration which the House decided to leave within the provisions of Schedule 11.

My third objection is that this would create criteria for claims under the provisions of Part I of Schedule 11 different from those which exist under the Fair Wages Resolution. As the broad aim of Part I of Schedule 11 is to establish on a much wider basis the same sort of criteria as apply to the Fair Wages Resolution, we would be establishing in areas which do not have access to the Fair Wages Resolution a lower standard than the House agreed 30 years ago should apply in the Fair Wages Resolution area.

For those reasons I urge the House to disagree with the Lords in this amendment.

§ Mr. Hayhoe

This matter has been discussed in Committee, on Report, and in another place. During the debates there has been at least some meeting of minds about the problem for which we have 1701 sought to find a solution in the wording that we have, from time to time, suggested.

The words which appear in the Lords amendment are similar to those which I moved on Report. One has always accepted that those words alone could not totally satisfy the point that one has in mind. However, we pushed them to Divisions, on the basis that this was a way of indicating to the Government that we hoped that they would try to find ways of achieving the objective on this part of the schedule, which deals with pockets where the conditions and wages are lower than those which normally apply, without carrying with it other disadvantages which would flow if these provisions led to leapfrogging in pursuit of an average which is always moving farther away. The act of moving towards the average ensures that it moves on. Therefore, one is continually pushing an ever-receding or an ever-advancing average.

The problem arises in the way that the legislation could be used. I suggested in our last debate that the white-collar unions might take a view about the way in which to use the Fair Wages Resolution approach which was different from that which has been taken by other unions during the 30 years' existence of the resolution. It has not been brought into effect on more than a few occasions during those years. However, its existence has probably had a general effect upon the wages and conditions of those concerned.

We are disappointed that the Government have not been able to find a way of drafting into the legislation words which will meet the fears which we have expressed and which I know the Government understand are held by people outside the House who have followed these debates with great care.

We are sorry that apparently there has been no way open to the Government to meet these fears and objections. We are moving towards the position that the words will remain unamended. We hope that the fears we have expressed in the past will not materialise. Time will tell. 1702 We hope that the schedule will not lead to an inflationary spiral. Having quoted Mr. Wigram earlier, I should indicate that his view all along was that our fears were unfounded, but other distinguished commentators took a different view. Therefore, the advice which has been forthcoming on this problem—presumably to the Government as well as to the Opposition—has been somewhat ambivalent.

We have sought to express the fears of those who saw these provisions giving an extra twist to the inflationary spiral. The Government have pooh-poohed those fears and said that that will not happen. Time will show who is right.

We have always accepted that the wording of the amendment was symbolic to get across what we had in mind and that it was not proper legal drafting or a watertight arrangement which could ensure that it would come about. It would be wrong for us to divide the House to hold to this Lords amendment. Therefore, we accept that the Government's will should run in this matter and that this House should disagree with the Lords amendment. We hope that our fears about the possible consequences will be shown to be groundless.