HC Deb 05 March 1981 vol 1000 cc425-30
The Minister of State, Civil Service Department (Mr. Barney Hayhoe)

With your permission, Mr. Speaker, and that of the House, I should like to make a statement explaining to the House and to the country the present situation regarding the threatened Civil Service strike on Monday. The Government have offered to non-industrial civil servants an increase of 7 per cent. from 1 April, together with a clear statement of our desire and intention to establish for the future a new, ordered and agreed system for determining Civil Service pay.

For 1981–82 all the public services are operating within pay factors of 6 percent. for their cash limits. For the Civil Service, where the Government are the direct paymasters, it will be possible, albeit with considerable difficulty, to squeeze a pay increase of 7 per cent. from the resources available within the cash limit. That is simply as far as we can go. Other groups such as the local authority manual workers and the teachers in England and Wales and in Scotland, are settling at about the same level within the constraints imposed by the cash limit. It is evident from this that there is no question of discrimination against the Civil Service.

There are many people in private industry who would feel that such an offer at this time could be classed as good, given the general economic climate and the relative job security that civil servants enjoy.

I know that civil servants are concerned as much about future arrangements for determining Civil Service pay as they are about this year's cash offer. In August last year my right hon. and noble Friend the Lord President of the Council explained to the union leaders that, given the overriding need in the broad national interest for increases in pay to be very restricted, the emphasis in 1981 would have to be on cash limits, reflecting what the Government felt the nation could afford. It was not, therefore, possible for the Government to operate the existing pay research arrangements in the normal way, and in October my right hon. and noble Friend suspended them.

A further cause for concern is the pay research system itself, which is more than 25 years old. Over the years it has become top-heavy and cumbersome and perhaps somewhat mechanistic in its operations. It no longer commands general confidence. What is now needed is a thorough overhaul—and this is something that I believe is recognised by the unions as well as by ourselves.

I recognise that civil servants fear that the imposition of increases based on cash limits this year, coupled with the suspension of the present arrangements, could mean that the Government intend that Civil Service pay should be imposed by fiat each year, but this is not the case. My right hon. and noble Friend told the union leaders on 23 February: The Government intends to review the arrangements for determining the pay of non-industrial civil servants with the object of establishing as soon as practicable an ordered and agreed system which takes account of all relevant factors and which will command the widest possible acceptance". Evidently that review has to take place before we can see clearly how the new system will be shaped. We have made every effort to clarify the Government's position and, so far as possible at this stage, to explain our intentions to the union leaders. Recognising their concern about such matters as independent fact finding, comparisons with terms and conditions of service outside, and arbitration, we have made it clear to them that these, as well as other relevant factors like job security, would be covered in the review. We will welcome further discussions as the review proceeds.

The Government therefore find it hard to understand how in these circumstances the union leaders justify their recourse to the extreme step of recommending industrial action to their members. I hope that the union leaders will think it in the best interests of the Civil Service for them to concentrate on making their contribution to the thinking on the new system rather than calling for industrial action from which the country is bound to suffer.

Mr. Charles R. Morris (Manchester, Openshaw)

Is the Minister aware of the gravity of the situation that will inevitably flow from his statement today? Every Civil Service union has now voted in favour of recourse to industrial action next Monday. As a result, Heathrow airport will be closed, the ranks of the nation's immigration officers will be seriously depleted, and unemployment benefit offices and offices of the Department of Health and Social Security—every public office—will be closed on Monday. That is the seriousness of the situation that flows from the Minister's statement.

Does the Minister accept that civil servants have a right to know why a Prime Minister and a Government who never weary of expressing opposition to a national wages policy should be hell-bent on imposing a wage policy on the people who are employed in the public sector? How can the Government justify what most reasonable people would interpret as blatant discrimination against public servants?

I want to ask the Minister two detailed questions about his statement. How will the new, ordered and agreed system of determining Civil Service pay differ from the Pay Research Unit procedures and the principle of fair comparisons enshrined in the pay research operations that have existed up to now? Will this new, ordered and agreed system of determining Civil Service pay be operative for the Civil Service pay settlement in 1982? Does the Minister accept that civil servants are always catching up with the private sector on pay?

On the general issue, will the Minister invite the Leader of the House to find time for the parliamentary debate sought by my right hon. Friend the Leader of the Opposition when he raised the issue in business questions today? Surely the Government will not sit back and do nothing in the face of the action that is contemplated.

Mr. Hayhoe

The right hon. Member rightly mentioned the seriousness and gravity of the situation which flows not from the statement that I made today but from the votes and decisions of the unions concerned and the action of their union leaders in calling their members out on a national strike on Monday. I hope that they realise the particular matters to which the right hon. Gentleman drew attention and the many other ways in which the public and the country will be damaged as a result of this action.

The right hon. Gentleman asked whether this was a national wages policy. Of course it is not. It is the application of cash limits to the public services, and it was forecast last August that that would be the main determinant. I utterly repudiate what I thought was the right hon. Gentleman's mischievous suggestion that what is happening is blatant discrimination. It is not, and it is a travesty to describe it as such.

The right hon. Gentleman asked how the new system would differ from the present system. He is asking me to pre-empt the review that the Government feel must be urgently undertaken. He also asked about 1982. I do not know whether the new arrangements will be concluded in time to operate in 1982. The sooner that union leaders get round the table with us to discuss these matters the better. A debate on this subject is a matter for my right hon. Friend the Leader of the House.

Mr. Jack Straw (Blackburn)

Does not the Minister accept that the Government have plunged the morale of the Civil Service to an all-time low as a result not only of their diktat on pay policy, but by their constant denigration of the value of public service and public servants and by their decision to tear up a pay system that was instituted by a Conservative predecessor in 1956, the late Lord Butler—

Mr. Hayhoe

He only seems to be"late".

Mr. Straw

I apologise for that slip—the former Mr. Rab Butler, the former Chancellor of the Exchequer, who designed that pay system specifically to take Civil Service pay out of politics? This Government have brought it back into the political arena. As the Minister has just told my right hon. Friend that there will be no undertaking that the new arrangements will come into force by 1982, what possible confidence can trade union leaders have in sitting round a table? Surely the consequence of what he has just said is that next year there may well be an imposition similar to the one this year.

Mr. Hayhoe

The sooner we get round the table and discuss these matters, the sooner the new system will operate.

In reply to what the hon. Gentleman said about morale being particularly low in the Civil Service at present, there is no doubt that in real terms the salaries of civil servants are now higher than they were during the period of office of the Labour Government. There can be no justification for that at all.

Mr. Paul Dean (Somerset, North)

Is my hon. Friend aware that many civil servants resent and deplore being led into an action which they know is wholly contrary to the best traditions of public service in this country? To encourage them, will my hon. Friend press ahead as fast as he can with new arrangements for pay and pensions that will avoid the disadvantages of the existing pay research system?

Mr. Hayhoe

I am glad to be able to assure my hon. Friend that my right hon. and noble Friend and I will press ahead with the arrangements. I agree that many civil servants—perhaps the traditions of that service should be acknowledged more often in the House, because we are well served by a Civil Service that is honest, uncorrupt and of great integrity—resent and deplore the leadership that they are having to follow, sometimes from Left-wing leaders in their own unions.

Mr. James A. Dunn (Liverpool, Kirkdale)

Does the Minister appreciate that by changing the system of negotiation before reaching final agreement on a new system he broke a cardinal rule that applies throughout trade union negotiations? That is what is resented most, together with the way in which the announcement was made this afternoon.

Mr. Hayhoe

I know that resentment exists because of the suspension of the pay agreement by the Government last year. As I explained, it was the Government's judgment at the time, taking account of the general economic situation, that it was right that the cash limits should be the major determinant in rhe 1981 settlement.

Mr. Tim Rathbone (Lewes)

Does my hon. Friend accept that many people in the country will accept the statement today as a clarification of the truth of the action that is to be taken on Monday? Will he also accept that many people are concerned that civil servants do not sufficiently appreciate the immense value of their index-linked pensions? Has that been sufficiently explained to them? They should weigh that factor in the scales when analysing their comparability with the private sector.

Mr. Hayhoe

I hope that civil servants will put all the relevant factors into the scale in determining their judgment concerning Monday and any future date.

As regards pensions arrangements for the Civil Service and, indeed, more widely in the public sector, as my hon. Friend will know, there has been an important report from Sir Bernard Scott. This matter is being considered. I do not regard matters concerning that report as being linked to any negotiations concerning this year's pay settlement for the Civil Service.

Several Hon. Members rose

Mr. Speaker

Order. I propose to call three more hon. Members from each side of the House, and then we shall move on.

Mr. Kenneth Marks (Manchester, Gorton)

Is the 7 per cent. and its relationship to cash limits based on then; being the same number of civil servants next year as there are this year?

Mr. Hayhoe

It takes account of a reduction in the numbers of civil servants which has been announced to the House by my predecessor.

Sir Albert Costain (Folkestone and Hythe)

Does my hon. Friend appreciate that next Monday will see one of the highest tides this year? Under adverse weather conditions, the whole of London could be put in a very serious situation. The saving of lives could depend on communications and accurate weather forecasting. Does he agree with me that civil servants are a most responsible body and could not possibly be aware of the situation when they chose 9 March for their strike? Will he try to persuade them at least to postpone it?

Mr. Hayhoe

I do not know whether the civil servants' leaders were aware of that. However, having a constituency which borders on the Thames in West London, I am aware that Monday is one of the riskiest days in March. Of course, my right hon. Friend the Secretary of State for the Environment is responsible for these arrangements—[Interruption.] Believe me, for those who live close to the Thames, this is no laughing matter. It is a matter of very serious importance. My right hon. Friend the Secretary of State for the Environment very much hopes that the small number of his civil servants who are involved in these particular emergency arrangements will be fully aware of their responsibilities on Monday—as I know he thinks they are on all other days.

Mr. Arthur Lewis (Newham, North-West)

The Minister mentioned the efficiency of the Civil Service. I shall pay civil servants a tribute, as he requested. The Civil Service is far worse now than it was when I became a Member of this House 36 years ago. With all the modern appliances, such as electric copying machines, we still have to wait three or four weeks for formal acknowledgements, and evidently the Leader of the House could not get an answer from his office for half an hour.

What is the position with regard to these people? I really feel for them—the poor, hard-worked, underpaid civil servants. Can they rely upon this new system? During my 36 years here, never have the Government implemented the recommendations of our Committee as regards Members of Parliament. May we please have what the civil servants are being offered?

Mr. Hayhoe

The last part of the hon. Gentleman's question is not for me.

Concerning answers to Members' letters and answers to questions, I know that the hon. Member will understand—as he has, quite properly, contributed to it—that there has been a substantial increase in that work load over the years.

Mr. Arthur Lewis

And in the staff.

Mr. W. Benyon (Buckingham)

Is my hon. Friend aware that industrial workers in my constituency, many of whom have settled for much less than 7 per cent., will be infuriated if this cash limit is raised?

Mr. Hayhoe

I find that there is concern among many of those in industry and commerce who have settled for figures well below the 7 per cent. which is on offer, and that, taking all matters into account, they cannot understand the justification for the action which the civil servants are proposing to take.

Mr. Dennis Skinner (Bolsover)

Will the Minister confirm that during the general election campaign nearly two years ago the Tory Party's policy was one of free market forces and free collective bargaining? Will he also accept that the Tories gloated continually, both before and after the election, about the wonderful response that they were getting from many millions of trade unionists who were voting Tory because of these wonderful policies? Is it not a fact that what the Civil Service trade unions are doing is asking the Tory Government to carry out their mandate and allow free collective bargaining to operate?

Is it not also a fact that on television recently the Minister for Trade made it clear that the present Government will give way to those who have muscle? Is there not, therefore, good reason for those trade unions that have a bit of muscle to use it in order to get a wage increase that at least keeps pace with inflation? Those industrial groups that have failed to do so ought to take that into account next year.

Mr. Hayhoe

As is wholly typical, the hon. Member is totally irresponsible and inaccurate. As regards the policy on which I and my right hon. and hon. Friends fought the general election, I quote from the manifesto: Bargaining must also be put on a sounder economic footing, so that public sector wage settlements take full account of supply and demand and differences between regions, manning levels, job security and pension arrangements. We also said that it was necessary to reconcile all these matters with the cash limits used to control public spending". Therefore, what we are doing is in line with the policy upon which we fought the last election.

Mr. Nigel Forman (Carshalton)

Is it not the case that large parts of the Civil Service have enjoyed pay rises of some 50 per cent. over the last two years? Does not this suggest that the time has come for an ordered and agreed system of the kind that my hon. Friend mentioned, based on much more realistic assumptions?

Mr. Hayhoe

It is true that the majority of the non-industrial Civil Service has, over the period of 1979 and 1980, had settlements which come in total to just under 50 per cent. of what was being received at the beginning of 1979. Indeed, much of those large increases flowed from the falling behind which had taken place during the period of office of the Labour Government.

Mr. Charles R. Morris rose

Mr. Eldon Griffiths (Bury St. Edmunds)

On a point of order, Mr. Speaker. I wonder whether I may make a plea to you. Before you call the Opposition Front Bench spokesman to conclude the questions to the Minister, may I ask you to think of this point? This will be the last occasion, before the industrial action takes place, on which the House of Commons will be able to express its view about what for our people could be an extremely serious matter. I appreciate, and invariably obey, your desires to protect the balance of the business, and I understand the pressures that exist for the business still to come. However, I wonder whether, Mr. Speaker, even though you have said that you will call only three more Members, you would entertain giving some five minutes more for this important matter before the strike takes place.

Mr. Speaker

I am much obliged to the hon. Gentleman for his point of order. I fear that I cannot give way, otherwise, on every occasion that I say that I will call three more Members I shall be under pressure to call five more.

Mr. Charles R. Morris

In regard to the allegation that civil servants have had a 50 per cent. increase in pay over a period of two years, will the Minister confirm that towards the end of last year a Civil Service Department memorandum was prepared which looked at Civil Service pay over a period of five years and demonstrated that civil servants had received pay increases of less than the average enjoyed by similar workers in the private sector?

Mr. Hayhoe

I make no allegation about pay increases for 1979 and 1980 totalling just under 50 per cent. I state the truth of the situation. I think that, dependent upon which base year one goes back to, one can get a variety of views about the relativities between the Civil Service and other groups. Indeed, that is the same with most statistics which are bandied across the Table of the House.

However, I hope that I am speaking on behalf of at least the majority of the House when I say that we recognise the great service that we receive from public servants in Britain and we ask them genuinely to consider, with very great care, action that will damage their traditions and the respect in which they are generally held, and which will also do great damage to the country if they continue with it.