INTERPRETATION OF PART I (Hansard, 30 June 1980)

§ Mr. Clinton Davis
I beg to move amendment No. 29, in page 9, line 9, leave out 'and the Treasury' and insert 'the Treasury and the trade unions which are recognised as representing their employees by the Board.' The position envisaged in the Bill with regard to consultation about the appointed day is that the Government will be under a statutory obligation to consult the board and the Treasury. The Minister is on record as saying that consultation with the board is tantamount to consultation with the work force, because he presumes that the board will consult the work force about matters that are the subject of consultation. That is a somewhat illusory way of considering the matter. In this instance, we wish to know to what extent the consultations that the Minister would have pursuant to clause 9 would have an aura of confidentiality about them. If that were the position, the board would necessarily feel, and might be obliged to be, constrained about consulting with the work force. That would be a thoroughly deplorable state of affairs.
Even if the board was free from such constraints, what effect would such consultations have on Government thinking? 1207 I am bound to say, as I have said before, that I am extremely disappointed about the way in which the Minister has failed to carry out the task of consultation about the principle of the Bill. It is common ground that there was no consultation before the Minister announced or published in the House the principle underlying the Bill. Why the Government chose to deal with the matter in that way I find utterly bewildering.
At least as a matter of common courtesy, the Minister should have had the management and the trade unions in to discuss so important a proposal. There was no question of the matter requiring such speed that consultation was rendered unnecessary or impossible. In the event, we know that, although it was announced that last July that the Government were embarking on this policy, it took a considerable time before the Bill went into Committee, and there has been a considerable delay between the end of the Committee stage and the beginning of the Report stage. Time, therefore, was not of the essence.
I cannot begin to understand why, in the interests of the fulfilment of their own policy, the Government did not engage in a wider form of consultation. After all, the Government might have been able to persuade those who have a vested interest in the industry that the Government's proposals ought to be supported. On the other hand, they might not have succeeded. One recognises that, if one seeks to introduce controversial policies, one will not please everybody. The Minister realises that he has not pleased me up to now. But when such a radical change is sought it is incumbent upon a Government to introduce into their thinking the people who will be involved. The Government failed to do that.
There is a lot of damage to be repaired, so that, pragmatically speaking, there is a necessity for the Government to broaden the possibilities of consultation. The Minister may say that his door is constantly open to receive the trade unions. He does not appear to realise the bitterness that has been provoked by initiating these policies without discussion. It is no good the Minister simply saying "My door is constantly open to the trade unions." It is his job positively to invite 1208 them to discuss matters and to try to repair the damage—perhaps even to go to see them. After all, in industry we should be trying to achieve the breaking down of the suspicion that exists.
If the Minister feels that he is innocent of the charge that I have laid, so be it. But he knows—I think that he realises this because he is sensitive to what is happening—that his duty is to try to defuse the position that I can assure him has arisen.

§ Mr. Onslow
I am sure that the hon. Gentleman is speaking in good faith, but in my most recent contacts with members of British Airways' trade unions I have not detected the signs of the bitterness of which he speaks. Perhaps he would explain a little more specifically the nature of the bitterness that he is talking about.

§ Mr. Davis
I assure the hon. Member that I have had numerous discussions with the trade unions involved in the industry. I am not trying to make a party point or to mislead the House. I am putting quite categorically on the record—and it can be confirmed—that there was a great deal of bitterness about the way in which the Minister failed to consult or talk to the unions at the material time, which was before he announced his policies.
Perhaps in the past the management and trade unions had been led by me or by various Secretaries of State to think that they would be brought into such discussions before changes of policy were announced. Perhaps in the case of the Minister they were not entitled to hold such expectations.
I make two points. First, it is my belief that the Minister and the Secretary of State were wrong to go about the announcement in the way they did. Secondly, I believe that even if they feel that they have been acquitted of that charge—I cannot see how they can feel that—they have a duty to go out of their way now to make sure that other voices are heard.
We shall discuss later the matter relating to the British Airports Authority. That is something about which the Government might have consulted earlier, before the Bill was introduced. It pays a Government to listen to other people from time to time. That is why I am urging 1209 the Government—I am not making a great song and dance about it—in the interests of better industrial relations, that this is what they should do. After all, when we talk about clause 9 and the appointed day, we are talking about a situation in which the Minister has stated that he does not intend to arrive at a position in which there is in effect a vacuum between the creation of the successor company and the sale of the shares. It follows, therefore, that the decision to activate this part of the Bill is of monumental importance to those whose livelihood depends on the successful operation of British Airways.
It is true—it has been argued not only in this House but in The Times as recently as 12 May—that Given the contortions which appear to be necessary for a flotation and the financial problems it would create for the airline, it is difficult at this stage to see any convincing justification for going ahead. In spite of those warnings from a number of people who have no axe to grind politically, perhaps, and who are certainly not enunciating the Labour Party's point of view, if the Government go ahead and a substantial number of people think that it is not a very propitious thing for them to do, that there is anxiety about their jobs and their livelihood, bearing in mind that timing is of the essence, as the Minister has conceded, and that bad timing or a bad launch could have disastrous effects not only on the economic prospects of the airline but also on the morale of staff and management, is it not right that the Government should be under a very clear duty to consult directly those representing the work force?
I believe that, because of the way in which this has been handled by the Government in the past, it is necessary to import a statutory duty to consult. If the record had been better, and if the Minister had been able to discharge that responsibility properly, one would have been able to say "All right. We understand that Ministers consult." But the anxiety that is going through the minds of a number of trade unionists—and leading trade unionists in this field have proved over the years to be very responsible people—is that the Minister may have his door open and we may go to him but that he will not be prepared to listen to what we have to say. After a 1210 meeting of that kind, it is no use the Minister saying "Thank you very much. I shall, of course, take note of what you have said." They want to believe that any views that they express to him will be listened to and that, if they are able to convince the Minister by a reasonable dialogue, he will act on their suggestions.
For the life of me, I cannot see that that is an outrageous proposition to put to the Minister. It is my experience—I believe that it is the Minister's, too, because he is a former employee of British Airways—that the work force in British Airways care about the success of the airline. I believe that they have a good deal of which to be proud. I think that it is a good airline. There is plenty of room for improvement, and they would concede that as well as anyone else. But they want to be listened to when they make representations. They want to have access through their representatives in the trade unions to the Minister. They want to feel that their voice counts. I believe that they have a right to know what will happen to their jobs, pensions and contractual rights.
As I have said, unless there is a statutory requirement, there is a strong feeling that the present Minister will care nothing for their views. I do not believe that I have overstated the case, despite the intervention of the hon. Member for Woking (Mr. Onslow) who took the trouble to have discussions with some of the unions concerned. That is a good thing. The fact that the Conservative aviation group went to that trouble is something of which its members can feel properly proud.
9.45 pm
However, notwithstanding the hon. Gentleman's feeling about that meeting, the united voice of those with whom I have spoken, including those who attended the meeting that the hon. Gentleman attended, is that they are very suspicious about the value of consulting. It is therefore incumbent upon the Minister to show that that is a misplaced feeling and that consultation is something that he values, will want to encourage and sees as a way of stimulating better industrial relations and better relations between his Department and the unions.

§ Mr. Tebbit
It seems that the heart of this matter is the fact that the hon. Member for Hackney, Central (Mr. Davis) is still upset because the Secretary of State chose to tell Parliament of the Government's decision before he told the unions. There can be no other way of putting it. [Interruption.] If the hon. Member for Huddersfield, East (Mr. Sheerman) wants to make a contribution, I shall be glad to give way to him, but if he shouts things from a sedentary position, he adds neither to his reputation nor to the debate.
There was no way in which the Secretary of State could discuss this proposition in principle with the unions before he made the announcement to the House. It just would not have been right or proper.
We have had most of these discussions already in Committee. I do not see what benefit it would be to the employees of British Airways to have a formal requirement that the Government should consult the unions before setting the appointed day. We shall choose an appointed day as near as we can to the time at which we envisage that the shares will be offered for sale. Then we must act quickly and without complications which would reduce the price that we would get for the shares.
That will involve judgment. We shall appoint the day after consultation with our professional advisers and with the board of British Airways. Therefore, the decision will be taken after we have received the views and advice of those with a legitimate and appropriate interest in the matter. The employees of BA of course have a legitimate interest, which I am sure will be adequately served by the consultation with the BA board. The board is, after all, the employer and, in every thing but perhaps the technical, legal sense, its members are themselves employees as well.
From the moment that the policy was announced, the Secretary of State and I made it plain that we were willing to consult the unions at their pleasure on all matters in the Bill. We could not undertake to discuss with them the essential policy at the heart of the matter, because that is a matter to be decided by Parliament and not outside. However, the Secretary of State extended an invitation to the relevant unions for this purpose im- 1212 mediately after his statement of 20 July and a meeting was held the following week.
Naturally enough, the trade union representatives said that they needed more time to gather their comprehensive view, and my right hon. Friend invited them to a further meeting before publication of the Bill. Unfortunately, they expressed the view at that meeting that they were not prepared to discuss any details of our proposals for British Airways on the grounds that they were fundamentally opposed to the policy and would be directing their efforts accordingly. Therefore, our efforts to consult about all these matters were frustrated, not by our obstinacy but by the fact that the trade unions maintained that they did not wish to enter into consultations.

§ Mr. Sheerman
Is it not the case that the Government had no mandate in their manifesto to make a change in the ownership of British Airways? They then made an announcement that they would make a change, and after that they announced that there were to be consultations with the trade unions. But they had already made up their minds. Would it not have been better to enter into consultations with the trade unions about the proposals before they actually became proposals?

§ Mr. Tebbit
Would it not be right to consult Parliament first by saying what we have in mind, rather than telling the trade unions? Surely that is the right way to go about it.

§ Mr. Clinton Davis
Was there any consultation with the chairman or other members of the board of British Airways or anyone else involved in the aviation industry before the publication of the Bill?

§ Mr. Tebbit
Of course there was a great deal of consultation before the publication of the Bill. I have just made it perfectly plain that the trade unions were offered consultation before publication.

§ Mr. Davis
I asked whether there was any consultation before the announcement was made in Parliament—that is, prior to the publication of the Bill. That is the material date. Was there any discussion with the chairman, management or 1213 chief executive of British Airways or any members of the board or anyone else involved in the airline business?

§ Mr. Tebbit
I repeat what I said. There was extensive consultation with the board of British Airways before the publication of the Bill. Secondly, the trade unions were told that it was open to them to engage in consultations before the publication of the Bill. That is the question that the hon. Member asked and that is the question to which I have replied. He may wish to ask another question and I am perfectly willing to reply to anything else, but I must repeat that I have answered that question.

§ Mr. Davis
The question that I seek to address to the Minister is this: before any announcement was made in the House about Government policy, did the Secretary of State or the Minister engage in any discussions of any kind—consultations or otherwise—with members of the British Airways board or anyone else in the airline industry? The Minister has confirmed that prior to publication of the Bill it would have been improper to hold consultations with the trade unions before he came to Parliament. I want to know whether he held any discussions with anyone else before he came to Parliament.

§ Mr. Tebbit
The British Airways board was informed of my right hon. Friend's statement before it was made. There was a problem here. I would have informed the trade union side through the medium of the chairman of the National Joint Council. Unfortunately, a message which should have been transmitted to him was not so transmitted. That was not the fault of my Department or of the chairman. I intended that he should know before the statement was made, in the same way as the chairman of the British Airways board knew. But we did not engage in consultations with the chairman of the board. We informed Parliament.

§ Mr. Davis
Why did not the hon. Gentleman satisfy himself that such a communication would reach the ears of all interested parties—the Trades Union Joint Negotiating Council as well as the board of British Airways? Surely the hon. Gentleman's Department has the wherewithal to do that.

§ Mr. Tebbit
The hon. Gentleman must know that what infuriates hon. 1214 Members more than anything is to read in the newspapers information that is to be given to the House later in the day or even the following day by the Secretary of State. The measures taken were designed to ensure that the statement would remain confidential until it was made. That was the first consideration. I do not know who the hon. Gentleman believes that he was responsible to as a Minister, but I am not responsible to the trade union movement or to the CBI. I am responsible to this place.
From that moment on it was made clear to the trade unions that we wanted to consult them. The door was open, No one came in. We should have been glad to have listened to the trade unions' worries about these matters. They chose not to see us. I expected the trade unions to be far more interested in the constitution of a company that is intended to be their employer than in the appointed day. I therefore took the trouble to send them a copy of the draft memorandum and articles of association last March. I asked for their comments. They asked for more copies so that they could give the matter proper consideration. I sent them. I have still not heard their views. I do not complain of that. It is up to the trade unions whether they want to talk to me about these matters, but it is utterly unjust for the hon. Gentleman to accuse me of a lack of willingness to consult them, when the letters that I write are not even answered and they do not tell me what they feel about the matter on which they say that they wish to consult. Am I supposed to kick in the door of the trade union office, grab an official, hold him up against the wall and insist that he tells me what he thinks or politely wait for a letter? I chose to wait politely, but letter came there none. The lack of consultation has been on the part of the trade unions.

§ Mr. Sheerman
The backdrop to the Bill is a Government who came to power adamantly ignoring trade unions at every level—

§ Mr. Bowen Wells (Hertford and Stevenage)
Nonsense.

§ Mr. Sheerman
—and a Prime Minister who showed in every act and gesture a contempt for trade unionists. It is therefore not surprising that the Bill was born 1215 in an atmosphere of dislike and contempt, and that the Minister received no answer. That is what the Government deserve. I do not blame the Minister. The fault lies with what his Government did to turn industrial relations into warfare instead of co-operation.

§ Mr. Bowen Wells
Nonsense.

§ Mr. Tebbit
The fact that the hon. Gentleman refers to this Government turning industrial relations into warfare shows that he does not remember what happened between Christmas 1978 and March 1979. That was warfare—the dead left unburied, hospitals closed and the sick left to sit in the snowdrifts waiting for an ambulance. What was that if it was not industrial warfare conducted by the Labour Government and the trade unions? Since I have held my present post, I have made the offer time and again to trade unions that they can discuss these matters with me. It is not me indulging in warfare if they do not choose to come.
I repeat that I am not responsible to the TUC or the CBI—

§ Mr. Tebbit
I am responsible to the House. It comes first. I consult this place before I consult the TUC or the CBI. That is the essence of the matter.
I took the trouble to send the draft memorandum and articles of association to the trade unions in March and they took the trouble to ask me for more copies so that they could consult their members and, I had hoped, so that they could let me know whether they felt that there were matters in those documents that ought to be changed. I have not heard a word from them. Is that warfare on my part? Where is the hostility? Where is the unwillingness to consult? It is not in my office.

§ Mr. Clinton Davis
The Minister will recall that he had to be virtually dragged kicking and screaming into the produc- 1216 tion of the memorandum and the articles of association. Initially, he refused to disclose them and only later did he change his mind.
The Government were embarking on a radical change of policy. A new concept was being developed. Why was it not possible for the hon. Gentleman to produce a Green Paper or a White Paper so that positive discussions could take place? Was speed so much an essence of the matter?

§ Mr. Tebbit
The essence of the matter is that the Government were elected on a clear understanding with the electorate.

§ Mr. Sheerman
No.

§ Mr. Tebbit
If the hon. Gentleman will wait until I have finished the sentence, he may know whether he agrees or disagrees with it. If he insists on behaving like a Pavlovian dog we shall not get far.

§ Mr. Sheerman
Like a latter-day Norman Tebbit perhaps?

§ Mr. Tebbit
The hon. Gentleman can choose his own expressions. The Government were elected on a clear understanding with the electorate that our programme would be to reduce the size of the public sector. The Bill is part of that operation. It can come as no surprise to anyone that we are taking measures to reduce the size of the public sector and that British Airways is one of the prime areas where we can do that. There was no call for a White Paper, a Green Paper, a brown, blue or striped paper. My right hon. Friend the Secretary of State told the House the Government's intentions. From that moment on, we were willing to discuss their implementation with those concerned.

§ Mr. Woolmer
If, within two months or so of the general election, the proposal to denationalise British Airways was no surprise, why had the Government not done the electorate the courtesy of putting it in their manifesto? If it was so clear to the hon. Gentleman and his colleagues that they intended to denationalise British Airways, why did they not spell that out in the manifesto?

§ Mr. Tebbit
We thought that a reference to a reduction in the size of the public sector made plain that we would go in for denationalisation. Whatever the 1217 hon. Gentleman thought, it came as no surprise to the rest of the electorate that British Airways was included in our plans. I hope that before long we shall be able to produce some more ideas to please the hon. Gentleman, even if they were not specifically mentioned in our election manifesto.
I do not want to prolong the debate at this time of night. I have made plain that, for me, consultation about all matters concerning the Bill is the order of the day. It was all the way through.
The hon. Member for Hackney, Central said that he had had to drag the memorandum and articles of association out of me. The only point about which we had any great difference was whether they should be subject to debate in the Committee and whether I could produce them before the Committee had finished its proceedings. I gave the undertaking that I would do my best, and I lived up to that undertaking. I think that that is a reasonable source of satisfaction to the hon. Gentleman.
The memorandum and articles were made available to the trade unions in March, and we are now virtually into July. There was ample time for them to respond if the unions wanted to consult me about them. I can only conclude that, for reasons that satisfy them, and are nothing to do with me, the unions have decided that they do not wish to indulge in the consultation that the hon. Gentleman is pressing upon me.

§ Mr. Clinton Davis
It is a travesty of an accurate record of what happened in the Committee for the Minister to give the impression that he was initially amenable to the idea of the memorandum and articles being provided. The record is absolutely plain, and the hon. Gentleman can consult it. He will see, and other members of the Committee will be able to vouchsafe, that initially he was opposed to the idea and gradually responded to the force of the argument. That is what he said. As a consequence, we were privileged to be provided with the draft memorandum and articles.
For the most part tonight the Minister has been very fair. I do not think that he has been very fair on this matter, but we should be warned by Proverbs that When he speaketh fair, believe him not: for there are seven abominations in his heart. 1218 It is the Secretary of State who must take the real responsibility, not the Under-Secretary. The right hon. Gentleman failed in his duty, when he was embarking upon a fundamental change of policy, to engage in consultations. Some of the propositions that the Minister has advanced tonight have been utterly absurd. He went so far as to say that the public must have realised, because of the Conservatives' statement that they would reduce the public sector borrowing requirement, that they were going about this policy of privatisation of British Airways. That is absolute rubbish. On that basis, why did the Conservatives in their election manifesto mention anything at all about denationalisation, or privatisation, as they did?

§ Mr. Tebbit
I said nothing about what we are doing being part of reducing the public sector borrowing requirement. I said that it was made plain that we would reduce the size of the public sector. Therefore, the fact that not everything was included in the manifesto did not exclude it.

§ Mr. Davis
But the Conservatives were absolutely specific about a number of industries. They were not at all specific about British Airways. They were not mentioned. Yet a matter of four, five or six weeks later—the Government must have known about the policy even before then, I suppose—they chose to announce it in the way that they did. It was an affront to the way in which they should be conducting the job of trying to imbue some confidence in an industry that is going through a very anxious time.
The Government's constitutional reasons did not appear with regard to the Companies Bill or a large number of other matters, matters concerned with the hon. Gentleman's own Department, where the Government consulted before introducing radical changes. The Minister's argument is totally bogus—as Sam Goldwyn said, genuinely bogus. If that was the obstacle, all they needed to have done was to introduce a White Paper. There could have been a Green Paper. If, however, the Government had wanted to state their policy, a White Paper would have enabled people to discuss matters gainfully with them before the Bill was introduced.

§ Mr. Tebbit
What would have been the difference between publishing a White Paper and making a statement, as the Secretary of State did, on 20 July? I do not see that it would have made a difference. If we had published a White Paper, the hon. Gentleman would have said that we should have consulted everyone before writing it.

§ Mr. Davis
It would have been possible for the trade unions to have brought to bear on the Government, before they were totally committed to the Bill, their feelings about where they thought the Government were going wrong. The trade unions believe that the Government have gone wrong. We have already had a number of debates that make clear that events will indicate that the Government have misjudged the situation. The atmosphere in which the Government initially published their proposals has changed. The airlines are going through a difficult time. It is difficult to see how the Government can genuinely pursue this policy over the next two or three years unless they intend to sell off public assets at an appalling loss.
The Minister has said not one word of contrition for his behaviour. That is a pity. The Minister could have been bigger and said "I think, on reflection, that the trade unions might have been wrong and might have misjudged the situation." It is not good enough to react by saying that he sent the unions the memorandum and the articles of association. The memorandum and the articles of association have been expertly drawn. The solicitors who undertook the job have justified their fee. I hope that the Minister will not challenge the matter before the Law Society. The solicitors have done a good job. That is not the answer.
The Minister should not simply be saying to the trade unions that his door is open and that he will receive the unions if they care to call. The hon. Gentleman should be saying "I want to discuss matters of policy not only with the trade unions but with other people concerned in the aviation business". I do not consider that the situation that prevails today, in terms of accessibility to the Minister in the belief that the Minister will listen, is remotely like that which existed during the five years in which I held office under a number of Secetaries of State.

§ Mr. Patrick Cormack (Staffordshire, South-West)
Very modest.

§ Mr. Davis
I do not accept responsibility, because the direction is given by the Secretary of State. I am not claiming responsibility, but it was a better atmosphere. If a Government indicate that they are prepared to listen, they will gain respect from everyone in the industry. I do not believe that the present Government have gone out to get that respect. I do not believe that they have earned it.