HC Deb 20 January 1978 vol 942 cc928-40

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

4.15 p.m.

Mr. Tim Smith (Ashfield)

I am grateful for the opportunity of raising this afternoon the question of pay and productivity in the Nottinghamshire coal mines. It is a particularly auspicious time for such a debate, as both pay and productivity are at higher levels than they have been for a considerable time.

Last week was the first week of full production since Christmas and since the local area incentive scheme was introduced in Nottinghamshire. Therefore, this is a good time to review the operation of the scheme.

The 15 collieries in North Nottinghamshire produced well over 10 million tons of saleable output in 1976–77, and output per man-shift was 56.9 cwt. These figures place the area among the leaders in productive efficiency. The Silverhill, Sutton and Teversal collieries are in the Ashfield constituency.

In South Nottinghamshire there are 12 colleries, which produced nearly 12 million tons of saleable output in 1976–77, the output per man-shift amounting to 54.1 cwt. This area, which is based on one of the richest coalfields in Britain, also features among the leading producers. Annesley, Bentinck, Hucknall, Linby, New Hucknall and Pye Hill collieries are in the Ashfield constituency.

The miners who work in the Nottinghamshire pits are among the most dedicated and hard working in the country. Therefore, it was depressing to hear them say, as they were saying until recently, that there no longer seemed to be any point in hard work. Until recently, year in, year out, in real terms their pay had been contracting and their tax increasing. In consequence, both production and productivity had slowly been falling.

In 1974, when the National Coal Board published its "Plan for Coal", precisely the opposite was forecast for production and, indeed, productivity. The report stated that In the decade up to 1972–73 output per man-shift increased on average by 4 per cent. every year. The Board consider forward increases of this order are perfectly feasible and should be exceeded. The outcome was a little different. In 1974–75 output per man-shift was 45 cwt., the following year 44.8 cwt. and last year 43.6 cwt. There has been a slow but steady decline in productivity.

The tripartite coal industry examination report of 1974—prepared by the Government, the National Coal Board and the National Union of Mineworkers —had emphasised the importance of an effective incentive scheme for the industry. Indeed, the NUM recognised that if the NCB was to keep its part of the bargain, which was increased investment, it had to turn its attention to increased output. Therefore, in 1975 a national production bonus scheme was introduced. Unfortunately, after the first quarter, it failed to produce the hoped for results and, therefore, the bonus

Lawrence Daly, general secretary of the NUM, writing in the special ballot issue of the Miner last October, had this to say about the national production bonus scheme: That scheme failed because it was too remote from the point of production—the pit itself. There was no way a face team, never mind the individual miner, could relate his earnings to his effort. For many years—obviously the whole question has a long historical background, and one could take it back at least to 1966 and the introduction of the national power loading agreement—the Nottinghamshire miners have felt a sense of grievance about the way that the whole question of pay has developed. It was not that they wanted to see a return to piecework—far from it. Rather, they wanted some reward for effort. In particular, they wanted equal pay for equal work rather than equal pay regardless of the work done. It seemed to them, as they work in an historically highly productive area and therefore a highly paid area, that each time a new national agreement was introduced they had been the losers. The most recent example was the national concessionary coal agreement, which would have resulted in a reduction in the allowance currently enjoyed by Nottinghamshire miners.

The leaflets which the Nottinghamshire area NUM put out last summer actually stated: All previous national agreements have penalised the Notts. Area. It is not surprising, therefore, with this background, that there was some sense of grievance, and the ballot on the national production bonus scheme. coupled with falling saleable output and output per man-shift, led to the realisation that any bonus scheme to be introduced must be decided, as Lawrence Daly put it, at the only logical place—the pit—and by the people best equipped to arrive at the standards—those working there.

So those were the principles of the national executive scheme proposed last year. There was no question of a return to piecework; the scheme was to start from the basis of the national power loading agreement, and any bonus pay was to be paid on top of the current basic rate. Those who were opposed to the scheme last autumn argued that it was divisive, and they said that all workers should be paid equally, regardless of effort, or pit would be set against pit and man against man.

It was said also that if a higher basic wage was paid immediately higher production would follow automatically as workers were paid the right rate for the job. It was these arguments that carried the day at last year's NUM conference. It was a combination of these arguments and the failure of the protagonists of the scheme properly to comunicate the complexities of it to the members that resulted in the "No" vote in the national ballot last October.

Bearing in mind the difficult background that there has been over the last few months, I believe that the Nottinghamshire area NUM in general and Mr. Len Clarke, the president, in particular are to be congratulated for their determination in pressing on for what they believed to be right. In December the national executive committee gave the go-ahead for area schemes to be negotiated along the lines of the proposed national executive scheme, and the Nottinghamshire area NUM wasted no time in agreeing with the National Coal Board in Nottinghamshire an area scheme for the county which was based largely on the national scheme that had previously been rejected.

The scheme has been operating for only a few weeks and therefore one has to be cautious about jumping to conclusions one way or the other, especially since the Christmas period has intervened. However, last week was the first week of full production since Christmas. It is normal that production is higher before Christmas and tends to slacken in January. On this occasion, however, the reverse has been the case, and last week national saleable output reached 2,334,000 tons, compared with 2,226,000 tons in the corresponding week last year.

Perhaps it is more significant that this was the first week since last July in which annual output had exceeded output in the corresponding week of the previous year. Output per man-shift last week was 45 cwt, compared with 43.7 cwt a year ago. The national record is 48.6 cwt, which was set in March 1973. These national figures include areas that are operating incentive schemes and others that are not.

The Nottinghamshire figures are rather more striking. In North Nottinghamshire last week, saleable output was 246,000 tons, compared with 230,000 tons a year ago. Output per man-shift was 61.4 cwt, compared with 57.2 cwt in the same week last year. Here the area record, which was set as long ago as December 1970, is 65 cwt.

In South Nottinghamshire there were even more striking results. Saleable output last year was 212,000 tons, compared with 178,000 tons a year ago, and output per man-shift was up by about 10 per cent., from 49.7 cwt a year ago, to 57.6 cwt last week. The area record in South Nottinghamshire, set in April 1973, is 64.5 cwt.

On top of that, Hucknall Colliery, which is in the Ashfield constituency, last week broke its all-time record for production. This is attributable to factors other than just the area incentive scheme, but, nevertheless, it is a notable achievement. The four faces at that colliery produced 27,200 tons, which was an improvement of 1,150 tons on the previous best figure, set in May 1972.

As a result of all that the area management expects improved output of between 5 per cent. and 7 per cent. on a fairly regular basis, and as a consequence it expects profits to improve, which is the object of the scheme. It is possible now to say, I think, although it is early in the day, that the scheme is genuinely self-financing, with that degree of increased output, and is in no sense a bogus scheme.

I think, therefore, that all those who have been associated with bringing about the improvement are to be congratulated. By that I mean the management, the union leadership and, above all, the men themselves, who, during the last few days, have proved themselves to be the most hard working in the country. Len Martin has been proved right, and Arthur Scargill, the president of the Yorkshire area NUM, wrong.

I am only sorry that the Government adopted such a feeble attitude to the whole question while the negotiations were going on. I know that their view was that it was wrong to intervene in a matter that was of concern to the industry, but it was also a matter of national concern, and I think that if the Secretary of State for Energy had given his wholehearted support to the national incentive scheme it would have had a greater chance of success.

It was as a consequence of the unsatisfactory reply that I received to a supplementary question on 14th November last year that I gave notice that I would raise this subject on the Adjournment. At that time I asked the Secretary of State whether he agreed with me that the Nottinghamshire miners would have benefited most from the introduction of the national agreement, which had been rejected in the ballot, and what his view would be if the Nottinghamshire miners sought to have their own local productivity agreement.

The right hon. Gentleman said that he considered that all the issues had been understood in the national ballot, but in view of the complexity of the agreement I think that that statement must be open to question, just as it must be in view of what happened subsequently, when a number of areas accepted a similar scheme. I hope that the Government will now accept that these area schemes are of benefit to the miners in terms of higher pay, and of benefit to the nation in terms of higher production.

4.28 p.m.

The Under-Secretary of State for Energy (Mr. Alex Eadie)

I have listened with great interest to what has been said by the hon. Member for Ashfield (Mr. Smith) about miners in the Nottinghamshire coalfields. I endorse their fine record because on many occasions I have met them. Indeed, I have crawled along some of the coal faces which the hon. Gentleman described.

There is one thing that miners resent, and I was sorry that the hon. Gentleman brought in the issue of criticism. Miners resent people who have only as close an association with the coalfields as being able to put a shovel of coal on the fire lecturing them on how to produce coal. It is, therefore, a pity that the hon. Gentleman talked of people lecturing the miners on how to produce coal; but if we take the matter in the context of his speech perhaps we can see how things develop.

Before I follow in detail what was said by the hon. Gentleman, I think we must set the matter in context, because had it not been for this Labour Government there would not have been any coal industry from which to get the productivity to which he referred. We as a Government removed this industry from the undertakers, and I can say that because I arrived at the Department of Energy nearly four years ago.

Let us consider the national position and how it evolved. Four years ago, the coal industry was in a state of chaos —beginning a national strike in an atmosphere embittered by the earlier strike two years before. That was the situation when the Labour Government took office. The first action was to settle the strike and get the miners back to work. We then had to consider ways of healing the wounds of the immediate past and regaining the loyalty, good will and confidence of the workers in the industry who had been so disastrously alienated.

I give the hon. Gentleman credit for mentioning that it was for that purpose that we set up the tripartite coal industry examination. In that tripartite group, under the chairmanship of the then Secretary of State, we had representatives of the Government, the National Coal Board and all three unions. It was the first time that the unions had been brought into the policy-making and future planning of their industry at the highest level.

The group reviewed the demand for coal up to 1985 and endorsed the National Coal Board's "Plan for Coal", an ambitious undertaking which set out how the demand was to be met—namely, by a massive programme of capital expenditure to improve and increase existing capacity and create 20 million tons of new capacity to exploit fresh reserves. The Government accepted the group's recommendations and undertook to make available the large amounts of finance needed for development and new investment.

Since then we have had a further major review carried out by the same tripartite body, which resulted in last year's report "Coal for the Future". This reiterated support for "Plan for Coal", which is now well under way. It was modified in shape, but there were the same targets and aims. The report said: to reverse the decline of the industry and and equip it for the vitally important job of meeting a major part of our total demand for energy in the 1980s and beyond, efficiently and competitively". Now we have the Energy Commission, the first ever exercise in full public participation in the formulation of national energy policy and one of the most important and imaginative steps. That must be so when we consider that we are projecting to the year 2000. That was set out in "Coal for the Future". It is already clear that coal will have to play a greater rÔle in the country's energy policy than we were thinking of even two or three years ago.

In the previous Session, we had the most important piece of coal industry legislation since its nationalisation—namely, the Coal Industry Act 1977, which I had the great pleasure and privilege of piloting through the House. It added to the legislation of the previous two years to establish a better framework for the coal industry to operate in and it made massive additions to the borrowing powers of the National Coal Board, which now has the prospect of going up to £2,600 million.

Thus, for the first time in many years we have given an assured future to the industry and the men who work in it. And this was not just an arid and remote exercise in future planning. The men who work in the industry are the most important element in it. The tripartite group fully recognised this, and it must not be forgotten, amidst the grand design for the future of the industry, that it has a social legacy of the past—problems which the Government have played a very large and generous part in helping to alleviate.

First, there was the contribution of more than £100 million—a very large sum by any standards—to a scheme set up by the industry itself to compensate men who had contracted pneumoconiosis and their dependants. That was a long-overdue piece of social justice, and I am glad that the House agreed. The Government also undertook to help relieve the Board of another heavy burden of the past—namely, the deficiency in the pension scheme related to men who had retired before April 1975. Currently, we are paying £28.2 million a year for this purpose. We shall shortly be coming to the House for authority to increase this by a further £5.8 million a year.

I make no apology for reminding the House of this background and how the industry, with massive Government support, has risen from the ashes of 1974. As I described earlier, we took it from the undertakers. But there is one aspect of these years that has been a constant worry to the Government, the Board and the unions alike. That is productivity. Despite strenuous efforts and repeated joint efforts made by the Board and the unions in concert, productivity and output have persisted in being disappointing and there have been depressed trends.

The tripartite group recognise this aspects as crucial. In its 1974 interim report, the group said: A sound and effective incentive scheme could make a major contribution in raising the efficiency of production and matching performance to the industry's true potential. This belief was reiterated in the 1977 report "Coal for the Future." That answers the point that the hon. Member for Ashfield raised at the end of his remarks.

Unfortunately, due to a difference of view within the industry and the exigencies of national pay policy, it did not prove possible to introduce such a scheme until just recently. The events of the last few months have been too well publicised and are too recent to need me to remind the House of them. However, as everyone now knows, it looks as though productivity schemes will be established in all areas, although a decision has yet to be taken in South Wales. The last few months have been a very difficult time for the industry, involving much heart-searching. This is not surprising, because the productivity scheme introduces a change of direction which will affect every man in the industry.

It is a genuine, self-financing productivity scheme fully within the Government's pay guidelines. A standard task is fixed by work study methods on each coal face. This standard task takes account of the geology of the face, the coal-cutting machinery in use and any other relevant factors. On average, over the industry as a whole, the output that we have been getting in recent times is reckoned to represent some 75 per cent. of the sum total of those standard tasks. So the scheme provides for the face worker to receive incentive pay for all production that he achieves in excess of 75 per cent. of the standard task for his face.

If a face worker achieves a full 100 per cent. of the standard, he earns £23.50, with proportionately less for lower achievement and proportionately more if he manages over 100 per cent. The other related workers in the industry receive bonuses based on the face workers' earnings but calculated, according to their own choice, on the average for the pit or their area. These range from 65 per cent. of the face workers' incentive payment for those immediately in support to 40 per cent. for surface workers.

The scheme has two aspects. It is generally self-financing, because no payment is made until the coal has actually been got and measured. Secondly, because in setting the standard for each face account is taken of local conditions, it is designed to allow men working difficult seams to earn the same bonus for the same level of effort as men working easy seams.

The two Nottinghamshire areas were the first to negotiate and sign agreements with the NCB for schemes in their areas after the National Executive Committee of the National Union of Mineworkers had agreed that individual areas were free to negotiate their own agreements with the Board. They did this as long ago as 19th December, only 10 days or so after the NEC of the NUM agreed that this could be done. Their scheme is retrospective to 28th November on the basis of measurements which were being made from that date, and the men have already had some payments in advance. When the computer programme is fully operational and the accounts come to be settled, they ought to find, if all the unofficial reports are to be believed, that they will have earned a very satisfactory bonus.

The Nottinghamshire miners have already been amongst the most productive. We know that, on average, conditions in the Nottinghamshire pits are better than conditions in some other areas. Nevertheless, it is a great credit to the workers that, with less than 14 per cent. of the total manpower in the industry, they produce about 18 per cent. of the coal and always at an output per man-shift up to 25 per cent. above the average of the rest of Britain. It is an impressive record and one for which the country has cause to be grateful.

I believe that, as a result of the steps that the Labour Government have taken, the coal industry has an assured long-term future—as long as it can remain competitive. As far as we can foresee, it will be a vital element in providing the energy needs of the nation. I hope we shall find that the productivity scheme, which is now being introduced after so much thought and heart-searching, will prove to be the key which will unlock the great potential of the industry and enable it to earn its rightful place in our fuel economy.

I am glad to have had this opportunity to pay tribute to the achievements of the industry as a whole and particularly to the Nottinghamshire miners, who are part of our great British coal industry.

4.42 p.m.

Mr. Eric Ogden (Liverpool, West Derby)

Perhaps I may tempt your patience, Mr. Deputy Speaker, for a couple of moments. I know that it is usual for an Adjournment debate to take place strictly between the hon. Member who raises the subject and the Minister. However, this has been a slightly unusual debate.

The hon. Member for Ashfield (Mr. Smith) sits on the Opposition Benches in solitary splendour. On the Government Benches we have my hon. Friend the Under-Secretary and my right hon. Friend the Secretary of State for Energy, whose interest in the coal mines is known in every area. My right hon. Friend the Minister of State, Northern Ireland Office, came from Northern Ireland to listen to the debate.

I should like to make two brief points. The hon. Member for Ashfield took 13 minutes to give us information that was good to be put on record, but he asked very few questions. Some questions have been answered.

I happen to be the chairman of the miners' group this year and a member of the NEC. We recognise that the hon. Member has been elected as the Member for Ashfield. Whether or not we agree with his politics, his colleagues and the miners sent him to this place. We recognise that. If there are any facts, information or support that the miners' group can offer him, he has only to ask my secretary or myself. A collection of newspaper cuttings is nothing like the experience he could gain if he took our advice and asked us for information.

That is an offer made across the Floor of the House in the interests of the hon. Member's constituents and our industry.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Five o'clock

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