Water Industry (Dispute) (Hansard, 10 February 1983)

§ The Secretary of State for the Environment (Mr. Tom King)
With permission, Mr. Speaker, I should like to make a further statement to the House about the water industry dispute. Since my statement last Thursday there has been little change in the number of people advised as a precaution to boil water. This now stands at 7 million.
There has been a further increase of some 15,000 in the number of properties now without normal supplies which now stands at 38,000. Once again, arrangements have been, or are being made, for alternative supplies. There have been some further reconnections of properties to mains supply. The quality of effluent from many sewage treatment works continues to deteriorate and some streams are polluted, but there has been no serious effect on rivers.
In my statement last Thursday, I informed the House that the employers were ready to have immediate negotiations about higher earnings in relation to improved productivity under the terms recommended by the mediator in paragraph 8 of his report. These negotiations took place on Sunday at which time the employers tabled a series of proposals. These proposals covered improvements in productivity, pay by credit transfer and changes in working practices.
In spite of 12 hours of discussion at ACAS on Sunday, no agreement was possible. At this point, since there was still no agreement, the employers exercised their right to invoke the final stage of the agreed procedure, in accordance with the agreement signed by both parties and witnessed by Mr. Lowry of ACAS on 21 January. I now quote from Mr. Lowry's letter which accompanied the agreement: The third sentence of the clause deals specifically with possibility of arbitration—the final stage in the procedure. It emphasises that arbitration is the course of last resort which means that it will only be used when negotiations properly carried out (in this instance with the help of the mediator) have failed to produce an agreement. I consider that the sentence is absolutely clear. In the circumstances of such a disagreement either party would have the right to seek arbitration and the other would have the obligation to respond. Last night ACAS was formally told by the trade union side that it was not willing to accept arbitration. [HON. MEMBERS: "Shame".]
In my two previous statements to the House, I urged the earliest possible end to this damaging dispute which while only seriously affecting a small proportion of the population is none the less causing very real hardship and distress to many, not least the sick and the elderly.
I also stated my belief that the offer of an increase of an average of £10 a week, quite apart from any further benefits through increased productivity, is by any standards this year a very fair offer indeed.
I also made clear in both statements that there were two main options to achieve an end to the dispute and an immediate return to work. The first of these options involved negotiations on higher earnings for productivity as recommended by the mediator. These negotiations failed to produce agreement. There therefore remains the second option that the agreement reached through ACAS must be honoured and the terms of the national agreement requiring arbitration must be followed.
If normal service to the public is to be resumed at the earliest possible moment and if the water workers are to 1155 lose no more earnings, it is vital that those concerned reconsider their position and agree to accept binding arbitration as clearly stated in the agreement.
The whole House will appreciate the seriousness of the situation if a clear agreement, freely entered into, that provided a sensible procedure for resolving this dispute is not to be honoured.

§ Mr. Gerald Kaufman (Manchester, Ardwick)
Is the right hon. Gentleman aware that the country views with grave misgiving the prolongation of this potentially exceptionally grave dispute and that all hon. Members want an early and honourable end to it before major damage and hardship, beyond what is already being suffered, is brought about? It is useful that following his unhelpful radio interview last Friday the Secretary of State has said nothing today to exacerbate this situation further. However, will he have a word with the Secretary of State for Employment whose false and malicious statement last Tuesday could have been a major setback to any prospect of a settlement?
Why, in his statement, does the Secretary of State not present the situation in the balanced manner of the ACAS report rather than in the partial way in which he has presented it to the House today? Why did he not quote the condemnation of the employers' approach in last night's statement by ACAS saying: Expectations raised by certain statements made to the media by the employers and subsequently dashed have not made the negotiations easier and have prejudiced the prospects of a settlement. The Minister has referred to negotiations which he says took place last Sunday. There were no negotiations. What happened was that the employers stated their terms and did not budge from them throughout the day. Why are the employers so reluctant to accept a proposal by the unions of an inquiry whose terms of reference would deal with wider issues such as the restoration of a stable and long-term industrial relations framework in the water industry? Will the Secretary of State assure the House that the Government are not involved in the refusal by the employers?
Why did not the Secretary of State tell the House that the unions stated last night that if an inquiry had been allowed to proceed the dispute could have been over by the weekend? Why did he not tell the House that the unions involved in the dispute have an honourable record of accepting the recommendations of inquiries—[Interruption.] The Secretary of State for Employment has no conception of what honourable means.

§ Mr. Speaker
Order. In the heat of the moment, people say things that they would not otherwise say. The right hon. Gentleman will withdraw that remark.

§ Mr. Kaufman
At your request, certainly, Mr. Speaker.
On the other hand, I hope that the Secretary of State will withdraw his untrue statement on Tuesday that in the water industry there is a long trail of agreements that have been voluntarily entered into and ruthlessly broken".—[Official Report, 8 February 1983; Vol. 36 c. 874.] and if he will not withdraw it, he will document it, as the Department of Employment, questioned about it by the press, says that it knows nothing about it.
The Secretary of State should make clear his wish that the employers accept an inquiry on the terms of reference 1156 proposed. This dispute must be settled quickly and honourably. We on this side will do our utmost to bring that about.

§ Mr. King
I certainly join the right hon. Gentleman in his opening remarks. This is a grave and serious dispute.

§ Mr. Dennis Skinner (Bolsover)
Will the tight hon. Gentleman withdraw that statement?

§ Mr. King
It is causing intolerable hardship to many of our fellow citizens. I should like to see it ended at the earliest opportunity. The right hon. Gentleman cannot have it both ways. He draws attention to the concern of ACAS over expectations being raised rather higher than was justified. We are aware that the original interview with Mr. Hill on "The World at One" by Robin Day did give rise to a misleading impression. The right hon. Gentleman then criticises me for an unhelpful intervention when I was seeking precisely to avoid the charge that expectations had been raised too high, and echoing what Mr. Hill had himself said on "Newsnight" that night when he sought to correct what he realised could have been a misleading impression. I will not take the House through the transactions, but hon. Members will be familiar with those broadcasts.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman) said that there had been no negotiations during the 12 hours in which the two sides discussed possibilities of improved earnings for productivity. He will be aware—I have a list of proposals made—that there were a number of proposals, some involving earnings improvement for everybody on a modest scale, some involving significant increases for those who change their working practices and some involving a reduction in the working week next year for everybody in the industry. At the same time, the employers invited the unions to put forward any proposals that they had to improve earnings through improved productivity. I am sorry to say that they were unable to respond. My right hon. Friend the Secretary of State for Employment, when referring to the breaking of agreements, spoke of the one-day strike, which I am sure that the House would not support, and which took place in November in breach of every agreement. At the moment, there is a procedure for the settlement of the dispute. We are trying to get people to revert to the procedures in the existing national agreement.
The right hon. Member for Ardwick and the Leader of the Opposition will know that it is fundamental to any system of industrial relations that if an agreement is signed—I was trained in this when I was in industry by some tough union leaders—union leaders should take pride in seeing that it is honoured. The seriousness of this problem is that there is a specific agreement, witnessed by the chairman of ACAS. The problem for ACAS now is that the unions, sadly, are refusing to honour it. I hope that they will reconsider their position.

§ Mr. Kaufman
After a hurried conversation with the Secretary of State for Employment, the right hon. Gentleman has dragged out what he claims is one example—or is it two? Will he now document what the Secretary of State for Employment called a long trail of agreements that have been voluntarily entered into and ruthlessly broken by the unions concerned."—[Official Report, 8 February 1983,; Vol. 36, c. 874.]? If the right hon. Gentleman shares the Secretary of State for Employment's view, expressed in those disgraceful 1157 words, he could not rely on the good faith of the unions to honour an arbitration agreement if arbitration were proceeded with.
Does the right hon. Gentleman deny that the unions involved have an honourable record in accepting the recommendations of inquiries? Is he impugning the integrity of the union negotiators? If he accepts the integrity of the union negotiators, will he encourage the employers to take part in an inquiry?

§ Mr. King
I am not impugning anybody's integrity, and it would be singularly unhelpful if I did. The decision so far taken by the union leaders is unwise, and unwise for the whole trade union movement. How can the employers in this dispute possibly go forward, as they have been invited to do, to enter into fresh agreements about some fresh form of negotiation if they have no confidence that this agreement, so seriously entered into and witnessed by the chairman of ACAS, will be honoured? Some agreements can be vague, but this has been very carefully drawn out. If it is not honoured, that is serious.
What I have said on this serious matter, about which everybody who cares about the proper conduct of industrial relations in this country must be concerned, should be reconsidered and the resolution of the matter as provided for in the agreement, should be pursued immediately.

§ Mr. David Steel (Roxburgh, Selkirk and Peebles)
Is the Secretary of State aware that, while the failure to use the agreed arbitration procedure is deplorable, the public, listening to the various interviews given on radio and television over the past few days by both sides to the dispute, have received the clear impression that the negotiations have been conducted with an unparalleled degree of downright incompetence? Will the Secretary of State consider calling both sides together and offering to set up an independent inquiry into the pay and conditions of the water industry workers?

§ Mr. King
It was always known that the negotiations would be difficult this year. There is the issue of what is called the upper quartile. It was always recognised, and that is why the employers at the very start, faced as they were with the wide gulf between what they thought the industry could afford and what the unions expected—it is generally known, and the unions have just reconfirmed, that they expect something in excess of 15 per cent. this year—

§ Mr. Skinner
What is wrong with that?

§ Mr. King
—that with this wide gap it was necessary to have some arbitration to resolve the matter. This is why that is in their national agreement. I am grateful that the right hon. Gentleman, if I interpret correctly his opening remarks, would join me in calling for the strict observance of the national agreement and specifically the agreement so recently signed.

§ Mr. Eric Cockeram (Ludlow)
Can my right hon. Friend confirm the announcement on the tape at lunchtime today that the main 75-mile pipeline to Birmingham has burst outside Ludlow, and that, further, if it is not repaired, the Birmingham supply will be endangered in three days' time? If that is so and my right hon. Friend cannot get that pipeline repaired by the water industry, will 1158 he accept that there are many worthy citizens in Ludlow and elsewhere who will repair the pipeline in the interests of the sick and the elderly in the city of Birmingham?

§ Mr. King
I was not aware that there had been a burst. I have heard a report that there may be a blockage, but in any case that there was some interference with the flow. Clearly, this is covered by the emergency cover arrangements that are part of an agreement between the unions and the water industry. I trust that in a matter of this importance, the emergency cover arrangements will operate. It is known to the House, and I pay tribute to it, that in many parts of the country, where it has been necessary, the water workers have been prepared to take emergency steps to meet emergency arrangements. While there have been one or two problems in certain areas, I hope that people will recognise the importance of strict observation of the emergency cover arrangements.

§ Mr. Peter Hardy (Rother Valley)
Will the Minister confirm what he seemed to be saying in his statement, that the water workers were offered a certain £10 a week extra? How can he be sure of knowing what the employers are offering, when the employers do not seem to know what they are offering?

§ Mr. King
I make my case clear—the £10 is an average. I have carefully checked this against the average earnings. If the hon. Gentleman calculates the 7.3 per cent. against the figures of average earnings shown in the new earnings survey, he will see that that is one check. He can then tack it on the base rates and add it to the average earnings. He will find that the figures are correct.
The figures are difficult, and while certain people have sought to exploit the details, the figures depend on the years of service, on the amount of overtime worked, on whether the person is on a shift, and on a number of different factors that can affect earnings. The average of £10 is, on my best information, correct.

§ Mrs. Shirley Williams (Crosby)
Is the Secretary of State aware that his statement is perhaps a little complacent as it is now suggested that there may be raw sewage in the streets in north Wales and other parts of the country, particularly Gloucester? While my party would accept the Secretary of State's attempts to get binding arbitration on both sides, he will be aware that there is some mistrust in the arbitration procedure, not least because, in principle, a year ago Ministers decided to bring to an end the arbitration procedure in the water industry. In the light of that, will the Secretary of State consider the possibility of a committee of inquiry, but on the assumption that it would have to be binding on both sides as a possible way of making progress in what is now a tangled and increasingly difficult dispute?

§ Mr. King
There is no truth in the right hon. Lady's suggestion that we are getting rid of arbitration. The only question that has arisen, which is one of the features of the water industry's structural procedures, is the unilateral access to arbitration. That is a different matter, and it is not necessarily the arbitration procedure.
I have no reports on the right hon. Lady's comment about sewage. At the moment, I stand by the statement that I have made. However, I am grateful to her for what she says about agreements. Anybody who has the most elementary knowledge of industrial relations knows that if 1159 there cannot be some confidence that agreements will be honoured, we have no foundation on which a sensible industrial relations structure can be built.
The right hon. Lady queried whether I think that the Government's record on arbitration is good, and suggested that there may be concern about the Government's involvement. The agreement to go to arbitration was signed on 21 January. The Government were aware of the terms under which the agreement would operate. The unions have raised difficulties in going to arbitration.

§ Mr. Ian Lloyd (Havant and Waterloo)
I congratulate my right hon. Friend on his robust assertion on the radio the other morning that the employers do not have a penny of their own. Every penny laid on the table must be met by the ratepayers and the water ratepayers, many of whom in my constituency would regard £140 a week as a prince's ransom.
Does my right hon. Friend agree that one of the most serious aspects of the dispute is the physical occupation of several water installations by those who have no legal right to be there? Is there not a great danger that if this fact is not made clear, and if the occupiers believe that they can stop the water, other citizens who have an equal right to the installations' products may feel equally entitled to enter those installations to ensure that that does not happen? That way lies anarchy. Will my right hon. Friend use his good offices to ensure that those responsible in these matters comply with the law?

§ Mr. King
I know that the water authorities take a serious view of the occupation of plant. They are taking steps in each case to ensure that the position is corrected.

§ Mr. Skinner
Anarchy.

§ Mr. Speaker
Order. May I say to the hon. Member for Bolsover (Mr. Skinner)—

§ Mr. Skinner
rose—

§ Mr. Speaker
Order. —that if every hon. Member behaved as he behaves, the proceedings of the House would come to a stop. He has hardly stopped his running commentary while other people are talking. It really is intolerable. He must exercise some self-control.

§ Mr. Skinner
I was only—

§ Mr. Speaker
Order. If the hon. Gentleman argues like that, I will ask him to leave the Chamber.

§ Mr. King
We view this matter with great seriousness and action is being taken in each case.
Although I would not use the phrase "a prince's ransom", the earnings of manual workers in the water industry, having regard to the offer being made, are not unfair. While they may seek to argue their case for further improvement—nobody denies their right to do that—a procedure must be followed. The offer that has already been made, on top of the present level of earnings, cannot justify the hardship and distress that are being caused up and down the country.
The cold weather that the country is facing at the moment is causing problems in different areas. There are the problems of frozen stand pipes and of elderly people having to carry water over icy or snowy tracks. It is intolerable that this dispute should continue. I hope that people will reconsider their position and accept binding arbitration.

§ Mr. Reg Race (Wood Green)
On the question whether the ACAS agreement is to be honoured, will the Secretary of State tell the House whether there have been proper negotiations, since he interfered in the negotiations and told the employers to reduce their offer? Secondly, will he confirm that the employers told the workers that a £10 increase was on offer but that it turned out to be 50p? Thirdly, the employers did not even know what offer they were making because they calculated it wrongly. How in those circumstances can it be said that proper negotiations have taken place? Does the Secretary of State not recognise that for many of the workers on the lower rates of pay, who are not on productivity schemes, the current offer is inadequate?

§ Mr. King
As to negotiations, when the employers met they increased their offer three times. They have offered to enter into negotiations on further earnings through higher productivity. Part of the signed agreement to which I have referred was that negotiations should first lake place under an independent mediator. It was only when he decided that proper negotiations had taken place that he would seek, if agreement had not been reached, to become the mediator and to make a recommendation. He made an original recommendation when he was satisfied that proper negotiations had taken place.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I must inform the House that I have received notice of two applications under Standing Order No. 9. I will allow questions to run until half past four and then take the applications under Standing Order No. 9.

§ Sir David Price (Eastleigh)
Does my right hon. Friend agree that there is no entirely objective method for settling what a water worker or anyone else should be paid? Is he also aware that the normal commercial constraints that prevent many people from pushing their luck on pay do not apply in a statutory monopoly? In those circumstances, is it not in the national interest that, not only on this occasion but normally, water workers' pay should be settled through arbitration?

§ Mr. King
Settlements should be in accordance with agreements that are freely entered into by both sides. I understand why my hon. Friend has raised this point. It is extremely important that this agreement that provides for arbitration is honoured.

§ Mr. Giles Radice (Chester-le-Street)
Is the Minister aware that the dispute could have been settled by the weekend if ACAS had set up an inquiry under section 5 of the Employment Protection Act, 1975? Will he encourage ACAS to set up such an inquiry and the employers to agree to it?

§ Mr. King
Is the hon. Gentleman telling me that the unions would agree as a binding obligation to accept the findings of an inquiry? I understand that they have not been willing to do that, although it is provided for in the agreement. I should have thought that the hon. Gentleman, with his knowledge of trade union procedure, would read the agreement and understand why I made the statements that I did from the Dispatch Box.

§ Mr. David Madel (Bedfordshire, South)
Should not both sides follow Mr. Lowry's advice on arbitration?
1161 Should they not re-examine the mediator's recommendations on efficiency and bonus payments? There has been much misinterpretation by both sides. Should we not ask the mediator to come back quickly to look at them and to call off the strike while the mediator tries to sort things out?

§ Mr. King
I have sought to put both options before the House in the statements that I made. It is clear that it is not possible at this stage to get an agreement on the first option. In that case, the second option must be pursued. It is no longer acceptable to the vast majority of people for this dispute to linger on. The dispute is damaging the industry, the water workers are losing money, and arbitration is the way to resolve the dispute.

§ Mr. Bob Cryer (Keighley)
Does the Minister accept that one of the most nauseating factors is Tory Members lining their pockets with a multiplicity of directorships and parliamentary advisorships, yet telling manual workers to keep their wage claims down? Does he also accept that the atmosphere of mistrust and suspicion in this dispute has been engineered by his intervention on the side of the employers? The lower-paid workers in the water industry have not had an adequate offer, and those affected by productivity agreements recognise that with 3.5 million people on the dole, productivity is another formula for putting more people on the dole.

§ Mr. King
That is a pretty cheap and unhelpful intervention. This is a serious dispute. It is nauseating to find an hon. Member who affects to support the trade union movement who does not realise the importance to the trade union movement as well as to the country of encouraging agreements to be honoured at all times.

§ Mr. Reg Prentice (Daventry)
If the unions continue to refuse arbitration, which is a clear breach of faith, and if the hardship to the public and the risk to health increase, will the Secretary of State bear in mind some further possibilities? First, he might issue guidance to the water authorities encouraging them to use private contractors for repairs to mains and other equipment and, secondly, he might use troops where that would be helpful.

§ Mr. King
I do not wish to speculate on future developments. I hope that there will be a reconsideration of the position. I hope that the Opposition will lend their good offices to achieve that. There is no question that the Government will stand idly by if there is a serious risk to health or to the life of the community. If that were the case, any Government should take steps to see that essential services were naintained.

§ Mr. Laurie Pavitt (Brent, South)
Will the Secretary of State, on behalf of hon. Members on both sides of the House and their constituents, express a word of appreciation to the water workers who have kept flowing the many gallons of water needed for kidney machines? Is he aware that in one hospital not far from the House a renal unit has 81 home dialysis machines in operation, all of which have been kept fully supplied with water? Will he express a public word of thanks to the water workers for honouring that commitment?

§ Mr. King
I do that unreservedly. The Government appreciate the efforts that have been made by many people to try to keep services going. Sadly, that is not the universal picture. My plea today is that it should be.

§ Mr. Gerald Kaufman (Manchester, Ardwick)
I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, the potentially grave damage to public health of a prolonged continuation of the dispute in the water industry and the need for an early and honourable settlement. The matter is specific because the dispute has now reached its 18th day with no clear prospect of an early and honourable settlement. It is important because water is a basic necessity of life and the maintenance of an efficient and properly maintained water and sewerage system is indispensable to public health and well being. It is urgent because the latest discussions have broken down, accompanied by an unprecedented rebuke by ACAS to the employers.
The dispute can do great and serious damage to public health if it continues much longer. An early settlement is vital, and this House must play whatever part it can in bringing that about.

§ Mr. Speaker
The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely, the potentially grave damage to public health of a prolonged continuation of the dispute in the water industry and the need for an early and honourable settlement. I am satisfied that the matter raised by the right hon. Gentleman is proper to be discussed under Standing Order No. 9. Does the right hon. Gentleman have the leave of the House?
The pleasure of the House having been signified, the motion stood over under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) until the commencement of public business on Monday 14 February.
I should tell the House that the right hon. Member for Crosby (Mrs. Williams) made a similar application. The debate on this matter on Monday will last for three hours.

§ The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen)
In view of what you have just said, Mr. Speaker, my announcement a short time ago of the business for Monday must be wholly reconsidered. With your permission, and for the convenience of the House, I shall make a statement later this evening on the revised business for Monday.

§ Mr. Speaker
I think that that would be in the interests of the House.

§ Mr. Cryer
On a point of order, Mr. Speaker. Since the Leader of the House has said that he will make a statement later this evening, can you ensure that the annunciators give advance notification of when that statement will be, as they would, for example, for a business statement on a Friday?

§ Mr. Speaker
It is reasonable to request that when an important statement concerning the arrangements of hon. 1163 Members is to be made there should be about one hour's notice on the indicator so that hon. Members can come into the Chamber and hear the statement.