HC Deb 12 January 1978 vol 941 cc2003-14

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

10.10 p.m.

Mr. Frederick Willey (Sunderland, North)

I wish to take the opportunity to raise the question of industrial relations, and I am obliged to the House for giving me an opportunity to do so at an earlier hour than I had expected.

I raised this matter during the recent debate on the Polish ships order. In Sunderland we still regard the Indian order as complementing that order, and I hope that it will not be long before there is an announcement making it clear that the negotiations have been concluded and the order placed.

Although I raised the question of industrial relations on that occasion, the Minister of State was not able to reply to the issues that I raised. I have no complaint about that. He spent his time more profitably demolishing the case that the Opposition had raised.

I want to return tonight to the subject that I raised earlier. The position at Swan Hunter has been settled. That yard is not in my constituency, but the difficulties that have been experienced there are germane to this debate. What I complain about, essentially is lack of communication, because this has very much affected the position of Pickersgills.

On the Polish order, Mr. Kember went to London. He did this without any prior consultation in the yard, and it was not surprising that he received short shrift when he returned. The Polish contract has some extraordinary employment conditions, and once again these were presented without there having been any prior consultation with the unions.

The overriding point that I make on the issue of industrial relations is that the position in shipbuilding is different from that in any other nationalised industry. By the 1977 Act, British Shipbuilders is statutorily bound to provide industrial democracy in a strong and organic form, and by the Act it is statutorily obliged to provide the largest sensible degree of decentralisation of decision-making to the separate profit centres.

I emphasise to the Minister of State—although he knows this well because he was largely responsible for the acceptance of the amendments dealing with industrial relations and decentralisation—that decision-making is not only about such matters as sales and pricing, but is specifically about investment programmes and industrial relations.

Under the Act, British Shipbuilders must be about to report to the Secretary of State, but how can it report effectively if it has held no consultations or discussions at company or district level? If it does so, it will seem to be acting not only outwith the spirit of the Act, but outwith its specific provisions.

I turn to two matters that I raised in the previous debate. The first concerns Doxfords. I first raised this with my hon. Friend the Minister as long ago as July 1976, and at that time I received two specific assurances from the Government. The first was that the question of improved facilities for making crankshafts was being considered most carefully by the organising committee. I was further assured that my proposal about complete crankshaft and forging casting units would be made subject to a practicality study.

As the Minister of State will remember, I saw him in March last year, and remind him of the words that he used when he wrote to me to confirm what we had discussed. He said: I also undertook to use my good offices to bring about an early meeting between British shipbuilders and the management and worker representatives at Doxfords. Later in July I was told that British Shipbuilders had commissioned a facility audit to take an overall view—a rather wider subject—of the investment proposals at Doxfords.

I ask my hon. Friend the following questions. What at present is the authority delegated to Doxfords? How and when has it been defined? What has happened about the studies originally undertaken by the organising committee? Has the facility audit been completed? Who will have access to the studies? Rather more personally, what good offices have been exercised by the Minister of State, and what has been the response to his efforts? I expect explicit replies, otherwise through lack of action or failure to communicate the impression will remain that British Shipbuilders is not living up to its expectations.

The second matter that I raised was that we should have a meeting of management and men at Sunderland. I asked for the meeting at the request of the unions so that they should co-operate fully and take advantage of the new opportunities". They felt that such a meeting was necessary to ensure that nationalisation got off on the right foot to encourage co-operative effort in the yards". Bearing in mind the background on the Wear—for example, the disquiet expressed at Austin and Pickersgill and the constant criticism of the company's management of nationalisation, I expected British Shipbuilders to respond enthusiastically to the invitation. I am sadly disappointed, and notwithstanding the previous debate I am still awaiting a reply. All that I have had is a Christmas card from Mr. Casey. The situation is intolerable.

There are two matters arising. First, we asked British Shipbuilders to inaugurate such a meeting. My hon. Friend might suggest that we should do it ourselves, but if such a meeting is to be meaningful and significant it must be summoned by British Shipbuilders. Secondly, it is unrealistic to expect any local initiative from management. I am sorry to say that the dead hand of British Shipbuilders is so pervasive that we are rapidly developing an epidemic of buck passing. The unions are now complaining to me that management is making an increasing number of unnecessary references to British Shipbuilders on matters that should be settled at management level.

It has been suggested that we should wait until progress has been made in national discussions. It was suggested that while discussions were continuing with the national confederation it was premature to hold a meeting such as we have suggested. I ask my hon. Friend what national discussions would be prejudiced. I have made inquiries at Sunderland and no one seems to know what has been discussed. It was put to me graphically that communications are less than nil. That has caused a good deal of suspicion and distrust. What I am told, what is belived, is that there is no hint yet of tackling future policy; that there is no suggestion yet of any greater involvement, or worker participation, being raised in the discussions. As long as rumours such as that continue to circulate, the position of British Shipbuilders is naturally damaged.

I am told that among the matters being discussed is a common pay structure. I should be surprised if this were true, but it is a rumour which is doing a great deal of harm on the Wear.

In my constituency we have not only the shipyards but the Wearmouth pit. It appears that the miners are now going in the opposite direction and seeking local productivity agreements. This affects the men in the yards. Sunderland shipbuilders sensibly made its own wage and self-financing productivity deal. However, it is said that it did so against the advice of British Shipbuilders.

We have only recently settled the question of non-manual workers. The complaint is that that settlement was held up too long by the Government and that this gave credence to the view that there is a move towards a national wage structure. At Austin and Pickersgill the management referred its own proposals direct to the Government without discussing or involving the unions. My complaint is muted because I took up this matter immediately with the Departments concerned and the Minister of State and others got it cleared up at once. It was tackled with remarkable expedition. For that I am grateful.

The unions felt that they should have been consulted and that the management's proposals should not have been considered at all until negotiations had been held. As a consequence of this we have had protracted, acrimonious negotiations. I am happy to say that these are now settled, but this has aggravated the suspicions about a centralised wage structure and has badly affected productivity at Austin and Pickersgill.

I could raise many other matters which have been and are disrupting industrial relations. Following the 1st August agreement the manual workers complain of the cut-off in paragraph 8. They say that their democratic rights have been removed. It seems to me that this agreement was no more than a continuation of the status quo. Perhaps that complaint is more a matter of practice than of the agreement between the confederation and British Shipbuilders. In any case, British Shipbuilders may well say that it is not a matter for British Shipbuilders.

There are worries about the Austin and Pickersgill occupational pension scheme and about what the future will be if a national pension scheme is introduced. These anxieties and complaints may really be unnecessary. British Shipbuilders may well said that they are groundless, but it is about time that it told us so.

The truth is that complaints such as this—and I could give many more—are symptomatic of bad industrial relations. We have been fortunate on the Wear because in the past we have had good industrial relations. We have provided a model for industrial agreements.

I doubt whether I should have been raising these difficulties with the Minister of State if British Shipbuilders had responded to our invitation. I am sure that the Minister will agree that we cannot afford to allow industrial relations further to deteriorate. Good industrial relations are essential in shipbuilding because the industry is still relatively labour intensive. It is facing real difficulties and needs the greatest productivity that it can obtain. As we shall discuss on Monday, we know that the industry will face redundancy questions, and if one has redundancy questions to face one must have good labour relations.

I make no apology for appealing to my hon. Friend again. I emphasise once again that we all appreciate his ready response to those of us who pressed for a measure of local autonomy and more effective and more organic industrial relations, but matters have deteriorated. We very much regret it and hope that before long we can be on the road to better relations by holding a round-the-table conference in Sunderland.

10.25 p.m.

The Minister of State, Department of Industry (Mr. Gerald Kaufman)

My right hon. Friend the Member for Sunderland, North (Mr. Willey) has been vigilant, alert and active on behalf of his constituents who work in the shipbuilding industry to my knowledge since I became closely involved with the industry—and certainly ever since we served together on the Standing Committee considering the Aircraft and Shipbuilding Industries Act, where my right hon. Friend's participation was so valuable in improving the measure.

I noted, too, when I had the opportunity during the passage of the Bill to visit both the yards in Sunderland, how well my right hon. Friend was regarded by his constituents. My hon. Friend the Member for Sunderland, South (Mr. Bagier), who shares my right hon. Friend's concern about these questions was also present then.

I always welcome it when my right hon. Friend raises these matters, because it is right that they should continually be discussed and that our pride in having achieved nationalisation should be accompanied by a similar pride in ensuring that nationalisation achieves the aspirations with which we embarked when we sought to place the measure on the statute book.

I rejoice with my right hon. Friend at the news from the Tyne today. We have all been watching the situation there with great anxiety. The consequences of a failure to achieve a satisfactory outcome would have been very grave for the Tyne. That being so, the outcome today is extremely satisfactory.

My right hon. Friend raised a number of points, some of them general and some of them detailed. I shall seek first to deal with the more general points and then try to reply to his specific questions. I not only had the advantage of hearing his speech in the debate last month on the Polish deal but also had the opportunity of reading the report of his views in Lloyd's List earlier this week. Apart from my knowledge of his concern, I was to that extent doubly forewarned about some of the points he was likely to raise.

We are well aware—those of my hon. Friends who represent shipbuilding constituencies most of all—that the industry has for long suffered from bad industrial relations. That was noted in the Geddes Report of 1965 and the Booz-Allen and Hamilton Report of 1972. I think that we are all agreed that, as was evident during the 58 Sittings of the Standing Committee, nationalisation provides a last chance—we can put it as starkly as that—to put the industry on course to make a full contribution to the economy, justifying the large sums of public money that have been provided since the Geddes Report and assisting in maintaining the maximum possible employment in the industry. I think that it is agreed on all sides that an improvement in industrial relations is essential for the industry to improve its competitiveness.

As my right hon. Friend pointed out, we have tried in the Act to set the right framework for an improvement in industrial relations. I have already pointed out that my right hon. Friend deserves a great deal of the credit for those provisions in the Act. My right hon. Friend knows that I bear him no ill will at all for the fact that he was responsible for the only defeat of substance that I suffered during the whole of the Committee stage of the Bill on exactly these matters.

As my right hon. Friend has pointed out, the Act provides, among other things, that it shall be the duty of British Shipbuilders to promote industrial democracy in a strong and organic form. We inserted those amendments on Report after I had consulted the workers, which included meeting the shop stewards in both of the yards in Sunderland.

I agree with my right hon. Friend most ardently that industrial democracy presents an opportunity to enlist the commitment and enthusiasm of the workers and to secure their participation and consent and that it is vital that they be secured. As my right hon. Friend knows, my right hon. Friend the Secretary of State has appointed to the board, pending the full achievement of industrial democracy, three part-time members who have been drawn from the trade unions. I think that we are all agreed that they have already made a valuable contribution to the work of British Shipbuilders.

Of course, since the establishment of British Shipbuilders, British Shipbuilders and the Government have, first and foremost, had to tackle the grave shortage of orders. We inherited an industry—this is common ground—that was in decline and in disarray, an industry that was on the verge of collapse, so it was essential to take urgent action to safeguard the industry and to safeguard the jobs of the shipyard workers. We have taken that action. We are continuing to take it.

The order situation has greatly improved. My right hon. Friend will know that we have used the Intervention Fund, that we have taken measures specifically to assist in getting orders for the Wear, and that there are men working today on the Wear who, without the action of the Government, would be on the dole today. Therefore, we have been doing everything we can to preserve jobs, and we have been remarkably successful in what we have tried to do.

The order situation has been greatly improved. I do not pretend for a moment that we have enough orders, though I will say that only one of our international competitors has a longer order book than we have today.

Without these efforts, assisted by the Intervention Fund and other Government efforts, thousands of men in the shipbuilding industry would be on the dole today.

The House knows that in 1975, orders totalling only 75,000 gross registered tons were secured for an industry capable of producing 1¼ million gross registered tons. British Shipbuilders is operating in the very harsh climate produced by the recession and the over-capacity of the world shipbuilding industry following the expansion of other countries' industries in the 1960s and early 1970s. While our industry certainly is not responsible for the over-expansion, it cannot avoid some of the consequences.

My right hon. Friend has pointed out very fairly that while we are determined to maintain a viable industry providing the maximum of employment, contraction is inescapable. We have introduced a Shipbuilding (Redundancy Payments) Bill, which will have its Second Reading on Monday. I do not know whether my right hon. Friend will be joining me on that Standing Committee as well. The Bill is designed to enable a special redundancy payments scheme to be implemented to alleviate the hardships caused by contraction. I hope that the Bill will help to create the right framework for good industrial relations.

Although, of course, the task of securing all this has naturally had top priority in order to win a period of stability for the industry, British Shipbuilders has been far from neglecting industrial relations. One of its aims—a prime aim—is to ensure efficiency and socially responsible involvement of management and workforce in achieving common business aims, and it recognises that procedures have to be developed for securing the commitment of management and workforce to secure an improved performance throughout British Shipbuilders.

The Confederation of Shipbuilding and Engineering Unions, which has worked hard with British Shipbuilders—I shall return to this point if I have time—has entered into a procedure agreement for the avoidance of industrial disputes covering both manual and management grades.

With regard to industrial democracy, working parties in consultation with the relevant trade unions, have been set up to work out urgently overall guidelines. I do not pretend for a moment that progress has been as fast as I or my right hon. Friend or, indeed, British Shipbuilders, would have liked. Much remains to be done, but a start has been made as was required under the Act.

Within the overall guidelines each subsidiary will be responsible for designing its own procedures for the introduction of industrial democracy. I would not accept any other way. That is what de-centralisation means. My right hon. Friend from the very first day emphasised the importance of de-centralisation.

The Corporation is proposing that the introduction of industrial democracy will be monitored by a joint working party with the relevant trade unions. I am as anxious as my right hon. Friend that British Shipbuilders should move quickly to make progress on industrial relations reforms. They have made a report under Section 5 of the Act to the Secretary of State on their organisation and the promotion of industrial democracy. We are at present considering this report and it will be laid before the House shortly.

I should like to inform the House that I am asking British Shipbuilders to let me have a further report on industrial democracy within six months so that we can see how much better they are getting on. I absolutely refuse to be complacent about this matter.

As my right hon. Friend knows well—and he has been kind enough to say so—I am a passionate believer in industrial democracy. I do all that I can to promote it in those industries for which I have responsibility. I realise that it will take time to develop the overall guidelines that I have referred to and that with 23 different profit centres a fragmented approach must be avoided as decentralisation is pursued.

I, too, want to see progress. I want to see improved relations in individual yards and I want to see consultation with the workforces at individual yards. I assure my right hon. Friend that I shall be discussing these matters seriously with British Shipbuilders in the context of their report.

Several hon. Members

rose—

Mr. Kaufman

I would rather not give way. I have only a few minutes left and I still have some questions to answer.

My right hon. Friend also stressed that British Shipbuilders and company managements should provide more detailed information to the workforce on future plans and the scope for the industry. Since the inception of the Organising Committee there have been more than 160 meetings between British Shipbuilders' management and the representatives of the workforce. We look forward to many more. There are monthly meetings with the Confed and there is now a monthly newspaper.

I do not pretend that the situation will be satisfactory until it is seen to be satisfactory and accepted as satisfactory. A great many of the misgivings which my right hon. Friend voiced—questions of consultations, the allocation of the Polish order and Doxford—arise from problems for which there are no easy solutions. We must ensure that the channels are maintained through the Confederation of Shipbuilding and Engineering Unions and we look to the Confed itself to maintain proper lines of communication locally.

It would be wrong if Ministers intervened within trade union organisation, and that is one of the problems that I have faced in dealing with industrial democracy. On the one hand I am concerned to ensure that the workers have their voices heard and on the other I am concerned to ensure that this does not interfere with the proper representation nationally of the workers through the Confed and its individual unions. In the case of Doxford, for example, that is a problem which militates against my intervening as effectively as my right hon. Friend might like.

I frankly admit that there have been problems about pay and that these have been as a result of the way in which the Government have tried to monitor pay settlements to ensure that they comply with the guidelines. I make no bones about the fact that in some cases these arrangements have given rise to delays. There have also been earlier teething difficulties. I hope that as experience in operating the machinery grows these difficulties will be substantially diminished but I do not—

The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty minutes to Eleven o'clock.