HL Deb 13 July 1955 vol 193 cc667-757

2.41 p.m.

LORD AMWELL rose to draw attention to the changing character of industry and the need for a new outlook in respect of industrial relationships and to move for Papers. The noble Lord said: My Lords, in putting down the Motion for this afternoon's debate my idea was not to invite your Lordships to duplicate the discussion in another place on June 23, but rather to rescue one or two points that I think were significant, and to deal, as shortly as possible, with what I regard as some fundamental considerations in respect of the question of industrial relationships and the general industrial position. It seems to me unfortunate, indeed alarming, that in a changing world so many, in all departments of industry and in all divisions of politics, cling to the old ideas and patterns.

For example—and only so, for I have no wish to pursue the point at length—during the recent conference of the Institute of Production Engineers on automation, the President, Sir Walter Tuckcy, said that the automatic factory would double our standard of living by 1984, the year of George Orwell's romance. The tone of that conference was one of tremendous enthusiasm for "the good time coming," but there was not much reference to the many specific problems which are bound to arise especially in the transitional stages, not only of automation but also in the development of atomic energy. Although it is said that there will be plenty of time and that all development will be sufficiently gradual for us to get into our stride, the problems will begin when the transition begins, and that seems to be very closely upon us. One would think that we are to sail into an age of material abundance with no great difficulty, and that such questions as labour displacement, marketing and so forth would present, if anything, only minor difficulty.

Then there is the impact of atomic power. I should imagine that in a machine age and under conditions of world-wide atomic energy and power producing superabundance, the problem of marketing would be of tremendous concern to a nation like ours, dependent as we are on the sale of manufactured articles and coal for our balance of payments. Sooner or later we shall have the position that the whole world, including ourselves, will not want coal; and that development, too, will present a problem in regard to labour and other things. How even supersonic salesmen are to sell superabundance in a power-drenched Empire and world is beyond me. They might as well try to bottle sunshine and sell that. I may be too dismal and premature in my outlook, but, as automation has begun and as atomic power will start being fed into our own grid within the next two years, we ought to be thinking about these problems now. I mention those points to indicate my view that we are not giving proper attention to some of the problems and fundamental questions with which we shall have to contend sooner or later.

During the debate on June 23 in another place, Mr. Shinwell said [OFFICIAL, REPORT, Commons, Vol. 542 (No. 13), col. 1563] that these strikes are far too numerous and destructive, and, in the end, may prove disastrous. That statement was supported by Mr. Alfred Robens in even stronger terms. He said, [col. 1561]: Our economic position is balanced on a razor edge. We have no 'fat' on which to live. Those were Mr. Robens' words despite the £5,000 millions of "fat" supposed to have been created on the floor of the Stock Exchange during the last few weeks. He continued: An adverse turn in the terms of trade, any slackening in effort, a sharp turn down of our exports, and we may find ourselves in a very desperate position indeed. Those are statement; from two leading representatives not of the Conservative Government but of the Labour Opposition, which show the seriousness of the position, despite suggestions that the position is not as serious as may be thought because of the fact that not so many men were involved in the disputes that are in our minds now. The significant thing here is that in the changing character of industry and its greater complexity, quite a small number of persons can do a tremendous amount of damage. That fact must be taken into account.

During the debate on industrial relationships there was very little reference to what is probably the most important factor in to-day's industrial unrest, namely, inflation. It is true that, earlier, Mr. Gaitskell had quoted a newspaper article in which the writer made the comment: Do you wonder that workmen with £10 a week or less are sticking their hands up to strike for more wages? The writer was referring to the Stock Exchange boom and he said that the Tories would have these troubles until they restored real value to the home pound note, by which I imagine he, meant restoring subsidies, and giving perhaps new ones, on the principle that a nation like ours can for ever live by its members taking in each other's subsidies. The problem is much more fundamental than that. Some dividend increases are substantial—and I refer to this at some length because behind a great deal of the discussion that is taking place is the assurnplion that the reason for the industrial troubles that we have suffered and that have caused a diminution of £90 million in our export trade is the fact that large dividends are being paid, that fortunes are being made but that workers are not sharing as they should in that wealth. That may be true; but continual harping upon what one might call "the class war theme does not really help us. One of the reasons why a debate in this Chamber should be useful is that, following the historic function of the House of Lords, we can take up points of that kind, develop them and endeavour to get at the facts and their meaning.

What does Mr. Gaitskell propose to do about it or that any Government should do? Labour fights shy of a capital tax. A capital levy was blown sky-high by Bernard Shaw, and if do not know of any authoritative economist in the Labour ranks who really believes that it is possible, in a complex capitalist system, to indulge in the idea of spreading out the amount of money available in the country by encroaching upon its capital reserves. But apart from the question of profits and dividends, I want to get at the facts. The gross profits already go back to the Treasury by more than 50 per cent., quite apart from taxes on the personal incomes of the shareholders. Mr. Gaitskell himself, when Chancellor of the Exchequer, had to confess that if all incomes over £2,000 a year were confiscated the yield would be no more than £58 million, or hardly enough to carry on a major modern war for more than a day or two.

Where does the discrepancy come in when we hear talk of £5,000 millions of "fat" despite Mr. Robens' statement about the country having no "fat" to live upon? Unless he is able to show that to-day any serious difference can be made in the wages situation by getting at this money and how it can be done within a capitalist system which he cannot alter in detail until it collapses, if it is destined to collapse, it seems to me that tub-thumping at that kind does no more than inflame, where a careful analysis would be much better, especially as there is sonic distortion of fact. Gross profits have not appreciably varied during the last two years, despite soaring dividends. According to the Labour Press Service gross profits have hardly varied during the last two years. Dividends have gone up over the years since 1935 by 100 per cent. as against more than double that in wages and considerably more in prices. And, of course, dividends reflect the inflationary character of the movements of the economic life of the country.

In the Minority Report on Taxation of Profits and Incomes there are suggestions that a tax on capital gains—which goes all against the Keynes' theory (which is accepted by all Labour's leading financial experts) of priming the pump to all eternity—would stop "conspicuous consumption." A special correspondent of The Times Review of Industry has been analysing a Report of the Inland Revenue Department which says that extermination by taxation does not work. The rich are not noticeably inconvenienced, the writer says, and the steady increase of a class which in theory is taxed out of existence shows the remarkable resilience of capital in a Welfare State. That, of course, is what a Welfare State is for. An early Victorian economist, named Karl Marx, pointed out that capitalism rested upon an average rate of profit automatically thrown up by the money law of private enterprise economy. The rate has varied very little during the hundred years since Karl Marx elaborated the theory of the flat rate of profit. I do not expect modern Socialists to understand or accept Marx's theory. Not even those who call themselves Marxists have ever read his works except at second hand in bits and slogans. I am not a Marxist; I do not agree with either his economics or his philosophy; but he did know his capitalism. A monetary share-out—because that is what is in the minds of the workers especially during a period of inflation—is good powder and shot for elections. No wonder hands go up for striking if the fiction of there being a vast and perpetually illimitable Tom Tiddler's ground is sedulously fostered! It saves a lot of hard thinking. But when men like Mr. Robens admit the fact that we are living on reserves and that there is no "fat" behind us, surely we ought to reconsider the ordinary propaganda attitude that is so much in evidence, and carefully examine what the financial and economic position of the country is, especially in relation to foreign trade and all the rest of it.

Frankly, I cannot understand Mr. Harold Wilson's description of the Stock Exchange fluctuations as a huge inflation of capital. I must, I suppose, apologise for that fact to some of my trade union friends, and I do not expect them to go with me in every point I propose to make this afternoon. I cannot help that: they will get their "little bit of fat" later on. I think we have to consider this matter from other than a Party point of view. It is not a Party question, any more than the Welfare State is a Party question. Therefore one has to be a realist in one's economic thinking, and I suggest that the more we can analyse these things the better. I say that I cannot altogether understand Mr. Harold Wilson's description of the Stock Exchange fluctuations as a huge inflation of capital—£5,000 million, I think he said. I do not know what he means. I miss his point. Gambling at Monte Carlo inflates the revenues of Monaco, but what it does in any inflationary way to capital I do not know. If a punter puts a pound on a horse which comes first in the next race—I think that is a proper illustration on a day like this—that pound goes into the bookmaker's pocket: it inflates the bookmaker's income at the expense of the punter. But it is the same pound; it does not become two pounds. In the same way, a shilling which has been lost is found by someone who gives it to a beggar—three incomes, one "bob."

The other kind of calculation has vitiated Socialist propaganda since the Fabian Society invented the fiction of the national "cake." The only national "cake" that exists (and here I am talking real original Socialism) is the goods and services that are available. The idea that we can measure all these things by money, upon the assumption that we can spread money out like muck and solve all our problems, is the kind of thing no Socialist would have looked at years ago, when they laughed at the idea of sharing out. The only national "cake," as I say, is goods and services. This has been not more but less available, just upon a monetary basis. For, after all, the basis of inflation is: the more money the fewer goods and services; and the fewer goods and services the less money relative to each other. So the thing has to be probed a little deeper than merely by examining what happens on the Stock Exchange, which I think does not matter a great deal, though I agree that it reflects the inflationary conditions under which we are living. We have had a conspicuous example this week-end.

Our difficulties in the industrial field are not primarily a question of wages. Industrial relations are considerably better than they were thirty years ago. On the whole, both employers and men are satisfied with the existing machinery of negotiation, though not always with the working of it. Clearly, employers would be less concerned with the wages they pay were they given corresponding production: if we want a bigger "cake we must sec that there is more production. It is impossible to eistribute what is not there. We have to knock that into the minds of a good many people who seem to think that there is a "Tom Fiddler's ground" somewhere that we can never get to the end of. That is not true, as the Labour Party itself found to a considerable extent when it was in office.

Production affects the home and the export market in three ways: in price, in quality and in time. Of those three, time—by which I mean the guarantee that the goods will be delivered on time—is more important than is generally understood. That problem of delivery is one that has upset our markets to a tremendous extent. For instance, last year Norwegian shipowners placed orders for eighty vessels in foreign countries. Normally, we should have had 50 per cent. of those orders, but not one of those vessels in in British yards. Bremen, Rotterdam, Hamburg and Antwerp—in all these ports British ships are there for overhaul and repair, in all yards. And that is because of the time issue more than anything else. It is also cheaper—but never mind about that.

There have been some investigations as to conditions of labour upon the Continent, and apart from the question of prices the loss of returns caused by ships being laid up in dry dock is a most serious consequence to shipowners. I have had an instance relating to the case of a £500,000 contract for water power machinery for the Middle East. Britain could not guarantee delivery within two years; and the British contractors insisted upon the inclusion of a strike clause. Germany guaranteed delivery, at much lower cost, in three weeks. Those are just one or two instances; they could be duplicated. Almost any newspaper will give you instance after instance of the way in whch the question of time has affected our foreign trade, and the orders to which I have referred. The other day there was a letter in The Times from the glass bulb manufacturers which stated that there were ten million glass bulbs awaiting transport overseas.

There does not seem to be mach thought given to the question of lower prices and full employment together. We may remember that the Labour Government of 1949 devalued, the pound, with the result that prices soared, though the Government of an earlier time acted upon the recommendation of the Cunliffe Commission in 1920 and Lraited the fiduciary note issue to a permitted maximum equal to the actual maximum of each preceding year, and prices rapidly fell so that the: policy had to be abandoned. I doubt if we can have full employment and lower prices. I am sure we cannot unless attention is paid to the question of more: production. Unless we have more production we cannot have these two things together, in spite of the Keynes triology for which our financial pundits fell very heavily, of priming the pump by means, of high wages, high, profits and high prices. The Labour Party, or some of its financial experts, said, "High wages: that will suit the unions; high profits: we can tax those" (in the process of priming the pump, if you please); "high prices: well more wages will solve that problem." That is not very careful thinking but we fell prostrate before Keynes, just as we fell before the noble Lord, Lord Beveridge, at a somewhat later date.

The noble Lord, Lord Beveridge, has pointed out that the Welfare State is precariously balanced. It is very precariously balanced and the Welfare State will be killed stone dead unless something more is done on the lines I am suggesting: that we have some profound examination of our economic position. In his famous Report, Lord Beveridge made it clear that he wanted the world made safe for capitalism. That Report was no Socialist Manifesto. He said that a healthy, contented and productive working-class was essential to the success of capitalism and that it was capitalism that was to finance the Welfare State—which, after all, did not begin with the noble Lord, Lord Beveridge. Welfare depends upon competitive success. There is no class war or Party about it, except perhaps in little details; but fundamentally no one is against the idea of welfare, because welfare pays. It is essential for the maintenance of modern business. The biggest of modern businesses have had "Welfare States" of their own for years, and we read of a new development in welfare in America, a very comprehensive one which has trade union agreement.

Now that is not hostility to capitalism: that is the point I want to get home. In these matters the class war had better be abandoned. We live under capitalism and we have to make the best of it, and it is not making the best of it if we sabotage, or talk about sabotaging, it because that is popular in election time. That is a dangerous view which is behind a great deal of the unrest that exists at the present moment. I have heard it said that the Labour Party sold its soul for a mess of Beveridge, but I would not repeat that accusation for the world. Welfare thinking has taken the place of Socialist thinking. But if it is welfare that is wanted, we shall find it worth while to consider carefully where we stand. There is no halfway house between co-operation with, or fighting, capitalism, while it lasts. What I am going to say may sound reactionary to some of my friends, but I want to be realistic. We have either to fight capitalism or cooperate with it while it is here. I will tell you what I think as a Socialist in a minute or two, but we are not living under Socialism. We depend for our bread and butter and for to-morrow's breakfast, lunch and dinner upon the integrity of a system in which we may or may not believe but which is there—and that is the point I would drive home. There is no halfway house between co-operation with capitalism while it lasts (and I will tell you what I mean by co-operation with capitalism in a moment) for production, industrial peace and many other things, and the Communist point of view.

Let us be logical: it is either class war or compromise. Just milking the capitalist cow to death is no solution to anything. After all, compromise is the essence of negotiation and it is also, for my Marxist friends, good dialectics. To use Marxist jargon, it is the "true penetration of opposites." It is particularly necessary to examine as they work out today the economics of the system under which we live and by which we live. The community at large has given no indication that it wants any other system. Let me say, in parenthesis—and I think it is necessary to say this or I should be misunderstood, and that would be a terrible thing—that I am a Socialist of the old Libertarian school. I think that liberty is more important than Socialism or any other ism. I do not believe in any State-imposed equality of money income. That is an impossibility, for reasons every Socialist ought to know; and I am certain we cannot redistribute inflation to any advantage. The Socialist idea of equality was never that of sharing out money. It was (and I should like this carefully noted) that abundant production—we come down to production again—believed possible in important primary commodities, at any rate, would, in a free world, render the law of supply and demand, and therefore buying and selling for profit, obsolete and absurd.

I am not arguing the case. The Socialist idea of equality had nothing to do with the distribution of money, nothing to do with doles, nothing to do with "doing good to the poor." As Bernard Shaw said, we did not want to do good to the poor; we wanted to exterminate them. I am not arguing the case: I am putting it just so that it will be understood. Equality was not something in money terms to be obtained by Act of Parliament, but something that would develop naturally and spontaneously as a result of our being able to produce more than could be consumed. That was the background to our idea of economic justice. We may have been premature, but what I now read about the atomic age, which is upon us in full pelt, makes me wonder how near and acceptable a genuine Socialism based on plenty and freedom might be. If we cannot sell against nightmare competition, we may have to consider "producing for use" there is a familiarity about the phrase which I think we shall recognise. We are producing for use even now. We have to do it in a condition of superabundance, because we cannot sell superabundance anywhere when we really get it. The only thing we can do is to restrict production, which is a contradiction in terms.

Nor was Socialism considered to be a way of putting capitalism into a State—I beg your pardon, strait-jacket. Morris and Blatchford both wrote anarchist novels in violent protest against that idea. But it seems to be a general idea on the subject at the present time. We did not believe in anything of the kind. The early Socialists believed in free cooperation, a better balanced economy and decentralised administration, so far as possible, because they stood for the smaller unit in the name of freedom and democracy. They believed in the Socialism of man rather than in the entrails of a machine, and they realised that it was impossible to have freedom and impossible to get democracy in remote control and highly industrialised machinery. It simply cannot be done. You can only have tyranny of one kind or another. This is all very philosophical so far, but I think it necessary to make that clear.

One of the obsolescent ideas that persists is that modern strikes are waged against the bosses of industry. They are not. Whatever the justice of any wage claim may be—and of course unions, combinations of workers, exist to press their claims; that is perfectly reasonable and justifiable—nevertheless, strikes are against the community, and the community are, in the main, the rest of the working class. It is not a question, even there, of class war, although it is made to be, especially by our Communist friends. The cost of meeting it is passed on to the consumer to a much more assured degree than was the case in earlier days of cut-throat competition.

It is argued (and this is to the point at the moment in reference to the increased price of coal, and the interview that was published this morning with one of the coal-mining leaders, who says that they are not charging enough for coal) that we should all pay more for our coal and for our food loan we do, in order that miners and agricultural workers should have a better deal. I have no objection to that view; it is a matter for argument and working out. I would not go down a mine for many times the salary or the income that I enjoy at the present moment—I grant that. But the facts should he acknowledged, and the pretence abandoned that what the workers get out of the alleged class struggle automatically comes out of the pockets of the owners of capital. I have quoted The Times Review Correspondent upon what is really happening. Higher wages do not come simply from the pockets of the owners of capital; and they cannot in the capitalist system. There are as many capitalists as ever; and as much gorging, guzzling and all the rest of it, as ever there was, if not more, simply because the system does not work otherwise. We talk about limiting dividends. What limit do you propose? I am not arguing in favour of huge dividends, but one must take the average into account. And taking a ceiling of 4 per cent., which sounds extremely reasonable (although if 4 per cent. could be guaranteed to the average capitalist he would be in clover), that makes an average rate of return of less than 22½ per cent., and probably less than 2 per cent. Capitalism cannot run on an average of 2 per cent.

I want to do my best—and I have been trying to do my best, misunderstood very often—to show my own friends in my own Party that all this harping on distributing money and picking other people's pockets in order to make things better for the workers, is based on fallacies. A ceiling of 4 per cent. does not mean that all the returns would be 4 per cent. If it did, you would have a gilt-edged security of some value. The present tendency is disquieting in many ways. How much of the vast fortunes recently supposed to have been made on the Stock Exchange has actually gone in greater "conspicuous consumption," to quote the phrase in the Report, and how much in "fructification," we do not know. But whether profits are ploughed back or distributed, they stand in the main as capital assets. In the end, all of them, except for certain luxury spending—and after all, a millionaire cannot sleep in two beds at once, or eat two dinners at once—are ploughed back by reinvestment, not all in the industries that made them but, in a more general way, in the run of reinvestment. The suggestion that thousands of millions extra goes in orgies, conspicuous or not, is rodomontade.

I have taken that line of thought in development, to some extent, in order now to get down to something perhaps more controversial in a practical manner. I noticed in one newspaper a report that there have been talks between the Prime Minister, Sir Walter Monckton, and leaders of industry and the trade unions, giving consideration to basic principles of industrial relationships to be embodied in a document to which trade unionists and industrialists would subscribe. That is not fighting capitalism, but cooperating with capitalism. The report goes on: These principles aim at securing a 'pause for reflection' before strike action.… The first principle would be that in no circumstances should a strike or lock-out be declared until all the established machinery for negotiation, including arbitration, had been exhausted. The second would comprise an undertaking that the Ministry of Labour should be notified a reasonable period in advance of notice of a strike or lock-out. Then there should be set up an agreed procedure, the report went on, by which the basic facts of an industrial dispute could be impartially established. Though none of the precepts would have statutory force, if both employers and unions subscribed to them it is felt that they would be a powerful restraining influence. That is all very nice. But why does that idea not apply to the ballot? No one proposes that there should be legislation, with sanctions and penalties, compelling people to vote by ballot before a strike. It is the same kind of agreement and understanding. The idea of a ballot should be the accepted principle of the union and that would have the same effect—it would have "a powerful restraining influence." I will refer to that in a moment or two.

We have here to get down to a fundamental principle. The rights and privileges of trade unions are not likely to be attacked by proposals of legislation. This Government are not going to attack trade unionism they will not risk attacking it for one thing. We remember what happened in 1927. In any event I object to "multitudinous laws incarnadine"—some of them are bloody, are they not? But responsibility must accompany freedom, as the Trades Union Congress General Council fully understand. What are those rights and privileges? What is their standing? In the first place—and I hope my trade union friends will not jump too soon—there is no moral right to any forcible attempt to gain material advantage by inflicting loss and inconvenience upon others—even upon enemies. There is no moral right to strike. Whatever excuse there may be for a strike, there can be no intrinsic moral right to be judge and jury in one's own case. The right to strike is a legal one, resting upon something entirely different: that, short of slavery, no man can be forced to work against his will.

But that principle carries something else. Such a legal right involves collateral respect for the rights of the community. In theory the liberty of the subject is the basis of a legal right or privilege so conferred. Similarly, in the argument for the closed shop we see the same kind of fallacious reasoning. It is said that workers benefit by trade unionism and should be made to toe the line, instead of enjoying benefits at their fellows' expense. That is a dangerous argument. To take an analogy, workers benefit by the legislation of a Labour Government (at least, the Labour Government would say so), but no one can properly argue that, because they do, a worker who supports a Tory, a Liberal, or an Independent at an Election should be deprived, if not of the right to live by his trade, at least of his vote. What is the difference between the two? Both ideas would be totalitarian; and by totalitarianism is meant the right to say that a man shall not get his living because he does not do what he is told to do, and does not join the organisation he is told to join. Labour politics, as well as trade unionism, cost money and these people are not "standing their whack" if they vote Tory, Liberal or Independent. As I say, I am for liberty first, before anything else.

Trade unionism ought to be strong enough to rest its case on moral suasion; and indeed, it is. Its recognised importance in the structure of modern industry makes totalitarian methods as unnecessary as they are alien to the liberal traditions of our land—and I am using the word "liberal" with a small "1." We can surely get on without them. There are not so many blacklegs at heart as all that, and when it comes to members of one union being treated as blacklegs by members of another, surely the limit has been reached. It has a bearing on the other question I have hinted at—namely, the question of balloting. The idea of I am right and it is therefore my duty to persecute your", to quote Macaulay, is not absent by any means. No member of a trade union branch who values his peace of mind will take any conspicuous part against popular clamour unless he is made that way. I know what I am talking about. As a lifelong trade unionist I have suffered from just the thing to which I am objecting at the present moment and which seems to be so generally accepted. In matters of political voting abstention is thus accounted for. In an open vote on any vital question the hand goes up very often to avoid being branded. Now that is a fact, and that is a justification for the principle of voting by ballot.

But it is amazing. The Minister of Labour has turned dawn the proposal for a ballot before the strike, although we have had an example of what is happening. The Trades Union Congress have disciplined the trade unions by agreement. Why not the ballot by agreement with the Trades Union Congress? I do not know that anybody has asked for anything more. The value of a ballot is that it puts in the wrong people who want to break laws or rules. No-one says that it will stop a strike—of course it will not; but it will go a long way to sustain freedom of the individual. A point made several times has been that a ballot would take time, and would therefore reduce the effectiveness of the strike weapon. I do not think the strike should be a weapon. We do not want the weapon idea at all. The strike is a final safeguard and a final resort, and this idea of its being a weapon is no good for the interests of the nation. I do not like weapons—I prefer reason. In my view, where there is ample machinery for industrial negotiation the strike, as a weapon, should be barred.

The tenacious fight that has been made in this country for the vote by ballot was for something—a principle—and I do not see why trade unions should be exempt from the democracy our forefathers died for. That is emotional, I suppose, but that is how I feel about it, and about a good many other fundamentals of democracy that are rapidly receding in this brave world of ours. In an admirable letter to The Times, Mr. Ted Leather said: …ideas about secret ballots and other legal devices have been firmly and universally rejected; all such ideas fall by one critical test. Such laws cannot be enforced when the number of lawbreakers run into thousands. That seems to me to be a strange doctrine. No-one proposes direct legislation, or penal legislation, against the individual trade unionist, but surely there is a case for the trade unions themselves to make that rule obligatory and to apply their own sanctions if they are required. I think we could leave the justice of that position to the trade unions themselves.

Trade unionism has played a great part in modern industrial -history, but fundamentally the background of all social and industrial reform has been technical development. Not until they have ceased to pay have old abuses been finally and irrevocably ended. I know what I am talking about there: I spent part of my life in one of the worst of the sweated industries in the East End of London, and I know every industry from A to Z as it existed in those days. The whole thing came to an end because it was found much more expedient to utilise new machines. New machines and better methods of production were introduced. It was not a question of trade unions or political pressure at all. The old abuses came to an end very suddenly indeed. Trade unions and, of course, the politicians have dealt with the recalcitrant and reactionary elements as part of their business.

With all respect, trade unionism is not a sacred cow, and is not above Parliament, numbers or no numbers. I think that needs to be said. I do not say that against the leaders, who are sensible enough, but it is certainly against a feeling that runs right through certain sections of the trade union movement to-day. There is too strong an undercurrent—no more than that, perhaps—of totalitarian thought, of Fascist-syndicalist mentality that cannot be tolerated in a free society. Surely the very existence of a ballot rule tit exists in some of the unions, and some of the leaders support it) is salutary, if only for the reason that it puts would-be law-breakers (that is Mr. Ted Leather's term) in the wrong. I do not regard that as an interference with legitimate rights and privileges; it is a special case, if only for the injury inflicted upon everyone by unofficial strikes. In a producer's economy the consumer gets the rotten end of the stick every time.

What is needed more than anything else is factory floor efficiency and speed in dealing with the smaller difficulties that should not require reference to remote authority. Good will is lost more on the factory floor than anywhere else. I will give one illustration which is very much to the point. When I was Parliamentary Secretary to the Ministry of Aircraft Production, I had to investigate a threatened strike in a war production factory. That strike could easily have spread, for many of the smaller factories round about the particular area were largely Communist. On the surface the complaint was trivial: tea at the break was too hot to drink. When looked into, however, the real trouble was found to be that the men were given five minutes to drink scalding tea and were then hounded back to their benches by an ex-sergeant-major type of foreman with a full sergeant-major type of tongue. These people are human, and one can understand that when that kind of problem arises the trouble grows. When one wished to see the management, as well as the workers, about the complaint they closed up like an oyster. The men were reluctant heroes, and the whole thing was put down to Communist influence, the assumption being that the Government should step in and deal with the Communists. This type of thing causes a tremendous amount of trouble. It ought to be solved without striking, and by realising the human side, particularly of industry.

Communication and understanding are, above all, the responsibility of individual employers, and I think there is too much "caginess." The greater the mechanisation and the consequent soullessness of modern production, the more need there is to put it back in the human—not patronising or just welfare contact—friendly touch. I think business is beginning to realise this, but humanism is not always present. The point has been succinctly put by Mr. E. V. Francis in the Daily Telegraph. He said: If the employers do not want legislation, political interference, or T.U.C. intervention in industrial disputes, are they not being too unsuggestive? It is well to remember that our system of industrial relations stems from basic principles of democracy, voluntary association, and independence of authority. The forms of organisation are secondary to the spirit, and good industrial relations cannot be created by legislation. In the last resort, it is good sense and good will of management and men in their day-to-day relations that matter most.

I want now to say a few words, if I am not taking up too much time, on the subject of profit-sharing. This is a very interesting subject, because profit-sharing has existed in this country since the days of Robert Owen. There are hundreds of schemes in Britain alone—quite apart from other countries—corning under the general head of profit-sharing, in which may be included every form of monetary incentive. Every time, the principle comes back to incentive, and there-fore to production. The misgiving with which the idea was received for so long was due to the feeling that profit-sharing was a trick, first of all to get more out of the workers in "surplus value," as it was called, and, secondly, to split the forces of Labour. I notice that Dr. Summerskill has resurrected those arguments, but I think she might have held her hand for the time.

Much of the ancient hostility has died down. Some explanation of this lies in the fact that the idea of marshalling workers behind managements against trade unions was present in many instances. I know of one case in particular, though I need not go into it now. The feeling existed, too, that giving the worker a stake in the business, like giving him a stake in the country by way of facilities for house purchase through building societies, would be to turn him into a Tory for life. Perish the thought! To-day it is better understood that it does not follow necessarily that high production merely stuffs the pockets of idle shareholders when we are, in fact, being priced out of markets by low production. Trade unionism is now too strong for profit-sharing to be so much of a danger, so we might as well look at the question anew. More important, psychologically, is the lingering fear that intensification of production will take us back to unemployment. The answer is surely that low production and inflation will do that more quickly. In any event, new methods in a push-button and atomic age will compel a solution of that question.

The Chairman of the John Lewis Partnership and associated companies has said that profit-sharing will fail in so far as it is no more than, or appears to be no more than, a sprit: to catch a mackerel. In this matter, the test of an executive's sincerity will be its day-to-day relationship with its workers and there might be some means of turning profit-sharing (those are my words, not the Chairman's), particularly shareholding schemes, into true partnerships of industry in conjunction with, the unions themselves. Why should not the trade unions train capable men from the floor on staff college lines? I do not mean just electing them on popularity lines to be representative of one side in a quarrel. I mean to train directors who would be appointed on an agreed basis in proportion to the union membership and the number of shareholders. I am not talking of workers' control as an abstraction, but of what can be experimented with and tested, dependent upon thoroughly efficient training with union support and good will.

When we look at the quality of management evolved in the business of trade unionism itself, it seems stupid to talk in old-fashioned terms about the impossibility of the idea. Trained men who know the business from the floor would do more than all the shop stewards to keep an even keel. Business has to unbend in this matter. There is no halfway house, as I have said, between co-operation and Communism. We must either admit that all our institutions, including our social ones, as well as our livelihood from day to day, depend for the time being on the integrity of the economic system under which we live, or we must undermine it. What nonsense this undermining stuff is! Left or intelligentsia—none of them believes in it, however useful it may be to delude the politically illiterate.

Finally, I want to ask a question of the noble Marquess, Lord Salisbury. In the debate in another place, both Mr. Walter Elliot and Mr. Shinwell agreed upon a principle where one would hardly, perhaps, on the surface expect such agreement: that was upon the principle of the establishment of an Economic Council. It was one of the most constructive things the whole of that debate. I agree whit the importance and essential practicability of the idea, provided that it is not again buried in having thrust upon it the obligation merely of negotiating individual and niggling disputes. An Economic Council does not mean anything of that kind. Let the negotiating machinery remain. The Council would not he another Royal Commission but a standing Council which would examine, impartially and thoroughly, the whole economic situation of the nation, and of the nation in relation to the rest of the world. The-Council would issue its White Papers, continuously keeping the economic machine under the closest possible surveillance, and the best economic brains in the whole country should contribute to its work.

I will not develop the matter further. There is a good deal in the debate to, which I have referred which might be looked up. The noble Marquess knows the point that I am putting. I should like to know whether it is at all reasonable to expect the Government to come down on one side or the other on that question. If it is a worth-while scheme, it is worth doing as quickly as possible, if possible, I should like to have a reply during the course of this debate as to whether we cannot have a Council of this character which will keep the public well informed—not a secret society in secret business: nothing of that kind, but a Council that will be authoritative about all these problems and, of course, the background of the strikes (if there are strikes), the reasons for them and all the rest of it a Council that will be available so that we shall know where we are going on the questions of wages, industrial relationships, profits, foreign trade, and everything of that kind. I beg to, move for Papers.

3.36 p.m.


My Lords, I do not propose to follow in detail the various points which the noble Lord, Lord Amwell, has made in his analytical, able and remarkable speech this afternoon. We are most grateful to him for having brought forward for discussion a subject not merely of such great interest but of the highest importance in relation to the laying of future plans for the well-being and prosperity of our nation. The need for a new outlook, which is referred to in the noble Lord's Motion, is, of course, an ever-present need, and, indeed, is one which has necessarily occupied increasing attention ever since the Industrial Revolution of about 150 years ago. No Government of any political complexion is likely to underrate the necessity for a constantly adaptable outlook upon the delicate and sensitive relationship between employer and employed; a relationship which, of course, covers an ever-widening field, without any coarsening of its quality as a corollary of increase in its quantity.

The gradual, if, to many of us, regrettably slow, shift of the whole picture away from the old reactionary policies of the extreme Right, healthily tempered, of course, by intermittent, empirical lessons of some of the shortcomings of Socialist theories, must be apparent to any rational Government; and there is no reason to suppose that Her Majesty's Government to-day are not fully alive to the great responsibility of maintaining an up-to-date and constantly changing outlook upon constantly changing circumstances. It is, therefore, I suggest, a matter not so much of a continually new attitude which is required—for that is surely accepted as a sine qua non—but of a sufficiently accelerated rate of progress to keep abreast of, if not even slightly ahead of, developments; and to apply to the industrial problems of 1955 the remedies and solutions rather of 1956 than of 1954.

The changing character of industry, which is also referred to in the noble Lord's Motion, is, I submit, a phenomenon to-day which no longer calls merely for a dead-heat between a disease and its cure; it demands on the part of any machine or machinery of conciliation an inventive anticipation, a readiness to be in advance of what is currently and immediately required. It is, I think, this aspect which justifies the call from this side of the House for a general reassessment by the Government, not of their willingness but of their preparedness to meet new situations with new ideas which are not necessarily based upon the traditional remedies of the past.

It is too readily accepted that there still exists, basically and intrinsically, the class distinction which admittedly existed in the industrial field for many generations, a distinction which in its secondary aspect reflected roughly the ability to assume leadership and responsibility as against the struggle to establish a reason- ably higher standard of living, but which in its primary aspect, and for basic, logical reasons, meant simply the wide difference in income groups. That wide difference, as your Lordships well know, has gone. We have virtually achieved, at last, the abolition from our midst of the very poor; and, concurrently and inevitably, we have at the same time virtually abolished the very rich. Even the ordinary poor and the ordinary rich (if I may so term them) are not only far closer together in terms of income but are far fewer in number. For that reason, I maintain that the facile bracketing of employer with affluence and privilege and of employed with poverty and exploitation is outmoded and totally obsolete. For that reason, too, the approach to industrial relationships generally can no longer be based upon the political conception of "haves" and "have-nots," since this over-simplification is no longer realistic and its abandonment is already foreshadowed in the significant alteration of the trend of opinion shown by the people of this country in the last election—a trend, I would say, of holding back for some further reassessment.

Obviously, industrial harmony comes only with prosperity and stability, and since full employment in itself is not enough to achieve these, but must be accompanied by high productivity and a check in the rise of costs in all directions, it is most important that Her Majesty's Government should prepare the path of easier and friendlier industrial relationships by, amongst other things, quickening its welcome intention to seek means of bringing into being some sort of partnership and of joint responsibility and advantage between worker and employer. At the same time, I hope the Government will press forward with the encouragement of the easier movement of goods, of people and of ideas, by the rapid reduction of the innumerable barriers of every sort which have impeded us for so long in national and international progress.

3.42 p.m.


My Lords, I listened with great interest to the speech of my old friend Lord Amwell. He has mentioned a number of points, and if I attempted to deal with them all I should take a long time; so I am going to leave such matters as dividends and profits, and finance and the Stock Exchange, to others who are to follow and who know more about these things than I do. I was struck with one or two of the comments he made about lower prices and full employment being dependent upon increased productivity. We in the British Productivity Council have been trying to preach that for a long time, and we are very glad to have support from him.


It has been from both sides.


I am glad to hear Lord Amtwell so forceful on that matter. He also said that there are no "gold mines." No employer has a "gold mine"; it all has to be earned before it can be shared. I admire his courage and his broadmindedness in giving us his views on capitalism and for condemning the class war. I was interested in his little chats to his colleagues.

Coming to his Motion, I agree that the public are at the present time most concerned. As the noble Lord says in his Motion, there is in industry a changing character. But that is not new—it has always been changing, ever since I have had anything to do with it; and from what other speakers have said, it has been going on for even longer than that. There has been keen public concern about the recent outbreaks, and there has been a call for action. It conies down to this: that somebody ought to do something to deal with the matter—then there is a full-stop. The schemes that are put forward and have been discussed are not very new; they are mainly A development of existing ideas—whether there should he a ballot or not, and it is in that way that many troubles will no doubt be threshed out. But we must keep a sense of proportion. These waves of industrial unrest come in various periods over the years. Those with which we have been so concerned lately are not so bad as some that we had at the end of the First World War, and are nothing like so bad as some that have arisen in other countries where there has been violence and rioting. I saw stated in the Press (I cannot say how true it was) that if an average were taken for the amount of man-hours lost last year, the figure would be one hour per worker per annum spread over the whole of the working population of this country. It is not so bad that we should consider that the whole of our work in the last few years has been useless. It has not; we have made a great deal of progress. I cannot speak for the nationalised industries or the public corporations where there has been so much unrest. I must leave it to those who believe in Socialism to prove that it will work. I am concerned with the ordinary industry of the country, productive industry.

I do not know whether your Lordships realise that in productive industry the large units of which we hear so much are really in the minority in the number of establishments in the country. Factories with up to 100 employees to-day number 38,000, employing a total of 1,390,000 people. Of those having between 100 and 1,000 employees, there are just over 12,000, employing 3 million-odd people; and of those employing over 1,000 people each there are 900, employing 1,980,000. Those are the latest figures, published I think in 1947. We do not hear of a lot of trouble and unrest in these smaller factories; it is in the larger organised units. I have nothing to say about the nationalised units; I cannot speak for them because my whole experience has been in the larger organised productive units of industry. There is often a lament to the effect that it is a great pity that industry has grown large and that the old idea of the man who knew all his workpeople has passed away. But it is only natural, in fact it is inevitable, that that should have happened: it is the result of progress; it is universal, and had we tried to remain a nation of small manufacturers we should not have been able to compete with the Americans or even to feed our people. Moreover, the increased demand for a higher standard of living has meant quantity production, which, in turn, is linked with price, reduction; and that has meant vast capital expenditure. It is only large concerns that can embark upon this large capital expenditure which will enable them to produce goods more cheaply and so spread the demand for them.

In small firms as they exist to-day there is still a personal touch, but in large units that has to be countered in other ways. When, some fifty years ago, I started in business the small organisation was much more universal; the proprietor knew his people, called them by their Christian names and patted them on the back. But it was then full-stop; he did not do much else for them. A little paternal gratitude was shown at Christmas time and when they were sick, but that was entirely a matter of charity. There was very little welfare work. I remember that in the First World War, at the time when I was appointed managing director, one of our directors said to me, "You need not worry about canteens; they are the work of catering establishments." But we did worry about them, and we made what contribution we could in order to expand production. To-day, if you look at that aspect alone, you will see what remarkable progress has been made. Canteens are universal and are most sacred—you cannot take them away once you have given them. Production managers come round and want to know if they can have the canteen for expansion purposes. We say, "Not until you have an alternative for it." We should not risk it; nor would they.

In the last fifty years developments all along the line have been remarkable. I have mentioned canteens, but I remember that there were old football grounds here and there round the city. To-day there are big sports organisations which the workers take part in running. There are often successful sports organisations and things of that sort. The workers run them. They are given financial support, encouragement and help; but the work is done by the workers themselves. If you try to run the schemes for them they will not be a success. When I started, so far as I remember, there was no such thing as medical hygiene. To-day, we have medical officers, nurses, ambulance and X-ray rooms; we attend to young people's teeth and feet, and look after their corns. Those things have all developed in the last decade or two. The noble Lord, Lord Amwell, referred to an incident of a cup of tea when we were both at the Ministry of Aircraft Production. Quite right, too. When I first went into industry the foreman was a little king and had almost the power of life and death. He was a sergeant-major. He had "the sack" at his disposal. To-day all that has gone. We have personnel departments, and the worker is not in fear of a sudden spasm of temper on the part of his foreman, for he knows that his foreman will have to go to somebody else to get confirmation and that he will have the right of appeal. There is a feeling of security which never existed in the early days. That is all the result of steady effort and of a more enlightened outlook on both sides, and it continues all the time.

To-day, too, there is a great deal of educational effort of all descriptions. There are classes and courses, both inside and outside the factories; there are classes for managers, superintendents, foremen, technicians and other staff; and (probably most important of all) there are courses for charge hands, the men who are in direct contact with the man on the floor of the shop. There are works committees where they meet to discuss various questions. In the old days it used to be said, "I do not know what it means, but they have settled it." To-day the idea is to get men to understand that the word "they" does not refer to an impersonal organisation miles away, but that the men themselves are part of the "they." Schemes have to be explained and gone through with them. If that is done it will be found that the ordinary worker is quite intelligent and anxious to co-operate. But he objects to being treated as a child. It used to be said, "It is no good my making any suggestions, for nobody takes any notice of them." But to-day there are suggestion schemes, and awards are given; workers are on those awards committees—and they are the meanest lot of people on earth and will not let "the other chap" get away with anything unless they think it reasonable. There are works and inter-department competitions, such as that for "good housekeeping," in which there is terrific keenness between departments to see which wins the cup or prize for the year or particular period. To-day there is co-operation such as has never existed before. Industry itself is changing and the attitude in industry is changing.

Perhaps I may mention here one organisation with which some noble Lords are connected, the Anglo-American Productivity Council, which organised and sent sixty-seven teams to America, by invitation and with the cooperation of the Americans. There was a joint arrangement in finances, as we had no dollars; we sent the teams and the Americans looked after them over there. These teams were in three tiers which were worked out by committees connected with the employers' side and the trade union side, and the scheme was to be on the basis that teams going out represented the whole industry. Where we could get them, members were chosen in equal numbers from the management, from technicians and from the floor of the shops. They went round and met together and talked before they went. Then they travelled in the same class on the same boat, and used the same hotels. When they came back they made an agreed report which was circulated, and they then took it upon themselves to publicise that report in each of the three grades, management, technicians and shop floor men. That idea had not been tried before, but it has proved a wonderful success. To-day it is being continued by the British Productivity Council: the Americans felt that we had used enough of their dollars and that it was time we stopped sending teams, so we decided to carry on in England. To-day there are local committees and circuit schemes under which people visit factories in their district, not necessarily those of competitors, for you can learn a lot from another man, even though you may think his business is totally different from your own. I am using in the textile business an idea which I got from a meat factory in Chicago. All that is being done by the closest co-operation between the trade unions and the employers' organisations, and I should like to pay a tribute to the trade union officials who have taken such an interest in this matter, despite a good deal of opposition in the early days, as can be imagined.

The main hope for the future lies in a continuation of these efforts, and for heaven's sake let us keep politics out of it, for politics is the last thing that we want in business relations. The trouble with politics is that instinctively we take sides, perhaps because we sit on either side of an old college chapel; otherwise it might be different. We must avoid in industry any idea of taking sides. Sonic people suggest that we want some sudden idea from heaven. Paul saw a sudden light and changed his tracks, and turned about. But the average conversion does not happen like that: it is a gradual dawning upon a man that he is on the wrong track and had better get on to another one. Then we say, "Has not that man mellowed are broadened?" To-day we need a steady outlook on our problems. Automation has been mentioned. It is a nasty word, but it means only an extension of what we have been doing for a long time, with the machines carrying operations a bit further, and making wider use of modern scientific methods. There will be opposition, but we must remember that if we do not get on with this, our competitors will. America and Germany are doing it, and we cannot afford to be left out, because, as the noble Lord, Lord Amwell says, we have in future to fight for our lives. No one will keep the British bulldog as a pet, and we must fight for our existence.

These developments, after all, are really the logical sequence to a period of inflation and full employment: they are nothing new. This is a new name for what the engineering industry has been doing for years in other directions. Continuous processes have long existed in the steel, food and chemical industries, and now we are bringing them into the engineering world. But in the engineering world we have for years had such things as travelling belts. To-day, nobody expects a man to pick up heavy castings and carry them about from machine to machine. They are passed along mechanically. Instead of a man picking up such things as castings and cylinder blocks in a motor car factory they pass along the line. I have seen this in the Ford factory in America, and we must follow suit here. But those machines have not just grown; nor have they been fitted up by children. The skill in this country is only being transferred from one end to the other. Professors, parsons, politicians and the Press are lamenting this machine age and saying that we have lost our skill. Nothing of the sort. There is more skill in this country now than there ever was. The only thing is that we have transferred the skill. We do not make Chippendale by hand now; we make it by machine. Machines can turn out Chippendale so that to-day it is better to live in a council house than it was to live in a noble's house in the Middle Ages: it is more comfortable. It is all a question of industrialisation.

Do not talk, either, about redundancy. We are short of skilled labour and the man who to-day is semi-skilled will become skilled. We want men to make the machines; then those machines have to be set up and maintained. The tools have to be made for them, too. I remember during the war trying to explain to Members in another place what tools were and why there were delays, and they said to me, "Why not go and buy them?" They thought I meant hammers and chisels. Toolmaking to-day is skilled and laborious work, and these automatic machines will need skilled men to make them, skilled men to operate them, and skilled men to maintain them. I only hope that we get enough skilled men to do these things. It means changes. People, as they get older, settle down and do not like changes. But we shall have to adapt ourselves. As Lord Amwell has emphasised, the great thing is to keep the workers informed. Do not let them find these things out overnight. Tell them what you are going to do, and you will find that they will be with you. Then there are the unions. Most of the unions are prepared to help, but they also must be given information in good time. We have been doing all these things in industry for a long time. I hope that I shall not be accused of trying to pretend that all is for the best in the best of all possible worlds—that is far from being the case. What I have been trying to show is that there is that new spirit in industry which is called for. It has been there for years, and it is now showing results. What we have to do is to see that it is further and fully developed where it already exists, and that it is extended into those areas where, as I know, it does not yet exist.

4.0 p.m.


My Lords, one good thing which has come out of the industrial unrest that has troubled us during the last few months is that the Motion which is on our Order Paper to-day enables us to discuss one of the most important of problems in industry generally. I find that since the recent stoppages the question of human relationships in industry is being widely discussed—in the Press, in Parliament, on platforms and from the pulpit. All kinds of people are busy discussing this subject, and I think it is right and proper that they should. This is not a question that ought to be left to the two sides of industry. The two sides of industry are more immediately concerned with the conflict, with the result that they naturally make it a live issue, and I do not think those outside industry can afford to disregard the question. Human relationships inside industry affect the life of the nation generally. I would first say to the Government that I think they are to be commended on this occasion on not allowing themselves to be rushed into hurried legislation on a question of this kind. In 1926 they made a major blunder. The workers then had been thoroughly beaten. Yet the Conservative Government of the day took it upon themselves to introduce drastic legislation which embittered the feelings of trade unionists throughout the country, and that feeling of embitterment remained until the Second World War. The present Government have shown a much more statesmanlike approach to the question. I commend them for having done so.

When I first saw this Motion on the Order Paper, I read that it was designed: to draw attention to the changing character of industry and the need for a new outlook in respect of industrial relationships. A number of questions suggested themselves at once regarding both parts of the Motion. I wondered what my noble friend, Lord Amwell, had in mind regarding the first part. In what way had industry changed, and since when—ten years ago, twenty years ago, fifty years ago? What were the changes which he had in mind? Industry has certainly changed in many directions. As I say, I wondered what was in the noble Lord's mind in putting down this Motion. I do not know now any more than I knew before Lord Amwell made his speech. I thought he would tell us that he had been looking back into trade union history and the history of industry generally, and that he had found that this, that and the other change had taken place, and that he felt, therefore, that we ought to adapt ourselves to these changes. Nothing of the kind. He took us back a century, it is true, and he told us what Karl Marx thought about things in his day, and how right he was in his day. Then he showed an abysmal ignorance of the present activities of the trade union movement. It is not fair that the House should be misled, as though it were the case that the trade union movement and the employers had been sitting still and not thinking this matter out. They have spent years in thinking it out.

I thought we would hear from Lord Amwell something about the change in industry consequent upon mechanisation, something about the change consequent upon legislation, something about the change due to the change-over from a period of under-employment to a period of full employment. And I expected that we should have suggestions from the noble Lord to do this that or the other. I must say that I marvelled that a man in his eightieth year could address your Lordships' House so vigorously for over fifty minutes. It was a real test of physical endurance. But, frankly, the noble Lord has much to learn regarding the trade union movement to-day. That movement is very much alive to this question, and the best brains in the movement are devoting their time to it. They are considering what can best be done against the possibility of further strikes here and there. It is not easy with full employment. With under-employment certainly it was easy.

In the realistic and up-to-date speech of the noble Lord, Lord Bennett of Edgbaston, we were told something of the phases through which we have passed We were told of 500 dockers assembled at the dock gates, each anxiously hoping, to be called in. We were told how 50 were called in and the other 450 returned home to tell their families: "No work to-day." Certainly the position was different then from what it is now. And full employment is a real moral test. It must be remembered that some employers failed to stand up to the moral test of unemployment. It is well for some employers to remember that. They took full advantage. I know that, for I was at work in the coal industry. Some poor collier who worked by my side at the coal face would find some abnormal conditions and he would report them, only to be told: "There are scores outside waiting for your place." Some employers used unemployment as a whip to those in work and I say that thereby they failed to stand up to the moral test of unemployment.

There are some workers—not many—who have failed to stand up to the moral test of full employment. Let it be understood that they are only a small fraction of tile, whole. Full employment is being enjoyed to-day. Buy your Lordships must know that what is behind the minds of many is the question: "Will it last?" That uncertainty does exist. Men are thinking: "If it is not going to last, what must we do to make the best use of while we have it?" Some of them seek to take advantage of it by working nearly all the hours that God sends in order to make a little money to put by for the rainy day when perhaps full employment ceases. Others decide to have a day off during the week now and then; to buy leisure, and to live on the rest of their earnings under full employment. If the workers could be told: "Do not worry; it is going to be full employment as long as you live" that would remove the sense of fear from the minds of many of them. But, of course, they cannot be told that. They had fear at one time because of the changes caused by mechanisation, but that fear has gone.

We are told by Lord Amwell that we ought to start thinking. I do not know where he has been. It may be that some of the speeches made in another place seemed to him unrealistic, and he may object to them. But I do not know whether he has noted the activity of the trade unions inside industry in this country. I have here a copy of a paper presented at the Margate Conference of the Institution of Production Engineers. I should like to see this in the hands of every noble Lord. The subject is "The automatic factory: how will the trade, unions react?" The author is Mr. E. Fletcher, who has been in charge of the T.U.C. Production Department since its formation and was previously Secretary of the T.U.C. Research and Economic Department. We have been told that we ought to start thinking: this document is the result of months, even years, of thought about how to handle this situation. I should not like it to be thought that trade union leaders or employers have been unconcerned about how things are developing.

The noble Lord was right in saying that automation is simply mechanisation at full speed ahead. Mechanisation at any speed creates problems, and at full speed ahead it creates bigger problems. The trade union movement is having regard to those. It is watching developments in another country where automation is going right ahead and it is watching the reactions of the workers in that country to see how far we should follow their example. It is considering what it can do about the sharing by workers in the increased production which is hound to arise and which should be considerable. How far it should be given in the form of cash or leisure or in the form of benefits, such as sick pay or pensions, or social benefits, such as education for workers' children, has to be decided. Automation is coming and is going to bring a tremendous displacement of labour, not into unemployment, but into other jobs. The problem is going to be how to equip those who will be displaced for the other jobs that are going to be vacant. I would remind my noble friend that the trade union movement, and, let me keep on repeating, the employers, have bent their minds upon this important question. The future of our country depends on finding a solution. If the noble Lord's speech were circulated throughout industry, I can think of nothing which would destroy good relations in industry more. We are not out to destroy the good relations that exist to-day, surely; we are out to build them up and maintain them.

I should like to put a direct question to the noble Lord, Lord Bennett of Edgbaston, who is well acquainted with the A.E.U. One of the leaders of that union saw me last night. I wrote down what he said, because I did not want to read out his words if some industrialist on the other side of the House could get up and say they were not true. My friend said that on one side there is the Engineering Employers' Federation and on the other side the Confederation of Engineering Unions—thirty-nine unions. There is no machinery for national joint consultation. When major alterations in industry are contemplated, there is no meeting. The only time they can meet is when a strike is looming or arbitration is forced. I do not know how far that statement is true, but I would say to the noble Lord that the employers in the engineering industry—and I know the difficulties about the hundreds of small employers—have a national organisation and I hope that sooner or later they will find it possible to take into their confidence the leaders on the men's side when they anticipate some major change in the running of the industry.


My Lords, the noble Lord will realise that changes do not take place through the whole range; they take place in individual factories. It is difficult for headquarters in London to discuss with people who know nothing about it what is going to be done in a shop in Birmingham or Coventry or Glasgow. In my view it has to be done on the floor of the shop by the people who are doing a job, with the workers who are going to do it. We shall not get much result by going to headquarters to a conference. The trade unions are helping when there is any difficulty, and if we take the trouble to explain it thoroughly and are not in too much of a hurry we can carry it in our own organisation and do not want help from outside.


I want the noble Lord to see whether some national organisation cannot be set up which can oversee the whole engineering industry. As he knows, the engineering industry is more subject to Communist infiltration than any other. It is significant that the A.E.U. gets the biggest sprinkling of Communist members and we are told from time to time that they count for a lot in the union. What I am asking the noble Lord to do is to counteract that activity by showing that the employers are willing to have a joint national organisation to have oversight of all that is happening. That will help him and the industry too.

The educational standard of the workers fifty years ago is vastly different from the educational standard to-day. The worker of to-day is more intelligent and has far greater knowledge, and he is a more difficult man to handle inside a trade union. He reads about and observes the difference in the standard of life between those who invest their money and those who invest their skill and labour in industry. He sees these things and the trade union leader cannot disregard them, because the trade union leader is elected by ballot and can be removed. At branch meetings the trade union leader is asked what he is doing to increase the workers' share of the prosperity that that industry enjoys. The workers say that they have not had the proportionate increase they ought to have as compared with those who invest capital. I am not going to refer to the figures used in another place showing how investors benefit more than anybody else—I do not think that the average worker worries himself too much about that sort of thing. But when we appeal for loyalty, output and production, we are sometimes reminded of these things.

I would remind my noble friend, Lord Amwell, that fifty years ago the Communists played no part in our organisation, and they do play some part to-day. Whatever else we may say about the Communists they are an enthusiastic lot. They are keen and attend branch meetings, which are not attended as they ought to be by other union members. It is those who attend who formulate policy, and those who do not attend complain about the policy later, maybe. There is a tendency at times to see a Communist when there is no Communist and to take advantage of that. I do not think that any of the recent stoppages was due to the Communists. But I know them: they are active and they have to be watched. They are Communists first, second and third. In trying to establish good relations, we must have regard to that fact.

Industrial life is only a part of human life—though I certainly know it is an important part. Its function is to enrich the rest of life. Industrial life fails entirely except as a means to enrich the rest of life. The danger is that man is not always seen in his entirety: he is seen in bits and pieces, as a factor in industry, and only a factor in industry. But man never ceases to be a man in his entirety. I sometimes find when I discuss this matter with Communists that our basic difference comes there. I had an instance of this at the United Nations Fifth Assembly in 1950. As your Lordships know—and maybe the noble Marquess, the Leader of the House, has experienced this—for some unknown reason the British delegate is placed between the representative of the U.S.A. and the representative of the U.S.S.R.; they are his permanent friends on the Committee, and he is looking first right and then left to see what is happening. During a break I said to one of the Russian representatives: "We are wasting our time; we shall never find any agreement." He said: "Why?" I said: "We are not dealing with the same object. Man to you is simply something to be used in the furtherance of State interests. His individual development is not considered by you. You see an economic problem, and nothing more than an economic problem, and you decide to solve it by any means. We approach this differently. My Government"—and I could speak for my Government in those days—"sees man in his entirety. He is an economic being, but he is a moral and spiritual being. The result is that we have to find a solution to our economic problems and, at the same time, safeguard his moral and spiritual character." His reply was: "Pie in the sky."

My trouble is that we do not see that sufficiently here. The tendency in one part of the speech of my noble friend was to say, "You have here to-day capitalism. Act accordingly." I am not sure sometimes—and I do not want to rouse the anger in this debate of either the noble and learned Viscount on the Woolsack, or the noble Marquess the Lord President of the Council—but that capitalism is not rather tainted with the same thing that I find in Communism: that is to say, seeing man too much as a factor, and not seeing a man as an entirety and a worker in industry. That is what worries me a little. My tendency to Socialism has always been from that direction. I have always felt that the needs of man in his entirety would not be met except under some economic system on the lines of Socialism. I know that to translate these things into everyday life is our job. The Minister of Labour in another place appealed for "an upsurge of a sense of responsibility." How do you do that? How do you instil a sense of responsibility where there is no sense of responsibility? There was a period in our lives when our sense of responsibility was not as big as it is to-day and was not as real to us as it is to-day. What happened? Responsibility in one form or another was imposed upon us in our trade unions, in our homes, in our churches and in our schools: we were made responsible, and we developed a sense of responsibility in the process. What I want the employer in industry to do is to place responsibility on the worker. The combined experience of the worker in industry to-day is enormous, and he can be consulted even on questions which are considered to be managerial, and managerial alone.

At the request of the late Prime Minister I very grudgingly left the House of Commons in 1942—it was the most reluctant decision of my life—to take on a position in the Ministry of Fuel and Power involving control of the North West. Major decisions had to be made from time to time, to close this colliery; or to transfer 300 or 400 men to that colliery two or three miles away. The moment I had made up my mind on the advice presented to me as to the best course to take, the first thing I did was to call in the district officials of the Miners' Federation and the local officers of the branch concerned, and talk to them. We might take weeks or sometimes months over it, but finally the pit was closed, or the men were transferred.

Someone may say: "But that was in the war, when you were able to bring home to the worker the serious need of his doing his job." Why cannot we do it now? I do not know what the Government have in mind. I hope that consultations will continue, not only with the organisations associated with industry, but with other organisations interested in this vital question of human relations. But is there any reason why somebody, somewhere should not try to explain to the public in general the position we are in to-day? The noble Lord, Lord Balfour of Burleigh, often appeals to us on this side of the House to get on the hustings and tell the workers their responsibility. We have done that all down the years, and we shall never stop doing it. I sometimes think that a lot could be done by one of these conferences we had in the war: a national conference, with representatives of both sides of industry, with the Minister of Labour or the Prime Minister, or both, and a leading member of the trade union, to tell the public generally what their duty is. At Election time it is a case of getting votes, and sometimes some candidates do not mind how they get them, so long as they get them. But that is all over now. Surely, something could be done to enlighten the workers generally. We must somehow or other instil this sense of responsibility throughout industry. I think our position to-day is far from being as prosperous as we think it is. The mechanisation of the future will. I believe, be at a faster rate than the mechanisation of the past. If that is going to work to the advantage of the country, then we must get the worker on our side.

With regard to the Communist menace, the most reverend Primate, the Lord Archbishop of York, wrote a book some time ago entitled The Age of Revolution. I am sure your Lordships are all pleased to know that the most reverend Primate is back at Bishopthorpe. We hope his convalescence will be a short one and that he will soon be back in our midst. I am sure that he would have taken part in this discussion to-day had he been able. He has been observing the Communists, and I am satisfied that we need to observe them. I have seen their activities in various trade unions. This is what the most reverend Primate says: Communists must make their influence felt in trade unions and labour associations. Where there is trouble they must inflame it; where there is none they must make it; they must destroy good relations between employers and employed; they must encourage the continuation of a strike, and obstruct all attempts at a just agreement through negotiation or arbitration. Where sabotage can hinder production, it is to be used. At all times on all occasions the party and the cause are to be given precedence over the interests, safety and welfare of their fellows and the good of the nation. Loyalty as a citizen is to count as nothing compared with loyalty to the cause. Many noble Lords, like myself, might not subscribe to the whole of that. But changes in industry are not confined to Britain. The Communist world is busy making changes in industry, and the changes they make will impose on us a responsibility for good relations in our industry. Communist China, Communist Russia and the satellites are all busy making changes in industry. I have never believed that slave labour is the best labour; I have never believed that man is the better for compulsion.

That is our problem: how to get the best from both sides of industry and a sense of responsibility right through industry. I believe that the skilled labour in this country is equal, if not superior, to the skilled labour in any country. I believe that the manual labour in this country is as good as, if not better than, the manual labour in any country. I have great confidence in the workers in industry. I am not without confidence in the employers of this country. I think generally they are intelligent, far-seeing and anxious to do the right thing by their country. The most important factor is good relations. Changes in methods, mechanisation, or anything of that kind will not get the best out of industry. Good relations are the only solution, and the employers have a great part to play in getting those good relations. After all, in many cases the men have been with the same employers for ten, twenty or thirty years, and they ought to take these men far more into their confidence. These men will not betray them. They will go to the workers and tell them exactly what the position is. I have sufficient confidence in the British worker, once the position is explained to him, to understand that he will get a square deal. He will give of his best as much in peace as he did in war.

4.32 p.m.


My Lords, I think every one of your Lordships must join with those who have already spoken in expressing our gratitude to the noble Lord, Lord Amwell, for initiating this debate to-day. But, like your Lordships who have already spoken, I do not intend to follow him into the political and economic theory which he put forward as an introduction to his discussion on the theme before us this afternoon. It is not for a moment that his remarks were not full of interest, but the subject in front of us is, in my view, sufficiently important and enormous to deserve of all the time that we can give to it on this occasion.

I should remind your Lordships of one most interesting fact in the speeches that we have heard. They have been from many standpoints—and I have listened to every word with the greatest attention that I could command—but none of them, as I understand it, has complained of the fundamental principle of our industrial relationships at the present day. It is worth stating again that it is fundamental to our system of industrial relations that the settlement of wages and conditions of employment is left to the free negotiation of employers and workpeople freely organised in trade unions and employers' associations. It is for employers and employed to decide on what terms they are willing to live and work together; and throughout British industry the settlement of these terms is generally undertaken by associations with a long tradition of independence and responsibility. As I understand the speeches, no one wants to alter that position—to have any intrusion on the independence which I have endeavoured to describe.

It was interesting that in his current Report, the Director-General of the International Labour Organisation said: A distinct preference for voluntary methods of agreement is a dominant characteristic of the whole policy and practice of industrial relations in the United Kingdom. My right honourable friend the Minister of Labour, took the Director-General up on that point and said: I would put it even more strongly than that. It is more than a distinct preference. It is the basic element is our policy. I think it is tremendously important that we should bear in mind the gradual growth by which that policy has expressed itself. Over the last 100 years there has been a steady increase in the number of joint arrangements dealing with disputes, and at the same time there has been a parallel development of the system of collective agreements on wages and conditions. It is important that we should realise and adjust our minds to the fact that a system of collective voluntary agreements on wages and conditions of employment cannot by itself ensure the smooth functioning of industry. It must be accompanied by a parallel system of agreements on the procedure for dealing with disputes when they arise. That is, as I am sure the noble Lord, Lord Macdonald of Gwaenysgor, would agree, a responsibility on all the people in the country, whether they be in industry or in Government, or are citizens who are in neither.

That emboldens me for one moment to put to your Lordships what I conceive to be the functions of Government at the present time. Under a system such as I have endeavoured to describe the Government can never be directly responsible for the maintenance of industrial peace. It cannot dictate to the parties the terms on which they must agree. It can, however, encourage the use of peaceful methods for regulating industrial relations and provide services to assist the parties in the maintenance of good relations and the settlement of differences. I think it is worth while reminding your Lordships, in a sentence merely in outline, of the services which the Ministry of Labour do give at the present time. Occasionally, when trouble arises, some of these services come for a moment into the limelight; but the truth is often forgotten that these services are going on working for the benefit of industry, and smoothing the turning of the wheels, all the year round, all over the country. I refer to the conciliation services of experienced officers in London and in the large towns, voluntary arbitration officially provided by the Industrial Court and a variety of other methods; Courts of Inquiry which often clear up many of the doubtful points and dispel a great deal of darkness which has shrouded prospective trouble.

I say a word with particular fondness about wages councils because I had some part, in the time of the Coalition Government, in putting the Bill for the reconstituted councils through another place. One has to remember that that system has gone on and been improved. The result is that, although most wages are settled by free negotiation, on a purely voluntary basis, wages in a number of less strongly organised industries are based on the proposals of wages councils which are given statutory backing by ministerial order and enforced by a Government inspectorate. Here again, the settlement of wages is not determined by the Government. It is determined by a council on which both sides of industry, if I may use that term, are represented and an independent chairman presides. Similarly, the Government provide information and advisory services, particularly in regard to personnel management problems. That is the background and that is the position of the Government agency to-day.

The noble Lord, Lord Amwell, referred to a number of current nostrums which are put forward at the present time. The noble Lord, Lord Macdonald of Gwaenysgor, also referred to them and I do not think there is any difference between us. I refer to the suggestions that have been put forward that there should be imposed —I repeat "imposed," because it is very important from Lord Amwell's point of view—measures such as the holding of secret ballots before taking strike action; legislation making unofficial strikes illegal; or the imposition of compulsory arbitration. All these things have been suggested at the present time. May I quote my view with regard to them? In so far as these remedies rely upon compulsion, they are contrary to the basic assumptions of freedom of association and freedom of negotiation on which our system of industrial relations rests. Secondly, without the good will of the trade union movement, they would be politically impossible; and in any case it is not practicable to deal with serious industrial unrest by penal measures. I think it is right that a member of the Government should state that quite plainly. The effect will, in general, be good.

Having said that, which is negative, may I say a word on the positive aspect of the Government's approach. We believe that there is nothing fundamentally wrong with the basic principles governing the system of industrial relations which I have tried to describe. Over most of the industrial scene, for most of the time, industrial relations are good. The successful regulation of these relationships is, of course, not news, as the occasional breakdown always is. I think my noble friend Lord Bennett of Edgbaston made that point, but it is worth emphasising how big is the successful sector and how small is the sector in which trouble arises. Like the noble Lord, I do not for one moment want to give an impression of complacency. Recent troubles clearly emphasise that there is room for improvement in the actual conduct of industrial relations. The Government are consulting responsible leaders on both sides of industry and are willing to consider any suggestions which might contribute to industrial peace and the smoother running of our free system. I could not agree more strongly than I do with my noble friend Lord Bennett of Edgbaston that it is a mistake to think that problems of industrial relations are amenable to solution by some general panacea or some general formula.

The problems arising from the employment of more than 22½ million people in a wide range of industries and services must be complex and various. Here I think I am in agreement with something that the noble Lord, Lord Amwell, said on the work on the floor: the solution of these problems depends on good day-to-day work by the thousands of people engaged in dealing with them. I do not want to go into the recent disputes, because I think we are on a more interesting problem this afternoon, but it can clearly be seen from the recent disputes that the difficulties which have arisen are specific and particular and not of a general nature calling for general solutions. They indicate imperfections in the conduct of industrial relations, rather than faults in the system. To sum up what I have to say on this point, the Government are anxious to do all they can, in consultation with the leaders of both sides of industry, to improve industrial relations. All ideas will be considered, but they can be successful only if they are consonant with our free traditions that I have tried to describe. Whilst the Government do not disclaim their responsibilities—and I should be the last to do that—they realise that in the end the answer to these problems must rest on the good will and good sense of our people.

I want now to turn to a matter which the noble Lord, Lord Amwell, had clearly in mind—I think it has also been in the minds of many of your Lordships: that is, the problem of industrial relations, especially the human relations part of that problem, in a period of full employment and technological change. As I understood it, that is one of the matters which the noble Lord, Lord Amwell, had in mind, and I think the noble Lord, Lord Macdonald of Gwaenysgor, has assumed that that would be a matter to be considered. We can all, I think, welcome this opportunity of drawing attention to the problems and responsibilities that these changes involve. To-day management can no longer rely on the discipline of "the sack" and cannot expect to recruit from a reservoir of unemployed. The noble Lord, Lord Macdonald of Gwaenysgor, had that fact clearly in mind, and he put it in that moving way in which he refers to his personal experiences. He faced the position, and everyone must face the position, that the unions to-day have immense power in their hands: theirs is a sellers' market. No Highlander can ever forget the effect of past difficulties, because our minds always live a good deal in the past. I realise what are the feelings of the noble Lord on this point, bit I think he would agree with me that in the present position of that immense power and their sellers' market it is incumbent on them to use their power wisely and again with the long-term interest of their members in mind.

We have in the past years seen an increasing proof of the important part the improvement of human relations must play in industry to-day. It matters not from what angle one regards the problem. If it is regarded as an end in itself, it is a contribution to human happiness. It can be considered as a means to higher productivity. It can also be considered as a vital contribution to industrial peace. I believe, as I think your Lordships who have spoken will agree, that the improvement of human relations means, as my right honourable friend the Minister of Labour said at Geneva, creating confidence between management and workpeople which will allow men to work together with understanding and with a common approach towards the problems of industry. Again I say there is no golden road. It demands fair and consistent dealing in everyday matters over a long period.

In a time of technological change, when new machines and new working methods are being introduced, there is an especial duty on management to inform the workers fully in advance and to consult with them about matters which will affect their daily work. I so agree with the noble Lord, Lord Rea, that in such a period it is important to be looking at 1956 and not at 1954. Noble Lords would probably agree with me in general that friction in industry often arises simply because people have not been told what is going to happen; they feel that they are helpless, to some extent insecure and subject to arbitrary factors; and they react by refusing to accept responsibility themselves and by resisting change in one way or another. As Lord Bennett of Edgbaston said, good employers in this country have long realised the importance of taking their workpeople into their confidence. There is nothing new in this. What we are pressing for is that the practice of the best, or the good, employers should be more widely spread. I think Lord Bennett of Edgbaston would agree that people often refer to "progressive" firms. What we want to see is that what are termed "progressive firms" should be, first, the fashionable firms; and, secondly, the normal firms. When we get to that I think the position will have improved.

But following up what my noble friend Lord Bennett of Edgbaston said about the American productivity teams, I should like to ask your Lordships to consider what has happened at home on the question of work study—I think it is a remarkable point. I think everyone will agree that a few years ago it would have been extremely difficult to obtain the agreement of unions and workers to the introduction of systematic methods of studying jobs by specially trained engineers, using charts and stop-watches. But to-day the T.U.C. itself, and a number of its constituent unions, have recognised that they also have an interest in the improvement of working methods and in the use of some form of systematic analysis of the time taken to perform a job. I understand that the T.U.C. include the subject of work study in courses which they run for union officials, and are fully prepared to accept that what has hitherto been regarded as matters for management are now matters of responsible attention on the part of the unions. My Lords, I think that is a very important advance. The noble Lord, Lord Bennett of Edgbaston, may remember certain inquiries that he and I made together some eight years ago. I think we can fairly say that this is a most important and helpful change of mind which has come into being since together we made those inquiries.

My Lords, the Government welcome these efforts. I have mentioned the Trades Union Congress and their dealings with work study. I did not mean by that to suggest that employers' organisations are not doing the same. Of course they are—the work is going on, and they are providing help for their constituents. As I say, the Government very much welcome these developments. I should like to say this on the point which Lord Amwell had in mind. If the sweeping scientific industrial and management changes which are sometimes referred to under the term "automation" are on the way, in my view they will demand very much more consultation between management and unions. It has been notable, however, in discussions at various conferences recently, and in the Press, that there are no signs of resistance to these new techniques. It is a great thing that I am able to say, with agreement from all quarters of the House, that there are no latter-day Luddites. That attitude of mind has gone, and we can congratulate ourselves that industrial opinion recognises that we cannot refuse to take advantage of technological progress. I should like to pay a very sincere tribute to the statesmanlike attitude which the Trades Union Congress have adopted on this point. But we must also take note of a warning (I think this has been implicit in your Lordships' speeches from all parts of the House) first, that the unions must be given full and early information on impending changes, and secondly, that both management and trade unions must give serious consideration to the problems of the individuals affected.

I shall try to be as quick as I can, but I think that the noble Lord, Lord Amwell, deserves some reply on the question of the Economic Council to which he attached importance. This is a very difficult matter, as any noble Lords who have studied the question will agree. The suggestions are very like those that were put forward in February, 1954, by the Courts of Inquiry into the disputes in the engineering and shipbuilding industries. I will not read the words, but your Lordships may remember them, at any rate generally. What has to be faced —I am sure Lord Macdonald of Gwaenysgor, will agree, and if I am not stating it absolutely correctly he will contradict me—is that the T.U.C. opposed the suggestion, as I understand it, broadly for four principal reasons. First of all, they said that general guidance of the sort contemplated by the proposed body without detail would be unhelpful; then, that detailed inquiries would necessarily be prolonged and would almost certainly be out of date; thirdly, that economic questions involved matters of opinion as well as of fact, so that there was a possibility of minority views and minority reports within the body, and that would only impair industrial relations. And fourthly, they said that reports of a general nature might be held by a particular industry not to apply to its circumstances. I hope that I have put the position of the T.U.C. fairly.

The T.U.C. objection had, however, a constructive side which I think has been voiced by Lord Macdonald of Gwaenysgor to-day. They claimed that they were willing to place the truth about the economic situation before their constituents—they had done so in the past and they would do so in the future; and they held that their own pronouncements about the economic situation would carry greater weight than those of a committee which might be regarded with suspicion and might do more harm than good. I have referred to the view of the T.U.C. because I think it is important in regard to Lord Amwell's proposal, and because I think everyone must agree that the suggestion of an Economic Council is clearly one which can be fruitfully pursued only with the co-operation of the trade union movement; and in view of their clear opposition it was obviously out of the question to pursue the proposal.

I am not going to weary your Lordships by debating the arguments, which I have tried to summarise fairly, because, as I understand it (I shall be corrected if I am wrong), there is no reason to think that the attitude of the T.U.C. would be any different now from that which was expressed at that time. I say this because I should like Lord Amwell to believe that we have tried to consider the point, and because I realise the feeling with which he advanced it. Apart from the position of the T.U.C. I see two difficulties. First of all, the proposed Council aims, or appears to aim, at combining two functions which are performed to-day but are kept separate: first, the provision of economic information and an assessment of the country's economic position and prospects on a general basis, and secondly, a consideration of particular wage claims. At the moment the first function is performed through the National Joint Advisory Council, the National Production Advisory Council for Industry, Government publications and ministerial speeches. The second is performed by negotiating bodies, arbitration tribunals and wages councils. As I see it, there is a difficulty in attempting to confine the general and particular functions in one high-sounding authority. I felt that it was right to deal with that point and to put the difficulties to your Lordships, and I should he glad to hear any answer to the difficulties which I have propounded.

My noble friend Lord Rea (I say "my noble friend" because our personal friendship goes back some thirty-seven years to the time when we served in the same battalion, a rather long time ago) put forward the expected but none the less important plea for co-partnership and profit-sharing. The last thing that I want to do is to denigrate the suggestion, but I think one ought to make clear what are the limits within which it operates; not to build too extravagant hopes but rather, on the other hand, to face quite clearly what are the difficulties and advantages. I hope to show both. I welcome the renewed interest in this subject as a proof that firms and companies are now seriously thinking about the social responsibilities of industry and of the essential problem of arousing the interest of the worker in the enterprise in which he works. If I first speak of the limitations, it is simply to assure your Lordships that I am facing the problem wholly.

I do not think one can say that co-partnership and profit-sharing is, in itself, a solution of the problem of good relations in a particular firm. It is rather something additional which can be brought in after management has convinced its workers of its competence and good faith in other ways. Equally, it is not by itself a solution to the problems of financial incentives to greater productivity, because the amount of money involved is generally too small in relation to wages; and in relation to work actually done it is too remote. Having said that, I hope to convey some comfort to the noble Lord, Lord Rea, by saying that the ownership of shares can lead workers to take a more active interest in the fortunes and financial structure of the firm for which they work. Many good firms now send statements of their annual accounts to all their workers, whether they own shares or not. I believe that this is a practice which is warmly to be commended, because it shows that management considers it has a duty to report to those who invest part of their working lives in the firm, as well as to those who invest their money; and if the workers have some money invested they will be more likely to read financial statements with more care and interest. I think it is this psychological effect, rather than the amount of money involved, which is the most valuable principle of co-partnership and profit sharing.

I am trying to appreciate and face the position of the Trades Union Congress on these points, and I know their difficulties. I know that there are still long and lingering looks behind, and that they rather stand in fear that the possession of shares may have some influence on wage negotiations. Frankly, I do not think that that means much to-day; it is one of those things which still come in from the past. The other matter which the T.U.C. have in mind is that if a worker has invested in the shares of his own company and things go wrong, his eggs will be in one basket; and if he is stood off because the company is going through a bad time, that will be just the period of time when it will be difficult for him to get much from the shares. After putting all these points and weighing them up, I strongly agree with the noble Lord, Lord Rea, that what I have called the psychological point is one of great importance; and I hope that the revival of interest and encouragement of this matter will continue.


May I interrupt the noble and learned Viscount for a moment to say that I did not mention the word "compulsory" in speaking about profit-sharing—in fact, I believe that there is very little between us here.


I am relieved to hear the noble Lord say that, and I can agree with his concluding remark. I am sorry to have detained the House for so long but, as some of your Lordships may know, this is a subject which has been of great interest to me for many years.

I should like to sum up by reminding the House of the five points put by my right honourable friend the Minister of Labour to the International Labour Organisation at Geneva as being, in his view, the true basis of good industrial relations, especially on the human side. I firmly believe that these points apply to industry in every sector. I do not mind whether it is private, nationalised or co-operative; for in all these sections of industry there are always people who give instructions and people who take them; and in my view these points apply completely generally.

My right honourable friend gave five basic elements. First, the payment of fair wages and the observance of good conditions, without which there is no chance of establishing good human relations; and good conditions must cover not only matters such as hours of work, but also adequate safety, health and welfare provisions. It is remarkable that the first element, and especially the second part of it, was emphasised to-day in almost the same words by my noble friend, Lord Bennett of Edgbaston, from his experience. Secondly, proper and adequate supervision and control; for example, to ensure an even flow of work. Forced stoppages of work through lack of materials or of parts can be frustrating and irritating, and can lead to lack of confidence in the management. Thirdly, the provision of information and the perfection of the art of communicating information, including general information about the industry and particular information about a particular firm or business. The fourth element concerns joint consultation. Like my right honourable friend I make that a separate one, because it covers not only the giving of information but the exchange and interchange of ideas, and it is a method of making use of the collective energy of the workpeople and the method of building up confidence as well. The fifth and final element which my right honourable friend mentioned involved recognition of the human factor as of outstanding importance. The policy of management, he said, must be based on the recognition of the fact that a man is neither a tool nor a machine but a complex human personality.

Those were the five basic elements that my right honourable friend put before the International Labour Organisation. So far as I can see, they are subscribed to by everyone in your Lordships' House to-day, wherever he sits. I hope your Lordships will not think it out of place if I pay tribute to my right honourable friend the Minister of Labour. He is a very old friend of mine.


Of us all.


We have for years fought or been together in our professional activities. I mention that because his ability and his personality are entirely his own. I think everyone would agree that his personality has been helpful to everyone in industry during the last four years, and for the reason that he is supremely interested in all the people he meets, and in their problems. I like to think—and I hope that your Lordships will not grudge a lawyer having the thought—that he also benefits from the traditions of the profession from which he comes, which, after all, prizes the reasonable man as an important element in our law, and the pre-eminence of justice and a wide experience of humanity as being the qualities by which the administration of justice is best carried on. I am grateful to your Lordships for allowing me to pay this tribute to my right honourable friend, because I think your Lordships will agree that the country owes him much for his stewardship during his term of office.

5.12 p.m.


My Lords, I should like first to claim that forbearance which is always granted to those who address your Lordships for the first time. The only justification I can plead for doing so in this important debate is that I have some small but first-hand experience in the management of labour in one of those large industrial organisations to which reference has already been made and which are, it seems to me, of immediate relevance to our debate this afternoon. I would here say that, in my view and experience, there is no reason why disputes should arise more often in big concerns than in small, nor why, having arisen, they should not be settled as effectively in the large undertaking as in the small one. And the reason I say this is simply because good management can, and does, see to it, whatever the size of the organisation, that there is adequate machinery for dealing with disputes at the time and the place at which they arise.

In a debate like this, it seems to me important that we should view the problem in the correct perspective. It certainly should not be supposed that in British industry, generally, relations between management and men are bad. Over a very wide field, in my view and experience, they are probably as good to-day as they have ever been. But it is unfortunately true that the poor relations which do exist tend to exercise a quite disproportionate influence, because they occur in sections of industry which are fundamental to the national economy as a whole. May I observe, without in the least seeking to be controversial, that, in general, they obtain in that sector of industry for which the nation has assumed responsibility. For, indeed, the reason why the State took control of some of these industries was—at least in part—because relations in them had previously been so unsatisfactory. The important point is that, having assumed responsibility for them, the community should see to it that these industries are made efficient, and to-day good relations are fundamental to industrial health and well-being.

Before we presume to prescribe remedies for the troubles in these industries, we should first establish the relevant facts about them. The Report and recommendations which have recently been issued by the expert committee which considered the organisation of the National Coal Board were a welcome step in this direction. Now we look forward to the forthcoming Inquiry into the working of the National Dock Labour Scheme. The problem which we are considering is naturally complicated, because it has to do with human beings. I do not pretend to have the solution, but I should like to contribute a few points which are drawn from my own experience and which may, perhaps, be of help to your Lordships in considering this subject. First and most important is the need for good management. There really is no substitute in industry for leaders who know their jobs. This means that in the industries about which we are concerned there must be adequate machinery for the selection and training of potential leaders from within the organisation. It also means the payment of salaries which will attract from outside men of high quality. If the community, including industry under private and company control and owner management, really means to obtain efficient systems of transport and fuel supply, it may, at least for a time, have a bill to foot in seeing that these salaries are paid. But here is no loss, for in the long run it is an investment which will surely pay handsome dividends.

The next subject I should like to touch upon is what is known as joint consultation. It is a commonplace that there have been enormous strides in popular education over the last fifty years. It is also generally accepted that full employment is a social policy which has conic to stay. Management thus finds itself confronted to-day by workmen who are intelligent and more highly educated human beings, and who must be treated accordingly. The corollary is that managers must secure the interest of their workmen, and recognise their dignity as individuals. Joint consultation is all very well, but it will fail like any other machinery if there is not the goodwill and intention to make it work. If it is to show results, the primary responsibility lies with management. The British workman of 1955 will make his contribution on one condition: that he is first given information about his work which interests him. Battles in the last war were won by men who had been taken into the confidence of their higher commanders; they knew what they were trying to do themselves as part of an overall design. Consultation of this kind does not even have to take place in committee: it can be carried out on the shop floor as a normal method of everyday management.

The last point I should like to make concerns rewards. There seems to be greater need in industry for the adequate reward of skill and responsibility, not merely in terms of wages but also in status, prestige—call it what you will. In the present state of our industrial development it is one of the functions of the trade unions to seek by negotiation with the employers to procure for their members basic rates of pay which will give them appropriate living standards and which will be related normally to the prosperity of the particular industry. But above these minimum levels there must be adequate rewards for skill and responsibility, not necessarily dictated by the current supply and demand, nor even by equity. It is rather because they alone will supply those incentives which, as a nation, we must have if in future men are to think it worth while to undergo the education, training and self-discipline needed to fit them for the more skilled and responsible jobs in industry.

In the years since the war there has been perhaps too big a contraction in the gap between the rewards offered to the skilled and those accorded to the less skilled. The time seems to have come for widening this gap a little. But on what basis are these differentials to be determined? And how and by whom should the job be done? Here I would venture only one or two observations. First, it is the management which should take the responsibility in the first instance for threshing out the problem and finding the answer. The initiative should also come from the management, not from the trade unions, or Governments or even from Judges of the Supreme Court. It will be time enough to invite the unions to discuss a wages policy when the principles have been worked out. Secondly, the structure of wages within any industry must have a rational basis and be related to that particular industry. In the long run it is much more likely to be accepted by the trade unions if it can be shown to be based on clearly defined principles. Thirdly, the problem should be approached in an unhurried way. Here the unions have a part to play in exercising patience while the search is on.

There is only one more thing I should like to say which is relevant to the subject of awards. It concerns the profit-sharing and co-partnership schemes to which reference has already been made. I have only two small points to make about this. First, I would agree that they will prosper only where the management has already earned the goodwill of its employees. In my view they are the trademark of good relations; they are not the cause and certainly not the guarantee. Again, in the current discussion of such schemes there appear to be some people who view their introduction as a means of securing for the employees at least some share in the actual management of the concern. I believe that view to be based on a dangerously false premise. Not long ago a greatly respected leader of British industry found himself faced with a request that a representative of the workmen should be elected to the board of his company. In the course of his reply, this is what he said: Industry is one and indivisible; it is one great army and it marches as one army, and it marches under its competent leaders. If they are not competent, then there are means of getting rid of them; but there is only one standard and only one test for those who have to direct and lead and that is their competency to lead.

5.26 p.m.


My Lords, it is always a pleasure to be able to congratulate one who addresses this House for the first time, and I do so with particular pleasure after listening to the speech of the noble Lord, Lord Rochester. He has followed the best traditions of this House in that he has contributed his special and first-hand knowledge of the subject under debate, and contributed in no mean terms. When we come to read the OFFICIAL REPORT to-morrow we shall see more clearly how many valuable points he has put forward. I hope very much that he will continue to be able to spare time from business to attend your Lordships' House and take part in its proceedings in the same way as did his late father, whose loss we regret so greatly.

When I listened to the noble Lord, Lord Amwell, who I am sorry is not in his place at the moment, it struck me that his approach to the problem was a little old-fashioned, and I was interested when I heard the noble Lord, Lord Macdonald of Gwaenysgor, confirm that view. The noble Lord, Lord Amwell, mentioned one point which I think is important—namely, the difficulty which some of the more conservative members of trade unions feel in going against some policy which might be popular although they consider it to be unwise. That is a feeling I have had for some long time. One may complain of people who one thinks are troublemakers, but I am not at all sure that the people who submit to these troublemakers do not deserve more blame than they sometimes get. The decent, quiet people in any union, if they like to have secret ballots, no doubt will command a majority. I am sure that the noble and learned Viscount on the Woolsack was absolutely right in saying that matters of this sort are within the competence of the unions and organisations which they affect. It is within their power, and particularly within the power of the decent, quiet people who do not want trouble, to put these things right. If the proceedings of unions were improved in that respect it would be a big step towards reaching the objective which it is evident this afternoon noble Lords on all sides wish to reach.

Like some other noble Lords, I was a little surprised when I saw the Motion on the Order Paper, I was puzzled to know exactly what the noble Lord, Lord Amwell, thought were the conditions in industry which have changed particularly. It struck me that although the tempo of mechanisation is increasing and although we talk of "automation" to represent that increased tempo, it is nothing new. Likewise it is nothing new in our history to see a state of acute competition in overseas markets. It has happened time and again. It is happening now and no doubt will happen again: but it is not something fundamentally new. What is happening now is that at a moment when more men are being replaced by machines—and this is taking place at a time of full employment—we are in danger of being priced out of markets by foreign competition. So really it comes to tins: that if we replace men by machines, we may (though personally I doubt it) have unemployment; but if we do not modernise our industry and are priced out of the markets, then we shall certainly have unemployment of a type far more difficult to cure than temporary difficulties caused by reorganisation, mechanisation and so forth.

It also struck me that if there was one, new factor in the industrial position, it was possibly this: that we are now getting to a time—in fact, we have got to the time—when every worker who joins industry as a new recruit has received, or is supposed to have received, a secondary education; and I would say that, in practice, at least 80 per cent. of those who join industry and are supposed to have had a secondary education have really had it. That is an important factor, because it means that nowadays there is every reason to believe that the vast majority of the rank and file of industry will be able to give their minds to the problems in which everybody wishes them to be interested. I think it is only fair to say that in the old days quite a number of workers did not find it easy to understand the problems that were put to them; and as a result, it was easy for troublemakers to put the wrong slant on all that the, management were doing and saying.

The more we have educated people in industry, the less it will be possible to do that; and the more certain it will be that when a proposition is put to workers they will understand what it is about. It will be harder for bad managements to get by with bad propositions; and it will be easier for good managements to be certain of getting the cooperation of the workers at a time when something which is not apparent on the surface, or is not apparent as a short-term benefit, has to be put over to the workers at large. Therefore, I feel that this increase of secondary education is of itself going to do many of the things we all want done. Incidentally, it will make it much harder for any management foolish enough to try and do so to treat those people as machines or as units and not as real people.

My noble friend Lord Bennett of Edgbaston, in his interesting speech, mentioned that we still have a large number of small manufacturing businesses in this country, where the "boss" is in contact with all his workers. However, I think it is fair to say that the trend is now towards larger businesses, and probably is bound to be—for a number of reasons. Therefore, this problem of dealing with the individual must be tackled in a new way. It sometimes strikes me that we who talk about these things do not pay nearly enough attention to the position and importance of the works manager. That rather reminds me of the debates in Parliament on Army matters. You could read columns of Hansard and still believe that there was no one in the Army other than colonels and privates, who were alternately the heroes and the villains of the piece; whereas everybody knows that the person mainly concerned most of the time is the sergeant-major, who is seldom mentioned in the debates. In the same way, industrial debates sometimes seem to me to read as if there were only two sets of people in industry—namely, directors and workers; and they, too, alternate in the parts of hero and villain, according to who may be talking about them.

But in practice, for better or worse, the relations between the employers and the workers depend largely on the personality and skill in man management of the works manager; and the bigger the concern, the more important is the works manager, because he is the one who has to put the policy of the board in operation: it is he who, in a big concern comprising a number of industries, has to advise the board before they take this or that decision. Therefore, in the bigger concerns, the board of directors have to listen to the works manager's advice, and if it is bad advice they will not do the right thing. But, equally, when the works manager has got the policy, they have to back him up and see that he gets the moral and material support necessary in order for him to do his job properly. I am quite sure that the more that line is taken the fewer the difficulties that will appear in what are called the impersonal large organisations.

Equally, I am certain—and I think the noble Lord, Lord Rochester, also said this—that it is unwise to regard what we call (I think wrongly) profit-sharing as some kind of sovereign remedy. Personally, I think the term "profit-sharing" is a most unfortunate one, because to my mind, the word "profit" does not mean money that the firm has for disposal. It is a term of art used by accountants to describe a certain figure halfway down the ordinary company's accounts at which the company begins to be taxed. It certainly does not represent anything like money available for free distribution to the stockholders, the workers or anybody else. If ever it comes my way to talk about these things, I try (I do not know whether I am right) to talk not about profit-sharing, but about sharing in the fortunes of the company, because the fortunes of the company are sometimes good and sometimes ill. If the company is producing something, the quickest and most sure way of seeing that employees share in the fortunes of the company is to have a scheme such as I believe all production companies have in some form.

There are many ways of doing it, just as there are many different things that companies produce. Some variation of that scheme, applied to the actual workers on production and to what are called the "non-productive" workers, could be operated in any company I have ever heard of, and with certainty; whereas profit-sharing—that is to say, making some of the money available to the workers which otherwise would be available for ordinary dividend—is a much more chancy matter. The difficulty or ease with which this scheme can be operated varies very much from one company to another. I grant that most of these difficulties are there to be overcome, if you want to overcome them. To mention one or two, there are difficulties of foreign controlled companies and foreign subsidiaries. Take again the wholly-owned subsidiary company which may not itself make a profit, the profit being taken in the parent company. I mention those things to show how cautious we should be in approaching any profit-sharing scheme, because I believe the right way to begin on the plot of allowing employees to share in the fortunes of the company is to see that there exists a proper bonus scheme throughout. After that, as time goes on and as workpeople become better educated, and therefore can be expected to know more about the financial problems with which the management have to deal, one might begin to build up some form of—I will not call it profit-sharing, but of making more universal the plan of sharing among the workers some of the money which would have been available for the ordinary dividend. But all these things are a continuous process, as my noble friend Lord Bennett of Edgbaston said. There is no point at which you can call a halt and say that things are going to be different—because they never could.

We happen, because of foreign markets and things of that sort, to have come to a particular stage in our industrial history where the greatest care is necessary, in the financial, the commercial, the technical and the labour field, to see that our industry is organised to meet these difficulties as well as it can do. One of the contributions which any board of directors or top management can make to a solution of this problem is to see that no one is appointed to a position where he will be in contact with men unless, in their opinion, he has the right standard of man-management. Equally, this problem of promotion has always been there. It has always been possible, in well-conducted companies, for the man on the machine or the office boy to get to the top. Here again I could not agree more with what the noble Lord, Lord Rochester, said. People should go to the board room to do jobs which ought to be done in the board room, and nothing else. They should go there because they are the best people to do their job. What is wanted is not that people should try to do other people's jobs, but that people who do one sort of job should be able to understand intelligently the jobs that others are doing. If it is right that they should take over those jobs because they are the best men, then they should do them. So it is a gradual process, and I have no doubt that it will be helped greatly by the expressions which have been made from all parts of the House in this debate this afternoon.

5.42 p.m.


My Lords, I, too, should like to join in congratulating the noble Lord, Lord Rochester, on his excellent maiden speech. He sits in front of me, he spoke in front of me, and if I can follow his example and do half as well I shall be very pleased.

This afternoon the noble Lord, Lord Amwell, and many other noble Lords talked about automation and the human problems that arise from it. That is a subject I wish to develop this afternoon, realising, as the noble Lord, Lord Bennett of Edgbaston, said, that automation is nothing new but rather a catch-word to describe a process which has been going on for a long time. None the less, it is certain that we face to-day an opportunity and a prospect of a standard of living that was undreamt of twenty years ago. Our nation has the scientists, the engineers and the skilled workers who can lead us to great prosperity and happiness, and that very soon. The problem, as I see it, is with the worker. If I were a worker in a factory I should be rather worried about this so-called automation—what it held for me, and whether I was going to lose my job. For example, the car factory worker hears about or sees this new wonder. While there is the present demand for motor cars he has no need to worry. While there is a demand and full employment everywhere he knows he is all right. But what happens if times change a little? Then this system of automatic machinery becomes even more necessary than before, if we are to compete or hold our place with other nations. What is important, therefore, is to have him realise that there will be new jobs and new opportunities arising from these inventions.

There is, I believe, a risk that, in our excitement over these new discoveries and our determination to keep abreast of them, we may neglect the labour problems to which they give rise. At this time, as I have said, the danger is not very apparent, as all the pressure is on management to instal labour-saving and automatic machinery. Without, however, the full co-operation of the worker, half the value of the installations may be lost. In a sense we are in what I should call an accelerated industrial revolution, and it is to be hoped that this time we avoid the modern equivalent of the Luddite Riots: that is to say, go-slow movements or even unofficial strikes against new machinery and the introduction of it. If we fail in this, who is to blame? The worker, management, the trade unions or the Government? I should think the worker least of all. The responsibility lies primarily, I think, with the management and with the trade unions. But on a subject like this it is impossible to generalise, because so much depends on the individual company and the individual circumstances. I wonder, however, whether it is sufficient to rely on the individual approach, when this problem is so large, and whether the Government themselves have not a very real and particular responsibility.

We were reminded several times to-day of the industrial productivity teams which were initiated by the Government at the end of the war, and of the great success that has followed from them. I am wondering whether something like that is not necessary to-day, and whether the Government should not take the lead. The other day, in another place, the question was raised whether there was not a need for a special inquiry to study the problem of automation and the possible result in unemployment. The Minister of Labour replied that the Government did not consider it necessary to have a special inquiry at present. I do not know what weight should be attached to the words "at present." At any rate, it shows that the door is not closed to such an inquiry. In the meantime, I know it is the hope of all that the trade unions and management will continue, separately and together—and particularly together—to study the problem and see how best they can tell the worker just what is the meaning and importance of these new developments.

5.48 p.m.


My Lords, I am glad that my noble friend the Earl of Perth spoke on the subject which he chose this evening. I think that the extent to which economies in technique and in mechanisation are developed and, as a counterpart to that, the consequent effects upon the human beings involved are foreseen and provided for, will, to a large extent, determine not only the future of industrial relations but the future prosperity of this country as a whole.

The noble Lord, Lord Amwell, in opening this debate to-day, said, and I think rightly, that it was a particularly appropriate subject for your Lordships' House. He remarked that as a deliberative Assembly this House has perhaps certain special advantages. I am glad, and I think we all are, that he gave us this opportunity of debating the subject which he introduced. It is a vast and complex subject, and we all have to choose on what particular parts of it we shall ourselves concentrate. I should like this evening to say a little on one matter that seems to me of importance: that is, the need to adapt in some respects the system under which labour disputes and wage negotiations are conducted, with the traditions and ideas which determine how that system functions, to the completely novel conditions of the present world in which we live. Since that system was developed we have the new national monopolies; we have an advanced Welfare State; we have full employment; and we have a great change in the distribution of the national income.

The first of those four changes has created a new type of employer. The second relieves the obligation which formerly fell upon a striker and his union to maintain the strikers' families during the strike. The third, full employment, changes substantially the prospect before a hesitating striker. The fourth means that more and more the struggle between economic classes is not between rich and poor generally, but is a conflict of differentials within the workers' world itself.

If we look, too, at the actual strikes which have recently come to an end, and consider their characteristics, we see equally what a changed world we now live in. Let me recall them, if I may, without attempting to express any opinion upon the merits of the particular disputes, but solely in order to show how different in intrinsic character are modern disputes from those which were normal before the war. In rapid succession, we have had the Scottish miners' strike, an unofficial, localised strike in a nationalised industry; then the newspaper strike in which only 700 men, by stopping, affected the work of 20,000 union members in the same industry, and many others both in that industry and outside it. Thirdly, we had the dock strike, the most serious of all, immobilising a large proportion of our shipping and our exports, which was caused solely by an inter-union dispute. Fourthly, we had a seamen's strike of the catering staff of some of our great liners, which was unofficial and was opposed by the Seamen's Union. Finally, there was a strike of footplate men, again in a nationalised industry, where the main difficulty arose from a conflict about differentials between two unions. How different are all those from the normal pre-war wage negotiations between unions and employers!

This bare recital at once suggests a few comments: first of all, how unimportant is the wage factor in comparison with other elements, such as, For example, inter-union conflict; secondly, how much greater, how mensely greater, the indirect consequences are than the comparatively trivial amounts immediately involved in any disputed claim. The Government have told us that the indirect consequences of these recent strikes cannot yet be computed exactly. But I think we may safely say that, taking these recent strikes as a whole, the amounts involved for the workers in the industry itself, whether we take what they hoped to gain or what they lost in lost wages, are to be reckoned in millions of pounds; that the loss to industry is to be reckoned in tens of millions, and the loss to the workers as a whole and to the country is to be reckoned certainly in hundreds of millions. This great discrepancy would have been even greater if the strikes had been further prolonged; for the radiating, indirect loss through the stoppage of an essential service can be reduced for a time, but only for a time, by improvisation.

My next comment would be that, in the present world of a Welfare State and modern taxation, more than half of the indirect loss through the stoppage of an falls, and must fall, upon members of unions and their families; if we add the other classes whose income is no greater on the average than union members' wages, the proportion would rise to something like, as a guess, four-fifths. The main part of the loss, indirect as well as direct, as a result of strikes and stoppages, now falls, as Lord Amwell said, upon the working classes. That is true, whether the loss takes the form of unemployment, increased taxation, either direct or indirect, as the only alternative to the restriction of the welfare services, or a limitation of imports through loss of exports and, therefore, foreign exchange, with the necessary consequences of shortages, high prices or rationing.

Two conclusions, I suggest, follow at once from this. The first is that the unions as a whole, with the T.U.C. at the centre, now have the strongest motive, in case of any impending or actual strike in a basic industry, to find what kind of settlement would be in the interests of union members generally, and to make it known. The second is that the interests of union members are now so nearly identical with those of the country as a whole that a settlement on this basis—that is to say, a basis which the union movement had decided was in the interests of the union members as a whole —would be unlikely to be unjust or injurious to others.

One other feature of the recent strikes is worth noting. Nearly all of them occurred in industries in which, to an exceptional extent, restrictive practices and ideas limit output and earnings. It is because of that that I welcome the contribution of my noble friend, Lord Perth. The Lord Chancellor said that there are no latter-day Luddites. If he is referring to trade union leaders and to the great political Parties, or if he merely means that people now do not smash up machines, of course he is right. Nevertheless, I venture to say to your Lordships that there is a counterpart to the latter-day Luddites, in that there are in very many industries, though not in all, resistances which effectively prevent the real economies now possible from being made, and therefore the real possibilities of securing a greater output per man and with it a higher average standard of living. There are resistances of that kind, due to a fear that redundancy in a particular job will mean that a man will lose his job. I venture to put to your Lordships, and through you to the union workers as a whole, that, if redundancy means only that two men can do the work of three and that thereupon the third gets a better job and all three get higher wages and improved standards, then it is something to be welcomed and not resisted.

But, as Sir Stafford Cripps pointed out a long time ago, full employment, while it should help that situation by providing an alternative job when there is redundancy in one, is fatal if it is interpreted as meaning that a man regards himself as having a right not only to employment but to employment in precisely the same industrial process in precisely the same place as before. If that view were deeply and widely held, as it is. I think, in some industries or in some sections of them, then not only should we have to give up hope of doubling the standard of living in a generation, but we should not be able to hold on, with world competition, even to the standards which we now enjoy.

I quite agree with the noble Lord, Lord Bennett of Edgbaston, that we must not exaggerate the actual consequences of these recent strikes. They are indeed serious. The export figures, as we see in this morning's paper, show that. But I would not say even that they are disastrous, still less fatal, in themselves. Their significance and importance is that they reveal dangers and certain ideas which, if allowed to continue and grow, might well have consequences that in future would be not only disastrous but fatal to the country.

A new policy, a new system, in some respects a change of attitude and ideas, are all imperative. In what direction should we seek a solution? Not, certainly, in a drastic change in the law: I think there is universal agreement in your Lordships' House on that. General outlawry of strikes, the legal compulsions of fines and imprisonment, are impracticable, and, even if they were not, they would be highly undesirable. I believe, as I believe most of your Lordships believe, that the right to withhold one's labour from a job, and to do it not only individually but collectively and within a legal system which, like the present one, permits it, is an absolutely essential right for citizens in a free society. If at any time—I say this because there was a certain amount of irresponsible chatter during, the recent strikes—a Government or a Parliament attempted, otherwise than in the immediate and temporary emergency of a war and its aftermath, to outlaw strikes generally and to exercise penal compulsion, they would have crossed the Rubicon which divides the free from the unfree world.

Yes, but the right of any group to withhold its labour, and to do so collectively, does not in itself imply a right to intimidate others into acting similarly, to victimise or punish those who do not, or even call upon others as a duty, in the name of loyalty, to support a strike unconditionally and without any judgment of its merits. It does not necessarily imply a right to expect that a job, however essential to the work of others, should remain left undone. Nor, I suggest, does a right to organise justify necessarily every conceivable form of discipline in relation to the formation of new unions or their extension. These are separate problems, meet for discussion by the trade union world. They may be approved, perhaps in some cases conditionally; but they cannot, I suggest, be regarded as sacrosanct in the same sense as the general right to strike.

If the outlawing of strikes gives no solution, where next do we turn? Not, certainly, to further nationalisation. On the contrary, I think it is essential to realise how the creation of new national monopolies has, in some respects, sometimes aggravated the strike problem. I think it is true to say that proportionately more time has been lost in the great nationalised industries than in industry as a whole. That is partly due to what I have always thought was a fatal omission —I am not now speaking of the general merits of nationalisation—when new nationalised monopolies were created, to consider what changes in the system of wage determination were required as a consequence. The whole of the older system was taken over holus bolus.

But consider the difference. Where a union, as is still the case in the larger part of our economy and in earlier days almost the whole, negotiate with employers, one fact is known to both sides—namely, that wages must come out of earnings. There must be earnings. Both sides know that beyond a certain point—though there is a dispute as to where that point is—higher wage costs would bankrupt the employers and would bring disaster to both sides. But now in a nationalised monopoly it is, and must be, in the minds of both sides that that limitation, which made the old system of union negotiation reasonable and compatible with public interest, does not apply. There is a monopoly, and therefore if there is not enough out of current earnings to meet a wage claim, fares and prices can be put up; and if that limit is passed, this is a State-owned concern and in one way or another the Government and the taxpayer can be involved. That is an absolutely fundamental difference. Of course the law may lay it down that the concern must pay, one year with another. It may continue the old Railway Staff Tribunal, for example, which worked well in the past, to be something in between the worker and his new employer. But how fragile these defences are was shown in February, 1951, when, within a few days, first the Tribunal was thrown over and then the Transport Commission, and the Government of the day and the taxpayer were at once directly involved.

I think of this difference the more vividly because I was for four years the last Chairman of the Railway Staff Tribunal in the pre-war and pre-nationalisation days. It was a difficult period, when the full impact of the new motor competition was falling on the railways. But during those four years we never failed to get a unanimous verdict in the Tribunal; we never failed to get it accepted by both sides, and we had no strikes. But is it to be wondered at that that system will not work equally well under the completely new conditions? I suggest that it ought to have become recognised, as a counterpart to the new conditions to which I have referred, that workers in that industry should not—while they may retain the ultimate right to strike as a last resort as a legal right—feel themselves as free at once to jump into a stoppage and strike as would perhaps be reasonable in regard to the employees of a small private industry. If what I suggest should be a code of behaviour for the workers in the industry is so, I believe that that might well affect the attitude of the workers in other industries to a certain class of strikes. What I have in mind specially is strikes in a national monopoly, on whose continued service industries as a whole depend, resorted to without justification and against the will and the expressed opinion of the trade union world as a whole as to the merits.

I should like to make one or two positive suggestions. Obviously, in the ways that have been suggested to-day, the Government, the employers, and the trade unions all have their part to play. As to the Government, of course they must in the last resort intervene to keep the essential life of the country going, and in that term I would include the maintenance of exports. But it should be only in the last resort.

Here, I should like to make a suggestion that is much more modest and, I think, more practical, than that of a composite large council composed of the three elements, Government, employers and unions, to pronounce either upon the general economic position or upon the merits of a particular dispute. The Lord Chancellor has, I think, dealt quite sufficiently with the difficulties of that proposal. But it might be possible for the Government, in such association with the employers and trade unions as to ensure impartiality, to see that there is a small fact finding body available for disputes, particularly, but not solely, disputes in the national monopolies. Its task would be threefold: first, to ascertain and make known what have been the changes in the national income since the last settlement of wages within that industry; secondly, what changes there have been in productivity in the particular industry; and thirdly, what are the corn-parable rates of wages and remuneration for similar skilled work in other industries, particularly those where negotiations are still proceeding as they used to generally, as an equal negotiation between the union and employers who have to make their earnings in competitive conditions.

If that were done, I venture to suggest that the trade unions would have the greatest opportunity of their lives and a greater opportunity than any other section of this country to solve the problem that is in all our minds. The unions have the motive, for the reasons I have mentioned, that the greater part of any loss caused by a stoppage falls upon them and their families. They have the power because it is quite clear that no serious strike could continue if workers in other industries definitely refused to support it, even by abstention. I suggest that they have also the responsibility, partly because so many of these conflicts are of an inter-union character, which is obviously a direct responsibility of the union world, and partly because they have the power and the interest.

By this I mean that it would surely not be impossible for the trade union world (I do not say the T.U.C. with its present powers and influence alone) to develop within itself art organisation which would enable trade union opinion to be collectively expressed in regard to any serious dispute. They would have the help of the mare limited fact-finding office to which I have referred; but the judgment would be a collective trade union judgment as to whether a particular strike was one meriting the support of union workers as a whole. The loyalty with which trade unionists support each other might in future be discriminating loyalty, in the sense that where the verdict of the union world generally was that a strike was justified they should fully support it; but where that general trade union verdict was that the strike was not justified and was against the interests of the union world as a whole, they would not support it by discouraging others from carrying on the job. I realise that, to reach that point, long and difficult processes of reorganisation, study and education within the trade union world may be involved; but if it could be reached we should be, I believe, in sight of a solution of this problem.

I would suggest to trade union leaders, whether in greater or in lesser office, that if they are able so to organise the whole movement as to be able to express collective union opinion on particular disputes and stoppages they would be doing an enormous service to all their members and to the country. In doing so they would strengthen their movement. Obviously they would increase the influence and importance of their members' views. But because, ultimately, their interests are so nearly identical with those of the country, they would be doing the whole country—as well as those sections who are in the trade union world—a very great service. I venture to put that suggestion to your Lordships and, through your Lordships, to the trade union world.

Obviously, the whole problem before us is one that will take many years to solve and will require the combined efforts of trade unions, employers, Government and public. No one of us here can hope to do more than make a small contribution of such ideas and reflections as may occur to us. Within the limits of the permissible time, or perhaps the rather more than properly permissible time, I have ventured to put my own views before your Lordships.

6.14 p.m.


My Lords, I am grateful to noble Lords who have given me, through the usual channels, their consent to intervene in the debate at this moment on behalf of the Opposition because the Leader of the House requires to wind up at a certain time owing to a very pressing engagement. I will therefore keep one eye on the clock and not wander very far from the subject matter of this Motion. Whatever noble Lords may have thought of the speech of the noble Lord, Lord Amwell, who introduced this Motion, I think all will agree that he had every right to say what he did say. It is good that opinions other than orthodox opinions should be expressed. While the noble Lord was speaking there came into my mind a remark used by my noble friend Lord Stansgate on one of those all too rare occasions when he entertains your Lordships with witty and brilliant speeches: that your Lordships' House is one of the few remaining places, even in this country, where a man may speak his mind. Evidently my noble friend did so.

A number of noble Lords have declared an interest so perhaps I should declare my bona fides for speaking in this debate. I have the advantage of having been on both sides of industry. Graduating from the shop floor, I have been an employee and an employer. I cannot claim ever to have been a shop steward, but for five years I was chairman of a national joint industrial council, when I was president of an employers' organisation. So I can at least claim some slight knowledge of the problem. After the stirring and eloquent speech of my noble friend Lord Macdonald of Gwaenysgor, than whom no one speaks with greater authority for the trade union movement in this country, I will not say much about strikes, but I welcomed what the noble and learned Viscount on the Woolsack has said, as a statement of Government policy: that there is not the slightest intention of bringing in legislation. That would be the biggest folly of any Government—I do not care whether it is legislation on secret ballots or not—for in the last analysis the only course is logical education and persuasion. No one in this world—at least not in a free country—has yet found what to do with the man who sits down and says, "I will not."

Noble Lords on this side of the House have not attempted to hide their deep concern at the unofficial strikes that have taken place. Some of us have striven throughout our industrial lives to bring dignity to labour. We had always thought that when the clay arrived when, as a country, we could give security, good conditions and good welfare, a new dignity would descend on labour. That a relatively small handful of malcontents cart upset this is, to us, a bitter disappointment, but we are glad to know that there is nothing between us and Her Majesty's Government upon the way to deal with this matter. I agree with what has been said by the noble Lord, Lord Bennett of Edgbaston, whom I have known all my industrial life and with whom, politically. I have never agreed and from whom, industrially, I have never disagreed. With him, I believe that industry has never stood still in grappling with problems.

The present is a momentous time to discuss this question because we are to-day living under conditions that have never before obtained in the history of this country. We are on the verge of nuclear industrial power of which I hope the noble Marquess who leads your Lordships' House, and who is responsible for its development in this country, may tell us something. What a huge problem we have! Then there is automation—a hateful word, as noble Lords have said. But we have something which is presenting us, and which will present us, with an even bigger problem than those two factors. For the first time in our lives we have full employment. How can we fit all this new development into a context of full employment—or, let us admit it, in some respects over-full employment? Perhaps a better expression than over-full employment would be "concealed under-employment." I will explain precisely what I mean.

These matters will present us with some very stern problems; we have to ask ourselves some very stern questions, and we have to find some honest answers. One great problem is confronting Her Majesty's Government now. I will only mention it in passing, as I see that on about the last sitting day of the present term of your Lordships' House we shall have the opportunity of discussing the Report of the Monopolies Commission. Restrictive practices in industries in this country have, more than any other single factor, "feather-bedded" incompetence. We talk about greater productivity—and I do not dissent from one word which Lord Macdonald of Gwaenysgor has said on that subject. He said that that is our key to success, and I am delighted that he said it.

Full employment does not mean, and never has meant, a freezing of the industrial structure of this country. It never could mean that. It means that there will always be a job for those who are ready and willing to work. But the restrictive practices and price rings and other arrangements in this country are harbouring thousands of redundant workers who ought to be released for more profitable work in industries that are screaming for labour. That is a matter which is going to face the Government and the country with a very hard choice. Do we want an element in competitive industry in this country that is going to weed out the incompetents, or are we going on with a system that is going to "feather-bed" them and force us to carry them? If we had full employment, with everyone working 100 per cent., and machine development up to 100 per cent., then, as my noble friend has said—and this has been echoed by the noble Lord, Lord Bennett of Edgbaston—the wisdom and the skill of the people of this country would know no bounds, and prosperity would be here for all time.

That brings me to what I consider the greatest problem we have to solve. As my noble friend again said, it is useless to deny that underlying all this industrial unrest—I do riot want to exaggerate, but it is no good shutting your eyes to it—is the fear on the part of the average worker in this country that there is no such thins as continuous full employment. He says that there never has been. "You have told me this before," he says. "You told me this after the last war; you told me that the harder I worked the more prosperous I should be. And in two and a half years I, and two and a half million of my pals, were unemployed." And the workers now ask: "What is the difference to-day?" What is the answer? They were told between the wars, in the late 'twenties and the early 'thirties, when we had that two and a half million unemployed, that the harder they worked the sooner they would work themselves out of a job. The tragedy is that that was true. How can we get over that to-day? How can we give that confidence which is so necessary to the worker? How can we get him to take the long-term view? As my noble friend has said, you learn from talking to men on the shop floor. You say to them, "Don't do this; what you lose now you will gain tenfold in five years' time." They say, "Yes, guvnor, but give us a bit now." That is human nature.

What is the answer? I believe that the answer will be found upon the lines of guaranteed work. We have moved away from the "hourly sack"—that is sacking at an hour's notice—to a week's notice. I believe that we have to move steadily towards giving the worker something approaching, maybe, a yearly contract. I believe that those two great American companies, the Ford Company and General Motors, are thinking along the right lines. A great many problems are going to arise out of this, but I believe that we have to give the worker who works with his hands the same security as we give to the man with the white collar in the office. I should not like to see it brought in too hastily, but that is the end to which I believe we have to work.

We must not forget human nature. We have to thank the noble and learned Viscount who sits on the Woolsack for giving us, in an extraordinarily good speech—if I may say so without impertinence—the thought that "man is not a digit." You can put digits in columns, and they stay there. But you cannot put human beings in columns. A human individual is a very animated being, with passions, loves, hates and all the rest of it. And the first question he asks himself when any proposition is brought to his notice is: "How does it affect me?" One must always bear that in mind. This is a world of security. Perhaps that is not so good—I do not know. Some of us may have achieved what success we have achieved in a world of insecurity, hazard and scramble. Perhaps it is not so good to have security. But a real urge for security is sweeping over this world at the present time. And after two world wars, terrific unemployment and slumps and booms, we cannot expect anything else. In America, a move has already been made. The greatest private enterprise country in the world is now seeking to ensure permanent security for its workers. And I think that is what we have to do.

I should now like to say a word on the thorny subject of profits and capital. There is more nonsense talked about profits, I think, than about anything else. I am a believer in the profit motive. So is everyone else. There is nothing wrong with the profit motive. What is wrong and what has been wrong is the use of the profit motive as it has been used over this last quarter of a century—especially between the two wars—to break the lives of individuals. What we have to do is to give incentives to the people to increase their skill. To induce the unskilled worker to become a skilled worker he must be given a profit motive. Everyone has had the profit motive before him since childhood when he was occasionally given a penny to buy sweets. I became a capitalist at the age of three years, when an aunt of mine gave me a money-box into which I put pennies. When I was a worker, an employee, I assure your Lordships that I never wanted to work for any firm that made a loss. That did not attract me at all. And since I have been an employer, I have never been able to pay high rates out of a loss: the only way I have known of paying them is out of a profit. Let us get out of our heads the idea that profits are something indecent.

What we have to do is to give higher and higher rewards, and we can do that only out of an industry that is profitable and in a country that is prosperous. There is much nonsense talked about high wages pricing us out of the export markets. I read some of this in the Tory Press and it makes me sick. This really is a veiled attempt to get a devaluation in wages. High wages will never price us out of the export markets, any more than low wages in the 'twenties and 'thirties priced us into them. What we want is higher and higher rewards, coupled with higher and higher productivity. What we have to do is to find the way of relating rewards, basic wages and incentives to productivity. As my noble friend Lord Amwell has already said, increased productivity is the only way by which we can get anything. I thought he made that abundantly clear. So I hope we shall not hear so much in future about pricing ourselves out of the export markets. What will put us out of the markets is low productivity and, as my noble friend says, late delivery.

Late delivery is a bug that now has bitten Her Majesty's Government. The other day I heard the Minister of Transport say with some pride in another place that we are going to get roads in ten years' time—when some of the great turnpikes in America have been built in three years. I wonder what would have happened during the war, just before the invasion of Normandy, when we were assembling our Forces and the American Forces in the New Forest, where previously we had no roads on which a tank could go and where we had built some of the finest roads in the world, like the one from Beaulieu to Lymington, if the immediate past Prime Minister had been told, "Yes, you can have them in ten years' time." Your Lordships can just picture what he would have said. This is becoming a fetish. If you want anything in industry to-day, your supplier seems to glory in the view that it is a sign of business and prosperity that he cannot give you delivery under two or three years. That is a problem of management, and one that has to be overcome.

Another point I want to mention is this question of profit-sharing. My views on this were well stated by the noble Lord, Lord Rochester, who I thought made one of the best maiden speeches I have heard in this House for a long time. I say this with some diffidence, but I have never believed in profit-sharing and co-partnership. I do not doubt for one moment that it is being advocated by sincere and honest people and I do not attribute any base motive. I remember some of the speeches on this subject made by the noble Marquess the Leader of the House and some by his noble uncle, Lord Cecil of Chelwood, whom we miss so much from this House at the present time. Profit-sharing will never contribute anything material to the solution of the problem we are trying to solve, because although profit-sharing schemes are all right while there are profits to share, when, through no fault of the workers, there are no profits to share, then they are the basis of trouble. I have seen it happen so many times—through a fault in design, over which the worker has no control, he does not get anything at the end of the year. There is only one way to give incentives and that is to relate the incentive as near as we can to the physical and mental effort of the individual. As soon as he has to rely upon somebody else, then there is trouble. I know that in some occupations this is not easy to do, but we have to get as near as we can.

When we get shares offered to workers, then I begin to have my suspicions. In profit-sharing schemes in the past, the workers have taken up only a small percentage of shares. When they have had them, and if they had any sense, when a high profit was to be obtained on the Stock Exchange, they cashed them. Why should they not? When you get workers' shares with strings tied to them, as I saw the other day in connection with a well-known company, who were offering workers' shares at par, which they could sell only to other employers at par, I thought to myself, "What is this? This is a labour anchorage scheme, not a profit-sharing scheme." Why should the worker who has shares in a company be treated any differently from the ordinary shareholder who can take his profit if he wants to do so? And what is going to happen to the shares that go below par? No, there is no future in a system of profit-sharing. The workers do not want to manage the company. Many a worker has said to me that it was for him to produce and for me to turn his efforts into a profit. He did not want to manage the concern. Many of us who have everyday experience of industry will freely admit that one of the greatest difficulties we have to-day is to get youngsters to take responsibility. They want security, not responsibility.

That brings me to my penultimate point—namely, joint consultation. Again, I agree with the noble Lord, Lord Rochester. I am in favour of joint consultation, but it must be on the floor. That is where it should start. But we should also have consultation at top level, as my noble friend, Lord Macdonald of Gwaenysgor, said in his interesting suggestion to the noble Lord, Lord Bennett of Edgbaston. I see no reason why the Engineering and Allied Employers' Federation cannot have a standing joint committee with the trade unions. I think that the workers should be told about what is being done. But we cannot start an industry doing what we have not been able to do before—that is, divorce authority and responsibility. Industries cannot be run by committees. In our industry, in a highly competitive world, there must always be somebody to say: "Let's go." The man who says, "Let's go" five minutes before his competitor says the same thing is the man who wins.

This committee talk ran through industry two or three years ago like a disease. I believe that managements must treat the worker, right from the lowest level, as a colleague in the business. But if anyone thinks the worker—if I may use the vernacular used in the shop when anything goes wrong—is going to "take the can back," then he is mistaken; and it is unfair to ask him to. It is the management's responsibility to carry the workers along, and that happens in all good shops to-day. The noble Lord, Lord Bennett of Edgbaston, was quite right. Here we have—I hope for a long time to come—in the engineering industry, at least, predominantly the small firm. I know that in this highly competitive world we must, in the struggle for efficiency, end up with the large unit. One of the troubles to-day is that no director of any concern of any size has a halfpenny in the concern; they are really only employees. An executive director has one share signed on a blank transfer; and that applies right through industry to-day. It is seldom that one finds in a large concern any director with a substantial holding. I consider that there should be consultation from the highest to the lowest level, right the way through—but not by set committees, because committee minutes are not a marketable commodity in industry; they cannot be sold; and more time is wasted by committees than in any other way I know.

I want to say one last word, and I want to say it quite seriously to the Government. I believe that one of the greatest deterrents to full production is our tax system. I think there is something wrong in a taxation system—I am not talking about the weight or the incidence of taxation, but about the system—which, first of all, is a definite deterrent to enterprise, risk-taking and initiative, and which, at the other end of the scale, makes absenteeism profitable. I would ask the Government to look into this seriously. I do not think there is any royal road—certainly not by legislation—by which we can solve the problems. If we could always reckon on such a humane, understanding Minister of Labour as we have now, I should have no fear for the future. But we should be doing him an ill-service to say that he is indispensable. We have got to find a new spirit, and I believe that that is where some of us, perhaps, make a mistake. Some of us who are bitterly disappointed with some of the happenings in the industrial world to-day are perhaps trying to make haste too quickly, or are trying to change human nature too quickly. But I am sure that the employer of labour has a bigger part to play in this matter than even the worker. His is the main responsibility, and if only he will seize it, and bring to labour in industry in this country that dignity which we so much require, to double the standard of living in twenty-five years will be just a spare-time occupation. We have the brains and the "know-how" and, if your Lordships will excuse a vulgarism, we have the "guts" as well.

6.45 p.m.


My Lords, I know that the noble Marquess, Lord Salisbury, has another important engagement and I want to refer only to one or two matters which have not been touched upon as yet. I think it is quite clear that the problem of human relations in industry is just a question of the acceptance of an all-round sharing of responsibility. The evolution of responsibility is possible now because it can be built on the basis of the safeguards of the welfare society and the higher wages which are now being enjoyed. We are really seeking to proclaim a new public philosophy and to announce a new approach in industrial human relations: and this means that no one can undertake a job in management without sharing responsibility, and that everyone who works in industry must, as a deliberate act of will, be willing to accept the sharing of the responsibility which is offered. I think this follows in our Western tradition, based upon the philosophy of the classical times and picking up the philosophy of the Middle Ages, with their respect for natural law above people and Government alike.

On a less philosophic level, I want to say a word or two on the question of incentives. I agree with the noble Lord, Lord Lucas of Chilworth, that the most direct incentive is the immediate reward on the basis of work done. But that reward, to be effective, must enable the worker to obtain what he desires as the result of his work. I hope that the artificial distinction between necessities and luxuries will be abandoned, and, as I have mentioned before in your Lordships' House, I should like to see the purchase tax abolished. I feel that it puts articles for which they work out of the range of the workers and acts as a definite disincentive to greater effort. I should like to see the substitution of a retail sales tax, excluding items of food, of, say 5 per cent., until such time as the Government do not need the revenue—if that time should come.

One other matter to which I wish to refer is the subject of the nationalised industries. The noble Lord, Lord Salter, referred to these, to some extent. In my view, the workers in the nationalised industries feel that nationalisation was sold to them on a fraudulent prospectus, or at any rate a misleading prospectus, which contained an economy of truth. I am not imputing any intent to deceive, but it is clear that nationalisation has not turned out for them what they thought it was going to be. But where we have nationalisation, we have to see that it works. We, the public, are now the proprietors, the shareholders, and we have to accept the consequences of being the owners and workers respectively in a public service.

So far as the owners are concerned, I think this means that we have to assume the ultimate responsibility for a fair wage scale for all grades. Whatever the façade set up to manage, the Government cannot evade final responsibility. I suggest that what is required, somewhat on the lines of what the noble Lord, Lord Salter, suggested, is an advisory council, a sort of Whitley Council for the nationalized in-dustries, to which disputes can be referred, and that workers should be willing to remain at work while disputes are referred to such a council and until its recommendations are approved by Parliament. In my view, the Government are really the executive for the people in the matter of the nationalised industries, and they must set up any machinery necessary. In the event of a deadlock, they must accept responsibility for the terms of service, much as they do in the older Civil Service. We have to face up to this fact, and if we do so I think it will have two good results. It will be fair to those who work in these industries, and it will be a warning against adding to the list of nationalised industries.

Then there are many businesses of a semi-professional nature. It is the custom of the trade unions who look after the workers in these businesses to negotiate with the management salary scales based on age and service. In these days of full employment and rapidly changing conditions, I think this is much too rigid a method, and works to the detriment of efficient and progressive workers. I should like to see the trade unions concerned consider this matter and adopt methods to-day different from what they thought of thirty years ago. They should adopt a policy of greater flexibility, particularly in the matter of differentials, to which those who keep themselves up to date with new developments and new methods are entitled.

I now turn for a moment to the question of profit-sharing, to which the noble Lord, Lord Lucas of Chilworth, referred. I admit that this is a difficult subject when considered over the whole range of industry, and it would be well for those who are considering the matter at the moment to refer to the Report of the Royal Commission which, I think, reported in 1925. As the noble Lord, Lord Lucas of Chilworth, said, it is no good starting schemes in which interest fades out after quite a short period, as happened in many of the businesses which were investigated by the Royal Commission in 1925. I do not think profit-sharing could be introduced in a big way, under which individuals can benefit, without involving the counterpart of profit-sharing—namely, loss-sharing. I cannot imagine that this possibility would be likely to appeal to anyone at the present stage of industrial relations.

But there is one method which, although not providing great individual incentives, would benefit the staff of an industry as a whole, and I think it ties up with the idea which I have tried to put forward—that of the evolution of responsibility. It is that, after an agreed level of distribution to shareholders, a share in any increased distribution should be paid into a fund for the benefit of the staff. It would be appropriate if such a fund, as I should like it to be built up, were administered by representatives of the staff, who would thus gain experience in investment and in the management of capital, as well as in the use of it for the benefit of those with whom they work. A scheme like that involves no question of sharing losses, and it gives an overall incentive for good teamwork.

The final point I wish to make is the question of a more imaginative campaign for saving and for small investors in industry. It is true that there are means of saving which to some extent benefit from the increasing dividends paid by industry, but I do not think the opportunities are sufficient. I should like to feel that the Treasury and the Board of Trade would be willing to consider a modification of the law (which I suspect is necessary) to bring in, for small investors, a simplified and less expensive way of acquiring an investment in industry, perferably with a good spread. I have something in mind on the lines of a unit trust, with a simplified form of procedure. I think a scheme which would enable quite small savers to invest generally in industry, or a group of industries, would in many cases provide a more satisfactory investment for them than putting their savings in the businesses in which they may be working. It is upon lines of this sort that I think there can be an improvement in personal relations, the object of which is to make everyone happier in his work; and it is to happiness in their work that all in industry should try to contribute.

6.56 p.m.


My Lords, I should like first of all to apologise to the House for intervening before the original list of speakers was completed. It is, as your Lordships know, something I seldom do, but, as the noble Lord, Lord Lucas of Chilworth, has already said, I have a long-standing official engagement which I promised to fulfil, and I felt sure that the House would understand if I trespassed on its kindness.

And now I should like to come directly to the substance of the debate. It arose, as we all know, in this way. When the recent railway strike came to an end, a proposal was put forward that there should be a special debate on that strike and the lessons which were to be drawn from it. I consulted with the leaders of the other Parties in this House, and we were all agreed—and I am sure we were right—that a debate when the strike was hardly over and feelings were still seriously exacerbated would be unlikely to produce any useful results and was liable, indeed, to do a good deal more harm than good. It was far better, we thought, to allow a breathing space to elapse and then in the light of recent events to have a wider debate over the whole area of industrial relations. It was exactly at that moment that we heard that the noble Lord, Lord Amwell, had put down a Motion which seemed to have exactly the scope and purpose which we had in mind. I must say that I think the House owes him a most sincere debt of gratitude, both for timing his Motion so well to produce the valuable debate we have had this afternoon, and also for himself approaching the delicate questions with which he had to deal in what I thought was an extremely fresh and thought-provoking spirit.

There is no doubt that recent events in the industrial sphere have come with a considerable shock to the British people. They had thought that we in this country had the finest system in the world for regulating relations between employers and employed. That system, as we all know, had been built up by a long process of trial and error over a period of upwards of a century—perhaps the noble Lord, Lord Amwell, would say longer than that. It was operated by leaders on both sides, who were wise and experienced in the ways of conciliation, and also by a great body of workpeople who were animated by a similar spirit. We had come to believe here in Britain that we were reaching a point where, though no one in any section of the community questioned the right of a man to withhold his labour if he wished, the strike weapon would in fact be rarely used, and then only when every other conceivable alternative had been tried. Then, suddenly, we were brought up against a series of disputes which seemed to indicate that that assumption was not entirely valid and that in, at any rate, some industries, the system was not working quite so smoothly as we assumed it always would. In circumstances of that kind, I think it is not at all surprising that the public mind has been seriously troubled and that we should all be anxiously inquiring what has gone wrong with this system, of which we had, and still have, a very high opinion.

It would, of course, be profoundly wrong—and the noble Lord. Lord Bennett of Edgbaston, emphasised this earlier in the debate—to exaggerate the extent and the area of these new and disconcerting developments. In the great majority of industries to-day the system of collective bargaining is working admirably. That is borne out by the simple and obvious fact that industrial production is, I believe, higher to-day than it has been in any period in our history. All that is most satisfactory; but it does not alter the fact—and it is a fact which we cannot ignore—that, though this system is working so well in the majority of industries, it has shown serious defects in others. Its failure in the industries where it has not been so successful has been so far-reaching, as the noble Lord, Lord Salter, in the remarkable speech which he delivered to us this afternoon, pointed out, as seriously to prejudice the prosperity of the industries where it was in fact succeeding.

For the industries where it was breaking down—and this was the point made in the admirable maiden speech by the noble Lord, Lord Rochester—are key industries, predominantly transport industries, in fact; and transport industries are, of course, the main arteries of trade and commerce. In the modern world, therefore, as I see it, a strike in the transport industry is not what it used to be in the past—that is to say, just a dispute between the employers and the employed, or a dispute between one union and another, like any other dispute—though that may be the intention of those who are directly involved; it really works out as a trial of strength between one section and the rest of the community. And the same, I suppose, would be true if we had such a strike—I hope we never shall have another one—in the coal industry which, in this country, where there are no other sources of power, provides the life-blood of our whole industrial system.

I have no doubt at all that the slow strangulation of this country is the last thing that the average worker in these industries wants. The vast majority of them, as we all know, are ordinary, decent, patriotic citizens, as are noble Lords here. They do not want national ruin. Indeed, they would be horrified if such a thing were suggested to them. What they want is what they regard as justice: in other words, they want a fair deal, and that, as I see it, is just as much in the interests of the rest of the community as it is in theirs. In such circumstances, it seems to me, after listening to this debate, that the main questions before industry and the country at the present time are: first, how to ensure that those people will get a fair deal; and, secondly, and equally important, how to give them confidence that they in fact have had a fair deal, taking into account all the circumstances of the case. I am afraid that the second is likely to be a good deal more difficult than the first.

The noble Lord, Lord Amwell, in his extremely interesting speech, as I understood it, thought that the best approach to these two problems was by means of a standing economic council which was to watch the economic situation and, as required, to give wise advice to all concerned about any new developments that might occur, so that the fairest possible deal could in due course be obtained for all concerned. He pleaded that case with great persuasive power. On the face of it, I should have thought there was nothing in that proposal to which anyone could properly object. But, my Lords—and this has already been said by my noble and learned friend the Lord Chancellor—a great deal of advisory machinery is already in existence; and, with all deference to the noble Lord, I have serious doubts—as has the Lord Chancellor—whether yet another advisory body, however distinguished it might be, would do all that he hopes of it. Moreover, there is always a danger that a body so distinguished as that might slip into the position of being an arbitral body. If it became an arbitral body, I imagine it would not be acceptable to the trade unions themselves.

Then we had another proposal, rather of the same kind, from the noble Lord, Lord Salter, who speaks with immense authority on these subjects. As I understood his proposal, it was that he recommended the setting up of two bodies, one a fact-finding body—some kind of independent fact-finding body—and the other an organ of the trade unions to express trade union opinion as a whole. So far as the first is concerned, that is a matter which would require further consideration. I hope that the noble Lord will allow me to pass it on to my right honourable friend the Minister of Labour. So far as the trade union body is concerned, he knows much more about these things than I do, but I am not quite clear why the Trades Union Congress could not already do that particular job.


The first body was a purely fact-finding body without the element of discretionary opinion upon a particular dispute, which I think is open to all the objections that the Lord Chancellor expressed. So far as the trade union body is concerned, what I was hoping was that there would be such a development of organisation within the trade union movement as to enable such opinions as are sometimes expressed by the T.U.C. to be really effective to a degree that they are not effective now in determining the attitude of the workers throughout the trade union movement.


That is a matter for the trade unions, and not for me. I have no doubt that they will take note of what the noble Lord has said. Indeed, I feel sure we shall all take note of everything he has said, because, as I say, he speaks with great authority on these things. But, having said that, I must add that, personally, I cannot help feeling that the real remedy for our difficulties is to be found not in any change of machinery, but in a change of heart. As I see it, that is bound to involve—and it is no good our blinking the fact—a slow process of education, and education not on one side of industry only. First, I suggest that management, so far as they are concerned, must be ready (and I think the noble Lord, Lord Macdonald, has already made this point) to take the men much more into their confidence than has been the case in most businesses in the past. Too often in the old days—and even when I was young—the view was taken that the men could not be expected to understand the intricacies of business; and the way to satisfy them, we were sometimes told, was to see that they got their pay packets punctually, that they got proper amenities, and to leave it at that. I do not dissent from the fact that it may possibly be true that in some cases that would be the best way to satisfy them and keep them contented, but it is not the way to give them that responsible outlook which alone in the long run will make industry, whether nationalised or not nationalised, happy and prosperous.

This is becoming, as we all know—it has been mentioned to-day—more and more generally realised by the whole body of progressive employers. A science, about which we have heard a great deal this afternoon, is growing up under the name of "human relations." It has this exact purpose in mind: to create a new and better relationship between the management and the men. The science of human relations, as I understand it, means, in simple words, if I may paraphrase what was said by my right honourable friend the Minister of Labour, in a recent speech, creating that confidence between management and workpeople which can enable them all to work together with a common understanding and a common approach to the problems of industry. That is really what is comprehended in this new science.

There is, of course, no short cut to this new outlook. It involves, first, a record of fair and consistent dealing between employers and workpeople over a pretty long period, so that they may absolutely trust each other. It involves the management giving the workers frankly the facts, wherever they can be given, as to the situation both of their own firms and, so far as can be done, of the industries of which they form part. It also involves telling the workpeople beforehand (this has been stressed I think in a good many speeches this afternoon) of any projected changes, technological and others, which are likely to affect their interests. Finally, it involves taking them into consultation and treating them very much as human beings, and not merely as cogs in an industrial machine. On that point, if I may say so in passing, I was entirely in agreement with Lord Macdonald of Gwaenysgor who made it with considerable force. But I thought, as I listened to him, that he was a little out of date in his view of modern capitalism, just as he thought that Lord Amwell was a little out of date in his view of modern trade unionism. I do not think that the modern capitalist is quite as old-world as Lord Macdonald of Gwaenysgor seemed to consider him.

There is, of course, nothing new about this approach to our problems. Good employers have long realised the import- ance of taking their workpeople into their confidence. But having said that, I must add that I do not pretend that it is always as easy as it looks. It may be, and I think is, a comparatively simple matter to create a good human relationship between the management and workers in small, compact firms; but it is far more difficult, and inevitably so, in huge concerns which are nation-wide in their operation and which employ hundreds of thousands of men and women. The noble Lord, Lord Bennett of Edgbaston has said, with all his knowledge, that we have this great organisation for better or worse. But, even there, I believe that much can be done by devolution, by joint industrial councils, by joint works committees and so on, and, I say with some trepidation to the noble Lord, Lord Lucas of Chilworth, with schemes of co-partnership and co-ownership in one form or another such as are being ever more widely adopted in recent years.

As the noble Lord knows, I have long been a believer in these schemes just because they imply a common interest between those who lend their money and those who lend their labour in a joint concern. Indeed, I regard the question of status as far more important than any question of the money they get or the money that they do not get. The noble Lord, Lord Lucas of Chilworth, seemed to adopt the attitude that these schemes had never succeeded. But I remember a very successful scheme, the South Metropolitan Gas Company, which was deliberately slaughtered by the noble Lord and his colleagues in the days of the last Government. He may perhaps have read an interesting letter in the Daily Telegraph by Mr. Spedan Lewis to which I think the noble Lord, Lord Amwell, referred in his speech to-day.

The noble Lord himself, and also Lord Rochester, sounded a warning note with regard to schemes of this kind; he said, as I understood, that they must not be regarded as a panacea for all our ills. We all know that that is perfectly true. No-one, so far as I know, except an absolute lunatic enthusiast, has ever suggested such a thing. But what they can be in suitable cases is one, and to my mind not the least important, method of bringing about that better relationship which we all have in mind to create. I think I can say—and in so saying I am not conflict- ing with anything that has already been said by my noble and learned colleague the Lord Chancellor—that such schemes would, I am quite certain, have full sympathy from Her Majesty's Government. Indeed, I personally feel (here I am sure that I shall have the agreement of the House) that in this new and bewildering world in which we live we ought to rule out nothing which may bring happiness and security to the working people of this country.

My Lords, I have tried in what I have said to sketch in, I am afraid too briefly and inadequately, the kind of contribution which I suggest might be made by managements to a solution of our present difficulty. In fact it is being made in a great many cases, though it might be made even more widely. But if there is a contribution which management can make, there is equally, I believe, a most important contribution to be made by labour, and especially the leaders of labour. Above all, there are some illusions, deep-seated illusions, which must be eradicated from the minds of those who work in industry. The noble Lord, Lord Amwell, referred to one or two of them. He spoke of a popular illusion, which I certainly should not be so impertinent as to mention in your Lordships' House, were it not so prevalent outside that it cannot be ignored—that is, that the State has an inexhaustible supply of money of its own which it can, if it will, dole out to indigent industries. There seems even now to be far too little understanding, even among quite intelligent people, that the Exchequer is merely the reservoir into which flow the streams derived from profits in industry; and that if, by any mismanagement of ours, those streams were to dry up and the reservoir become empty, the results for us all would be absolutely disastrous. I ant sure that all of us, in whatever part of the House we sit, would agree with that; but it is not universally accepted.

Then there is another equally fundamental truth, namely, that producers and consumers are not different people. We are all, within ourselves, both producers and consumers, consuming either our own or somebody else's products. Therefore, in the complicated type of society in which we all live, while the workers who produce some particular commodity may, by their combined pressure, succeed in apparently making themselves better off, if the only result is to force up also the price of other commodities which they and their families wish to buy, the advantages which they gain will be largely illusory. That is a truism which is not generally recognised. Yet it is absolutely essential that it should be recognised if we are to have continued peace and harmony in industry. The real difficulty, as I see it, is how to get this type of fact across to the man who for this purpose really matters—by which I mean the man at the bench, the man in the workshop, the man on the footplate and so on.

The main weakness I suggest, with all deference, of many of the schemes which have been recommended to us this afternoon—economic councils, joint advisory councils and so on—is that they aim at tackling this job at far too high a level. It is not the distinguished members of bodies of this kind who have to be convinced. The men who take part in discussions at that level on both sides are already converted: they know these simple fundamental facts. What we have to try to do is to get at the men lower down. There, I suggest, in this slow patient process of education the trade unions and their leaders have an essential part to play. I feel that they have an immense responsibility coming upon them, in the years that lie immediately ahead of us, to give wise counsel, as indeed a great many of their leaders already do. We all know many cases of men of great moral fibre who are always giving counsel to their people, even though it may be unpopular. I am not suggesting that it is not done at the moment, but I say that it must be continued and extended, for, after all, they, and only they, are in a position to put across to their members the truth of the harsh modern world in which we live. They alone are in a position to draw the right lesson from the fuller information which we hope the managements are going to put out in all forms and industries; and they alone are in a position to convince the workpeople of this country that in the modern world we simply cannot afford disputes such as those which we have recently been experiencing; that our prosperity, to repeat a graphic phrase used here a short time ago and repeated to-day, is really balanced on a razor edge and can be maintained only if we find means of producing more at the same cost.

By that I do not mean that the British workman should work harder. In the vast majority of cases, as noble Lords know, and as the noble Lord, Lord Bennett of Edgbaston, said, they are already working very hard, and with the skill that they have always shown. I mean rather that they and we must take advantage of every new facility which science now puts before us, whether it be work study, man management—to which the noble Viscount, Lord Bridge-man, referred—or automation, a word which has also cropped up in these discussions. We must take advantage of anything which may help the individual workman, in the same time and by the same effort, to produce more than he did before.

As the noble Lord, Lord Macdonald of Gwaenysgor, said in his speech, there is nothing new or necessarily disturbing about such things as automation: they are merely a further extension of that mechanisation of industry which was, perhaps, the main feature of the Industrial Revolution of the nineteenth century. As we all know, that mechanisation has, over the period of the last 100 or 150 years, enabled this country to carry a far larger working population at a far higher standard of living than they enjoyed before. Similarly to-day, with these new inventions which are coming before us, industry itself has changed, and is changing more. There is much more diversity and complexity; diversity of product and of process; and much greater specialisation of functions. Whereas in the past there was the simple structure of managers, foremen and workers, these groups are now themselves divided, subdivided and again subdivided. There are general managers, engineers, chemists, accountants, personnel managers. The foreman finds himself alongside functional specialists of all kinds—inspectors, work study men, quality control staff and others. The new industries and new processes which are being used in the old industries call for new skills and new crafts at the craftsman level; as well as the old carpenters and fitters, there are chemical process workers, craftsmen in electronics and instrument makers; and more men are needed with high-grade skills, while at the same time new semi-skilled occupations, such as tending semi-automatic machines, have arisen.

There is, too, greater diversity of unskilled work. The old picture of large groups of fairly comparable and interchangeable people in industry who could be dealt with en bloc is, as noble Lords will know, becoming much less representative. Moreover, the character of the jobs themselves is tending to be changed at an ever-increasing rate by technological developments in industry, and this complexity inevitably brings with it greater interdependence, and greater sensitivity to disturbance. All that means, as the noble Lord, Lord Lucas of Chilworth, has rightly emphasised, that the future opportunities before is are unlimited provided that we are ready to grasp them, and, I think the noble Lord said, provided that we do not try to freeze our industrial structure into its present form; and I would add, also, provided that we do not try to cling to old ideas, old prejudices and old bitternesses. But, equally, it means that we can probably afford less now than ever before in our history to quarrel among ourselves at this crucial moment, or to waste our time, effort and money in such internecine quarrels as we have lately seen. If we were to do that, we should, I am sure the noble Lord, Lord Lucas of Chilworth, will agree (although he did not like the expression), price ourselves out of existence in competition with our foreign competitors. That is the lesson of the recent disputes, and is, I believe, the lesson to be drawn from this most valuable debate. The writing is on the wall. It is not too much to say that it is for us to read it or perish.

7.24 p.m.


My Lords, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.