HC Deb 05 July 1984 vol 63 cc582-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]

12.6 am

Mr. Ken Eastham (Manchester, Blackley)

The entire country is aware of the mining dispute, which has lasted for about four months. However, tonight I shall present to the House the details and history of a strike at the Phillips Rubber Company in Dantzic street—a back street in Manchester—which has brought suffering and shame well beyond the bounds of reasonableness and fair play.

The strike was declared and made official by the Transport and General Workers Union on 3 January 1984. The dispute, which involves 102 workers, is still unresolved. It was a consequence of a breakdown in negotiations on the company's final pay offer of a £1.92 increase on a basic wage of £48 a week. The current average national wage for a full-time male worker is £167.50, and for a female worker it is £108.80. A meeting was convened through ACAS on 20 January, but the company still refused to improve its offer. Furthermore, Phillips Rubber threatened the workers involved with summary dismissal if the miserable wage was not accepted and they did not return to work by 7 February.

We hear much about the conduct of strikers; for a change, I shall put on record the unmerciful conduct of an employer, some of whose work force have been loyal employees for more than 30 years. May I also dispense with an assumption sometimes made, that the women are working only for pin money? Nothing could be further from the truth.

When picketing, the strikers have been passive in their conduct, and very little policing has been required. Knowing the details of the shabby brutality accorded to the employees by the company, it is a great wonder to me that there has been no violence during this dispute.

By way of illustration, let me cite the case of one of my constituents, Mr. A. Cooper, who lives in the Moston area of Blackley. He furnished me with photostat copies of letters received from the Phillips Rubber Company. One was dated 9 February 1984, and stated in brief and brutal form: Dear former employee, Please find enclosed parts 2 and 3 of your P45. Please keep them in a safe place as your new employer will require them when you get a new job. Part 1 has been forwarded to the tax office. Yours faithfully, Phillips Rubber Company Ltd. L. J. Holt, Joint Managing Director. All the documentation is available for examination. My constituent asked, "If the firm returned my cards, and if I am now unemployed, why can I not receive unemployment benefit?" I pursued this case with the manager of the DHSS and asked for a ruling and detailed summary of Mr. Cooper's circumstances.

Mr. Cooper is a young married man with two children—a daughter under one year and a small son aged two. According to the DHSS assessment — it should be remembered that its figures are based on subsistence level—his minimum total requirements were calculated at £52.65 a week. His income comprised child benefit, £13; family income supplement—because of his starvation wages — £9.90; and strike pay £15. The DHSS concluded that he needed a supplement of £29.75.

However, thanks to the Conservative Government's Social Security (No. 2) Act 1980, there was a deduction of £15 from that figure because this man was on strike, leaving him with a benefit entitlement for his family and himself of £14.75p a week, this at a time when the Manchester Guardian, on 25 June 1984, said that the average weekly food bill was £34.24p.

After I made inquiries on Mr. Cooper's behalf, and received a ruling by the regional adjudicating officer at the Department of Employment, his benefit was finally restored as from 11 June 1984. The whole story is one of complete shame, and many more such cases could be recorded.

That brings me to the question of low pay generally. I recently served on the Select Committee on Employment. The Low Pay Unit told the Committee: Low wages are a cause of social and economic deprivation and proverty. Earlier I mentioned the £9.90 paid to Mr. Cooper in FIS because of his Phillips Rubber poverty wages. In reply to my question the Low Pay Unit told the Committee: One of the main problems with FIS, apart from the fact you have employers telling their staff to go to the DHSS for their pay, is that it causes the poverty trap whereby for every increase in earnings you often lose up to 100 per cent. of that increase in withdrawals of means-tested benefits and tax and national insurance. If Mr. Cooper had received a wage increase of anything less than £10 per week, his overall increase would be almost nil.

Ever since 1891—confirmed in 1909 and 1946—we have supported the fair wages resolution against sweatshops. To our shame, an early-day motion calls for the abolition of wages councils. The motion, which carries the signatures of 110 Conservative Members, reads: That this House views with great concern the detrimental effect that wages councils have on the free working of the labour market and in particular the loss of job opportunities for young people; believes that the ending of such restrictions will enable the cost of labour to move to market levels and thereby create new jobs; and therefore calls on Her Majesty's Government to abolish wages councils as soon as its international commitment allows. Today, 7 million adult workers suffer from low pay. That figure excludes young workers. It is easy to see that the figure will be increased if we abolish wages councils. Wages councils are an essential mechanism for the protection of the most vulnerable workers in our society.

I am told that, with a small scab labour force, the Phillips company in Manchester is producing on a small scale. The firm has been fulfilling export orders, including some for the police and the army in South Africa. However, there is undoubtedly continuing and strong feeling throughout the trade unions about this catalogue of shame and this rogue employer who is disgracing the high reputation of my city of Manchester.

Is the Minister prepared to help to put matters right? There is an overwhelming case for an immediate high-level inquiry into the financial and labour affairs of the company. In appalling cases such as this, consideration should be given to the introduction of some form of automatic Government inquiry mechanism, obviating the need to go to a Minister.

Government Departments should not in any way be party to the abuse of workers by firms. Departments should not interpret the rules in such a way as to force workers back on to the mercy of such heartless employers. Despite what some politicians may believe, the general public do not applaud minority firms which behave like a form of leprosy, eating away at decent forms of conduct towards workers. Although attention is more frequently directed solely at the trade unions, employers are accountable too. In the 1980s, no company in Britain has a licence to treat its work force as brutally as the Phillips Rubber Company does.

These workers are not asking for luxuries. They ask only for the dignity of being able to make ends meet. The Prime Minister, during the general election, talked about the need to return to Victorian values. In a growing number of instances throughout the country, we seem to be rapidly returning to Victorian wage rates, on which workers cannot cope with the cost of living of 1980.

I believe that the Minister of State has the authority to take action to bring the dispute to a fair and just solution. It is a catalogue of shame. The shareholders of the company should re-examine the details of their business undertaking. There are things other than profits and balance sheets to be considered. Morality is important too. I appeal to the Minister to find a positive solution to restore some humanity to this dispute, which has lasted for six months.

12.23 pm
The Minister of State, Department of Employment (Mr. John Selwyn Gummer)

I have listened with considerable concern to the hon. Member for Manchester, Blackley (Mr. Eastham). I begin by saying that I shall be unable to answer some of the points that he made because a number of cases are to be heard by an industrial tribunal. I do not wish to avoid answering, but, for obvious reasons, those cases must be protected. If there is truth in what the hon. Gentleman has said—and I do not mean to suggest that what he has said is other than the truth—he will understand that I do not want to say anything that might cast doubt on those cases or interfere with them. The cases cover a wide range of the matters to which the hon. Gentleman has referred. I will therefore address myself to the matter with care, but avoid those matters that might be embarrassing to those who have brought those cases. Some of the cases are in the initial stages of preparation, and we do not know how far they will extend. That is another problem.

In January this year 143 disputes began, involving 127,000 workers. About half of them were about pay. I put that on the record because it is obviously true that, in each case, there is considerable difficulty attached to knowing the issue from both sides. I do not want the hon. Gentleman to think that I have all the details, as that would be impossible from the outside. I understand that the facts are as follows. The Transport and General Workers Union, which represents workers at the firm, submitted a pay claim which, if accepted, would have increased pay rates by some 56 per cent. It is quite right for the hon. Gentleman to say that that should be put in the context of the wage rates that are paid by the firm. The firm responded by making an offer of 4 per cent., which the union negotiators rejected, so 110 production workers stopped work.

The Advisory, Conciliation and Arbitration Service then stepped in. That is the first thing that a governmental body, albeit an arms-length one, should do. It held meetings with both sides in an attempt to help them reach a mutually acceptable settlement. Talks foundered when the union rejected the employer's revised offer and it became evident that the union claim was more than the employer felt he could afford. I quite understand the hon. Gentleman's objection to that, but what wages can be afforded when a company is being competitive is a real issue. The result was that the 110 striking workers were dismissed early in February 1984 after they had rejected their employer's request to resume normal working. The employer then advertised in the press for replacement labour.

On 20 February the strikers occupied the factory unlawfully and, began a sit-in. On that same day the company obtained an injunction against that occupation, and the sit-in ended on 23 February. New workers started at the factory on 5 March 1984, when a second sit-in began. It ended the same day with the granting of a second injunction. As the hon. Gentleman said, I understand that there was no violence. I was sorry to hear him comment on the fact that there was very little policing, as it would be sad if we had to have policing whenever industrial problems occurred. I think that he will agree that that would be undesirable.

I am informed—I say that because we ensure that the independence of ACAS results in its informing when asked and I have asked—that ACAS continued to keep in touch with the parties to the dispute and that it met both sides on 15 March, but was unsuccessful in helping them to resolve their differences. Meanwhile, work is continuing at the factory, despite picketing of it. I understand that the employer has withdrawn his vacancy notification from the jobcentre, as the jobs have been filled.

Those are the essential details of the dispute. The work force feel that they are underpaid and the employer believes that he cannot afford to pay more. That is not new. It has frequently happened as declining markets and increasing competition, part of which is for export orders, have brought home awareness of the need to produce quality goods at a better price than our competitors. I put it as clearly as that, not because I am taking sides but because there might be another side to the argument that the hon. Gentleman advanced.

Mr. Robert Litherland (Manchester, Central)

We know what the employer thinks and what the workers think, and we want to know what the Government think. People might have worked at the factory for 30 years and devoted their lives to the company and been restrained from taking wage rises in the past to keep the company going. All they wanted was an increase on £48 a week. In all of the discussions with ACAS, the employer has not improved the offer. What do the Government think about a company paying £48 for a 40-hour week?

Mr. Gummer

I understand that after the discussion with ACAS, the employer improved his offer. We are faced here with a number of people having made applications to an industrial tribunal, and I understand that others are preparing applications. It is important that I should not prejudice those cases, and I trust that the hon. Gentleman will appreciate that. That is the problem of dealing on the Floor of the House with a specific case which is about to come before an industrial tribunal. I am not trying to avoid the hon. Gentleman's question, and I hope that he will appreciate how the problem arises.

I will, therefore, deal with some of the wider points that the hon. Member for Blackley made. He will recall that I have spoken several times in the House on the subject of wages councils and have made it clear that I have not made up my mind about the question of the abolition or retention of wages councils. I have said clearly that their continuation or abolition depends on a simple proposition, but a difficult one to prove.

If it could be shown, in a society which now establishes a minimum wage by the level of supplementary benefit, that the existence of wages councils reduced Job opportunities without improving the wages of those in work, that must be a serious matter for the Government to take into account. If what the hon. Gentleman says about wages councils is right, it would be wrong to abolish them.

The Government have simply said that they have asked for the evidence and that they have the results of a good deal of research, some of which has surprised me—produced, as it was, by someone who was known to be a supporter of not just the Labour party but something to the Left of that—in that it suggests that some of the worries of my hon. Friends are not without foundation. However, we do not yet have all the evidence, and I have said that when we have it all I shall consider it carefully.

Mr. John Evans (St. Helens, North)

Will it be published?

Mr. Gummer

We shall be happy to make clear the evidence on which the decisions are made, whatever those decisions are, but something worries me and, in speaking of it, I hope that Opposition Members will not take it in a combative spirit but will accept that it is a real problem.

Comparing not just Britain but the whole of Europe with America over the last 10 years, there is one very noticeable difference. Whereas in America, in general, wage costs are slightly lower today than they were 10 years ago, the Americans in those 10 years have created 13 million new jobs. In Britain, wages are considerably higher in real terms, ahead of the rise in the cost of living, than they were 10 years ago.

Mr. Evans

In some areas.

Mr. Gummer

I am talking in general, in terms of national figures. They are considerably higher in general in this country, yet we have not produced anything like that proportion of jobs — indeed, we have produced fewer—under Labour and Conservative Governments, and the same is true throughout Europe

This is an issue which cannot be ignored by anyone who is concerned with unemployment. If we could find the reason why the United States has been so much more successful in the production of jobs, while we in Europe have been so much less successful, that would do more to help the unemployed than any amount of polemic, whether from the Government or Opposition Benches.

If I became convinced that wages councils reduced job opportunities without any real compensating advantage to those in work, I should have to present the House with that evidence and suggest that changes should be made. That cannot be done without the evidence. We should not take the position that the hon. Member for Blackley suggested, that those who investigate the operations of the councils and take evidence from elsewhere are trying to get at the poorest in society. Many of those who signed the early-day motion are known for their concern about unemployment and they see the Government's approach as one way in which we can begin the important business of trying to produce more jobs.

I accept that those with large families who are in work and who for competitive reasons, or through their own inability, earn only low wages must be provided with help, otherwise we force them into the belief that it is better—

Mr. Eastham

rose—

Mr. Gummer

Very little time is left. Without that help, we force them into the belief that it is better not to work. They will then take the whole of their income from the state, and not only family income supplement. That is damaging to personal integrity and personal pride. I take severe issue with the Low Pay Unit. I wish that it would broaden the base of its political sympathies so that it did what it claims to do instead of what it actually does. I believe that FIS is a humane and proper use of the state's resources, and it would be wrong to attack it in the way that the hon. Gentleman has—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-four minutes to One o'clock.