§ 5.0 p.m.
§ LORD BALFOUR OF INCHRYE rose to call attention to the effect of the present working of the Catering Wages Act on the hotel and tourist industries of Great Britain: and to move for Papers. The noble Lord said: The subject of this Motion which I move to-day is a non-Party one, because I think we are all united in the desire to see our tourist and hotel industry run efficiently, both for those who work in it and for those who consume its benefits. I have tried to list for the commencement of my remarks the points on which we enjoy common ground, and they are really self-evident. I think the first point of agreement is the importance of the industry, both at home and as regards our overseas trade. Some £70,000,000 of foreign exchange is earned annually from overseas visitors, and there is wealth untold and immeasurable in the way of relaxation and regained health for our own people who enjoy holidays. Secondly, I think we are all on common ground in wanting a sound industry, with fair conditions for all engaged therein, employees, management and owners.
§ Thirdly, I think, we must all admit that it was a very unregulated industry in pre-war years, with conditions varying from good to those upon which we look with regret to-day. Fourthly, I believe—and I hope the Minister who replies will agree with me here—that the 1943 Act 673 was a sincere attempt to improve conditions, an attempt supported by all Parties and brought in by the Coalition Government. Having said that I think we must admit that for various reasons the 1943 Act is not working out satisfactorily, either within the industry or for the consumers of the industry—that is to say, the people who are on holiday. Finally, I think it is common ground that if this industry is to meet its duties as regards the community it must be given a fair chance of running smoothly, and the present position must be somewhat modified. Those are my starting points on which I hope and think I have the House with me.
§ It is necessary briefly to recount to your Lordships; the background of this industry since 1943. The 1943 Act set up a Catering Commission, of which Sir Hartley Shaweross, the present Attorney-General, was the first Chairman. That Catering Commission recommended that the industry should have five wages boards: one, to lay down conditions and wages for staff in industrial canteens; a second for public-houses; a third for cafés; a fourth for licensed hotels; and the fifth for unlicensed hotels. In respect of canteens, cafes and public-houses, there are regular hours, there are fixed closing-times, and they can be run much more on industrial lines than can licensed or unlicensed hotels. Therefore, I am not concerned with those three boards, but only with the wages boards for licensed hotels and unlicensed hotels.
§ The wages board of the licensed hotels consists of sixteen people nominated by various interests on the employers' side—hotels, brewers, the retail trade and the Railway Executive. There are sixteen representatives of the trade unions, and there are three independent members. Here I think we come to the first trouble in the working of the 1943 Act. The trade union representatives started off with years of experience of trade union negotiation, and they started off with full knowledge of industrial arbitration; but they also started off with no knowledge at all of the hotel industry. On the other hand, the hotel industry representatives started off with no knowledge of trade union organisation, and no knowledge of industrial arbitration; and, I regret to say, they were not in agreement amongst 674 themselves on many aspects of the hotel industry.
§ The proposals as regards the wages board for licensed hotels were first issued at the end of 1947, and at once they were widely criticised throughout the industry. I must here admit—the noble Viscount, Lord Hall, can make the point, if he so wishes, in his speech—that the regulations which came into operation in March, 1948, were assented to by the hotel representatives. I give the noble Viscount that point. But the reason was that very inexperience about 'which I have spoken—inexperience in trade union organisation, lack of being able to foresee how those regulations would work out in practice, and, probably, the hope that things would not be as bad as the critics anticipated. In fact, directly what is called Licensed Regulation No. 3 commenced to operate, the general misgivings of the industry were translated into a real experience of the impossibility of running a domestic industry on what I may call factory lines. This licensed industry has about 150,000 staff. There are about 9,000 employers, and the average number of employees in each establishment is seventeen. So your Lordships will see the smallness of the units, and the individual attention which the employer gives to his own small place. To prove my statement, may I say that in less than twelve months the wages board themselves admitted the impracticability and the unsuitability of their work as contained in Licensed Regulation No. 3? It was amended by a document called Licensed Regulation No. 7, which certainly improved the situation but, I submit to your Lordships, failed to remedy the fundamental errors of the original order.
§ May I cite to your Lordships what those faults are? It is not the higher wage scales for the worst and lower-paid grades. That is not the fault. It is an impossible task for all but the biggest of the hotels to administer these regulations which the Minister approved under the Act. The staff are divided into a hundred grades, and there are nine pay variations in each grade. There are twenty-six typed pages of the regulation. How can the manager who is running a small establishment with two or three employees, and working himself in it, cope with this sort of thing? A factory 675 organisation with an executive management department can do so, but not the small man. It has proved to be absolutely impossible for the small people to comply with the regulations. Let me here say at once that on all hands I have heard of nothing but sympathetic treatment towards the small hotel keepers who are failing to comply with the regulations, by the inspectors and by the Minister's officials. There is absolutely no complaint that they have not done their best to avoid trouble, but this difficulty is inevitable when it is sought to run this domestic industry on factory lines.
§ The second fault lies with the overtime and spread-over provisions—I am well aware of the technicalities involved here, for I have burned the midnight oil studying the subject. The effect of these provisions is that, unless an hotel is one of substantial size, it must either cut its service to the visitors or run uneconomically, in the hope that better times may come, or it must try to impose on visitors a crippling high tariff charge which they would not accept and which the hotel would be regretful of putting forward. Let me give just one example of how this spread-over and overtime works. Let us assume a potential guest in a country hotel which has no night porter, and that that guest wants to come in at 11.15 at night—not very late. The day porter lives on the premises. He gets up and opens the door to that one guest. That day porter has to be paid an hour's wage, plus overtime rate, plus what is called a spread-over increase on all the hours he has worked in the previous forty-eight hours. The result is that the total cost to the hotel-keeper of opening the door to that one guest would be 16s. That seems to me a rather expensive tariff for opening a door to one guest.
§ I could multiply those instances to your Lordships many times over. I do not think there is any dispute in any quarter of this House amongst noble Lords who have studied the subject that these anomalies which I have cited do exist in many directions. The result is that the service has to be cut for the travellers, owing to the heavy wage charges which have to be put into operation when more than forty-eight hours are worked by the staff in the week, even though much of that forty-eight hours has not been spent in actual work but in standing by. The 676 result is no luncheon waiters, no early morning tea, no late meals for travellers arriving by air or by motor-car.
§ THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL)
There is, of course, at the present time, under the present regulations, a spread-over of twelve hours for which no overtime is paid.
§ LORD BALFOUR OF INCHRYE
That is quite right. I do not want to elaborate the point. There is a spread-over, but it is after the forty-eight hours worked that the heavy charges come in.
The third fault is that since Licensed Regulation No. 7 was made unemployment over the whole industry has been increasing, largely, I think, because the seasonal hotels cannot retain their staffs. I have here the official figures given to the Catering Commission. In January, 1947, the figure of unemployment in this industry stood at 17,404; in January, 1948, it was 21,471; and in January, 1949, it was 32,502. That shows that the effect of these new provisions and L.R.7 is that unemployment has risen. I can assure the noble Lord that I need not take just one month; I could give all the months, and the proportionate increase is exactly the same. The fourth fault is that many of the staff do not like these regulations. They work to set hours, which means that they go off duty just at what I should call the "gratuity time." Cases have been cited, I think in the last debate in this House or perhaps it was in another place, where men have had to go off duty in accordance with the provisions of the regulations, have gone across the road to another hotel and taken exactly the same sort of work for several hours, and then returned to their original place of work. These regulations have upset the balance between what I call the kitchen and the front staff, due to the Commission's direction to the Wages Board that tipping should be ignored.
I must for a moment or two develop this question of tipping, because it is very important in the industry. I am no defender of tipping, but it is part of our system of social life in this country. It is a reward for personal services rendered, and, whether we like it or not, it is with us. I am sure no noble Lord on any side of the House has any wish to see a man dependent for his living on the 677 servile collection of money. We do not want that. Nevertheless, pre-war wages did take; some account of tipping, as I believe they will have to do in the future. There is the extreme case, of course, of a man who before the war paid a large hotel for his pitch and then earned a four-figure income. I think it would be illogical to deny the effect of tipping on that man's livelihood. I notice also that the Inland Revenue are not very keen on ignoring the question of tipping. I understand that taxi-drivers and porters are assessed on what the Inland Revenue consider are their average earnings. I hope the Minister is not going to get up and say that he or the Government reject any idea of acknowledging tipping as part of the system, when the Chancellor of the Exchequer depends to some extent upon the successful collection of tax from tips. It would be a little illogical if that point of view were taken. I know that the trade unions object very strongly to the practice of tipping; but on this matter I wonder whether the trade unions really represent the men in the industry. I am told that there are 15,000 trade unionists out of 150,000 people employed in this industry, and they are mostly men in large hotels in the cities. Therefore I do not think that the trade union objection should be taken at too great a strength.
I have given, I hope not at too great length, the main faults which have arisen from the regulations and L.R.7 in regard to licensed establishments. In summarising the position I must touch for a moment upon the unlicensed establishments, which number about 90,000 in this country. Here, again, is a rather sorry tale. The Wages Order proposals for unlicensed establishments were provisionally put forward in February, 1949. They were broadly similar to those for the licensed houses. They made an industrial concern out of any four-bedroomed boarding house. It was quite impossible to work them. It was obvious to everyone that the confusion which already existed in regard to licensed establishments was going to lead to both confusion and muddle in unlicensed establishments. Therefore the regulations were withdrawn and amended regulations were issued in August, 1949. The regulations of August, 1949, were still hopelessly unrealistic, and up to this moment there is no unlicensed establishment regulation in force. The trade union representatives 678 bitterly oppose a different state of affairs for the unlicensed as compared with the licensed establishments. They believe in blessed uniformity. But, whatever the fate of the unlicensed establishments in the future, I hope that regulations will not be introduced before the Festival of Britain to complicate even more than it is at present the position of houses and hotels in this country.
The Government realised that the regulations were not working, for the reasons which I have given and no doubt for other reasons of which they have knowledge. The regulations were not working as the planners had expected and as the experts had hoped. So Sir John Forster was appointed Chairman of the Catering Commission, and the Minister decided in August last year that the Commission should undertake as an urgent task the investigation of the Regulations, and should report. I must question whether that was really the best body to conduct this investigation. The Commission start off certainly with great knowledge. There are members who have been on the Commission before. But are not the Commission to some extent reviewing their own work and having to criticise some of their own achievements in the past? Is it not too balanced a body to look at the matter really dispassionately? A balanced body produced rather a timid result. In any case, whether it was or was not the best body, this Wages Commission have recommended certain changes. I regret to say that in my view those changes do not go far enough. The Wages Commission have suggested one Board for Britain for all licensed and unlicensed establishments—that is, one Board for England, Scotland and Wales, with wages sub-committees to cover various aspects. Secondly, they recommend some relief for overtime. Thirdly, they recommend different wages and conditions for different types of establishment. They reconmend that the establishments should be classified into large London hotels, large provincial hotels, and small establishments. Finally, they do not recommend a separate board for Scotland. I think that is not an unfair summary of the Sir John Forster recommendations.
I would suggest something a little different. First, I think there should be a new approach by new personnel on the wages boards. When Sir John Forster's recommendations are accepted, if they are, and wages committees are set up, let them 679 consist of completely new people. Let them be people without the history of these unfortunate regulations behind them. Secondly, I would suggest a differential grading. Sir John Forster's suggestion is, I think, right; but I believe that the Catering Commission have to be bold in themselves laying down what their differential standard is to be. I regret to say that the hotel industry is not at all united. There are conflicting interests and varying points of view. Of course there is bound to be grousing, and there is bound to be complaint wherever the dividing line falls between a large and a small establishment. But I think that the Catering Commission have the duty to be bold in laying down the differential standards for large London, large provincial, and small establishments. I believe they must do it with a formula bringing into account beds and bar turn-over. One must take into account bar takings in the case of a licensed establishment. It is not for me here to work out that formula, but I am sure that those two factors must be taken into account.
Next I should like to see the Catering Commission free all small establishments from the mass of complications with which they are now hampered—twenty-six typed pages of regulations, 100 different staff grades and nine pay variations within each grade—and draw up a simple and flexible code for such establishments. Then I should like to see the Commission accept the view that tipping should be taken into account. Sir John Forster has recommended that the question of tipping should be re-examined by another national committee. Perhaps that national committee will recommend that another national committee should investigate its findings. I believe it is the Catering Commission's responsibility. Again, they should be bold and take the view that tipping must be taken into account. By all means let them remit to a committee the details as to how it should be taken into account, but do not give the committee responsibility for taking the major decision as to whether tipping should or should not be taken into account. That is the responsibility of the Commission. They must take the decision on that matter.
Now as to the question of a Scottish Board. I am afraid that I disagree pro-foundly with Sir John Forster and his 680 Commission that no Scottish Wages Board is required. The noble Lord, Lord Morrison, replying to the noble Earl, Lord Rosebery, in the debate a few weeks ago said that Scotland does not want a Wages Board. Certain hotels in Scotland and certain organisations in Britain which have interests both in England and Scotland have come out against the proposal for a Scottish Board, whether with the complete authority of their members or not I do not know. But it is not only the hotel industry of which we have to think. We must have regard to the consumers and the Scottish tourists' organisations. Those organisations have come out strongly in favour of the proposal. I suggest that Scottish opinion must be respected and cannot be ignored. These people want a Scottish Wages Board. There is another point of view from which I think it would be desirable to have a Scottish Wages Board. There are more seasonal hotels in Scotland than in England and Wales. The Scottish hotel industry is essentially a tourist one for the summer season—among the great attractions of the country being, of course, fishing and sightseeing.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF WORKS (LORD MORRISON)
The noble Lord is referring now to areas outside the large towns?
§ LORD BALFOUR OF INCHRYE
Yes. If there were a Scottish Wages Board they would set up a standard for seasonal hotels in Scotland. And there is much greater experience of seasonal problems in Scotland than in other parts of Great Britain. The recommendations of such a Wages Board could be used as a yard-stick for seasonal hotels in other parts of Britain, in England and Wales. I know that noble Lords who come from Wales will perhaps say: "Why should Wales follow Scotland?" The point is that, in my view, Scotland has a greater wealth of experience in the matter of seasonal hotels and a greater problem to solve. If the problem can be solved for Scotland, it can very largely be solved on the same lines for England and Wales as well. Finally, I would suggest that each of these wages boards should have a travelling sub-committee, the members of which would be constantly going round the type of hotels with which the wages board is concerned. It would be their 681 duty to stay at these hotels, to talk to the managers, to talk to the personnel, to talk to the visitors and to get into touch with all phases of hotel life generally. They would thus acquire a wealth of practical experience, and with that behind them they would not be likely to bring out such regulations as we have had brought out in the past.
Now as to the Minister's position. In the debate to which I have just referred, Lord Morrison said that it would be necessary to have an amending Act for Scotland, setting up a Wages Board. As I understand it, the procedure under the Act is for the boards to lay draft regulations with the Minister. Then the Minister has the responsibility either of accepting them and putting them into operation or of rejecting them. I would urge the Government to ask the Minister not to approve any regulations unless tipping is allowed for in them. And if the Commission will not accept a regulation that tipping should be taken into account, the Minister should review his position to see whether amending legislation should not be introduced. The same applies to Scotland: if the Commission will not accede to the view that a Scottish Wages Board is necessary, I ask that the Minister should introduce amending legislation in order to bring into existence that Scottish Wages Board I trust that I have not taken up too much of your Lordships' time, but I thought it necessary to cover the ground fairly adequately. Our one wish is to improve the wellbeing of this industry, both within and without. It is with that feeling in my heart that I beg to move for Papers.
§ 5.26 p.m.
THE EARL OF BESSBOROUGH
My Lords, I should like to say a few words in support of my noble friend Lord Balfour of Inchrye with regard to the effect of the Catering Wages Act, first on the hotel business and through the hotel industry upon the tourist business, which is of such importance, as we all realise. Lord Balfour's concluding words were that he had covered the ground. If I may say so, I certainly think that he has. In the few remarks that I propose to make I am afraid that I may be obliged to traverse some of the ground which he has already covered, in order to make a few points on the subject. Though the Act was passed seven years ago, in 682 1943, it is only in the last three years that we have been able to judge of its effect, because, as my noble friend has said, the order for licensed hotels was put into operation only three years ago. But the three years have given the industry, and the public, plenty of opportunity to judge of the effects of the Act.
It is perhaps of interest to recall its origin. It was due to the inspiration of Mr. Bevin, when he was Minister of Labour in the war-time Government, that the Act had birth. It was promoted and passed through Parliament under Mr. Churchill's war-time Government. Perhaps it is also of interest to recall its objects. The Act's sponsors stated that the objects were, first, to attain satisfactory wages and conditions of service for catering staff, and, secondly—and this was of great interest, because it was the first time that it had been stated authoritatively in this country—to develop the industry to meet the requirements of the public and. in particular, the requirements of tourists from overseas. These were laudable and, indeed, important objects. The second involved, for the first time in the history of this country, official recognition that the hotel and tourist industry had an important part to play in the national economy, and should be encouraged accordingly.
Those who have been associated—as I have now for exactly thirty years—with the organisation which represents hotels nationally, the Hotels and Restaurants Association, have, in season and out of season, stressed the national importance of the industry. We have pressed for its official recognition, recognition which has for many years been given by the Governments of a great many other countries to their own industry. But we were voices crying in the wilderness. Indeed, it took the circumstances of the last war, followed by the shortage of dollars after it, to bring public opinion, as well as Government authorities, to a realisation of the importance of the industry to the nation. When the Catering Wages Act was introduced, those of us concerned with the interests of hotels had some doubts whether the method proposed by the Act was so easily going to attain the twofold aims of its sponsors. We can now judge the effect from experience.
683 As your Lordships will remember, the Act deals almost entirely with the functions of wages boards to be set up after investigation had been carried out by the Catering Wages Commission as to the existence and adequacy of any wage-fixing machinery that was in operation. As a result of those investigations by the Commission, wages boards were finally set up. Two of them are concerned with hotels, one with licensed and the other with unlicensed establishments. These boards were manned by representatives of the employers and employed, and by independent members. As my noble friend has said, the employers' side was constituted entirely of people engaged full-time in the industry, while the workers' side naturally consisted mainly of trade union officials who, though no doubt perfectly competent in other ways, happened to have little or no experience of the hotel industry. The workers' side proceeded, in the manner which my noble friend Lord Balfour of Inchrye has described, to ask for regulations of a nature which might be applicable to factories but which in our judgment were entirely unsuitable for what has since been officially described by the Catering Wages Commission as "a domestic industry without parallel." Although the employers' side did all they could to press their point, the industry was loaded with factory regulations, and it is no exaggeration for me to say, speaking with some knowledge, that the regulations had a profoundly disturbing effect on the whole of the industry.
The entire existing wage system was put completely out of gear by the disregard of tipping. We may or may not approve of tipping, but tipping is there; and I suggest that so long as human nature is what it is tipping will continue, whether we like it or not. It was the custom of the industry to allow for the incidence of tipping in fixing wage rates, to preserve a fair balance between the various grades of staff. The nature of the hotel business brings some categories of staff constantly to the notice of visitors, whilst others it does not. This was always allowed for in the industry. But the wages board ignored it, and decided on substantial increases to tip-earning staff. The new procedure also introduced the forty-eight hour week and payments for overtime, for hours of duty spread over more than 684 twelve hours and for work on bank holidays. My noble friend has said that hotel staff were listed in no fewer than 100 grades, and I endorse what he said. It is staggering for a small establishment to deal with these documents, with their definitions of duties and rates of pay, the whole involving complicated calculations with fractions down to one sixty-fourth of a penny to arrive at the wages due. The order applied to all licensed establishments of whatever size completely regardless of the nature of the hotel business. No difference was made between an hotel with four bedrooms and one of 1,000 bed-rooms.
The hotels reacted in different ways, and I suggest this is an important point for consideration. Some were able to maintain their standards of service, and raised their terms to the public to cover the extra cost: the public had to pay more. Others found it impracticable to increase their terms, and curtailed their services to the public by reducing the staff on duty and by shortening periods when meals were available. Seasonal hotels opened later and closed earlier in the year. The result, of course, was that the public suffered. A third group tried to maintain their services by having the duties of the staff taken over by proprietors or managers and their families—a very common arrangement—and by working long hours. Therefore, whatever the reactions of the hotels of different categories, whether the wage increases were justified or not—and I am not going into that point—the general effect of the Order was against the interests of the public and obviously added to the difficulties of the employers. Certain staff undoubtedly received financial benefit, but on the other hand I would point out that to some extent their jobs became less secure. Protest by the industry led to amendments to the Order in 1949, but these, while they removed some of the more glaring anomalies, altered little the fundamental problems caused by increased cost, complicated record-keeping and the making of calculations. In the meantime, the proposed regulations for unlicensed hotels were published. Here again, the employers' side upon the board, warned by experience, pressed for simpler regulations for what were often quite small businesses. They met with little success, and the new proposals are just as complicated and unsuitable for their pur- 685 pose. I believe that over 1,000 representations have been lodged with the wages board which are in process of consideration. So that the unlicensed hotels, numbering about 80,000, are not yet saddled with regulations.
So serious were the repercussions of the licensed regulations on the capacity of the hotel industry to serve the public that on several occasions the matter was brought forward by Members in another place, until eventually the Minister of Labour agreed to set up an Inquiry. This was held by the Catering Wages Commission last spring. Immediately the organisation I represent, the British Hotels and Restaurants Association, put forward the following points: they stressed that it is a domestic industry which is concerned, and one which is valuable to the fortunes of this country; that most of the hotels in the country are small establishments which, unlike factories, operate from sixteen to twenty-four hours a day, seven days a week, during which time services may be required; that many of these establishments are inns legally obliged to be ready to receive travellers at all hours of the day; and, finally, that such an industry ought not to be crippled by regulations which make a number of the hotels uneconomic to run.
My noble friend Lord Balfour of Inchrye has asked for a new approach. I would support him very strongly in that. We suggest simplification of regulations, revision of overtime and other payments, so that they do not directly lead to reductions in service to the public—and this, I am informed can well be done—and the recognition of tipping in the making of wage regulations. The Report of the Catering Wages Commission supports most of the views put forward by the Hotels Association, but stops short of saying that wage regulations applicable to the hotel industry should be specially designed for it, which surely should be the case. It also omits to recommend that tipping be taken into account. The claim put forward by the Hotels Association is a simple one. It is merely that the reasonable requirements of the public should have the first consideration. That brings us right back to one of the two main objects which the sponsors publicly declared when the Catering Wages Act was introduced seven years ago. We are told that the hotels will have to be ready in a short time to receive a great influx 686 of visitors. The year 1950 is drawing to a close, and the Festival of 1951 is close at hand. One of its main objects, if not the main one, is to attract tourists from overseas. Therefore, at this late hour I do beg the Government to help and not hamper the hotel industry in its efforts in the public interest to provide the fullest possible accommodation for tourists. I hope that the noble Viscount who is to reply will be able to give us some assurance on these points.
§ 5.41 p.m.
§ EARL MANVERS
My Lords, I should like cordially to support much of what has been so eloquently said by the noble Lord, Lord Balfour of Inchrye, and by the noble Earl, Lord Bessborough. The Catering Wages Act, 1943, passed in the stress of war time (Heaven knows why!) by the then National Government, has been put into force about five years later by their less cautious successors. It has had an effect little short of disastrous on the smaller hotels and inns of the country such as are run by my concern, the People's Refreshment House Association. This result cannot but have the gravest repercussions next year on the success of the Festival of Britain to which some of us are looking forward. Instead of allowing innkeepers to make their own arrangements, suitable to their own circumstances, with their own servants or with trade unions representing their servants, a series of regulations have been made which, though they may work well enough in one establishment, are wholly unsuitable for another. Factory-type regulations have been imposed on a purely domestic business. The Wages Boards have been packed with outside trade union members having no knowledge of the hotel trade. Sufficient attention has not been given to the point that public holidays are just the time when the public need services from hotel workers. Variations in weather produce further complications, with different demands from customers. I am told that in Australia and New Zealand bars close at six o'clock and that dinner is off by 7.30. It looks as if we may shortly follow suit. The tipping system, though not ideal, can be relied on to do rough justice. It must be left to the innkeepers to settle matters between man and man. In my view, the Government would be well advised to let the Catering Wages Act fall into innocuous desuetude.
§ 5.44 p.m.
§ LORD GREENHILL
My Lords, this is the first occasion on which I have ventured to address your Lordships, and perhaps therefore I may crave your indulgence if I preface my remarks with a personal note. Unlike many noble Lords, I do not enjoy the advantage of having served an apprenticeship in another place. Therefore, what I have to say will probably exhibit all the rawness of a newly-entered apprentice. Such experience as I have had has been limited to the debating chamber of a municipal authority where, as many of your Lordships will perhaps know, there is no official reporter, and where, therefore, the feeling that one has to be logical in argument is not so strongly felt as it may be in your Lordships' House, where every word that one utters is taken down, and, I am informed, occasionally used in evidence against one. Nor can I claim any specialised knowledge of the subject that we are debating this evening. The interest I have is based on my being a Governor of the Scottish Hotel School, a school fostered and initially financed by the Scottish Educational Department and run under the auspices of the Glasgow and West of Scotland Commercial College—a central institution, as it is technically called.
It may interest your Lordships to know that the composition of that Board of Governors is, as to one half, representatives of the Hoteliers' Association, and, as to the other half, representatives of the Board of Governors of the Commercial College, In practice that arrangement, strange though it may seem, appears to work very well. What your Lordships may consider to be of some little significance is the fact that to-day the demand by students for entrance into that College is greater than the accommodation available for the students. I should be inclined to say that there is a definite connection between the existence of the Catering Wages Act and the increase in demand by students to enter this particular industry.
My knowledge of the problems involved is based on an experience as an ex-con-vener of a municipal transport committee—of which I am still a member—and as an ex-member of a committee on wages and conditions of service. In that experience some of these rather peculiar terms, such as "split shifts," "spread-overs" and so on, have 688 become quite familiar to me. Indeed, it has been part of my experience as a negotiator—representing, by the way, the employers' side of the negotiations—to have to deal with the demands of trade unions in which all these peculiar considerations are involved. I hope your Lordships will agree, therefore, that my knowledge is to some extent extensive as distinct from intensive.
My own feeling about this debate is that it is rather unreal to link up the operation of the Catering Wages Act with the advantages to be derived from tourism. Indeed, I believe we should be more logical if we regarded this as an inquiry into the operation of the wages boards. As the noble Lord, Lord Balfour of Inchrye, clearly indicated, we are all surely in favour of improving the tourist industry; we are all desirous to ensure the best possible service to the general public; and we all wish to encourage friends from abroad to visit us in our own country—and, if I may say so, not merely because of the dollars they will spend with us, but also because it is one way of cementing friendship with the peoples of other countries, which we would all welcome. I admit, of course, that any dollars which come our way are an acceptable by-product of what I consider even more important, and that is the cultivation of international friendship. But the real purpose of the Act was—and I would state this, not in opposition to what the noble Earl, Lord Bessborough, said—and I quote from the Forster Report:to make provision for regulating remuneration and conditions of employment of catering and other workersand also to see to thehealth and welfare and the general improvement and development of the industries in which they are employed.In the whole of the catering industry there are, as I am informed, over half a million people concerned. It is true that the noble Lord, Lord Balfour, mentioned the figure of 150,000, but I assume that that number referred to those in the licensed premises.
§ LORD GREENHILL
We have, as I say, to consider this body of half a million workers, who, because of the uncertainty 689 inherent in the nature of their occupation, were never closely organised and who, in consequence, suffered the disadvantage of having to make individual arrangements with their particular employers. I submit that all that has now happened is that workers are no longer exposed to the haggling of the market: they are no longer dependent upon haphazard earnings fluctuating according to the whim or mood of those who patronise these establishments. They are now assured of a minimum standard of wages; of conditions of service mutually agreed and not imposed upon employees, and of gradings mutually recognised as appropriate to the industry. May I say here, in view of the references which have been made by noble Lords to the large number of grades which appear both in the Report and in the regulations, that this large number is. I am informed, less than the number submitted by the Hoteliers' Association, and that in any event these gradings can be so arranged—in the case of the smaller establishments who obviously cannot possibly employ all of them—as to meet the requirements of the particular hotel and thereby simplify what appears to be on the surface a rather complicated arrangement. In other words, the industry is now somewhat belatedly operating under conditions universally recognised in industry as being in keeping with present-day industrial requirements.
One noble Lord remarked that he did not know why this Act was introduced in 1943. In fact, it was the outcome of twenty-five years of agitation. I understand that as long ago as 1929 or there-abouts Miss Margaret Bondfield was instrumental in another place in getting an Inquiry established—and there was one even before that. What is the extent of the employers' dissatisfaction with the operations of these wages boards? As has already been indicated by the noble Lord, Lord Balfour, of the five categories of catering establishments only two. the unlicensed residential and the licensed residential, have found difficulties. Of these two, the unlicensed have been given up as hopeless, because, as the Forster Report tells us, it is recommended that the existing board should be abolished. In view of what has been said about the unlicensed establishments, noble Lords might wish to know what the Report has 690 to say about the unlicensed residential people. In paragraph 168, on page 40, the Committee say:It seems to us somewhat extraordinary in the circumstances that between the time when the U.R. (3) Proposals were published and the latest date for representations upon them, any member of the Wages Board who had moved for their publication—much less the leader of the employers' side—should have engaged in active propaganda against their acceptance. Upon the subject of his intervention, the leader of the employers' side of the Unlicensed Board was not, we feel, entirely frank. To characterise at public meetings as 'calculated to end your solvency and sanity promptly and permanently,' Proposals which he had himself moved should be published, is not likely to inspire the hope that the Board will ever reach any satisfactory conclusion.Therefore, we may wipe out the position of the unlicensed from our consideration at the moment.
We are then left with the licensed residential people alone. Even here, while recognising the difficulty of satisfactory classification, advances towards satisfactory arrangements have been made, for, as the noble Lord, Lord Balfour, pointed out, this Report now divides the licensed establishments into "Large London," "Large Provincial" and "Small" establishments. If I sensed Lord Balfour's argument aright, he believes that the whole of the difficulty lies with the smaller establishments only—those who have neither the staffs not the experience to deal with these matters. There may be room for some kind of modification. The noble Lord has suggested that the modification might take the form of determining these classifications according to the number of bedrooms. He added also the question of turnover. I myself think that, so far as bedrooms are concerned, that might be a satisfactory basis upon which to make the classification. I do not quite understand why the factor of bar drawings should come into the classification at all. But there, again, under the recommendations of the Forster Report there is opportunity to enter into these questions with a view to hammering out the difficulties and, possibly, a recommendation.
May I say one more or less final word? I am aware that the Forster Committee considered representations from several organisations in Scotland. I am also aware that their Report has come down against the idea of a separate Wages Board for Scotland. I am further aware that the trade unions are, on the whole, 691 against the setting up of a separate Wages Board for Scotland. But I wonder whether I dare suggest that we might perhaps give another look at this question of a separate Wages Board for Scotland, for these two reasons. The first is that in the present state of Scottish sentiment I think that if we gave them the feeling that we recognised that they had problems peculiarly their own it might dispel the criticism that Scotland was regarded as a mere appendage of England. The second is—and I base this belief on my experience as a member of the Counties of Cities Association—that frequently in the consideration of questions dealing with the setting up of boards for Scotland as distinct from England, there is a conflict of views. Some people take the view that a Board should be set up because workers in England always get higher wages than those in Scotland, and Therefore Scotland would benefit; and, on the other hand, there is a feeling that, with the best will in the world, Scotland never gets the best representation. It is extremely difficult to come down to a balanced view of the whole problem. Therefore, I simply put it out as a suggestion that might be taken into consideration.
Of this I am fairly certain: that if only we can be convinced that good will exists between the employers, on the one hand, and the workers, on the other, given time to settle down to what is the universal practice in trade union organisation (after all, the three or four years that this Act has been in operation is not a long time), the employers will become accustomed to the method of negotiation and will find that the Wages Boards work quite well. In that way, employers, workers and the general public will all benefit.
§ 6.2 p.m.
§ LORD DERWENT
My Lords. I am particularly fortunate on only the second occasion on which I have addressed your Lordships in finding it my task to congratulate the noble Lord, Lord Greenhill, on behalf of your Lordships, on his maiden speech. I too am serving my apprenticeship here. It worries me a little that the noble Lord who has arrived after me is much more obviously nearer the end of his apprenticeship than 692 I am. I expect we shall hear him speak on many occasions in the future, and I for one shall be listening to him with very great interest.
I want to mention only one point to-night, and to put forward one suggestion, and I will try not to repeat what has already been said. It seems to me that one of the main difficulties we face is that all the regulations and orders made under the Catering Wages Act seek to treat the whole country as one unit: the regulations are the same for the whole country. We all know that every area has different problems from those of the next area (I am not thinking of Scot-land at the moment), and there are even differences between one hotel and the next. I am advised, and I believe, that if conditions of employment were fixed on a regional and not on a national basis many of our difficulties would disappear. To show your Lordships what I mean, I should like to draw your attention to the peculiar circumstances and difficulties of a group of towns, the whole of whose population is to some extent affected by the working of this Act—I refer to the northern seaside hotel resorts, towns such as Scarborough and Filey. I mention those two only because I know them best, but what I am going to say applies equally to the other Yorkshire resorts, and to most of those in Lancashire. Their problems are largely distinct from those of the south coast resorts. In the south, towns such as Brighton, Bournemouth and Torquay, have a series of seasons spread over twelve months. In the north we have a four-months' season, and the height of that season lasts ten weeks; it is during that period that everyone concerned has to earn his or her living to last over the twelve months.
Again, in the north our visitors come largely from the industrial areas, such as the West Riding, and those people, not unnaturally, like their holiday resorts to be holiday resorts, and nothing else. That fact makes it difficult to try and start any secondary industry on any large scale. Moreover, anyone who wants to start a factory would clearly rather do so in the industrial area, than be tucked away by the seaside. In the south, at any rate in Essex, Kent and Sussex, I am told that the large additional hotel staffs that are required in July, August, and most of September, come to a large extent from the London area, and go back to the 693 London area at the end of that crowded season. This, obviously, makes labour questions easier there than with us in the north, because in the north our inland hotels have their main season at the same time as the seaside hotels. The result is that in cur northern seaside towns, the whole population is to a large extent dependent on a successful summer season, whether a man works in an hotel, in a shop, as the groundsman of a golf course, or even as a fisherman.
What have these towns to provide? They have to provide accommodation, food, service, and entertainment of the standard that the visitor requires (and that standard is going up every year) and at the right price. Of course, the basis of a successful summer season in these places is in having adequate, efficient hotels and boarding-houses. We have heard mention to-day of luxury hotels. We do not go in for them very much at these seaside resorts in the north. We go in for large hotels but not the sort of hotel which can apparently charge what it likes, and have double and treble staffs. We like value for money, and in Yorkshire that means a lot of value and not too much money. We all know—and there is no argument about this—that the effect of this Act has been greatly to raise the cost of running an hotel. With the general rise in prices, this increase has to be passed on to the visitor. What is an hotel proprietor to do? He can increase his charges, but increased charges mean decreased profits if people will not pay those increased charges, and I think it is fair to say that the time has now come when hotel proprietors can no longer afford to put up their prices. The alternative, of course, is to decrease the standard of food or service. My Lords, that is a very dangerous thing to do in the seaside town. People come to these hotels year after year, and recommend them to their friends. They expect a certain standard of comfort, and if suddenly they do not get that standard of comfort, they get annoyed and tell their friends, and it may well be that that hotel is half empty the next year.
I do not want to go into all the details of why it is so difficult to run hotels; other noble Lords have dealt with this problem, and no doubt will do so. But there are one or two other matters that I should like to mention. In so far as I can find out from discussing the matter 694 with the hotel proprietors, they have no objection to the theory of a minimum wage, or, indeed, to the amount of the minimum wage as at present fixed. They have no objection to the theory or principle of overtime, but they find quite insupportable the amount and incidence of the overtime payments, the reasons for which those payments have to be made, and the period for which they have to be made. Particularly in these short-season towns, hotel-keepers find that if the overtime payment requirements are honestly carried out they are losing money.
Then we come to the compulsory rest-day, (I do not think it has yet been mentioned today), the most unpopular feature in a town which has a season for only a few weeks. It is unpopular with everyone. Proprietors have found that it is completely impossible to get temporary staff to take the place of people who are having their rest day. As a result the service goes down, as it is bound to do. The staff also dislike this compulsory rest day. It is a strange thing, but if you ask any single one of them, he will tell you that it is always on his rest day, when he is away, that the most generous visitors leave the hotel, so that he misses the tips. But, from the point of view of the staff, there is one much more serious matter. It has been the practice in times past, at any rate in my part of the world, for most of the hotels to keep on the majority of their staffs throughout the winter, although they have no real work for them. It was done largely by private arrangement; it suited both sides. The proprietor liked it because he was able to keep together his first-class staff, ready for the next season. The staff liked it because it enabled them to carry on during the winter, without dipping into the savings they had made as the result of their summer season. The position now, however, is that no hotel can afford to do that, and private arrangements with the staff are, I understand, illegal. The consequence is that most of these people are dismissed after only a short season.
What are they to do? It has been suggested that they should find temporary work elsewhere, because there is none in these towns in the winter. But many of these people have families and houses in the town, and it cannot seriously be suggested that they should leave their families and homes for seven or eight 695 months of the year. The alternative is to take permanent employment elsewhere. It is not very easy to do that, with the present housing shortage, but carried to its logical conclusion that practice would mean that in the following year only about one-half of the hotels in the place could open, so that there would be no accommodation for the industrial workers on holiday. It all sounds very complicated, but I am advised that if there were a great variation in conditions of employment, according to areas (I am not talking about minimum wages but about conditions of employment and rest days—perhaps instead of rest days taking additional holidays at the end of the season, and so on) satisfactory arrangements could be made which would please all sides of the industry.
§ 6.14 p.m.
My Lords, I too deem it a great honour to follow the noble Lord, Lord Greenhill, after his excellent maiden speech to-day. He described himself as an apprentice. Perhaps it would have been more appropriate to this debate if he had described himself as a commis—and a very promising commis at that. Other speakers have mentioned the Festival of Britain and the effect of the Catering Wages Act in that connection. I hope your Lordships will forgive me if I also mention the Festival of Britain, because I have just returned from America, where I have been doing my best to induce American visitors to come to this country next year.
I spent nearly four weeks over there visiting about ten cities, and I called on some sixty American travel agents in those cities. I found that the American travel agent "knew his stuff" very well indeed. One of the first questions that he asked me was: "What are you going to do about your hotels?" I do not propose to enter into a comparison between American hotels and British hotels. Of course, they have the great advantage on the technical side, in that they have hundreds of rooms with bathrooms. They are what one might describe as wonderful machines. But I think that we here have one big advantage over the American hotel—and I am sure that the noble Earl, Lord Bessborough, will agree with me: that our personal service is very much better. I suggest that the provisions of this Catering Wages Act and the Forster 696 Report are injuring that service which has made it possible for us to compete with the American hotels.
As the noble Earl, Lord Bessborough said, it is very often a question either of curtailing services or of increasing prices. With the present rate of exchange, our prices ought to compare very favourably with those of the American hotels, and though their food prices are very much higher than ours, when one looks into it their room prices are not so much higher as one would expect. An American travel agent was telling me that he thought that in some cases our prices were too high. So that even the American, who is supposed to be able to afford the highest prices, is beginning to say "Your hotel prices are high." I will not go into details of the way in which service is being reduced, because that has been dealt with by previous speakers. I would, however, tell the noble Earl, Lord Manvers, that he is slightly inaccurate about Australia. In an Australian country town, you can get nothing to eat after 6.30 p.m., except eggs and bacon at the Greek cafe—or the "Dago shop," as it is called. I hope we shall not come to that.
I should like to turn for a moment to some of the suggestions in the Report of Sir John Forster on the operation of the Catering Wages Act. One thing that was said was that on the Catering Wages Board the interests of the large hotels have overshadowed those of the small hotels. I do not think that is true, because, although two or three years ago the representation was uneven, it has now greatly improved, and I think on the employers' side the hotel industry is very fairly represented. But I do think it is the case that on the workers' side all sections of the industry are not represented, because practically the only hotels where trade union men are employed are the larger hotels, and particularly those in the large towns. Thus the staffs of the smaller country hotels are not really represented at all. I know it is a sort of fetish of the noble Lords opposite that nobody can represent an industry unless he belongs to a trade union. I do not think that is true. It would be quite possible to find individuals from these small country hotels who would put the case for the employees' side very well indeed. After all, the Navy, does it in the port canteen committees. 697 They pick competent individuals to represent the lower deck point of view on a committee, as the noble Viscount, Lord Hall, knows perfectly well. I maintain that it is not absolutely essential for a man to belong to a trade union in order to represent the employees' point of view.
Another recommendation is that a simplification of wage regulations and relaxation of stringent conditions is required for the small hotel. I entirely agree with that view, but I think it is required for all types of hotel. After all, if a large industrial concern employing some hundreds of men employs a fully qualified joiner, and a small industry employing a few men employs a fully qualified joiner, you would not expect to ask the bigger concern to pay a higher wage. As Lord Balfour has said, there are difficulties in regard to spreadover and so forth but these occur throughout the industry. I cannot altogether agree with one statement by the noble Lord, Lord Balfour. I think it would be very difficult to classify hotels in any sort of groups. They vary infinitely. They have different clientele, different room prices, and different standards, and I think it would be quite impracticable to divide them arbitrarily into various categories. I know that the trade unions say that the large hotels are perfectly all right because they can operate a shift system. That may be all right if you can persuade the general public to eat and sleep in shifts, but that I am afraid you will never be able to do. So far as I know, the only occasion in recent times upon which that was ever done was in the "Queen Mary" and in the "Queen Elizabeth," when they crossed the Atlantic carrying a whole brigade of American troops. They had to sleep eight hours each, three to a bunk and meals were being served continuously.
My Lords, I think there is one way in which we could greatly simplify this wages system. As many speakers have said, there are some 130 different grades of employees. It seems to me that the hotel employee would be perfectly well safeguarded if a basic wage for each group were prescribed by the Act. I am sure that the catering establishment or hotel which wants a man of higher skill is prepared, as has always been the case, to pay more for him. In fact it cannot obtain skilled staff without doing so. I think it would greatly simplify this Act 698 and in no way whatsoever injure the employee, if only the basic wages were set out.
Finally, I come to a question which has been mentioned by practically every noble Lord who has spoken this afternoon. To me it appears the most important matter of all—I refer to the question of tipping. As I have said before in this House, I have been frequently tipped, starting from the day at Claridge's when I, a naval cadet, was mistaken for a page. It has gone on through life, and on a train during the recent war I was tipped as a Pullman attendant, when in fact I was a Naval lieutenant-commander. There is nothing degrading about tipping, and I expect other noble Lords have been tipped. After all, tipping comes in exactly the same category as an incentive bonus in any other industry, and the trade unions strongly support incentive bonuses. What has been the result of practically ignoring tipping in this Catering Wages Act? In my view, the whole wage structure in the hotel industry has been completely upset.
By the nature of things there is always bound to be a certain amount of jealousy and bad blood between the staff behind the scenes and what I might call the tippable staff in the front. That has been very much accentuated by this Act. I suggest that an employer who puts a man in the position—as in the case of a link-man—of earning a wage running into four figures a year, has done his job, without having to pay him a large wage as well. Of course, everybody in the hotel knows perfectly well what that man was earning before and what he is earning now. They strongly resent the fact that he is earning a much higher wage, in addition to his tips. I believe it is true to say that as a result of this Act 95 per cent, of the increases in wages went to staff already in receipt of tips, and the remaining five per cent, went to what one might call the "back room boys" Obviously, that situation is creating very great dissatisfaction. A solution of the tipping problem simply must be found, and I think the way to do it is 10 pass it back to the wages boards and tell them to get on with it and find a solution. I think the people with a real knowledge of the industry could find a solution, if only they were left to do so. To talk about a further national Inquiry is quite absurd.
699 My Lords, to sum up: first, I do not think it is possible to classify hotels into various groups. Secondly, I believe that it is absolutely essential that the wages system should be simplified, and I think it could be done by prescribing basic rates only. Lastly, and above all, it is absolutely essential that the problem of tipping should be faced and dealt with as soon as possible.
§ 6.26 p.m.
My Lords, your Lordships will agree that the subject we have discussed has been an interesting one, and I think you will feel indebted to my noble friend, Lord Balfour of Inchrye, for bringing it up to-day. A number of important points have been raised during the debate. I would refer very briefly to only one or two of them before offering my few remarks. The noble Earl, Lord Bessborough, stressed the domestic character of the industry. That theme has run through a number of speeches. Not since I was a boy have I had the good fortune of the noble Lord, Lord Gifford, of being tipped; but I agree with his contention that it is an incentive which will always remain with us, whatever legislation we pass, and the backroom boys who do not share should be remembered in any formal adjustment. Lord Manvers was inclined to more root and branch methods, but I think he would agree with other speakers that what is at fault is really the tightness of the regulations, and that we seek more flexibility.
Lord Greenhill, in a most interesting and informed maiden speech, which we all enjoyed, gave us a number of things to think about. I am very glad that he agreed with what I was going to say in regard to a separate Scottish Wages Board. But that was only a part of his speech. He saw what was good in the Act and wished to preserve it. So do we. But we suggest that certain alterations are necessary to make it work satisfactorily. May I say, in regard to one point in the noble Lord's speech, that I am told that the information about the 100 grades of staff was submitted by the wages board and not by the Hotel and Restaurants Association? That is my information, but it is open to examination. I am told that the list came from that source. With other members of your Lordships' House, I hope that we shall 700 often hear the noble Lord again and that his apprenticeship (if indeed it is to be considered as such), will be a short one, because he is an old hand at speaking.
§ LORD GREENHILL
If I may be forgiven for interrupting, may I say that the information I was given was that the original list of grades came from the Hoteliers' Association, and that the list actually adopted is a shorter one?
THE EARL OF BESSBOROUGH
I have made inquiries of the Association, and I am afraid that the noble Lord has been unwittingly misinformed.
A maiden speech is always one about which we have no controversy, and I certainly do not wish to enter into one with regard to this point.
Passing down the list of those who spoke, may I say that I was interested in what Lord Derwent said about a rest day? That is a matter which enters much into the consideration of hotel-keepers especially in the north of Scotland and in remote places generally; I will refer to it later. The remit which the Minister of Labour gave to the Commission of Inquiry was a searching one, and I feel that the Report demonstrated beyond all doubt that there is not sufficient flexibility in the working of the Act, whether as a matter of normal practice or at holiday times. If this debate emphasises that, it will serve a good purpose. It is clearly a fact of which His Majesty's Government were well aware; they obviously had it in mind when they called for the inquiry, but I trust that this debate will underline it. The Act was the work of a Coalition Government during the war, and we are all in agreement as to its purpose, but many of us feel that its too rigid working has done, and is in danger of doing, a considerable amount of harm to the hotel industry. It is not so much the hotel proprietor who complains as the visitor, for he is suffering.
I think that the general standard of service afforded to visitors, more particularly in rural and remote areas, has definitely worsened during the past two or three years, due to circumstances out-side the control of those engaged in the industry. I do not put that all down to 701 the working of the Act, for other factors, such as rising costs and transport difficulties, have had their effect. So far as these troubles are capable of remedy, and in particular so far as they lie within the working of the Act, it is our duty to see them remedied and to ensure that good service is restored. I agree with Lord Gifford that we can be proud of our standard of service in this country. He spoke of it in comparison with standards in certain other countries, and, in general, I think we can be proud of the good standard which we have maintained in the past. We want to keep it up, but I am sorry to say that I think it has declined owing to the difficulties of the last few years. The importance of the industry has been underlined, but I shall underline it again by repeating what Lord Balfour of Inchrye said to the effect that as much as £70,000,000 in foreign exchange is within the earning power of the tourist industry. I believe that that is greater to-day than the amount which is within the capacity of either the coal or the shipbuilding industry as earners of foreign currency. Therefore it is a very important consideration indeed.
My Lords, this is St. Andrew's Day, and it would be unnatural if I did not say a few words about Scotland. I am glad that the question of a Scottish Wages Board has been dealt with in the debate, and that there is a measure of agreement upon this matter on both sides. Practically the whole of Scotland, with the exception of a few industrial towns, is a holiday centre, and it attracts tourists from far and wide. It has special characteristics of its own. Your Lordships will remember that the Forster Commission recommended a single Board for the United Kingdom, with committees for large London establishments, large provincial establishments, and small establishments, wherever situated; in fact, a structure on vertical lines. It seems to me that the case for a separate Board for Scotland is a very strong one, because the proportion of small remote establishments to the whole is far greater there than in the rest of the Kingdom. In this connection, I would draw attention to the evidence submitted by the Scottish Tourist Board, of which Mr. Tom Johnston—who, of course, is well known to all Scotsmen—is Chairman, and Professor Knox is a leading member. The Commission, your 702 Lordships will recollect, paid high tribute to the work of this Tourist Board. The Board's evidence, which is set out in a pamphlet, which may be in the hands of some of your Lordships, gives striking instances of the effect of the too rigid working of the Act in the rural districts of Scotland. That matter was gone into very fully by the noble Earl, Lord Rosebery, and the noble Earl, Lord Selkirk, in the debate on October 17. so I do not propose to enlarge upon it to-day.
I would, however, draw your Lordships' attention to the Schedule at the end of the pamphlet, which shows that in the islands and remote coastal districts of Scotland there are over 300 hotels depending on water transport, on ships—where the last arrivals and first departures of steamers inevitably necessitate a minimum hotel working day of over twelve hours, the permitted period of the spread-over. Sometimes the time has to be extended to as much as twenty-one hours, and the average over the 300 hotels is about fifteen hours The arrivals and departures may be late at night or early in the morning, and there may be long hours during the day when things are very quiet. It is a big problem for the hotel keepers in remote areas. Their trade is highly seasonal, and there is no considerable reservoir of labour upon which the hotel keepers in those areas can draw. Many of the remote hotels are inns, and. as such, they are under statutory obligation to keep open all the year round. I suggest that their circumstances ought to be taken into account.
Another factor which makes the North of Scotland different from other parts of Britain is the very long period of daylight in summer. That, of course, has an effect on the habits of visitors. If there were a Wages Board for Scotland, it would be composed of people who understood the special conditions which affect that wide area. It is true that the Commission propose to strengthen Scottish representation on the United Kingdom Board, but we are modest people and we can hardly ask for an absolute majority on a United Kingdom Board. Therefore, we would remain in the minority, although we might receive sympathetic consideration for Scottish cases. I claim that there is sufficient difference between the two countries to make it desirable to have a separate 703 board for Scotland. The noble Viscount who is going to reply on behalf of His Majesty's Government may say that that is not possible without an amending Act, because the Government can carry out only recommendations from the Commission. If an amending Act should be necessary, let us face it. In some of our debates we have had discussions on legislation which has been recently enacted, and we have been told that it should be left for some time to prove itself. But this Act has had a run of three years, and if the Government is convinced that amendment of any point is necessary I hope that Parliamentary time will be given for the necessary legislation. A good purpose has been served by the Inquiry, but its recommendations do not, in my opinion, go far enough. It may be necessary for the Government to amend the original Act. If that should be necessary, I hope that they will take early steps to do so.
§ 6.40 p.m.
§ VISCOUNT HALL
My Lords, this debate has been a very friendly one, although it has dealt with an important matter. The noble Lord, Lord Balfour of Inchrye, has largely given the history of the legislation and its purpose. He has also dealt fully with the importance of the industry. This was brought out, too, in the delightful and charming speech of my noble friend Lord Greenhill. May I join in the congratulations which have been extended to him? He certainly did not speak as an apprentice, but as a veteran. The points upon which he touched were clearly dealt with by him, and I can almost say that he seemed to be winding up the debate, with the exception of one matter, with which I will deal a little later. The noble Lord brought out the importance of the debate from an angle different from that emphasised by the noble Lord, Lord Balfour of Inchrye. He stressed its importance to the employees in the industry, of whom there are between 500,000 and 750,000 registered as depending on this industry for a livelihood.
I shall not refer to conditions existing before the Act, but I think it will be admitted that they were far from satisfactory. That could be attributed largely to the fact that the catering industry, for all 704 its importance, did very little to organise itself and bring itself into line with the other industries of the country. I fully appreciate the difficulties it had to meet in doing so, but there was no attempt, even by the larger concerns, to treat the industry as of national importance. The noble Earl, Lord Bessborough, said that at last the Government had recognised this industry as a national industry. The truth is that the Government recognised that it was a national industry long before those who lead it on the employers' side recognised the fact. That was one of the problems with which the industry was confronted. The conditions which existed before the Catering Wages Act could not be justified, and it was essential that an improvement in the working conditions should be brought about, both in the interests of the workers and in the interests of the good employers, who were penalised by the undercutting practised by bad employers. It was this undercutting which was responsible, in the first place, for the introduction of wages boards into our industrial system. I will not describe the catering industry as a "sweated" industry, but it is strange that it had to be treated almost as such to bring some semblance of organisation into it.
When the Catering Wages Act was introduced into another place, the then Minister of Labour said that the Act would do no more than set up machinery for the overhaul of the industry. The operation of this machinery lay in the hands of the industry itself. My right honourable friend said:I rely mainly on the creative clauses of this Bill—the clauses which create the Commission, which create the Wages Board and which create the opportunity for the Commission to investigate and report on all the problems concerning this industry. It is the creative side of the Bill which I have striven to achieve more than anything else. I want to make it effective and workable, and I hope that the Bill will be just the digging out of the first foundation upon which a good edifice may be built.It was fully realised that there would be much difficulty in getting the right kind of machinery, but it can be said that had the machinery which was established under the Act been properly tried out by both partners in the industry in all cases, then the improvement expected at its inception would have been more completely realised than it is at present.
705 The noble Lord who opened the debate dealt with the machinery which covered the Catering Wages Commission, which, after all, is acting as the steering committee for the five catering wages boards. The fact that there are five separate boards is an indication of the complex problems arising from the conditions in the industry. Those problems are brought out in the functions of the separate boards, of which the first three cover canteens, public-houses and clubs, and cafes. I agree with what the noble Lord said, that possibly it was easier to carry through a scheme for canteens, although that was not too easy, in view of the varying industrial conditions which existed and had to be met. Because of licensing hours, a wages scheme for public-houses was easier, but again there was great difficulty in regard to cafes. It should be remembered that these three boards cover nearly 130,000 establishments throughout the country, establishments which employ the majority of the workpeople in the industry. Not a single word of complaint or criticism of the work of these three boards has been mentioned in this debate.
§ LORD BALFOUR OF INCHRYE
My Lords, I agree with the noble Viscount that there has been no criticism of these boards; I do not think there is any need—but they are not covered by my Motion.
§ Viscount HALL
They are not included in the Motion, but at the same time it is as well to put the position in a proper perspective. The noble Earl, Lord Manvers, as my noble friend Lord Derwent rightly said, wanted to destroy the Act root and branch, and to go back to the "good old days." As the noble Earl is probably about my own age, that would mean going back to what the industry was like some forty years ago. We can never go back to conditions of that kind, and I think that is generally recognised.
Let me now come to a board which has given great difficulty—namely, the wages board covering unlicensed hotels and boarding houses. My noble friend Lord Greenhill has dealt with these establishments, and I am not going to deal with them in great detail. Unlicensed hotels and boarding houses number between 60,000 and 80,000, and form one of the largest sections of the industry. They have little or no organisation for 706 their protection, or for the protection of their workpeople. Had I been a member of a board which had received the strictures which the Catering Wages Commission made in respect of the board for unlicensed hotels and boarding houses, I should feel very sorry for myself. Those strictures are summed up in six words, "Four wasted years with nothing done." I can quite understand why the Commission was anxious to have one board instead of two.
A different story can be told in relation to the board dealing with licensed hotels and restaurants, around which the debate has mainly centred today. As the noble Lord rightly said, this board deals with a relatively small number of establishments, but they form a vitally important section of the industry. It is against this board that much of the criticism has been directed, but it can be said that this board has done well in a difficult situation, for there was no previous experience of voluntary wage agreements to draw upon in the industry, and it was therefore necessary for the board to start from scratch. The flexibility of the wages boards can be understood by the changes which have been made by this board. Their first order was made in January, 1948, and in reply to criticism the order was amended some eighteen months later. This went a long way to remedy the worst anomalies of the first order, but it did not entirely remove all he causes for complaint, and in December of last year, as has already been stated, the Minister of Labour directed the Commission to review the position in the licensed hotel industry.
I should like to say that I attribute much of the success of the work of this board to the chairman of the board, who is a member of your Lordships' House, Lord Terrington. In all the difficult discussions carried on by this board during the period from February, 1946, to the end of 1949, the independent members were called in on only nine occasions. Despite the noble Lord's reference to experienced trade union leaders dealing with innocent business men who had no experience of meeting these clever men, there was this large amount of agreement. Whatever can be said about Regulation 7, that was an agreed finding of the Licensed Establishments Wages Board. On the nine occasions when the independent members were called in to give a 707 vote, seven decisions were given in favour of the employers and against the workers' representatives, and two were given in favour of the workers' representatives and against the employers. To my mind, it was the trade union representatives, if anyone, who had a grouse—but I am sure they did not grouse. This scheme was accepted, and it is this agreed scheme about which there has been so much criticism. The Commission in their Report paid tribute to the work done by this board by saying:Indeed, the attitude of some of the wit-nesses on both sides of the Licence Board inspired us with confidence in the future working of the machinery.They took the view that some initial difficulties and misunderstandings were being ironed out, and that defects due to early inexperience in the operation of wage regulation machinery were being remedied. Let me repeat that the power which the wages board have in the initial inquiries into working conditions is such that they can take into consideration the varying and complex conditions, and reduce the varying grades and build up a negotiating machine of which the industry is in such need.
I do not want to join in the controversy which has arisen with regard to the varying grades. A statement made by my noble friend Lord Greenhill was questioned. If the noble Lord, Lord Balfour of Inchrye, will look at paragraph 120 of the Report, he will find that my noble friend was not so far out in the statement which he made. The noble Lord, Lord Balfour, suggested in his speech that it might be better if on the workers' side some of the trade union officials were replaced by persons actually employed in the industry. This argument was put to and considered by the Catering Wages Commission during the course of their recent inquiry. I agree that at first sight this argument seems attractive. I fully agree that both sides of the wages board should include a proportion of persons actually engaged in the industry. But officials, both of trade unions and of employers' organisations, have their place too. Indeed, it is on the officials that the main responsibility for making the board function must rest. Wage negotiating is a skilled job which is best done by persons who have had long experience. Those who are sitting on 708 the workers' side of these boards are selected from trade unions who have trade union membership employed in the industry—and there are many members of the various trade unions now employed in the industry. Unorganised workers and employers can speak only for themselves. Officials of trade unions and employers' organisations can represent the interests of all their members through-out the whole country.
It was further suggested by the noble Lord who opened the debate that the Catering Commission were not an appropriate body to undertake an inquiry into the effect on the hotel industry of the operation of the Wages Act. I would point out, however, that the very reason why the Act created the Commission was to provide a permanent independent board, aloof from the wage negotiations of the wages boards, which could keep a continuous oversight over the development and well-being of this industry, including the operation of the wages board machinery. The members of the Commission, while completely independent of the board and catering trades, have a wide experience in industrial relations, and in the course of time have acquired an intimate knowledge of the catering industry.
I should like here to say that the Com-mission were very well served in having Sir John Forster as their Chairman, a man of outstanding experience and ability in handling arbitrations and inquiries of this kind. The Commission have the complete confidence of the industry, and their views carry greater authority than would those of a specially appointed ad hoc Commission of Inquiry. It should be pointed out that the Commission were assisted by a number of assessors, drawn from both sides of the industry, including a Scottish representative. In addition, no fewer than forty organisations, representing every section of the industry—a list is contained at the end of the Report—besides many independent members, workpeople and employers were consulted. I think it can be truly said that the Commission were in every way an independent Commission, and could not be improved upon.
Nearly every noble Lord who has taken part in the debate has raised the question of the practice of tipping in the industry. It is true, as noble Lords have said, that tipping does take place. Tipping, after 709 all, is a legacy which has been handed down in the industry over a very long period. I was rather interested to hear what the noble Lord, Lord Gifford, said in relation to a minimum wage. He was quite prepared to establish a minimum wage, entirely apart from the question of tipping. He said that he would regard tipping as an incentive—as something in addition to the agreed wage to encourage a particular industry to do more work.
I spoke about those two things separately. I sought to do away with these 130 different grades. I thought that the interest of the employee would be served if, in each group or section of the industry, a minimum wage were prescribed, taking into account the fact that tipping took place.
§ VISCOUNT HALL
Then it would not be very much of an incentive if workers' wages were reduced because of the tips they received. I am not so sure that the Chancellor of the Exchequer would be very pleased if this were brought about, because the more wages a man received the happier the Chancellor would be, because of the extra revenue from taxation.
This question of tipping has given the Commission and the wages board cause for much thought. Early in 1947 the Minister directed the Commission to inquire into the problems affecting the remuneration of catering workers resulting from the practice of giving tips. The Commission at that time sought information separately from the chairmen of the employers' representatives and the workers' representatives of the five wages boards, who readily co-operated, giving full information on the many aspects of this question which had been exhaustively examined by the board. The Commission were assisted by receiving not only their representative views, but also their personal views. The result was that the Commission were unanimously of the opinion that tips should be disregarded by the wages board in assessing statutory minimum rates of wages. The information given was that it would be to the benefit of both employees and the public that tipping should cease to be relied upon as an essential part of a worker's living wage, since the amounts received by way of tips fluctuated as widely as possible between one grade of employee and another, between one establishment and 710 another, and between one period and another; and that it was a practical impossibility to make a general assessment of the cash value of tips. The Report indicates that much consideration was again given to this question by the Commission, for no less than twenty-three paragraphs of the Report deal with it.
I am of the opinion that the suggestion in their summary that a national joint committee should be established to examine, as a matter of urgency, the whole question of tipping, is the only way in which to deal with this matter. After all, it must be remembered that tipping is not confined to the catering trade alone. There are many other trades where tips are possible, although not to the same extent as they are in the catering trade. But if you are to penalise one industry, then, of course, you will have-to deal with this matter so that it will cover the other industries as well. It would be very unfair to penalise one industry unless there could be some general agreement in relation to this matter. The noble Lord, Lord Balfour of Inchrye, suggested, with other noble Lords, that the Commission should give a directive to any such committee that the practice of tipping must be accepted, and must be taken into account in any recommendations which they might make on this question. As was pointed out by the noble Lord, Lord Clydesmuir, the Minister has no power under the present legislation to give a directive to the Boards. That could be done only by an amendment of the Act, and. of course, it is left now for the Minister, the Commission and the boards to consider that recommendation.
The question of a separate Wages Board for Scotland has again been raised. Your Lordships will remember that this matter was fully debated in your Lordships' House on October 17, and there is little or nothing that I can add to what was so well said then by my noble friend Lord Morrison, other than to remind your Lordships that this matter has been under consideration on no fewer than three occasions: first, when considering the original split-up of the industry as between different wages boards; secondly, following the Knox Report and, finally, on this Report. The main recommendations of the Forster Report are that two of the existing wages boards (those for 711 licensed and unlicensed establishments) should be replaced by a single board, assisted by committees representing the various classes of establishment—a proposal which the noble Lord, Lord Balfour, supported—and that a national joint committee of the industry should be appointed to consider the vexed question of tipping. These suggestions are now being considered by the Minister. Within the last few days, he has received the last of the observations of both sides of the industry who have been examining them.
I now come to the immediate steps to be taken to deal with the anomalies in the existing wages order, to which noble Lords have referred this afternoon. I have no wish to minimise these difficulties, because difficulties there are. Indeed, those of us who have occasion to stay in small hotels, not only in Scotland or in Wales but in England as well—particularly in the rural areas and in the more remote parts—know all about these difficulties. The Forster Report has drawn attention to all these difficulties, and has made constructive recommendations for overcoming them. These recommendations cover such problems as split duties spread-over, overtime, night duty, time off and holidays, and I think they might take into consideration the suggestion which was made by the noble Lord, Lord Derwent, in dealing with rest days and adding them as holidays at the end of the season. I thought that that was a suggestion that might well be considered.
We have heard this afternoon of all these difficulties, and as soon as my right honourable friend the Minister of Labour received the Report in August he appreciated that it was most important that early decisions should be reached on the recommendations. Therefore, he referred the whole of them to the Wages Board on the very day that the Report was published. The recommendations obviously take a little time to consider, but it will now be possible for the Board, if it sees fit, to submit to the Minister revised suggestions which can be operative in the new Wages Regulation Order which we hope will be introduced before the beginning of the 1951 season. So probably many of the suggestions—and indeed much of the criticism—which have been made here to-day are now being considered by the Wages Board and I 712 have no doubt that they will submit their recommendations in relation to this matter. I wish here to emphasise that the Minister himself has no power to initiate or amend a Wages Regulation Order and that he can act only on proposals submitted to him by a catering wages board. The Minister has done all that could possibly be expected of him in helping the industry to solve its problems without interfering with the independence of the wages boards. The solution now lies with the industry, and there is nothing in the machinery under the Act to prevent this matter being speedily dealt with.
My Lords, what we want is a contented and efficient industry. We all wish that that should be brought about. We think that if this machinery is made to work, as time goes on the industry will be able to deal with its affairs on a voluntary basis of collective bargaining, such as function so successfully, not only in the other great industries in this country, but also in the hotel industry in other countries—for example in Switzerland. We are told that there is almost a complete organisation of both sides of the industry managing their own affairs and, indeed, conducting the industry, which is a credit to all who are associated with it.
I do not think I can conclude better than by quoting the words of the Commission:We desire to stress the fact that experience in Switzerland and other continental countries has shown clearly that from the point of view of the public, and of the employers and workers in the hotel industry, a completely satisfactory structure of wages and conditions can best be built up gradually on the basis of voluntary collective agreements. Such agreements can more easily take account of the varying conditions of the industry and thus ensure greater flexibility. It is to be hoped that better understanding on the Wages Board will eventually lead to complete organisation of both sides of the industry. Mean-while we regard the present statutory machinery as essential until such time as it can be re-placed by collective bargaining based on mutual good will and understanding.This country ought not to take second place to any country in the world in the building up of its negotiating and conciliation machinery. Indeed, in that respect we have led the world in our main industries. I have no doubt at all that there is sufficient ability in the industry we have been discussing to-day to ensure that if they give the Wages Board a fair 713 chance, taking into consideration all the difficulties which have arisen in the course of a short time, we shall be able to say that here we have an industry which is making a great contribution to our national well-being and which will give to those on both sides the reward which they deserve.
§ 7.16 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, I should like to thank and I am sure other noble Lords would also like to thank the Minister for his reply, and express my gratitude to noble Lords who have taken part in this debate. Particularly should I like to add my congratulations to the noble Lord, Lord Greenhill, on his maiden speech. He said that he spoke with the rawness of a new apprentice. If your Lordships will allow me to say so. he showed the skill of an old hand and subtlety in presenting the most favourable aspect of his points; and on Scotland, showing the direction of his own mind without embarrassment to his own mind, he showed the subtleness of a skilled debater.
I want to say only two things to the noble Lord. I thought he was a little unfair to the Unlicensed Board in his strictures in quoting the Commission's words "Four wasted years and nothing done." Perhaps that Board found their task was even more difficult and in some ways more impracticable than the task which faced the Licensed Board; and perhaps by no action they avoided the admitted errors which caused delay to Licensed Regulation 3, the substitution of Licensed Regulation 7 for Licensed Regulation 3, and the necessity for the Forster Commission to get over the difficulties which have been caused by Licensed Regulation 7. Lord Greenhill quoted the words at pages 40 and 41 when the Chairman said of the Unlicensed Board:Upon the subject of his intervention, the leader of the employers' side of the Unlicensed Board was not, we feel, entirely frank. To characterise at public meetings as 'calculated to end your solvency and sanity promptly and permanently,' proposals which he had himself moved should be published, is not likely to inspire the hope that the Board will ever reach any satisfactory conclusion.It reminds me of Bagehot, who said that the habit of common and continuous speech was a symptom of mental deficiency. I want to say one word on 714 tipping. The noble Lord came forward and said, in a sort of pained and surprised voice: "Tipping does take place," rather as if he had just discovered the facts of life.
§ LORD BALFOUR OF INCHRYE
Of course it takes place, and I hope that those responsible will face up to the realities of the situation. The noble Viscount said that it was impossible to put a cash value on tips. The. trouble is that the Chancellor of the Exchequer does, so perhaps those responsible might have a look at how the Chancellor does what the noble Viscount says is impossible. Finally, of the Scottish Board he said: "This has been under consideration three times." I am still full of hope when I think of the things that have been under consideration three, four or five times in this Government and have finally been altered. I remember the pay code for the Services, and the debates in this House in which we pressed for an increase. The Government said that everything was all right, but on the fourth or fifth occasion they altered their minds. So perhaps in relation to Scotland, having had the matter considered three times, the Government will soon be changing their minds and coming to the right decision. With those final remarks, I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.