HC Deb 27 June 1980 vol 987 cc1016-47 1.12 pm
Mr. John Smith (Lanarkshire, North)

We now move to another subject of debate.

Recent events in South Africa have brought home dramatically to us all the state of tension in that troubled country, and they have reminded us once again of the resistance that is bound to be made to the wicked policy of apartheid. Today, the Opposition seek to debate the question of the conduct of the Government in relation to their obligation to implement the EEC Code of Conduct for Companies with Interests in South Africa, and to consider the conduct of the Secretary of State for Trade in that respect.

The Code of Conduct to which I refer was approved by the Governments of the Nine on 20 September 1977, and it is set out in annex 1 of Cmnd. 7233, in which the previous Government asked British companies to adopt and adhere to its provisions, and instituted a system of reporting by these companies to the Department of Trade. The Code of Conduct represented an important step forward in joint action by EEC countries to influence their companies to improve their treatment of their employees in South Africa, particularly their black South African employees. Its seven basic provisions covered trade union organisation and recognition, the problem of migrant labour, pay, wage structures and black African advancement, obligations to families, desegregation at places of work, and reports on how the code was being implemented.

The EEC code replaced a United Kingdom code which was largely the result of the unanimous report of a Select Committee, chaired by my right hon. Friend the Member for Stockton (Mr. Rodgers), which reported in 1974. The United Kingdom code was a valuable initiative, but clearly joint action by the Community was preferable.

Under the EEC code the Government have clear and unmistakable obligations. I assert that the Government—and in particular the Secretary of State for Trade—have not carried them out properly. I also accuse the right hon.

Gentleman of attempting to mislead Parliament and the public into believing that in the action he has taken he acted no differently from the previous Government.

The system of reporting under the code is crucial, and it is the obligation of the Government to seek reports from British companies. That is dealt with in paragraph 7 of the code on page 6 of the Command Paper. I draw attention in particular to this obligation which rests on the Government: The Governments of the Nine will review annually progress made in implementing this code. Let me compare the record of the previous Government with that of the present Government in implementing the obligation entered into with regard to the code. On 15 February 1979, when I was Secretary of State for Trade, I published in Hansard a very long written answer which set out an analysis of the reports made to the Department of Trade by British companies and evaluated the progress—and, indeed, the lack of it—being made in each of the categories of conduct to which the code referred. I took the opportunity to make clear the Government's own view of where progress had been inadequate and where more action was required.

In annex F to my reply I listed the names of companies which, in our opinion, were paying black African employees below the lower datum level. I should explain that this level was a criterion set out in the code relating to a minimum wage of at least 50 per cent. above the minimum level required to satisfy the basic needs of an employee and his family.

The previous Government did more than simply collect information from British companies. They evaluated the information which they received, using their own sources to check the accuracy of some of the information supplied by the companies, and published the names of those they did not believe were paying wages at the level set out in the code.

I took this action not only because I believed that it was the proper thing to do; I also believed that it was necessary to do so in order to comply with the obligations that the Government had entered into in acceding to the code, that is to say, to review annually the progress being made in implementing it. How it is possible to review progress without evaluating it I do not understand.

What have the present Government done about the same code and the same obligation? First, there has been no parliamentary answer on the lines that I gave, despite repeated attempts by my hon. Friends to elicit one. Such an important matter should be the subject of a serious report to Parliament on the lines that I sought—apparently vainly—to institute.

Secondly, there has been no serious evaluation by the present Government of the information tendered to them by British companies. They have certainly asked for information in terms of the code and they have, of course, received reports from companies. I am pleased to note that marginally more companies responded this year than last year, which shows, I think, that the previous publicity was perhaps beneficial.

The Government have placed these reports in the Library of the House and produced a cursory analysis of them which does little more than categorise the replies by number. From the point of view of Parliament, the public and the press, this method of dealing with the matter is clearly unsatisfactory. Instead of a parliamentary answer which analyses the position in detail, we are merely offered a large amount of undigested material in which the inquirer has to quarry. It would take him several weeks of looking at the material in the Library to do that successfully.

Most crucially—this is the crux of our argument today— there is no attempt by the Government or by the Secretary of State to review progress, as is their obligation under the Community's code of conduct, by seeking to establish which companies are not adhering to the code. particularly in respect of wages. The whole point of the code and of the reports made under it is to seek to influence the behaviour of companies by the force of public opinion and media publicity. If companies are not adhering to the code, their failure to do so should be revealed clearly and publicly by the British Government so that they may be persuaded to improve.

The Government have at their disposal, as I know from my previous experience, information about British companies which they can use in conjunction with what they report to evaluate the progress that they are making. For example, we have the services of our embassy in South Africa. In cases where the previous Labour Government had queries about the figures supplied, those doubts were put to the companies concerned so that their replies could be obtained before any of the information, such as that in my answer last year, was made public. Incidentally, I note that the greater response this year, in terms of the reports made by companies, indicates that our practice of monitoring does not appear to have had any deterrent effect. Indeed, the opposite is perhaps the case.

I note also from specimen letters, which the Secretary of State lodged in the Library, that on 25 March 1980 letters were sent by the Department to 25 companies which had so far failed to report. Those letters included the phrase: A parliamentary statement … may be made. Therefore, they were replying on the basis that there would be a statement such as had been made the year before. Until then it looked as though the Department at least was contemplating suggesting to the Secretary of State that a statement should be made on the lines that I had made. I wonder what stopped it.

The Secretary of State for Trade (Mr. John Nott)

I did.

Mr. Smith

The Secretary of State says that he stopped it. Now we know where the responsibility lies. A process that was under way was stopped by the personal intervention of the Secretary of State, That is important because of what I shall have to say about him later. At least we have an admission, if not a plea of guilty.

My main accusation is that the Government have done the absolute minimum that they thought they could get away with under the code. They have not sought to use the code and the report system to encourage the minority of British companies —I stress that it is a minority—at least to come up to the minimum provisions of the code.

I think that the Secretary of State may seek to rely upon a statement made by the Minister of State on 25 May—made in the wettest of all possible wet terms—that the Government will continue to encourage British companies to implement the code. I think that is the only remark of that kind that any member of the Government has made in the past year. The Government may also rely on some of the pro forma letters sent out by the Department which clearly thought that the code would be implemented properly until the Secretary of State stopped it. It is significant that the Secretary of State has not so far lent his own weight in any public utterance to the observance of the code.

The right hon. Gentleman does not seem to appreciate, as did the Select Committee, that it is not only desirable but probably essential that publicity should be a weapon. The select Committee, which recommended a United Kingdom code of practice, stated in paragraph 190 of its report: It is important that companies should expect future publicity. I accuse the Government of back-pedalling on an important Community obligation of great value in improving the lot of black workers in South Africa.

I turn now to the extraordinary behaviour of the Secretary of State when he was challenged in the media about the changes that he has made. His first tactic, when he was challenged in a "Newsnight" programme, was to say that there was no change in what he was doing from what the previous Government did. I think that I have already demonstrated beyond any doubt the substantial differences that exist.

What did the Secretary of State say in that interview? Fortunately, I have a transcript of it. If he is wise, he will obtain one too. When asked a question, he said in a rather involved answer: I've published every bit as much information as the previous Government. Later in the interview, he went on to say about what he had done: It is no different fom the procedures of the last Government.

Mr. Nott

Read out the question that I was asked.

Mr. Smith

I shall do so if the Secretary of State wishes. The question was: Interviewer: 'You have, in fact, no weight given to the various reports in terms of confidential reports on what's happening on the gound? You're saying that the only information you have is the information that we have access to at your Deparment'. That is the interviewer complaining about not having the analysis that was given by the previous Government and names of the particular companies. However, the answer from the right hon. Gentleman, the transcript says, is: The infomation we have is the information we sought from the companies and which they sent in, and that's pecisely what we're going on. It's no different from the procedures of the last Government. And may I just say this; that if I was for instance—this is a voluntary code, I didn't publish it, the previous Government published the code—if, in fact, I was to publish a list of names of those who'd sent in the information which indicated some of their employees were paid below this level, then why should anybody send in the information at all? It would be penalising companies who tried to abide by the spirit of the thing against those who refused to send in any information at all. Now that's a crazy way of proceeding. I must tell you, I must tell you, that there's a lot of politics in this. I'm not doing anything different from the last Government. If that is a crazy way of proceeding, it is precisely what we did the year before, and the result of it was that more companies replied, not fewer. So what is crazy about it? It is a lot more effective than what the Secretary of State had done. For him to say that there was something wrong in what we did and to criticise it, and then to say that he was doing nothing different from what we did, is very odd indeed. He cannot have it both ways. He is either as good or as bad as we were, but he certainly cannot be different, which is what he said in that answer. It is to my benefit that I quote his answers in as much detail as I can.

That is the Secretary of State claiming, first, that he made no differenct. That is clearly untrue. There is another feature about it that worries me even more. The Secretary of State was asked a rather long question about the activities of the labour attaché at the embassy in Pretoria, a Mr. Vose, whose information had been used by the previous Government. This is the reply by the Secretary of State.

Mr. Nott

Was this on television?

Mr. Smith

Yes, on television. It is on page 2 of the transcript, at the bottom. The reply was: The information and the situation on the ground is not as you describe it. The poverty datum level is an extremely complicated system, arranged, I believe, by academics in South Africa."— I think that that last remark is meant to be pejorative in tone— It varies from one town to another. The particular figures which we are publishing relate to an African family with five children and, of course, in companies there may be many employees—black African employees—who have less than five children. So in actual fact to be really accurate is an extremely difficult thing to do. The Secretary of State knows perfectly well that that is rubbish from start to finish. It is more than an error; it is rubbish. It shows clearly that he had no idea what the poverty datum level was, because he knows, as I knew, that what the code set out was that the minimum wage was to be the subsistence level for a family of five, with 50 per cent. added to it, and that was to be the minimum wage whether or not there were any children, because of the difficulties of defining extended families in South Africa. So at least we have some admission from the Secretary of State. It is very clear that it is not just a piece of inaccuracy. It shows that he did not understand one of the basic elements at the heart of this whole matter. I am glad that he has the grace to admit that, at least.

Mr. Nott

I have not admitted it.

Mr. Smith

We shall hear what the right hon. Gentleman has to say shortly, no doubt.

The way in which the Secretary of State, throughout this whole interview, could not make up his mind as to whether he was doing no more or no less than the previous Government and was somehow doing better or worse than the previous Government, would have done credit to President Nixon at his most fluent. The inevitable conclusion to which we come on this matter is that the Government have back-pedalled on this code. There has been a change of policy, a change in the wrong direction. The Government are not doing what they ought to do under the code to evaluate the information, to process it properly and to name the companies which are offending in an attempt to make sure that we can all influence them. The Government are not adhering to a clear obligation which they have under the code of conduct and to the other countries of the Nine.

Let us consider what that means. It means that the British Government are backing away from one means—though not the only means—open to us to try to raise the wages of poor black South African workers in that country. I would have thought that nobody in this House would, say that it is proper for British companies to pay black South African employees below the level agreed by the EEC as the minimum datum line. Surely no one says that that is right and proper and that we should be giving any assistance to those who seek to do that.

Those companies who observe the code, and pay above it, should be praised, and I praise them. Those who do not should be condemned in this House and by every right-thinking person in the country. What is worse about the Secretary of State is that, having made this change of policy, he has sought, I believe vainly, to try to deny it. His denials have been exposed as unconvincing. At the conclusion of a letter to me the right hon. Gentleman said: If there is any need for the record to be set straight it is for those who, for inexplicable reasons of their own, are damaging the reputation of British companies in South Africa—and also totally misrepresenting this Government's and my own personal abhorrence of apartheid. I have never accused the Secretary of State of approving of apartheid. I have accused no one of that. But I am certainly willing to accuse British companies which do not pay proper wages as I am willing to praise those who do pay proper wages. That has nothing to do with the reputation of British companies in South Africa. It has a great deal to do with the reputation of this Government and the reputation of the Secretary of State who has not, in my submission, carried out his duties properly.

1.31 pm
The Secretary of State for Trade (Mr. John Nott)

I do not intend to allow the particular personal charges which have been made against me by the right hon. Member for Lanarkshire, North (Mr. Smith)—all of which, of course, I refute—to destroy this opportunity for us to debate the substantive issue of the conditions of black employees in South Africa.

This is an important subject and one which merits the attention of the House. It would be doubly unfortunate if, at a time when problems are increasing in South Africa and when there is, nevertheless, growing talk of reform and change in that country—

Mr. William Hamilton (Fife, Central)

Come on.

Mr. Nott

There is growing talk of reform and change in that country. It would be unfortunate if we were diverted down a largely irrelevant blind alley about a so-called list of names and whether, if it exists—and it does not—it should be published in the particular form chosen by the right hon. Gentleman. I shall return to the subject of the imaginary list in a moment.

Let me first discuss the real issues which are at stake. The real obstacle to black advancement in South Africa is not apartheid—which I detest—nor is it the level of African wages. Of course, the receipt of an adequate wage in return for a person's labour is rightly a matter of deep concern, whether it be in our own society or in the poorest country of the Indian sub-continent.

The wages paid to black employees in South Africa are not noticeably lower than those in many other parts of the African continent. They are probably higher than in some other continents. The possession of any job for the merest pittance would be considered a blessing to the people of Bangladesh whose income per head is estimated to be less than $90 a year.

The real reason why South Africa has incurred the condemnation of the world is not so much its low wages as the pervasive inequality of opportunity to which the black African has been subjected. It is apartheid—unjust, inhumane and not even practicable—that merits, and has received, the condemnation of all political parties in the House. It is, of course, and I entirely accept it, for countries with the closest historical connections with South Africa—we are such a country—to use our influence to bring about reform and change—change, if possible, that comes about voluntarily rather than by force. Since Britain, for historical reasons, has large investments in South Africa, we should do our utmost to ensure that the investments serve to reduce the injustices in that society rather than aggravate them. That is why I support the code. Any suggestions to the contrary are untrue.

Some British companies have employee practices which leave much to be desired. There are companies of other Western nations of which the same criticisms can be made. The press has a valid and legitimate role in drawing attention to the facts. The press performs a valuable function.

Generally, British companies have not been followers in South Africa. Some British companies have been in the lead. British management has been conscious of its moral obligations, unlike hon. Members and journalistic commentators, who do not have to wrestle with the real problems of African advancement in the conditions of that country.

The particular aspect of industrial relations which is most detrimental to the advancement of the black African is the restraint of job reservation and the problems of training. That is fundamental. The problems are in the interests neither of British companies nor of black Africans themselves. However, they persist in important areas, and normally with the opposition of British firms. That is why it is of such importance, when wielding any power of condemnation by allegation or accusation, for us to avoid discrediting the reputation and integrity of British industry generally. That will not do anything to improve the living standards of black Africans—and of course, I favour doing that as much as any hon. Member. If I were to distinguish between one part of the code and another, I should say that the provision that all jobs should be open to any worker who possesses suitable qualifications"— and that which urges employers to "draw up an appropriate range of training schemes for their black African employees", are more fundamental to the key question of African advancement than the simple minimum wage.

That brings me to the question at issue—wages. The code is right to set British and other European companies the objective of paying their African employees at least the minimum necessary to meet their human needs. Of course that is desirable. I confess that I do not believe that a rigid statutory minimum wage, if it were possible to introduce one, would be the best way of improving the real living standards of African workers.

A statutory minimum wage would tend to become a maximum wage. I have no doubt that that was one of the many reasons why the signatories to the European code came out against making it compulsory. The wage provisions of the code cannot be looked at to the exclusion of the code's other provisions. That is one of the reasons why the recent debate in the newspapers has been so misleading.

If a company provides good training schemes for its African employees, refuses to differentiate between workers of different races, gives good fringe benefits and has achieved good industrial relations—[Interruption.] The right hon. Member for Lanarkshire, North seems to be more interested in the press than in what I am saying. He seems to be concentrating his attention on the Press Gallery. If he listened to me I might be able to educate him.

Mr. John Smith

I was looking at the heavens in disbelief at what the Minister was saying.

Mr. Nott

I am trying to explain to the right hon. Gentleman where he went wrong. If a company gives good fringe benefits and has set about achieving good industrial relations, it is to be commended, even though some might question its performance over wages. Such a company is much more to be commended than a company that pays good wages but does none of these other things.

The pillorying in certain newspapers of certain companies for their wage levels, to the exclusion of all other working conditions—de-segregation, fringe benefits, training opportunities, recognition of black trade unions—and, amazingly enough, a show of naming companies alleged to be paying low wages but not naming at all companies that have failed to report and which I listed in my Department's summary has done anything to achieve the objectives of the code. It has set back the underlying objectives of the code to a greater extent than any action that I may have taken in refusing to publish what, by its nature, would be an inaccurate and misleading list of names.

The list that the right hon. Gentleman published in February 1979 did not include any fresh information. It was simply an extract—in my view a misleading extract—from the information in the companies' reports. In The Observer last Sunday the chairman of Metal Closures, one of the companies mentioned in The Observer the week before, wrote the following letter: I refer to your coverage of wages for black South African workers in which our own group of companies is mentioned as having paid one employee below the Poverty Datum Line. …While we regret that at that time there was one, recently engaged, temporary, worker being paid below the PDL, I wish you had mentioned the many benefits for black workers which our group has instituted, which were also itemised in our report to the Department. These include annual leave bonus, according to length of service, pension fund, sick pay and personal accident insurance in excess of that required by legislation. We also provide free clinics and chest X-rays. Black employees receive cash or gifts at the end of 12 and 20 years service and there are housing loans for them. We provide bursaries…for the primary and secondary education of children of black employees. We also award, for black employees only, seven annual bursaries to provide free university education for them or their children. Letters have been coming to my Department that make clear that if this type of exposure continues, few companies will continue to complete this annual voluntary return. A letter from a company sent to us says: I can only repeat that such treatment just cannot be expected to encourage voluntary participation in the future, particularly from those companies whose South African concerns are still very sensitive to such approaches and whose co-operation, therefore, should be sought rather than demanded. A letter from another firm says: I have seen the article appearing in the Sunday Observer of 8 June regarding the pay of African workers from which I understand this company is to be named in the House…The facts are that in the two years for which we have submitted reports the basic rates of pay of our South African subsidiary to its African employees have been 87 per cent. and 31 per cent. respectively above the PDL. In addition, there are fringe benefits for our African employees, clearly outlined in the report, which include bonus, pension scheme contributions, sick leave and loans to assist in education as well as housing. I believe that you will be receiving many letters expressing similar concern from other UK employers with interests in South Africa who will also be questioning the value of submitting any further reports if the contents are to be so misrepresented. If, this year, fewer companies were to come forward with reports than in the previous year—we shall do our best to see that this does not happen and to ensure that reports come in in the best possible way—the fault will lie with those who have grasped this opportunity to condemn the Government and myself as being somehow less concerned about the welfare and advancement of the black South Africans than the Labour Government. That is the implication that laymen are meant to draw from this campaign.

Mr. John Smith

I did accuse the right hon. Gentleman in the debate.

Mr. Nott

The right hon. Gentleman admits it. It is quite untrue. I am glad that the right hon. Gentleman has accused me of something in the House rather than doing so by letters to the press.

Mr. John Smith

Let us be in no doubt about this. I have not accused the right hon. Gentleman of failing to implement the code properly. It has taken him some time to explain it to the House. He has had many opportunities to make an oral statement, and he has only done so because the Opposition tabled the subject for debate.

Last year, I took the responsibility of publishing the names of British companies. This year, the number which has reported has gone up. Therefore, what is there in his argument which suggests that they will not do so? Secondly, what right has any company to complain if it cannot say that it is already observing the code? Surely we should be attacking companies which do not observe it. They have an easy way of avoiding any criticism that they are failing to pay the proper wages.

Mr. Nott

I note that, like all social democrats, the right hon. Gentleman claims to have a much bigger heart and much greater feelings than anyone else. That is a quite common claim by those such as himself who believe that they have a monopoly of feelings about black South Africans. It is an absolutely typical piece of social democracy. I do not accept that the right hon. Gentleman has any monopoly of feelings, any more than —I accept—does any member of any other party.

I want to place on record the nature of the data on wage levels in South Africa which is received. The full data required by the code on wage levels is very complex. Companies are asked to quote minimum wage levels and to say how many African employees are employed below the higher datum level and how many below the lower datum level. But these levels are based largely on studies by academics—I note that the right hon. Gentleman thought that it was pejorative to say that factually this was based on studies by academics—and are different for different places in South Africa. In some places, two different datum levels are available, each of which is valid under the code. In other places, no datum levels are available at all. Moreover, there are different published datum levels for different sizes of families. The code envisages use of the level for an African family of five or six members.

With all those complications, it is hardly surprising that not all company reports are as clear or as complete as we should like. In fact, my predecessor, Mr. Edmund Dell—I mentioned him specifically in that television broadcast —admitted in his assessment on 13 December 1977 that: The absence of standardisation in the form of reply has made analysis difficult—", and he added: indeed almost impossible."—[Official Report, 13 December 1977; Vol. 941, c. 115.] That was Mr. Dell's view, and I share it.

Mr. Michael Meacher (Oldham, West)

rose—

Mr. Nott

I shall not give way to the Gentleman on any account at all. He can make his speech in a moment.

This means that it is not always possible to tell from company reports with complete certainty whether African employees are paid below the appropriate datum levels. To produce any list of companies which are paying employees below the lower datum level is, therefore, impossible without introducing subjective judgments or uncertainties in interpretation. I am fundamentally opposed to publishing a list of companies and exposing them to censure when that list is neither verifiable nor complete.

The right hon. Gentleman has erected the publication of this black list into some kind of moral principle. The list has nothing whatever to do with the moral issues at stake in apartheid. I believe that it is wrong to expose individuals or companies to public censure under the protection of parliamentary privilege unless there is clear, objective evidence to support it. That evidence does not exist here. If the facts in the reports which are available for everyone to see are true, there is nothing to prevent any newspaper or any hon. Member from saying what they will outside this House. If the information is untrue or uncertain—in my judgment, this information in uncertain—I am not prepared to remove the protection of the law from British companies or individuals by the use of parliamentary privilege. That is my position, and that is why I did not allow a list to be published, because I did not believe that it would be sufficiently certain or accurate.

I believe that that was possibly the reason—I cannot say more than that—why the previous Government did not publish any such list until the right hon. Gentleman came along and published it in 1979.

Mr. Alexander W. Lyon (York)

I am finding it difficult to follow the right hon. Gentleman's logic. He supports the code and intends to continue to implement it—but to what effect? What will happen to the information when it comes in? Will the penalty simply be that a newspaper will look through the report and make its own judgment, or will something happen inside the Department to those companies which either fail to reply or reply in terms contrary to the code?

Mr. Nott

The hon. Gentleman seems to be unaware that the code is a volun- tary one, not a compulsory code. The voluntary code was introduced not by me but by the Government of whom the hon. Gentleman was a member. I have published exactly the same information, which comes from the company reports themselves. Those are in the Library. They are available to the press. The press has been studying those reports in my Department and has been commenting on them. There is nothing different, except that I have refused to draw false conclusions—I believe that they would be false—from those data or to give in a parliamentary statement a list of companies on which, for all the reasons that I have set out, I think great uncertainty exists. That is why I have not published a list.

I come now to the procedures followed by the Government. The right hon. Member for Lanarkshire, North suggested that, in some way, we had taken a step backwards. That is simply not so. Our support for the code of conduct, as he said, was made clear almost immediately we came to office by the Minister of State in the House on 25 May 1979.

From then on, as the right hon. Gentleman said, companies have reported in considerable numbers. Since the end of the second reporting period under the present code, in June 1979, 205 companies have published reports for that year out of the 224 that we believe to have been liable to do so. That compares with 184 companies that published first-round reports the previous year, out of 220 then believed to be liable. A rise from 84 per cent. to 91 per cent. does not seem to point to a step backwards or to any loss of momentum. Quite the reverse—more companies have come forward this year than last.

In April, I had my Department's analysis and summary of company reports published. We listed all the companies which had submitted reports. We deposited all company reports in the Library of the House and made them publicly available in other places also, and we listed those companies which had failed to report. We could hardly have made available more information than that, in the true sense of information.

Any hon. Member and any member of the public may now know which companies have reported and which have not. They may read for themselves the reports which have been made, evaluate the facts and draw their own conclusions. That is exactly how the voluntary code was meant to work and we have acted in strict accordance with that code.

Notwithstanding the misrepresentations of Labour Members, I shall continue to support the code. I have already stated my views and those of the Government on apartheid in South Africa. I have already said that we must ensure that our investments there serve to alleviate that system and improve the pay and working conditions of South Africans. I see the code as an important means of encouraging our investors to achieve those objectives. Where I differ from the right hon. Gentleman is that he believes that a blacklist of companies is the way to proceed. I do not, and that is the end of it.

Mr. John Smith

The Secretary of State knows perfectly well that the obligation on him is to review annually the progress made in implementing the code. If he does not evaluate that progress, how does he meet this obligation?

Mr. Nott

Is the right hon. Gentleman seriously telling me that his predecessor, Mr. Edmund Dell, failed to abide by the rules of the code in the three years before the right hon. Gentleman himself achieved the office that I now hold?

Mr. Smith

The right hon. Gentleman knows perfectly well that the code did not apply in those three years. It was agreed only in September 1977. The list that I published was the first that could be assembled under the Code. Therefore, will the right hon. Gentleman withdraw that remark?

Mr. Nott

Is the right hon. Gentleman unaware that his own Government published a code before the EEC code came into effect?

Mr. Smith

Will the right hon. Gentleman confine himself to the EEC code, and answer my question? I do not know why he is not answering it. It was quite specific, and I insist that he answers it. The obligation is to review annually progress made in implementing the code. If the right hon. Gentleman refuses to evaluate, how does he meet that obligation? It is a simple question.

Mr. Nott

The right hon. Gentleman's predecessor, who held the office for three years, pursued almost exactly the same arrangements under that code that his own Government introduced. If the right hon. Gentleman is asking me what I am doing to abide by the terms of the Community code, I have already told him. We go beyond the requirements of the EEC code. Does the right hon. Gentleman want me to read it out again? We have published a report. We have had an analysis of the reports that have come in. We have put our analysis and report in the Library, and it is available for everyone to see.

The only thing that we have not done, which is all that this is about, is that I have refused to blacklist companies and print their names in Hansard so that there is the protection of parliamentary privilege.

If the information in the company reports is true, anybody can publish it. There is nothing that I am doing to prevent anybody from publishing whatever he wants from the raw data available to the whole world. If it is true, anybody can repeat it in the press or in the House. I am not preventing anything. All the raw data are there, and free.

Mr. Smith

I am not aware that there was any complaint about anything that I published in Hansard. It will be news to me if there was, but if there was, I shall be glad to hear about it.

Secondly, how does the right hon. Gentleman say that he can review progress? He knows perfectly well that in my answer I said that we were doing well in some areas, not so well in others. The right hon. Gentleman makes no such comments at any stage. He merely analyses in terms of numbers. How is it that he has undertaken the obligation to review progress? Are we going forward in some areas, or are we going back?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Before the Secretary of State replies, may I remind the House that this debate will end at 2.30 pm. If there are many interventions from the Front Bench, that will make matters very difficult for Back Benchers.

Mr. Nott

Review of progress was part and parcel of the Select Committee's recommendations. I note that the right hon. Gentleman is of the view that Mr. Edmund Dell failed to abide by the Committee's requirements.

I have been accused of trying, first, to downgrade the post of the labour attaché in Pretoria. That is quite untrue. The right hon. Gentleman did not make that accusation, but it has been in the press, and my right hon. Friend the Prime Minister has been accused of it. It is a First Secretary post, and that is what it remains.

We have been accused of not naming companies that have made inadequate reports. That is quite untrue. Indeed, the charge in a letter from the hon. Member for Oldham, West (Mr. Meacher) was quite incomprehensible. Annex D of our report contains a list similar to that published by the Labour Government.

We have been accused of deliberately withholding information in our possession. That is quite untrue. We are working from exactly the same raw data—the information provided by companies—as the last Government were working from. Everything is published, and it is in the Library.

We have been accused of not urging companies to comply with the code. That is quite untrue. My hon. Friend the Minister of State made the Government's position clear in the House, and my officials, as the right hon. Gentleman said, contacted companies, urging them to send in their reports.

We have been accused of not intending further action. That is just what the right hon. Gentleman is saying. That is quite untrue. We shall do our best to get a good response in the next reporting period.

We shall not make the code compulsory, because it would not work if we tried to do so. Our problem this time will be to get a better response following the party political campaign that the right hon. Gentleman has led.

I have been accused by the right hon. Gentleman of saying on television that we made the same representations to companies as the Labour Government did. That is quite untrue. I was asked a question about the information that we had published. That is why I asked the right hon. Gentleman to read out the question instead of simply repeating the answer. I was explaining that the infor- mation in the reports was the same information as before. I was not answering a question about the representations that we had made to companies. The right hon. Gentleman has quoted me out of context.

We have been accused of a number of other things, but I want to leave time for the House to carry on with this debate. I apologise for taking so much time to answer some of the accusations that the right hon. Gentleman has made against us.

Several Hon. Members

rose—

Mr. Deputy Speaker

Seven hon. Members have indicated that they wish to speak in this debate. I have no authority or power to limit speeches, but those hon. Members who speak at length will deny others the opportunity to speak.

2 pm

Mr. Michael Meacher (Oldham, West)

In a highly tendentious speech, the Secretary of State drew attention to the lack of training and the practice of job reservation, as opposed to wages, as being the cause of African poverty in South Africa. It would be a great deal easier for Opposition Members to accept that kind of argument if the right hon. Gentleman showed by his deeds that he was taking action to improve this state of affairs.

We know that Smith & Nephew—I am very glad to name the company—has a good record in promoting trade union rights, but it is the only British company in South Africa with that kind of record. What action has the Secretary of State taken in respect of all the other companies?

The Secretary of State emphasised the importance of fringe benefits, the recognition of black trade unions and the approach to migrant labour. All these are very important issues. But what effort has the right hon. Gentleman made to make sure that the full information is made available on these issues in a reliable and fairly certain way? It is hypocritical of the right hon. Gentleman to draw attention to these issues and to say that he believes in private persuasion, but then to do nothing about it.

The answer to the question posed by my hon. Friend the Member for York (Mr. Lyon) is that no action is taken by the Department of Trade as a result of the reports being made. There is no penalty. The whole exercise in the hands of this Secretary of State has become a gigantic facade, inasmuch as he has deliberately left external researchers exposed to the law of libel, since he knows that the only means of establishing the truth about these reports, which some of his own officials have indicated are vague, fraudulent and evasive, is by reference to the secret memorandum provided by the labour attaché in South Africa, and the right hon. Gentleman has refused resolutely to make that crucial document available or, with his authority, to provide information based upon it. That is our case against him.

At the outset, it needs to be said that the only reason for this debate is the right hon. Gentleman's unwise—I hope that he now accepts that it was unwise—and devious decision not to publish, as the last Government did, the names of British companies paying workers wages below the poverty datum line. That, together with the assiduous researches of Mr. Adam Raphael, to whom credit should be given for this, is the background to this debate.

At least we owe it to the Secretary of State that by his initial evasiveness and then by the dishonesty of his answers during his televised interview on "Newsnight" on 5 June he ensured that this issue received far greater attention than it would have if he had taken the honourable and sensible course from the beginning. We are grateful to him for that, but that is as far as our gratitude goes.

It is obvious that the object of the Government's strategy is, simply, quietly to bury this issue. The only point of a voluntary code is that its cutting edge lies in giving publicity to those guilty companies which breach its provisions. Without full publicity being given to the findings at each round of the reporting, with analysis backed by the authority of the Government and with the vigorous use of publicity to get across the results, a voluntary code is next to useless. It is our case against the Government that this is precisely the result that the evasiveness of the Secretary of State was designed to bring about.

The right hon. Gentleman's defence will not stand up. He says, correctly, that he has published the company reports and that it is for hon. Members of this House and the press to publish their own conclusions, based on those reports, but he must know that that argument is entirely disingenuous. It is impossible, without reference to the secret analysis of the report, to reach a conclusion about the overall picture with any certainty. It is impossible to know whether any company has, for example, quoted the right PDL for its area, whether the wage levels quoted relate to the correct reporting period, and whether the company has over-estimated the fringe benefits that it quotes. The Secretary of State quoted, with no attempt to establish whether they were true, the fringe benefits of the company that he referred to in quoting the leet letter.

At least three PDLs have gained currency in South Africa. They are those fixed by the University of Port Elizabeth, by the University of South Africa and by the Johannesburg Chamber of Commerce. Since companies are free to quote whichever PDL they like, they of course quote the lowest. I challenge the Secretary of State to indicate how any external researcher could, unaided, establish from data of this kind the true position on a standardised basis. He knows perfectly well that that is not possible.

Worse still, the right hon. Gentleman wants to have it both ways. On the one hand he says that he cannot publish a definitive list of companies paying below the PDL because the information is too uncertain; on the other, he says that it is for hon. Members and members of the press to do their own research on these reports and to publish the results that they derive from that. How does he expect those who do not have the benefit of the undisclosed memorandum from the labour attaché in Pretoria to arrive at a standard of accuracy that the right hon. Gentleman forgoes. The right hon. Gentleman shakes his head, but he does not answer the question.

Such casuistry, I suggest, does not commend itself to those of whom he claims to be one but of whom, his actions show, he is not, and who believe that there is a simple overriding moral issue at stake, namely, the use of Government influence to reduce and eliminate by every possible means the exploitation of labour by British companies—an exploitation that is probably more callous than that to be seen anywhere else in the world.

Worst of all, the right hon. Gentleman has tried to cover the tracks of the dishonourable course that he has chosen to pursue by making claims that he must know are utterly untrue and to pretend that there is no change of policy under this Government. He declared in his "Newsnight" interview, and he has in no way refuted this: I have published every bit as much information as the previous Government. He also said I'm not doing anything different from the last Government. From his own words today it is perfectly clear that those statements are demonstrably false.

The Labour Government published a full list on 15 February 1979. When a Cabinet Minister states a blatant untruth —I do not say that he did so intentionally, because I am prepared to believe that he misunderstood his brief—he should apologise. It is incumbent upon the Secretary of State, if he has any honour in this matter, to recognise that and to apologise to the House.

The essence of this debate, as the Secretary of State said, is what the Government will do about the shameful and deteriorating situation revealed by the reports of gross poverty and lack of rights of the growing mass black African workers employed by British companies in South Africa. What action is the right hon. Gentleman proposing—he did not comment on it—since his Department's figures indicate a steady increase in the number of black African workers paid below the poverty datum line by British companies?

In 1977 the figure was about 700, according to the Department's best estimates. In 1978 it was probably about 800. It was stated by the Department to be over 2,500 only as a result of the addition of a highly suspect 1,700 from a single company—Lonrho. In 1979, again according to the Department, the number was 2,000. Similarly, the number paid below the MEL rose from 13,000 in 1979 to 20,000 in 1979, again accord- ing to the Department's figures. In view of this alarming deterioration charted by the Department we are entitled to be told what new initiatives the right hon. Gentleman is proposing to reverse this apalling trend.

The right hon. Gentleman said that he believes in private persuasion—

Mr. Nott

I never said that in my life. The hon. Gentleman said that I said it.

Mr. Meacher

The right hon. Gentleman did say that in his televised interview. He believes in private persuasion, as opposed to the publication of names.

Even if that were not so—I believe it is so—how does the right hon. Gentleman expect a voluntary code to have any effect? How does he explain the fact that he has not written a single letter to any of the chairmen of the guilty companies? Is not such policy of alleged private persuasion entirely hypocritical if he has done nothing about the results that this dredging of information has produced?

The Secretary of State hides behind the voluntarism of the code. He did so again today. There is nothing sacrosanct about a voluntary code. The previous Government accepted a voluntary code in the first instance only to see whether it would work effectively. It is clear that it is not working, and it is now incumbent upon the Secretary of State either to make aspects of the code mandatory or to indicate how the accepted objectives of the code can be achieved without a statutory back-up.

The prime objective of the code was, as the Secretary of State recognised, to promote African trade union rights. Until today, the Secretary of State has remained conspicuously silent on that. On 4 June I sent him detailed evidence from the Federation of South African Trade Unions which showed that the implementation of the code guideline, far from being developed by the companies, was being deliberately circumvented by them. Most serious is the manifest evidence of blatant opposition to trade union rights that was revealed. Again, the Department of Trade has clearly been colluding in this matter. I quote from the evidence of the Chemical Workers Industrial Union regarding the company Revertex Chemicals in South Africa: The union wrote to the Secretary of State for Trade requesting a copy of the report, assuming that since the White Paper states that companies are asked to ensure that a reference to the public availability of such reports is included in their annual report or chairman's statement, such information was public. The Department of Trade, however, informed us that because of copyright they could not let us have a copy of the report, but that a copy was available for inspection at the Consul General's office. On arrival at the Consul General's office the union officials were informed that they could read the report, but that they could not take notes or copy any part of it.

Mr. Deputy Speaker

I am sorry to interrupt the hon. Gentleman, but I hope that in fairness to other hon. Members he will bear in mind what I said 12 minutes ago.

Mr. Meacher

Yes, I shall, Mr. Deputy Speaker, but I hope that it will be acceptable if I speak for another three or four minutes.

The Minister of State's reply was that if those informants' comments were correct the revelations were regrettable but that both sides of the case needed to be heard before a conclusion could be reached. I accept that argument. But what have the Government done to gain access to the other side of the case? Have they written to any of the companies? That is typical of the weasel-wording of the Government on this issue.

The Secretary of State has still not replied to the point about non-publication. He said that if he published the names of the guilty companies they would not provide the information the next time round, but when the Labour Government published the names last time, 36 companies failed to publish reports, but this time only 19 companies failed to publish.

The Secretary of State asked whether it was fair to pillory the companies paying below the PDL when 19 companies refused to provide any information—as if those 19 companies had to be allowed to get away with it, and as if the reporting could not be made mandatory, which is the other alternative.

This has been a shabby episode in British public life, but it is still not too late for the Secretary of State to redeem himself of his misspent career over this matter. He can still decide, on further reflection and in the light of precedent, that it is his duty to publish the names of companies that are paying below the poverty datum line, because there is no doubt that the voluntary method works provided it is used with sufficient vigorous publicity. The original report of the Select Committee in 1973 produced some dramatic improvement in wage levels, and the position is now deteriorating only because the Secretary of State seems bent on giving a nod and a wink to companies that have no intention of doing anything about this issue. He wants to scuttle at the first available opportunity.

It is not even as though such an attitude is expedient, let alone moral. What does the right hon. Gentleman think will be the effect of his sullen indifference over the whole matter on the British Government's standing in black Africa as a whole? Has not the Secretary of State stopped to consider that the balance of our trading interest is not overwhelmingly, in export terms, with black Africa rather than with South Africa?

I hope that, even if the Secretary of State remains recalcitrant on this, the Select Committee on Trade and Industry will think it appropriate at this point to re-examine the issue and, in particular, to summon the representatives of the 19 companies that refused to provide the reports, as well as the 33 that appear to be paying below the PDL.

There can be no question but that the overwhelming responsibility for a new initiative on this matter lies with the Secretary of State. The Government's attitude is already badly compromised by the corporate cover-up that we have seen over the Rhodesian oil sanctions busting affair. If the Government are to retrieve their reputation for being soft on big business law breakers and code breakers the Secretary of State will have to change his line fast and reverse his deplorable and cynical sell-out of Britain's good name for responsibility and justice in these matters.

2.16 pm
Sir Ronald Bell (Beaconsfield)

The hon. Member for Oldham, West (Mr. Meacher) started by describing the speech of my right hon. Friend the Secretary of State as tendentious. If the hon. Member is under the impression that the oration he has just delivered—a somewhat extended one—was balanced, neutral and bipartisan, I can only say that it must be by his own standards, for I have rarely heard a more splenetic utterance than he has just delivered.

The right hon. Member for Lanarkshire, North (Mr. Smith), in one of his six or so speeches, spoke of the obligation on my right hon. Friend to apply the code and to evaluate it. He did not mention the article of the Treaty of Rome under which a Community obligation could arise. I feel tolerably certain that there is no such article, because the subject of foreign affairs is not included in the Treaty of Rome. [Interruption.] The right hon. Gentleman used the expression "Community obligation".

Mr. John Smith

It was an obligation entered into among the Governments of the Nine. It did not arise from the Treaty but was clearly an obligation entered into by the Governments.

Sir R. Bell

If the right hon. Gentleman said that it was among the Governments of the Nine, that would be one thing. but the phrase he used was "Community obligation", and he said that my right hon. Friend was in breach of it. It would not worry me terribly if my right hon. Friend were in breach of a Community obligation, but he is not.

The truth is that the whole of the code and all the talk about it is simply an impertinent interference in the affairs of another country. It is an assumption of superiority of judgment, most admirably set out in the speech by the hon. Member for Oldham, West, to which we have just listened, but which was also to be found in the speech of the right hon. Member for Lanarkshire, North.

What is the basis of all this? Are we to have an evaluation, for example, of wages in Tanzania, in India, in Pakistan or in South America? If we were to have such an evaluation of wages, we might find that a lot of people in Tanzania—and in China—were paid a great deal less than people in South Africa.

There are people in the Labour Party who are absolutely obsessed about South Africa, and there are people in the media who are absolutely obsessed about South Africa. The whole thing is done by mirrors. The Left and its allies build up this tremendous picture of South Africa as a unique phenomenon in the world, whereas the size of the black population in South Africa is a tribute to the standard of living that can be obtained by going there.

I do not know why we in Britain should think that we can make a useful judgment upon South African affairs. We have shown a lack of perception in our post-war judgments about Africa. Every constitution that we have devised has been wrong and abandoned. We are always talking about equality there, political as well as economic, but no country in Africa is operating a universal franchise in any significant sense.

It is easy to attack the separate development system of South Africa. But what do the Opposition propose in its place? How do they propose that South Africa should be governed? By universal adult suffrage? It is far too advanced a country to be governed in this generation, or perhaps the next, by the South African negroes. It will probably be shown that even Rhodesia, much less advanced, cannot in the present generation be governed by the Shona and the Matabele.

I mention these points because the argument about the code, the list and the reports is based on the assumption that we know better than those who live in South Africa how that country should be governed. But no one is prepared to say how it should be governed. The Opposition, except for a few political blow-hards, know that it cannot be run by universal adult suffrage. They know that the economic as well as the political life of South Africa has for some indeterminate time to be dominated by European brains, discipline and communal organisation. [An HON. MEMBER: "Why?"] Because they have built it up virtually to a European level of development.

Of course, one day the African natives may be able to operate a Westminster system of democracy and generate for themselves a European or Western level of economic advancement, but it is childish to pretend that that is possible in this generation. If that is not possible, for a considerable time we shall have two communities living side by side in South Africa: the minority community being dominant, because the country would collapse without it, and the majority community being subordinate. That is a difficult and unfortunate situation.

I dare say that most South Africans would, in retrospect, agree that to allow people to come in from distant parts of Africa to what, when they first went there, was an empty land was a great mistake and that they would have been wiser to follow the Australian policy of doing their own dirty work—the white Australian policy. But the situation exists and must be solved. In my opinion, it will be best solved by those who have to live with it rather than by those in distant countries who know virtually nothing about it.

The right hon. Gentleman and his hon. Friend the Member for Oldham, West talked about poverty datum lines worked out for various areas of a distant country about which they know little.

Mr. Alexander W. Lyon

By white South Africans.

Sir R. Bell

A good deal of the work in South Africa is done by unskilled labour. One of the results of this campaign from outside has been to raise wages to the point at which that kind of work will be better done by machines, especially in the mines. There is an acute shortage of skilled labour in South Africa. What my right hon. Friend said about training schemes was valid. However, there is a great surplus of unskilled labour.

The kind of blunt approach to which we have listened today will cause a great deal of misery among the unskilled workers of South Africa. A society should advance spontaneously and in a balanced way so that, as it advances, it is able to adapt. If tens or even hundreds of thousands of unskilled workers are thrown out of work in South Africa, because, by artificial pressure, the wage rate for the lower jobs is raised above the point at which machines become economic, a great deal of the responsibility will lie on those outside, who do not know what they are talking about, for interfering in somebody else's society.

Therefore, I say to my right hon. Friend that he is right to go slowly in this matter. He is right to rely upon a voluntary system.

The suggestion made by the hon. Member for Oldham, West that we should seek, however indirectly, through British companies, to impose a compulsory system to take effect in someone else's country is so astonishing, so impertinent, so arrogant and so puffed up by vanity that I honestly believe that it could only come from the hon. Gentleman.

2.25 pm
Mr. Ernie Roberts (Hackney, North and Stoke Newington)

I want to declare an interest in this matter as the chairman of the British Trade Union South African Congress of Trade Unions Liaison Committee.

We are trade unionists whose employers have branches in South Africa, where black trade unionists are used as cheap labour to undercut the wages, the conditions and the trade union rights of British workers in Britain.

As British industry is the biggest outside investor in South Africa, we have demanded from the British employers, the multinationals in South Africa, that they concede the same trade union rights to organise and represent black workers as exist in their companies in this country. We insist that they pay at least the same wages for the same work as are paid to British workers, in spite of what is said by the hon. and learned Member for Beaconsfield (Sir R. Bell).

The conditions and the practice of apartheid in South Africa have forced my trade union, the Amalgamated Union of Engineering Workers, to cut off 25,000 members that we had in South Africa and some thousands of members that we had in the Rhodesias. Our union, with 1½million members, abhors racialism and our trade union rules debar the practice of it. Sir John Boyd, our general secretary, and other TUC leaders have sponsored a book, which was published just last week, on South Africa and black workers, and the deplorable wages and conditions and the torture and the death of those who oppose such a situation in South Africa.

If the Government and the Opposition want the facts and they cannot be given here this afternoon, let them read the book which I am holding—"Organise or Starve". It is a book written for the South African Congress of Trade Unions. Its opening statement sums up what it is all about. It says: It must never be forgotten that apartheid and racial discrimination in South Africa, like everywhere else, has an aim far more important than discrimination itself. The aim is economic exploitation. The root and the fruit of apartheid and racial discrimination is profit. Migrant labour, pass laws, poverty wages, victimisation at the workplace, unemployment, repression, imprisonment, banning orders, deaths—these are the ingredients of exploitation that shape the lives of millions of Africans workers from the cradle to the grave under apartheid. Black workers fighting for a living wage in the textile industries at this very moment have been victimised and attacked. A statement has just been made by the organised workers of South Africa under the heading: South African textiles are dyed with our blood. Don't buy from South Africa. That is what South African workers are saying. The statement says: The Frame textile group in South Africa has dismissed over 5,000 of its black workers because they demanded a living wage. The security police have arrested their union leaders and once again the racist regime shows its true face of brutality and repression. You can support black workers and their trade union leaders in their demands by boycotting South African textiles and South African goods. Support your brothers and sisters in struggle. Reference has already been made to the list drawn up as a result of the code about which there has been so much argument. Yet I suggest that it should not be voluntary. It should be made compulsory. British companies should be made to disclose the information about the wages they pay and the conditions of their workers in that country. It is said that more than 2,500 workers have been paid starvation wages—that is, wages below the datum line. That is why we are seeking—

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.