HC Deb 12 December 1979 vol 975 cc1303-12
The Secretary of State for Industry (Sir Keith Joseph)

With your permission, Mr. Speaker I will make a statement about the future of the Post Office Board.

It is the Government's policy to encourage increased involvement of employees in decisions affecting their interests, but it is not for the Government to lay down how this should be achieved. The precise arrangements are for discussion and agreement between employers and their employees in the light of the particular circumstances of each individual business. This applies equally to nationalised industries, subject to any necessary Government and parliamentary approval.

In the case of the Post Office, the management and the Council of Post Office Unions agreed two years ago that there should be an experiment in industrial democracy at all levels in the business, including the main board. My predecessor, the right hon. Member for Chesterfield (Mr. Varley), facilitated in January 1978 the main board experiment by appointing seven representatives of the Post Office trade unions to be part-time members of the board. He also appointed two consumer representatives. These appointments are due to expire on 31 December, at the end of the agreed two-year period of the experiment.

In accordance with our general policy, it is for the Post Office and the Post Office unions to decide together what form they wish employee participation to take after the end of this year. One thing is quite clear at the present time—they do not agree that this particular experiment at main board level should continue. Broadly, the unions are in favour of a continuation, while management and a majority of the independent members of the board are not.

The chairman of the Post Office is continuing consultations with the unions and is making new proposals for close employee involvement in top level Post Office decision-making. It is for the Post Office management and the unions to agree on the way forward. I shall, of course, be ready to take any action that might fall to me to facilitate whatever new arrangements might be agreed between the Post Office and the unions. If an agreement were to be reached within the next two months which required such action, this could include bringing before Parliament an order under the terms of the Post Office Act 1977 to make permanent the statutory powers to make additional appointments to the board. However, in the absence of agreement that the two-year experiment should continue, the board appointments made for the purpose of that experiment will lapse at the end of the year.

I should like to express my appreciation of the contribution made by all those who have played a part in this experiment.

Mr. John Silkin

The Secretary of State started his statement by saying that it was not for the Government to lay down how increased involvement of employees in decisions affecting their interests might be encouraged. Does he agree that that is a totally different attitude from the one that he takes to the National Enterprise Board, in that on several occasions he has asked for trade union representation? He says that it is clear that there is a disagreement between the Post Office management and the unions on the question whether the experiment should continue. Was that not always the case right from the beginning? Indeed, was it not the case when my right hon. Friend the Member for Chesterfield (Mr. Varley), the former Secretary of State for Industry, rightly insisted that the experiment should take place against the then wishes of the management? That has not changed.

In ending the experiment, the consumer representation is also brought to an end. Is it not a fact that the Post Office management would also object to consumer representatives for just the same reason that they would object to union representatives? When will the Secretary of State publish the Warwick university report? That report is highly critical of management's attitude to the experiment and is extremely favourable to the continuation of the experiment. However the Secretary of State cares to dress up the matter, at a time when industrial relations throughout the country as a result of his Government's attitude is at its lowest, this will be seen as an attack upon the trade union movement and upon industrial relations.

Sir K. Joseph

There is a great difference between the National Enterprise Board, which is an agency set up by the Government with trade union members, and a trading business such as the Post Office, which serves the customer. The right hon. Gentleman is wrong when he suggests that my predecessor, the right hon. Member for Chesterfield, had to impose trade union participation in the main board upon Sir William Barlow. Sir William Barlow has told me that he was most courteously asked by the right hon. Gentleman whether, the trade union experiment having been proposed, he still wished to take the chairmanship of the Post Office. He accepted the invitation with enthusiastic agreement to an experiment that he hoped at the time would succeed.

I propose shortly to appoint new independent members to the Post Office Board and I shall bear in mind the point made about representation for the consumer. The board serves primarily to look after the consumer's interest. The Warwick university report will be laid in the Library. It was commissioned by the Post Office Board and I understand that it is being made available for publication.

Mr. Silkin

Will the right hon. Gentleman kindly answer my question about consumers? I made the point that the Post Office Board would be against the appointment of consumer directors. At the start of his statement, the right hon. Gentleman said that he would not interfere with anything that took place within the management of the Post Office.

Sir K. Joseph

As a whole, the board would regard its prime duty as being to serve the consumers. As part of that duty, it is essential that it should have the good will of those who work for the Post Office. That forms part of an effective service to the consumer. The appointment of specific representatives on the board to represent the consumers' interest is a possibility that the Government will consider. However, I, for one, regard the board's function as being directed towards the service of the consumer.

Sir Derek Walker-Smith

I appreciate the restrictions on my right hon. Friend's position in the matter and his enlightened approach to these questions, but is this not, on the face of it, a retreat from the concept of employee participation? Most of us would like to see that participation progress in the interests of industrial relations and improved productivity. Therefore, will my right hon. Friend cross-examine closely and conscientiously the Post Office management about the reasons underlying its attitude and any alternative proposals that it might have?

Sir K. Joseph

My right hon. and learned Friend would not be happy if the Government imposed upon one unwilling partner a constitution, after the allotted period, of an experiment that was undertaken by agreement. My hon. Friend the Minister of State has taken immense trouble to consult everybody concerned and I have read the papers that have been provided. I understand that Sir William Barlow, in whom I have great confidence, proposes that there should be closer participation with the trade unions. He will be making those proposals at the right time.

Mr. Charles R. Morris

Will the Secretary of State explain why he has caved in to the chairman of the Post Office Board and killed off this rather imaginative experiment in industrial democracy? The right hon. Gentleman seems to rest on the idea that an agreement between Post Office management and trade unions was an essential prerequisite for the experiment to proceed. Legislation that was enacted in this House made no such provision.

Sir K. Joseph

But it is precisely so. Agreement was the essential prerequisite. My predecessor, the right hon. Member for Chesterfield, emphasised that it was by agreement that the development of participation was encouraged.

Mr. Crouch

Is my right hon. Friend aware that many of us, on both sides of the House, who are believers in an extension of consultation across the floor of industry and the extension of industrial democracy, do not think that the disappearance of this experiment with worker directors is a retreat? Does he not agree with me that the real lesson that has come out from, for example, West Germany, in the successful practice of industrial democracy is that it is better developed by starting down the line rather than at the top of the line, and that co-determination and consultation are better achieved at the middle range of management and below that?

Sir K. Joseph

I think that there is much in what my hon. Friend says. I emphasise that all the arrangements for participation between unions and management in the Post Office, except that at the main board—and they are very extensive—will continue.

Mr. Golding

Is the Secretary of State aware that many Labour Members are appreciative of the courteous and very constructive manner in which the Minister of State has tried to tackle this problem? Is he further aware that many of us who are members of the Post Office Engineering Union are disturbed that detailed talks with management on this question did not take place earlier, but that we are very hopeful that in the forthcoming talks between the unions and management industrial democracy will be continued? We hope that that will be so, as we are fully committed to it because we believe that it has so much to offer.

Sir K. Joseph

I am grateful for what the hon. Gentleman says about my hon. Friend's conscientious consultation. I note his other remarks, although I must say that I think that the subject of the continuation of the experiment has been extensively discussed over recent months between management and the trade unions, and by the board itself in two full discussions.

Mr. Ian Lloyd

Does my right hon. Friend agree that while an organisation of the size and scope of the Post Office must obviously make its contribution to the evolution of industrial democracy, the Post Office carries a most formidable national responsibility in the area of information technology and in ensuring that British industry as a whole has every opportunity of using the most modern forms of information technology? Will he, therefore, encourage the Post Office to continue with the dismantling of the restrictions that it has currently imposed on applications over a very wide area?

Sir K. Joseph

My hon. Friend will know that in a previous statement the Government's intentions in this field have been made plain.

Mr. Harry Ewing

Does the Secretary of State agree that not only is there a need to discuss the Warwick report but there will be a need in the weeks ahead to discuss the evidence coming from the experiment? Will he concede that there will be two reports coming from the experiment, and that an undertaking was given in 1977 that the House would have an opportunity to debate the outcome of this experiment?

Finally, will the Secretary of State impress on the chairman of the Post Office Board, Sir William Barlow, the urgency of coming to a further agreement with the unions for the reintroduction of this experiment and ask him to treat this matter very seriously indeed?

Sir K. Joseph

I am anxious that as much information as possible should be made available. I can tell the House that in addition to the Warwick university report, which will be placed in the Library, there will be placed in the Library, by the initiative of the Post Office Board, the relevant board minutes and the discussion on which the experiment was considered.

Mr. Benn

Is the right hon. Gentleman aware that there will be serious disappointment and anger about the fact that he should have allowed the management alone to veto a scheme, in that boards do not veto appointments by Ministers and cannot do so, and that the whole principle of industrial democracy is that one is moving towards joint determination?

Secondly, is the right hon. Gentleman aware that the proposed changes in the Post Office and the introduction of new technology there both make the continuation of this experiment most necessary?

Thirdly, why has the right hon. Gentleman not acceded to the representations of the TUC, members of which have been to see him on, I think, two occasions and have asked for a further three months to be allowed for a proper joint evaluation between the unions and the management before a final decision is taken?

Sir K. Joseph

I have a whole sheaf of quotations here from the right hon. Member for Chesterfield and his right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), emphasising, perfectly honourably and straightforwardly, that this experiment and its continuation rested upon agreement by both sides. It is not the Government, let alone I, who are bringing this experiment to a close; it is the fact that there is no such continuing agreement.

There is a breathing space, a period of grace, inasmuch as although the membership of those appointed for the experiment lapses at the end of this year there is still an opportunity permanently to renew the facility for there to be extra board members, if the House chooses to use the period given by the original Act and to invite me, because of agreement between the unions and the Post Office management, to lay an order before about the beginning of February.

Several Hon. Members rose—

Mr. Speaker

Order. I propose to call those hon. Members who have been rising, provided that questions are brief—and it is dependent upon that.

Mr. Beith

Does the right hon. Gentleman realise that the consumer representatives would not have been on the board if the Liberal Party had not insisted that they were put there? What possible reason has he now for not ensuring the continued presence on the board of people who owe their allegiance to the consumers?

Sir K. Joseph

I acknowledge that it was the Liberal Party that sought to have two independent members appointed for that purpose, but I repeat that the chairman of the Post Office, Sir William Barlow, and the board as a whole—I hope—hold the interests of the consumer to be their prime concern. We distort the purpose of boards of management if we think that we have to appoint special representatives for the consumer in order that the consumer shall be served.

Mr. Kaufman

As the right hon. Gentleman has clearly been studying carefully the parliamentary proceedings on the Post Office Act 1977, perhaps I may ask him whether he recalls that, as reported at column 77 of the proceedings on 27 June, in response to an Opposition amendment calling for a White Paper to be presented to Parliament by the Government on the outcome of the report, I, on behalf of the Government, gave a firm undertaking that a report by the Government would be presented to Parliament, and that that undertaking which I gave was welcomed from the Opposition Front Bench. Therefore, while we welcome the information that is to come from the Post Office and from the Warwick university report, may we ask whether the right hon. Gentleman will fulfil what was a joint undertaking and, within the next three months, present a Government report to Parliament, so that Parliament may consider it?

Sir K. Joseph

I shall have to look up the context in which the right hon. Gentleman made his statement, but I am quite sure that in the absence of agreement I have no power to continue this experiment.

Mr. Gregor MacKenzie

No matter what the Secretary of State may say about the position of the chairman of the Post Office, his own position is perfectly clear. He is the Minister who appoints the board and it is up to him to make an assessment of the value of this experiment. How can he, within two years, make an adequate assessment of this situation? Secondly, will he say how he thinks that his decision not to reappoint the union members to the board will in some way improve industrial democracy and further better industrial relations?

Sir K. Joseph

I fear that I have a much simpler question to ask than that which the right hon. Gentleman invites me to consider. I have to ask: is there an agreement? There is not an agreement. Only if there were to be agreement was a continuation of this experiment proposed under the original Act.

Mr. English

If the prime duty of the board is what the right hon. Gentleman says it is I assume that he has pointed out to the board that it has been failing in its duty under successive Governments over the last few years by providing a worse service to its customers. Will the Secretary of State note that there is a view that trade unionists cannot readily sit on boards making management decisions to which their members might subsequently object? Can the right hon. Gentleman tell us what is the present situation in relation to the implementation of the Carter report?

Sir K. Joseph

I have been saying for some time, as has the chairman of the Post Office, that the standard of service to consumers has fallen. It is for that reason that I have told the House that I am considering various possibilities, including modifications of the postal monopoly. As for the Carter report, I made a statement to the House a few months ago explaining that we hope to legislate in the next Session of Parliament.

Mr. Cryer

Is it not the case that the Government refuse to intervene when there is a slap in the face for trade unions but will intervene to attack the trade unions whenever they can? If the Secretary of State does not intend to do anything until there is agreement why does he not tell his right hon. Friend the Secretary of State for Employment to get agreement with the TUC before introducing an employment Bill?

Sir K. Joseph

The short answer to the hon. Gentleman is "No".

Mr. Spriggs

The right hon. Gentleman said that in his opinion the directors of the Post Office Board represented consumer interests. Will he, instead of taking this attitude, think again and strengthen consumer representation on the board? I can tell him from experience that my parliamentary mail, which should arrive at my home not later than Saturday morning, regularly arrives on Monday morning. That is a reason why it is essential that we should strengthen trade union representation on the board rather than take representatives off.

Sir K. Joseph

The hon. Gentleman misunderstands me. I regard the whole board as having the function of serving the consumer.

Mr. Les Huckfield

Will the right hon. Gentleman admit to the House that the Warwick university report is highly critical of management's attitude throughout the experiment and that it praises the trade unions for their constructive role? Does he not understand that whatever he says to the House, and not matter what he said in his statement, his decision represents a retreat from industrial democracy that will put back the clock in industrial relations in the Post Office?

Sir K. Joseph

I do not wish to pursue the two last points made by the hon. Gentleman. I think that the phrase "industrial democracy" is misleading. I believe that participation is not put back one jot by the decision made today. As for the Warwick report, I regarded it as totally confidential to the Post Office. It was made available to my hon. Friend the Minister of State and myself only two days ago and I have not yet read it.