HC Deb 23 February 1983 vol 37 cc935-41 3.31 pm
The Secretary of State for the Environment (Mr. Tom King)

With permission, Mr. Speaker, I wish to make a statement to the House about the water industry dispute. The House will note that, following the findings of the chairman of the committee of inquiry set up by ACAS, agreement was reached last night in the National Joint Industrial Council for a settlement of the pay dispute and an end to the strike.

The terms of the settlement are as follows:

  1. i. the increase in the base rate should be 7.3 per cent. over 16 months, equivalent to 5.5 per cent. on an annual basis. This is exactly as recommended by the mediator a month ago on 23 January;
  2. ii. a number of the employers' proposals made in their offer on 6 February were adopted. These were improved payments under the national productivity scheme equal on average to approximately 55p per week; an extra day's holiday for employees with 10 years service; the introduction of a scheme for the payment of wages by credit transfer, for which the chairman proposed £75 rather than the employers offer of £50 as a single lump sum payment; and a minimum rate of £5 for employees taking part in local schemes for greater flexibility in working hours rather than the £4 offered by the employers which will apply to only a limited number of employees. In addition, there will be, with effect from 1 April 1984, a one hour reduction in the working week.
  3. iii. the chairman's findings and the settlement go beyond what had previously been on offer in only two significant respects—
    1. a. £5 of bonus payments are to be consolidated into the basic rate, which will increase average earnings by about 2 per cent. and
    2. b. the service supplement payable to those with over five years' service is to be paid to those with more than two years' service and to be raised, as in the employers' offer, from 2.5p per hour to 5.2p per hour. This adds 0.4 per cent. to average earnings over and above the employers previous offer.
The House will note that the chairman made no recommendation in support of the unions' central claim for comparability with other groups.

I should now tell the House the present position in the country. Ninety-one thousand properties are without normal mains supplies and 8.2 million people have been advised as a precaution to boil water. The quality of effluent from many sewage treatment works has deteriorated, but there have been very few serious effects on rivers. The House will appreciate the hardship and distress represented by the figures. None the less, it will also recognise the fact that after a four and a half weeks strike over 99 per cent. of users continue to receive their water supplies.

The water authorities and companies deserve every credit for this substantial achievement in keeping their systems running. The exceptional efforts of their staffs have maintained this essential service and safeguarded public health, and I pay full tribute to them. [HON MEMBERS: "And the unions".] Having said that, the House will recognise how damaging this dispute has been for all concerned. The water authorities and companies have been unable to maintain their normal service to all their customers, many of whom have suffered real hardship.

The manual workers went ahead with the strike in spite of an offer worth more than £10 per week on average. They have gained little more than £3 per week on average on top of that offer. In the process, they have lost many hundreds of pounds. For many of those involved it will take two to three years to recover the difference.

The cost of the water settlement cannot be found by raising water charges this year. Nearly all the water authorities have already set their budgets for next year. It will have to be met by further economies in operating and manpower costs.

The message of this dispute is clear. In industrial action of this kind there are no winners. There were always arbitration procedures available in the industry to resolve this dispute without a strike. The employers offered this on 11 November and again throughout the dispute. It has been an unnecessary strike. I trust that normal working will be resumed immediately and a full service restored to every customer as quickly as possible.

Mr. Gerald Kaufman (Manchester, Ardwick)

The Opposition share the satisfaction that will be felt throughout the country, though, if the evening press is to be believed, not by the Prime Minister, at the ending of this unnecessary and damaging dispute, but the House will have listened to the Secretary of State's sour and ungracious statement with a good deal of distaste. It was flavoured with the arrogance and insensitivity that provoked the strike in the first place. It was also irresponsibly provocative. Has the Secretary of State considered what the effect of belittling the settlement might be on workers considering their union's recommendation to return to work? If the unions have gained so little from the strike, why were they not offered this settlement in the first place, last November?

Can the right hon. Gentleman say how long it will take for the water system to gel: back to normal, when those having to use standpipes will regain their domestic supply, and when those now boiling water will no longer have to do so? What will be the cost of putting right the damage to the system?

In the debate last week, when I pressed for the inquiry that in fact took place—[Interruption.] Oh, yes; we asked for the inquiry. At that time, the Secretary of State stressed the importance of both sides accepting the inquiry's findings. I trust, therefore, that he will be gratified that both sides have accepted its findings and that the unions have honoured their agreement.

Has the Secretary of State reflected that if he had not intervened so damagingly on 11 November there would have been no strike, no hardship to householders, no pollution of rivers, and no costly damage to the system; and almost certainly a negotiated settlement last autumn would have been at a lower level than the one now accepted?

Has not the Secretary of State's intervention turned out to be a very expensive affair? Will the Government now abandon their invidious, discriminatory, back—door incomes policy, conducted by the arm twisting of walling employers? If the right hon. Gentleman, the Secretary of State for Employment and, above all, the Prime Minister have learnt their lesson, it may be that some good will come out of this sorry affair.

Mr. King

The House will be interested to recall the right hon. Gentleman's opening words, when he accused me of making a sour and ungracious statement. I must tell him that, if the cap fits, he should wear it. His attempt to rewrite the history of the dispute makes no impression on anybody who knows its background. If he has made any attempt to study the matter, he must know that many people in the union movement predicted that there would be industrial action in the water industry. It was to be the focus of pressure this year, and people know that to be the case.

The idea that a change being made in any opening offer provoked industrial action that would otherwise not have taken place is a total fallacy. The right hon. Gentleman must be about the only person in the country who still thinks that if a higher opening offer had been made there would have been a lower ultimate settlement. That is absolute rubbish.

The right hon. Gentleman attempts to claim the credit for suggesting the format of the committee of inquiry, but he does no credit to the employers who offered that on 4 November and continued to offer it throughout the dispute. It was enshrined in their national agreement.

The disgrace that the right hon. Gentleman bears is that at no time did he call upon the unions to honour the national agreement. Every old person who, during the past four and a half weeks, had to go to a standpipe in freezing weather has noted that he made no effort whatsoever—and nor did his right hon. and hon. Friends—to ensure that national agreements were honoured and that the strike was avoided.

The right hon. Gentleman asked when service would return to normal. Obviously that will vary in different parts of the country. I wish to make it clear to the House that, in the interests of all those suffering the present hardship and distress, I have asked the water authorities to ensure that normal service is resumed as soon as possible and that they use all available means to achieve that.

Mr. Tony Durant (Reading, North)

Does my right hon. Friend accept that many of the workers in the water industry were very worried by the strike and did not wish to participate in it but that the closed shop arrangement forced them to do so? Does he further accept that the settlement will, in the long run, cost jobs in the industry?

Mr. King

There is no question but that I and any hon. Member who has spoken to constituents who are water workers know that they fervently hope that there will never be another water strike. Even if the right hon. Gentleman denies it, they know all too well just how expensive it has been and the losses that they have incurred. It is a staggering thought. It was exactly a month ago that the mediator made his recommendations. They did not have to accept them but could have gone to arbitration. Had they done so, no one would have lost a day's pay and they could have still pursued the claim. Now, as a result of union leadership, they have lost hundreds of pounds which, I estimate, will take them between two and three years to recover.

Mrs. Shirley Williams (Crosby)

I offer the Minister my contribution to a shrivelled bouquet to the right hon. Member for Manchester, Ardwick (Mr. Kaufman), who obviously single handedly sorted out the strike. Will the Minister ponder on the fact that the result of the settlement is not that there are no winners but that the country is to some extent the loser? Will he confirm that there has been a substantial deterioration in what was already a ramshackle water system?

As 2 million people are waiting to make wage settlements during the next few months, will the right hon. Gentleman assure the House that the 9 per cent. annual rate that will emerge from the settlement will not be regarded as the norm? Will he tell the Opposition the extent to which, if one gives people with muscle well above the inflation rate, those without muscle end up either receiving less or with no jobs at all? Will he confirm that many water workers made a substantial contribution to maintaining emergency supplies?

Mr. King

I respond immediately to the right hon. Lady's last point. I pay tribute to those workers who honoured the emergency cover, but I am afraid that it was a far from uniform practice. There were some extremely unattractive incidents when arguments occurred about whether old people in difficult circumstances represented an emergency. But I pay tribute to those who honoured the emergency cover.

One of the lessons we learnt from the dispute is not how ramshackle is the water system—obviously with bursts there are problems—but how well the system performed. Some of the more modern plants performed extremely well. I have no doubt that one of the effects of the dispute—under which the system was put to a real test—will, as my hon. Friend the Member for Reading, North (Mr. Durant) said, be greater automation and mechanisation, more modern plants and, I am afraid, some reduction in manpower costs that will obviously fall on the workers.

On the annual rate, certain factors in the water industry concern the amount of bonus, which is outside the basic rate. The mediator and the chairman of the committee both confirm the going rate at 7.3 per cent. for 16 months, which establishes an annual rate of 5.5 per cent.

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Is the Minister aware that I appreciate his difficulty because he has finished up with egg on his face? Will he be a little more generous and concede that 99 per cent. of water consumers received their supplies due in no small measure to the sense of responsibility of employees in the industry?

Is the right hon. Gentleman aware that each region of my union was in touch with the health authorities about the cases to which he referred concerning the elderly, those on dialysis machines and so on? He should be generous enough to concede that point.

Has the right hon. Gentleman now learnt his lesson? Does he realise that the dispute would not have occurred had it not been for his flat-footed intervention? Has he learnt the lesson of honouring the Prime Minister's election pledge to allow free collective bargaining to operate?

Mr. King

The hon. Gentleman referred to contact with health authorities. I must tell him that part of the procedure for emergency cover under the closed shop arrangement was that there should be contact with water authorities. Many needy cases are not brought to the attention of the health authorities. They may be dependent on the social services departments of local authorities, and urgent action may have been required. If the hon. Gentleman is not aware of that, he should be. There were a number of distressing cases, something which I hope he would not condone.

The hon. Gentleman cannot honestly believe that the strike was caused through an argument about an opening offer. He knows that the union claim was in excess of 20 per cent. The unions were determined to achieve that figure. They have fallen far short of it. He should not refer to egg on my face. He is a Member of Parliament sponsored by the major union concerned in the dispute. No doubt he will wish to discuss with his members why they were led into industrial action by their leaders that has resulted in a loss of earnings for them this year.

Several Hon. Members


Mr. Speaker

Order. I propose to call four hon. Members from each side and then move on to the other two statements.

Mr. Jim Spicer (Dorset, West)

My right hon. Friend has made it clear that the wage award will not be passed on to consumers this year. As the fact that that applies to this year only will be in everyone's mind, will he give an assurance that it will be an ongoing process and that the consumer will not be allowed to suffer as a result of wage awards above the rate of inflation?

Mr. King

As my hon. Friend knows, the Government have taken a close interest in the performance of water authorities. We have set performance aims for each authority which clearly set out manpower costs. I was glad that the chairman of the negotiation committee, Mr. Len Hill, confirmed that those aims will be adhered to. The only way in which that can be done is through economies in costs, not by passing on charges to the consumer.

Mr. Peter Hardy (Rother Valley)

Does the right hon. Gentleman accept that much of the problem arose from his reorganisation of the water industry? Does he accept that if the employers had not been facing the possibility of new jobs there might have been a more peaceful situation earlier?

Mr. King

I do not accept that at all. Anyone who knows the background to this knows that the issue of comparability with gas and electricity workers had been in existence for three years. The pressure had been building up and it is sad that a dispute of this kind was inevitable, but the background is a great deal longer than some people suggest.

Mr. David Madel (Bedfordshire, South)

Will the Government make an announcement soon about rebates for people who have been without water for some time? Does my right hon. Friend agree that the very least that those people can expect is some form of rebate in view of all that they have suffered during the strike?

Mr. King

I well understand the concern about that. Clearly there is a valid point, as people who pay through a meter system do not have to pay for a supply when they are disconnected. The National Water Council is considering the matter and I hope that it will be possible to make a further statement later.

Mr. James Lamond (Oldham, East)

If we are to believe the Minister's desperate attempt to talk down the settlement reached as a result of the strike, may we take it that if other public service unions seek settlements at similar percentage levels there will be no girning from him or from anyone else on the Government side and that he will try to deflect any anger in Downing Street if other unions manage to achieve the same moderate increases that he has tried to tell us were forced on the water workers?

Mr. King

I am not trying to do anything of the kind. My duty in making a statement to the House—no Minister would dare to do otherwise—is to give the facts. I have to make clear the figures involved in the settlement. I have seen some propaganda and I have heard some people shouting about victory. I well understand the reason for that, as some of their members may be having second thoughts about why they were led out in the first place. It is my duty to make the facts clear.

As the hon. Gentleman knows, I followed the matter very carefully, and the facts that I have given are correct. I believe that the going rate increase of 5.5 per cent. approved by the mediator and the chairman is too high. It is much more than will be obtained by workers in private industry and by many people in far less secure jobs. Nevertheless, that is the decision and it must be accepted, but I hope that the country realises the implications.

Sir Kenneth Lewis (Rutland and Stamford)

Does my right hon. Friend agree that the most important thing now is to get back to normal working in the interests of the consumer and especially of those who have been badly affected by the dispute and have had no water for the past few weeks or have had to get it from standpipes? Will he therefore press the authorities to use every means—I believe that that was his own phrase—including the use of private contractors, to put the system right as quickly as possible and not to wait for that to be achieved through overtime working, which would take far longer?

Mr. King

As I said, I have asked the water authorities to use all available means. Obviously I hope that the manual workers will return to work immediately and make their contribution, but it would clearly be intolerable if the authorities did not use every other means available to them. The suggestion that people should be kept waiting for three or four weeks to be fitted into an overtime rota would, I believe, be totally unacceptable to everyone in this country. Therefore, I wish the manual workers to make a major contribution and I want contractors to come in as well so that those who have already suffered distress for far too long may be reconnected at the earliest possible opportunity.

Mr. David Penhaligon (Truro)

Will the Minister explain the position of local authority employees who do the same or very similar work? Does he agree that they are now at an unfair disadvantage?

Mr. King

I certainly hope not. There are separate negotiations for the separate groups of workers. On the wider issues, as the hon. Gentleman knows, both the mediator and the chairman specifically declined to make any recommendations in respect of any comparability claim in this matter. That is a very important decision.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Does my right hon. Friend accept that this has been one of the most botched-up wage negotiations in recent times? Does he further accept that this will be one of the most damaging and divisive settlements in this wage round? Does he agree that if gas, electricity and other public service workers seek the same increases, inflation will rise again and workers in the private sector will be disadvantaged? Is it not time that public sector workers were told that prices cannot continue to rise if industry is to recover?

Mr. King

I certainly endorse the second part of my hon. Friend's remarks. That is exactly the feeling of what I said about the going rate established in this case. It is far too high. It is significantly above the current rate of inflation and it is more than can be justified. I very much hope that all public sector workers recognise, as I am sure that many do, the importance of settling for sensible pay levels because the most important thing for them and for all of us is to see private industry recover as well.

Mr. Terry Davis (Birmingham, Stechford)

In the light of the settlement and the doctrine of collective responsibility, how does the Secretary of State justify the Government's refusal to make better offers to those who carry out vital life-saving work in the Health Service?

Mr. King

As I have made clear, each claim must be settled on its merits and it would not be right for me to comment on other claims now. In this dispute, the Government followed the proper procedures for the case. Negotiating procedures were available and open to be used, and it was obligatory on those concerned to use them. The challenge and the tragedy of this dispute is that the unions declined to observe the final stages of an existing national agreement. It was indeed an unhappy dispute, but the problem originally stemmed from failure to honour the national agreement.