Lords Sitting of 14 June 1961

Preamble
The House met at two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Sheffield
The Earl of Oxford and Asquith—Took the Oath.

ADVERTISEMENT AND DANGEROUS DRIVING
2.5 p.m.
LORD CONESFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been called to an advertisement by the Standard Triumph Company in the following terms: "You are invited to hurl the new Triumph 1200 at the nastiest corner you know … If you really take it faster that you should, you may get a bit of a tyre squeal. That's all."; and what action they propose to take to prevent and punish such incitements to dangerous driving.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, I have been informed by the Standard Triumph Company that, as this advertisement appears to have been misunderstood, they decided to withdraw it as from June 8th. Your Lordships will appreciate that Her Majesty's Government have no powers to control the terms of commercial advertisements. They hope, however, that those concerned with the sale of motor vehicles or their accessories will at all times bear in mind the importance of avoiding any form of publicity or propaganda which could be interpreted in a sense adverse to the best interests of road safety. This, my Lords, I am happy to say, generally speaking, they do.
LORD CONESFORD: My Lords, is my noble friend aware that this advertisement appeared on May 28, and therefore
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it was some time before it was withdrawn? In view of the number of road accidents caused by dangerous driving, is it not quite intolerable that a great company should employ their great resources in inciting the purchasers of their cars to drive dangerously? If such an advertisement does not fall within the provisions of the criminal law, is it not urgently necessary that the law should be amended?
EARL HOWE: My Lords, may I ask the noble Lord whether it is not necessary to have a slight sense of humour in order to read these advertisements?
LORD CHESHAM: My Lords, I was myself going to suggest that it was necessary to retain a sense of proportion in these matters. I myself would have hesitated Ito describe this advertisement as quite intolerable. I should have chosen, perhaps, the word "inadvisable", or even "undesirable"; but I do not think I should go to quite the same literal lengths of interpretation as has my noble friend. I think we are accustomed to a certain (shall we say?) overstatement in advertisements, and that the public as a whole tend to regard "incitements", as my noble friend called them, of this kind with a certain amount of reserve.
LORD CONESFORD: I agree that I do not think dangerous driving very funny. Is my noble friend aware that people have been observed on the roads obeying the instruction contained in this advertisement for this particular car? And is she further aware that the company may derive great profit from this disreputable advertisement? I am advised that it makes the strongest possible appeal to nitwits, and, in the expert view of advertisers, nitwits form quite a large proportion of the purchasers of motor cars.
LORD CHESHAM: My Lords, I am not aware, in fact, of numbers of people in these particular motor cars having been observed doing just this thing, and I should be interested to know the sources of evidence and statistics upon which the noble Lord bases his observations. He must remember, too, I think, that there is an obverse side to this particular coin, in that good handling characteristics in a motor car, particularly as regards road holding, are an advantage to road safety.
LORD CONESFORD: My Lords, do I understand from that that, provided your car has good road holding qualities, it is all right to drive round a corner blindly?
LORD CHESHAM: No, my Lords. I think this is getting a little out of control, if I may say so, because my noble friend is insisting on taking this matter quite literally. I do not believe, however nit-witted the public may be in responding to advertisements, that a very large number are so nitwitted as to do that kind of thing and obey an alleged incitement of this kind. I think people have more sense than that. The company have apparently recognised the undesirability of this advertisement by withdrawing it, and I do not think there is very much more we need do about it.

DOCUMENTATION OF TOURISTS' VEHICLES
VISCOUNT BRENTFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the fact that the United Kingdom is now the only country left in Western Europe which adheres to the outmoded system of requiring formal customs documents for the temporary importation of private motor vehicles by visitors from abroad, they will now remove this impediment to the free flow of the tourist traffic to this country.]
EARL JELLICOE: My Lords, the possibility of simplifying the current requirements is under review. I do not, however, accept that the fact that other countries in Western Europe have dispensed with formal documentation for tourists' vehicles necessarily means that this is no longer the best system in the different circumstances prevailing here.
VISCOUNT BRENTFORD: My Lords, can my noble friend accord us any statistics on this point? How much is the cost of maintaining this system to the taxpayers of this country, and what would be the estimated loss to the taxpayers if the system were abolished?
EARL JELLICOE: My Lords, I am afraid I have not the statistics for either
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of those eventualities, but it is my understanding that the possible loss to the Revenue of completely waiving the present system might, in fact, be very considerable indeed.
VISCOUNT BRENTFORD: My Lords, is that really so, in the light of the fact that no other country which has abolished this system has sustained any appreciable loss at all? So why should we?
LORD DERWENT: My Lords, before my noble friend answers, I would point out that he referred to the "different circumstances" in this country. Could he be more explicit as to what are the different circumstances?
EARL JELLICOE: My Lords, if I may take my second noble friend's question first, I think there are two main different circumstances. The one with which my noble friend is doubtless familiar is the fact that this country is an island. Therefore, both the volume of tourists and of tourist traffic in cars coming to this island is necessarily less than for countries entirely with land frontiers, and that makes a more formal control possible without imposing unnecessary and tiresome delays. The second difference is that, by and large, the combination of import duties and purchase tax which we impose on the import of foreign cars is higher than with our West European neighbours. Therefore, the temptation to abuse is greater and the gains that flow from it would also be greater. Those are the two main differences, as I understand them.
I am afraid that I am not quite certain that I retain my first noble friend's question in mind, but I think that he was asking whether statistics were available on the effect in Western Europe where the triptyques or carnets system has been abolished. I do not have details of that, but I should like to point out again that the circumstances, as we see them, are completely different for Western European countries, with their entirely land frontiers. To cite merely one statistic, I understand that in the case of Western Germany, something like 12 million cars annually cross the frontiers, and in the case of Austria something like 6 million, while in the case of this country only 60,000 cars are brought in annually by

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foreign tourists. The size of the problem is quite a different one for the Western European countries.
LORD LUCAS OF CHILWORTH: My Lords, do I understand the noble Earl to say that, because this country is an island and is therefore less attractive and has a lower volume of motor cars entering it, the practices of bureaucracy can have more leisure in which to be practiced? Do I understand him to put forward, as the real reason why we have this outmoded system, that fewer cars come into this country than cross the frontiers of Western European countries?
EARL JELLICOE: My Lords, I think that the noble Lord caught the first part of what I said right—that this is an island—but the deduction which he drew from that he did not get right. The fact is that our insular situation and the transport limitations which inevitably flow from that situation make a full customs control possible without causing significant delay to tourists. It is my understanding that the present system imposes something less than two minutes' delay in the average period to the average tourist.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, is the answer that the noble Earl is giving entirely from the Treasury point of view, or is there any question of security involved?
EARL JELLICOE: No, my Lords, the answer I am giving is not a question of security but of possible loss to the Revenue by evasion and abuse if the present system is waived. However, as I said in my first reply, the possibility of simplifying the present arrangements is under consideration.
LORD DERWENT: My Lords, may I ask whether, if so few cars come to this country, the system pays for itself or whether there is a loss on it?
EARL JELLICOE: My Lords, I cannot answer that in detail. As I said there are no statistics available of the precise cost of the present system, but it is my understanding that the abuse to which its complete waiver might well give rise could lead to a substantial loss to the Revenue.

BUSINESS OF THE HOUSE
LORD NEWTON: My Lords, in view of the anticipated length of business to-day and to-morrow, dinner will be available on both days between 7 and 9 o'clock, and noble Lords who wish to dine are asked to give their names to the refreshment department.

CO-OPERATION IN INDUSTRY
2.17 p.m.
VISCOUNT AMORY VISCOUNT AMORY rose to call attention to the need in the national interest for a more purposeful and dynamic spirit of co-operation in industry; and to move for Papers. The noble Viscount said: My Lords, I am afraid that during the past nine months I have delivered to your Lordships' House a number of disquisitions of a rather desiccated nature on the financial and trade aspects of our economic problems. To-day I should like to draw your Lordships' attention to a more human side of the same problems and, as I think, a side which is a vitally important element in our success. I refer to human relations in industry.
I do not propose to-day to analyse or to assess our economic situation. I believe that there will be no dispute that it is one that must cause us anxiety on a number of grounds. All I want to emphasise, and to ask your Lordships to agree with me about, is that it is one that imperatively demands that, as a nation, we make absolutely certain that we are giving the best account of ourselves that we can in every sector in the field of our performance. I have said often enough, I think, that I believe that complacency is our besetting national sin. I think we are very apt to consider that because something has long been our traditional way of doing things, it should remain unchanged and we persuade ourselves finally that it is unchangeable.
Over recent years, we have been giving perhaps rather belated attention to the modernisation of our capital equipment in industry and to the advancement of technical processes, and I think that it must be right that from time to time we should make a reappraisal of our performance in the field of human relations, and see if, as I rather suspect, we are not

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making the best use of what I believe is our most valuable national asset of all—namely, the 23 million people employed in industry who are of an average quality that I believe is unequalled anywhere in the world. My submission, my Lords, is that in this field of endeavour we are not raising our sights high enough, and we are accepting, as the best we can hope for, a level of performance which I feel falls far short of what, with our experience and our reputation for national unity and co-operation, when we are faced with formidable practical problems, we ought to be achieving. I think that we ought to be setting an outstanding example to the world, and I am not quite sure that we are doing so.
Let us see what seems to be wrong and what could be done about it. I suppose that industry, broadly, has three roles: first, to serve the consumer by producing goods and services as efficiently as possible, and then more specifically helping the nation by selling abroad sufficient to pay for the raw materials and the foodstuffs and other imports that are necessary to maintain and improve our standard of living; secondly, to provide a satisfactory and satisfying livelihood for those who work in industry; and thirdly, to earn a return on capital commensurate with the risks involved. I believe that success in each of those three roles calls for three things on the part of all engaged in the undertakings.
The first is positive and dynamic cooperation and teamwork; secondly, a spontaneous respect and concern for efficiency; and thirdly, pride in the job, both individually and collectively. I believe that these are the three essential elements, but when I look round to-day I am not sure that they represent really outstanding features of the present scene. To-day I am quite sure of one thing: that there is less bitterness in industry and in industrial relations than at any time during the past 100 years. But there is a terrible lot of apathy and inertia. Those, I submit, are our two enemies to-day; and they are very insidious ones.
I now propose to look rather more closely at some of the apparent defects to-day, though not in any spirit of recrimination, because we shall get nowhere unless we acknowledge freely that the
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failings we have are not the fault of any one section or side, and that many of them stem very realistically from past and now rather distant history. I will refer only to four of the problems, because this is a wide subject and I am the first speaker in the debate. I always remember a man who, speaking first in a series of discussions, said, "The section of the field that I shall take to myself to-day is God, man and the universe"—and the other speakers were not absolutely clear what was left for them.
The first problem I should like to say a word about is restrictive practices. I mention that first not because I believe that it is either the most widespread or the most serious of the practical problems with which we are faced, but because I believe that to-day it is perhaps of all the least excusable. It is a hangover from other and very different days. To-day, restrictive practices are not a protection for full employment, but a deadly menace to it. Full employment's best friend and safeguard is rising productivity; and I believe that there is gradually getting abroad a better understanding of that fact. Restrictive practices, however, are still a serious handicap in some of our older industries—for example, shipbuilding, where it is one tragic feature in the set-up of an industry that does not seem yet to have fully woken up to the fight it is going to have to save its life.
What are the remedies for that particular problem? I think that we should have, first, more education about what it is that really keeps employment full and secure; secondly, a resolve on the part of employers to prove that their policies in respect of redundancy in particular jobs, and for expansion show that restrictive practices are no longer necessary to secure the interests of their employees. The installation of new machines and labour-saving devices must show, in practice, that they lead to better earnings and conditions and greater security for those who work them.
The second problem to which I want to refer is a still more difficult one—namely, wage settlements. My Lords, since the war (I think there will be little dispute about this) the greatest single factor in causing internal inflation has been the propensity for wages to rise faster than productivity, with the result that in

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most years the rise in productivity has been more than swallowed up by the rise in wage costs. Here again I should like to make it clear that I am not allotting blame; indeed, Governments have a share, with both sides of industry, for the results that have occurred. I am afraid that once again we are entering into a period of cost and price inflation. If were to be asked what is the most serious failing in our system of wage negotiations, I should say—and I should do so diffidently, because I have had little firsthand experience of this—the absence of any specific consideration as to what the economy can stand at a particular moment in the way of increase of wages without inflationary consequences.
What seems to have happened is that the trade unions in a particular industry have, quite naturally perhaps, sought as big a rise as possible, and employers, in conditions of very full employment, have given as much as they felt they could pass on; and in some cases the Government, sometimes rather indiscriminately, have exercised their influence in the direction of peace and appeasement. The result has been that excessive increases have caused further price rises and further inflation; and then the Government have had to use such economic controls as were available after the event to rectify the damage done. In Holland, and I believe in Sweden, there is consultative machinery to ensure that consideration is given to what overall percentage of increase can safely be accorded before argument is entered into as to the division of that increase between the various sectors of the community.
I am convinced that we must work out some system between the trade unions, the employers and the Government so that, to my mind, this absolutely essential operation should be carried out in a calm, responsible atmosphere. I hoped that basic guidance and advice of that kind might be issued and accepted through the Council of Prices, Productivity and Incomes, as an authoritative and neutral channel, because I think that for it to issue from some such channel as that would be better than for it to issue directly from Government channels. I am sure that if once trade unions and employers and the Government could agree as to the need for such guidance—and the technique has been called in
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some quarters a "guiding light"—and that it would be useful and, indeed, the only sensible basis for subsequent free negotiations, then I am sure that a practical method could be worked out.
Lady Rhys Williams has suggested that it might be done as follows. As a basis, there should be the preparation of an assessment of the increase in national productivity for the preceding half year, carried out by a group of impartial statisticians, appointed jointly by the Government, the T.U.C. and the employers. Then the figure that was agreed on there would be expressed as the percentage increase on the global purchasing power of the community which could be carried without increasing inflationary pressure and so endangering the economic stability of the country and our balance of payments. There would be a further review at the end of every six months. Publicity would be given to the fact that any increase claimed above that percentage by one section of industry would mean that other sections would have to fall below the average, or stability would be frustrated. I believe that it would be well worth trying to get agreement on something of that kind.
I know very well the difficulties, and particularly the danger, that whatever percentage was proposed would in fact tend to become the minimum and not the average of increases given. But if agreement cannot be obtained on some such system, then I believe the Government would be forced to devise some more direct remedial action when aggregate increases went beyond what the economy could stand. They might, indeed, even be forced to evolve some device such as a payroll tax, falling not on the employer but on the employee's wage.
If wage increases are to be considered in the light of national requirements, then so, in equity, should profits, too. If profits in the aggregate are excessive in the light of increases in productivity and increases in the capital invested, then probably profits tax is the only feasible way of dealing with that situation.
Before leaving problems of wage settlement, I believe that our present rather ramshackle system of arbitration needs some re-examination. I would say only three things there. Personally, I

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believe that voluntary arbitration, voluntarily accepted, is much better than compulsorily imposed arbitration. But whichever system is accepted, I think the results of it ought to be accepted as binding by both parties. Secondly, I think arbitrators should give attention to the guidance to which I have referred above, as to what overall increase can be absorbed by the national economy. It may be that we ought to work towards a kind of system of a college of arbitrators who would build up gradually a code of practice.
Thirdly, I feel that an arbitrator's job ought to be differentiated fairly clearly from the conciliator's job—and there is a place for both. The arbitrator should think of what is fair and justifiable, and not what he thinks both sides would necessarily accept. I believe some of the confusion we have got into sometimes has been because there has been a confusion in the minds of arbitrators as to what their true role is. I sometimes feel that the Minister of Labour has a dual responsibility which must be extremely difficult to carry out. As a member of the Government, he shares responsibilities for the promotion of the Government's economic policies. When disputes break out, he is then responsible particularly for conciliation. I do not know whether it would be possible here, but one can see that there are some advantages in the system followed in some other countries where the two functions are separated, with the responsibility for conciliation placed upon an independent board appointed jointly by the employers, the trade unions and Government.
The third problem to which I should like to refer is unofficial strikes. That is a phenomenon to which it seems this country is particularly liable. The loss caused to third parties is deplorable, frustrating, and enormously damaging to the national economy. Often these disputes are not a battle by the employees against the employers, and more often than not exports are permanently damaged by them. Unofficial disputes in the docks—an industry where labour relations have always seemed very difficult—and in shipping, shipbuilding and the motor industry, have cost the nation tens of millions of pounds directly, and an
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incalculable amount indirectly, because trade has been permanently deflected. Buyers will not place orders for ships in many cases owing to uncertainty about delivery promises, and there seems an alarming tendency on the part of some shippers to abandon the Port of London in favour of Amsterdam, Hamburg and other places, owing to these sectional strikes. I submit that we simply cannot afford to put ourselves under that handicap in the competition for exports in the markets of the world. Inflictions of that kind really are self-inflicted wounds.
Now what are the remedies there? I think, first of all, a more acute realisation of the long-term damage that can be caused to the nation, and, secondly, general agreement that a contract must be sacred, and that no change in circumstances justifies a breach. The law should provide penalties for a breach of contract. by whomever it is carried out. If breach of contract is once condoned, suggest that that must be utterly destructive of any hope of mutual confidence or progress. Here, again, I believe we have something that we may find worth learning from the practices in Sweden, where I understand that a contract is regarded and accepted as something completely binding by all parties, and penalties are imposed for breach.
Thirdly, I would suggest that there is a strong case for the T.U.C., employers and the Government, examining our present procedures, or lack of procedures, for action precedent to a strike, and to see whether we can agree on a kind of national code of practice there. The origin of some of these costly stoppages have really been so ridiculous that they must have been avoidable if discussions had been held in a sensible atmosphere before action had been taken.
The last problem I want to turn to is the problem of the day-to-day relations between individual employers and employees. There, I am sure, we shall all agree that the essentials are good leadership and good communications. There is not substitute for personal leadership and no substitute for taking pains. The "boss" must be identifiable and approachable, and I think it is perhaps significant that the industry in which industrial relations are second to none is agriculture, where the link between the boss and the worker is closest. In the

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case of the big firm, personal links at all levels must be created and jealously safeguarded; and here some of the biggest firms have an excellent record. My noble friend Lord Fleck, if I may say so, has himself rendered great personal service in that field. I have mentioned the need for better communications between management and the men on the shop floor. Many unofficial stoppages, like military disasters, have been caused by bad communications, and the responsibility there lies first and foremost with management.
My Lords, joint consultation is not something to be talked about but something to be practised as a matter of day-to-day routine. As an example, I think it most important that workers should be told in advance what changes are necessary, and why, and then consulted in all matters that concern them as to how these changes can best be made. The longest warnings possible should be given in the case of the looming up of the likelihood of redundancies. In a nutshell, workers should be taken into confidence by management, and in everything that affects employment, conditions, welfare and security, they should be treated as adult, responsible human beings. I think those of us who are employers would do well, before we criticise any of our workers for showing perhaps not so much interest as we should like in their work, to ask ourselves whether we, on our part, are doing everything we can to make that work something in which it is possible to take an interest.
That profit-sharing has a useful part to play in positive co-operation is something about which from my own personal experience, I have no doubt whatever. Profit-sharing, however, is not an automatic means to good relations but a natural manifestation of the right spirit when it has been created—a sharing in the fruits of joint achievement. Another practice I should like to see making more progress is the adoption of a contract of service—that is to say a contract under which the length of notice will be related to the length of service. I consider that, in general, a week's notice is unnecessarily short to-day. But I believe that she terms of the contract, whatever it may be, should be equally accepted by both parties.
To-day there are a number of voluntary associations that are doing excellent work in this field of industrial co-operation: the Industrial Welfare Society; the Industrial Co-partnership Association, of which my noble friend Lord Fleck is President; the British Institute of Management, and the British Productivity Council, to mention only four. Might there not be some advantage in future if these bodies were to same extent to pool their resources and efforts? Because these problems, though there is no single answer to them the approaches to their solution have a good deal in common.
Before concluding, I should like to pay a tribute to my right honourable friend the Minister of Labour for the initiative he has recently taken to bring employers and unions together in certain fields to consider these problems calmly and constructively. If I may respectfully say so, I believe that my right honourable friend is an excellent Minister of Labour, and I wish him well in these tasks in which he is so patiently engaged. But I hope they will receive the support, the wholehearted support, of both sides of industry.
My noble friend, Lord Fleck, in his recent Fawley lecture suggested the timeliness of new high-level initiative on the lines of the Mond-Turner talks of over 30 years ago. I agree with him. The Mond-Turner talks failed because at that time understanding of the problems was not broadly enough based: they were before their time. But I hope that my noble friend will talk to us later this afternoon, perhaps about his ideas, speaking from unrivalled experience. But my own personal view is that a new initiative at the highest level and in the broadest field might well inspire a stimulating response. I hope, therefore, that my right honourable friend the Minister of Labour will see whether he can encourage these useful talks which he has already initiated to broaden out into something far more ambitious. We need a new code of conduct appropriate to our situation and our problems of to-day. I feel myself that if we fail to make progress along these lines then we may have to fall back on considering a Royal Commission on Industrial Relations. But that, I think, would be a far less preferable line of action than tackling them through a spontaneous

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joint initiative, because, for one thing, a Royal Commission takes so long. But if a response is to be attracted, it will not be enough to appeal to purely selfish motives, such as higher earnings, easier conditions or of "never having had it so good". The need is for an act of faith, and of spirit, and of leadership on the part of responsible leaders of the employers and the unions to work out a new basis for constructive co-operation at all levels.
My Lords, I am sorry if I have spoken too long, but I sincerely believe that the desire that this nation should give a good account of itself is widespread throughout the country. There is plenty of good will, but it is latent and passive. As always, there will be a response to leadership and example. Let us, therefore, bury hatchets, forget old suspicions and rivalries and cast away outworn attitudes. Let us join our strengths together in a real concerted national effort. If we do that with a single-minded determination that British industry shall lead the world no nation will surpass us in the level of our performance. I beg to move for Papers.
2.50 p.m.
LORD CITRINE: My Lords, the terms of the Motion which the noble Viscount, Lord Amory, has proposed to the House are these:
"To call attention to the need in the national interest for a more purposeful and dynamic spirit of co-operation in industry."
In thinking over this Motion, I found it difficult to conceive that any Member of your Lordships' House would feel unable to support it. I am sorry that I cannot say the same about certain features in the speech of the noble Viscount. Nobody doubts for one second his transparent sincerity. I have known him sufficiently long outside this House to know he is the last person in the world who would wish to create any kind of feeling which would increase rather than diminish the difficulties of establishing good industrial relations, which he described as being better to-day than they have been for a hundred years. I had framed my remarks on the assumption that our attention would have to be concentrated entirely upon the means of securing the very desirable end put forward in the Motion. Instead of this I find myself somewhat bewildered with
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the number of far-reaching proposals which the noble Viscount has succeeded in concentrating into his short speech, but which, I assure your Lordships, would provide matters of the most acute controversy in industry itself, and particularly in the trade union movement.
None of us, I think, would differ fundamentally from the statement that inflation is a very bad thing for the national economy. Nobody, I think, could doubt that there has been a tendency for wage increases to exceed the actual increase of productivity; nobody, I think, would challenge that, least of all myself. But some of the suggested ways of dealing with that situation, I think, would not contribute to industrial harmony. The noble Viscount, in the earlier part of his speech, spoke about trying to bring wage negotiations into a closer relationship with the actual increases in productivity in the national economy. And he, at a later stage, referred to the efforts of the Council on Wages and Prices. Let us just see what happened to that Council on Wages and Prices. It was appointed by the Government against the desires of the trade union movement. It was appointed against advice which I myself gave to the Government, as one of those who were consulted from the point of view of the nationalised industries. The natural result, to my mind, was that the trade unions boycotted the National Council on Wages and Prices.
"Three wise men" were appointed, but their wisdom was not sufficient to let them stay on the job very long, because one after the other they retired. While I am not for a moment suggesting that they have not been succeeded by equally wise men, I am quite sure that that method will not succeed in resolving this problem. It would be a most desirable thing if some barometer could be found which would measure the productivity in industry. But a question that I raised in my maiden speech has never yet been answered. When we talk about increase in productivity, are we talking about productivity of the country as a whole or of particular industries?
VISCOUNT AMORY: The country as a whole, I imagine.
LORD CITRINE: It would follow, then, that if particular industries were in a healthy position, having increased

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output very considerably and being well able to afford wage increases to employees, no wage increases would be paid because the general productivity had not risen by the margin that that particular industry had. Surely that follows logically?
VISCOUNT AMORY: I did not go so far as to say that. What I said, or meant to imply, was that industries where productivity had increased very greatly indeed must themselves bear in mind the fact 'that their increases might be exceptional and that the other sections of the economy could not produce as big increases as theirs; and therefore if they took the full benefits of their increases the others would have to take a good deal less.
LORD CITRINE: That is a very wide consideration, and frankly I should have preferred the opportunity of reading carefully in the OFFICIAL REPORT what the noble Viscount said rather than try to follow it in this rather discursive way.
I raised the question in my maiden speech as to whether industries which had taken special steps to urge their employees, which had equipped themselves with the most efficient and modern machinery and the best means of production—in other words enlightened industries—were to be debarred from making commensurate increases in wages merely because the national income might not have risen during the period, or might have risen only very slightly. I never had an answer to that. It seems to me that is a fundamental question. Is it going to be accepted by the general body of workers that those who have been urged by particular managements and particular industries to give of their best in that industry should then be told at the end of the road, "We are very sorry, but to give you an increase of any substantial amount might damage the national economy, because of the fact that the national economy as a whole has not advanced in the same way"? It hits right at the very incentives that we have been trying to build up in industry.
This whole business of wages is as higgledy-piggledy as it can possibly be. Anybody who has had first-hand experience of wage negotiation knows that, without my having to tell him. There is no scientific relation whatever between
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the proceeds of particular industries and the wages they pay to their workers. There may be exceptions, but at the moment I cannot call them to mind. Whether an attempt to set up some machinery whereby more exact measurement would be possible in regard to the improvement in the national economy—a very desirable end—could possibly be accepted by industries as a whole, I very much doubt. I have heard the references to Holland and Sweden before. I am not quite sure that they go as far as the noble Viscount seemed to imply. Certainly the impression made upon my mind when I read summaries of their legislation a year or more ago was that their industrial arrangements were not quite so complete.
The trade unions in this country have not given to any central body, whether the Trades Union Congress or anybody else, the right to determine their basic policies for them. They hold to their autonomy, their self-government, with very great firmness and tenacity. I was going to say, had I followed the remarks I had prepared, that I think one of the fundamental weaknesses in our country is that we have not the centralised leadership, either on the employers' side or on the trade union side, which we need to face the situation. I cannot develop that point because I have been carried in a somewhat different direction. But I am quite certain that neither the British Employers' Confederation nor the Trades Union Congress possess the power to determine the policies, particularly in regard to wages, which should be pursued in the separate industries that they broadly represent.
That is a fundamental difference. It is one which I fervently hope will be overcome, because I infinitely prefer what I might call central leadership by informed and broadminded men to the more or less parochial leadership that we had as a consequence of the evolution in industry, both on the employers' side and on the trade union side. But it would require a tremendous change to put the Trades Union Congress as a central body in a similar position to the central bodies in Holland, Denmark, or Sweden.
I believe that trade unions would be a little startled to think that it has ever been in the noble Viscount's mind that

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one of the remedies to be applied, in case by some chance the signs of inflation occur because of excessive wage increases, would be to put a tax on employees' wages. That is a startling proposal. I am not for one second saying that some disagreeable things may not have to be done from the point of view of the Trade Union Movement if inflation tends to get out of hand. But I cannot help repeating what I said on a previous occasion: that inflation over the post-war period and over a considerable part of the life of the Conservative Government was apparently so prosperous a thing that it was capitalised at the General Election and everybody was told that we had never had it so good". That, to my mind, was dodging a serious issue. All individuals by means of hire purchase schemes of one form or another, have been urged to put their future earnings in pawn. That is the outcome of it. I know that in the hurried way in which I am trying to refer to this point that is utterly inadequate as a description of hire purchase schemes, but, broadly speaking, people are mortgaging their future. That is what is happening, and I am not sure that it is an entirely desirable thing.
Then, in regard to arbitration, surely the noble Viscount knows, as Members of this House know, that the question of compulsory arbitration with legally binding decisions is something that both employers and trade unions have instinctively rebelled against throughout their history.
VISCOUNT AMORY: I am sorry; not compulsory (I said I did not like compulsory), but voluntary arbitration.
LORD CITRINE: What happens if one or other of the parties does not go to arbitration? Then you are not a single bit further advanced. The organisation will still say, "We are sorry, but we will not go to arbitration; we will fight it out." In that sense they are no further advanced at all. There are plenty of means for voluntary arbitration available to-day. I cannot help remembering that, so far as any approach to compulsion is concerned—and there can be a case made for compulsion—the British employers were desirous of getting rid of what they regarded as the shackles in that particular respect.
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Then the noble Viscount dealt with something about which we are all troubled, the unofficial strike. Do let us remember that in this country unofficial strikes are not out of proportion with what takes place in other countries. Is there any substantial difference from the point of the national income whether a strike is official or unofficial? There are many other features, and I think undesirable ones, in regard to unofficial strikes as distinct from official ones, but so far as loss to the economy is concerned it is not materially different. Let us not forget that in that Mecca of high earnings, the United States, only a year or two ago they had the longest steel strike in their history. It far transcended the number of days lost by strikes in the post-war period in this country, even allowing for the differences in the population and persons employed.
I could not, and would not, wish to challenge the assessment of damage that is done by means of strikes, whether official or unofficial, to the national economy. I would not do so because I know what a fool's game it is in the long run. But we have yet to discover the means whereby we can bring home to working people a real understanding of that fact. I share with the noble Viscount the view that it would be a good thing if people in industry could be educated up to the point of a full realisation of that fact.
In regard to day-to-day relations in industry there is the question of better communication. That strikes a lamentable note on both sides, between the trade unions and their members and between the employers and their workers. Communications exist in a commendable measure in particular firms, but, speaking generally, they are almost non-existent. More rows take place because of bad communications between the management and the workpeople, and between trade unions and their members, than I think people realise. I think it is known that for many years I have been an ardent advocate of joint consultation —I mean real consultation, and not lip service. I am sure that, encouraging as post-war progress has been in that respect, it would be much greater if the people at the top of industry made it part of their industrial faith and took a really active part in promoting that kind of relationship.

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I see that it is thought that it might be beneficial to have something in the way of another Mond-Turner conference such as took place in 1928. I should be in favour of that. I took part in that conference but I do not know whether it has ever been shown why the practical proposals made between Lord Melchett's industrial group of employers, on the one side, and the Trades Union Congress, who were engaged officially in those discussions, much against the wish of a considerable portion of their members, were not carried out. I do not think the reason has ever been properly ventilated. The real cause was jealousy on the part of the employers' organisations. There was no liaison, on the one side, between the Federation of British Industries and the then National Employers' Confederation. Each was keen on preserving its own functions.
I tried hard, by personal consultation and also in the official meetings that we had, to see whether there could be one single, all-embracing body which could be formulated to deal with these problems, because how in the name of goodness can you separate consistently and right through, so-called labour problems from economic and financial problems? I have never been able to do it. Yet I found my task impossible. What happened was that an arrangement was made that we should write to a particular address (I cannot remember now whether it was the Federation of British Industries) if the question appeared to be a commercial question, and to another address if it was a so-called labour question. Then the two employers' bodies would have a meeting, and they would determine to which section the matter should be referred. Frankly, that is just lamentable, and I hope it will never be repeated. I would endorse the view that a national conference capable of examining all the industries involved in this should be called. I would give it my certain and sustained support.
Let me turn for a moment to another phase of this subject. Looking at this Motion it seemed to me that there were three major obstacles in the way—apathy, suspicion and hostility. The noble Viscount has referred to apathy, and I think it is not something that can be levelled merely against workpeople and management: it permeates our society. The thinking, the hard work, the attend-
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ances are always left to the faithful few. I am not sure that such a stricture might not apply to assemblies with which we are all acquainted. The average worker is primarily concerned with his own domestic problems and the other small problems of life. He has not the least realisation of the dangers of inflation. He does not understand that it is possible for the economy to get out of hand and for savings to be destroyed overnight, and perhaps for something not dissimilar to the inflation of Germany in 1923 to take !place in this country. He has a blissful confidence in the ability of our nation to get out of any trouble. While that is very comforting in war time, and a great psychological reserve to fall back upon, it is not a good thing when we are dealing with these questions of industrial and economic policy.
"Loss of exports!—we will talk about that when it comes round to us." That is the way they think. We in this House all know perfectly well that this country cannot maintain the standard of living of its people unless it is able to export commensurate with the amount of imports we need for our industries and to feed our people on the higher standard of living. We all know that. But, so far as my observation goes, the average worker is not in the least worried about that. The driving force in the trade union movement is what is called the militant members—the members who go to the branches, the members who act as shop stewards, the members who, in other words, take a first-class active interest. Those are the people who ultimately control policy in the trade union movement, however it is evolved. They are suspicious; they do not acquit employers of any kind of personal motive, financial advantage or anything of that kind in proposals that are put forward from time to time. And while it heartily agree with what the noble Viscount has said, that into the evolution of these conditions there come memories of things that have happened years ago and have now completely disappeared, they are a prejudice to thinking in the approach of the more militant trade unionists.
Bosses v. workers!—that is a very common cry. There is an assumption there that there is no common interest between the two. They even distrust their own officials. And when a not inconsiderable part of the time of trade

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union officers is spent in trying conscientiously to put forward policies to the benefit of their members, they find themselves abused and their motives questioned. That is a very common experience. I take no delight in referring to these things. I am merely trying to indicate some of the obstacles that stand in the way of achieving the purpose of this Motion. I am not, I hope, being interpreted as meaning that I associate myself with the view that all the trouble comes from the Communists. It does not. This sort of attitude of mind existed long before the Communist Party was thought of. There is not the least doubt about it, the Communists are organized for it, and, I think, to a very large extent have been financed in the process from abroad. They are organised to exploit legitimate grievances and to create those that are not so legitimate, because they honestly believe that the interests of the workers and those of the employers are irreconcilable. As a matter of fact, I should feel a little more at home on this point if we were dealing with the debate on ideologies that is to follow this one, because it enters into this problem very deeply, more deeply than is perhaps recognised.
Take, for instance, what happened at the International Labour Organisation last year. We all have had circulated to us (or, at all events, it is available in the Office) the 1960 Report of Her Majesty's delegates 'to the Conference of the International Labour Organisation. At that Conference, among other things, they were dealing with a recommendation which was designed to promote close co-operation between employers and workpeople and, indeed, in another respect, between Governments and both those groups. What happened? The motion was carried no one voted against, but 34 delegates abstained, including, to my surprise, the employer representative of the United States. But the whole of the Communist bloc abstained. And why did they abstain? In the words of the British delegates who were there:
"The explanation given by the Communists for their abstention was that the instrument offered"
now notice these words—
"the possibility of engaging in class co-operation which, in fact, prevents the workers from fighting for their rights and for better living and working conditions."
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Now you perceive the connection. That is a genuinely held belief on the part of the Communist Parties in every country in the world—I repeat, a genuinely held belief—and they work assiduously and continuously inside the trade union movement to get that belief spread. So I think we can see that there are some obstacles in the way.
They believe in what has been called the class war, but what I think could more properly be called the class struggle; they believe that that cannot be ended under so-called private ownership, and can end only at such time as when a classless society has been established. I might say that in my visits to Russia I did not succeed in finding that classless society. I wrote a pamphlet in 1927 going into great detail and showing what was happening, because people were quite oblivious to it. Having re-read that pamphlet, I would say that in every essential the situation is the same to-day; there is no difference in the approach. Continually the Communist Party is working inside the trade unions, first having tried to defeat them, to split them, and more latterly to capture them. In some cases, as your Lordships know, they have taken advantage of the electoral weakness of trade union machinery. They have been able to get into positions of influence inside the trade union movement. That is particularly true of the shop steward movement. There was a time when it was attempted to create that movement as a separate movement from the trade union movement, and I spent a good deal of my energy in my trade union days in trying to combat that.
Most of your Lordships will be familiar with what happened last year in the electricity supply industry, where, despite the official policy of the unions negotiating with the nationalised Boards, an unofficial committee laid down a date for a strike to take place. It led to some internal dissension, and I hope that eventually it will lead to the establishment of greater trade union discipline. But there it was, and a strike might easily have taken place. I read only a week ago in the Guardian a statement by a man whom I highly respect and whom I regard as one of the most courageous trade union officials of his day, and that is Mr. Carron, the President of the Amalgamated Engineering Union. He said,

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according to a brief report, that the menace of a small but growing group which used subversive and disruptive propaganda to try to upset the Constitution of the country should not be underestimated. Then he went on to say:
"… if we wish to preserve our way of life we must be prepared to fight for it. The battle-field is located in our workshops and factories."
I do not want to develop this theme further, my Lords, although much can be said about it. It amuses me now, and again to see in certain quarters a denial on the part of a Communist trade union official that they have anything in the way of tutelage as to what policy they should pursue. Good gracious me! I have seen it denied that there are so-called advisory committees set up by the Communist Party. That does not take in any experienced person: but the general public, of course, and particularly some trade unionists, are easily gulled in that respect.
I have spoken about the capture of certain trade union official posts because of the electoral weakness of trade union machinery. I think there is here a case for the Trades Union Congress to look at very closely. It might even be that the legislation which is now existent in Australia could furnish very valuable experience. There were certain Communist-dominated unions there which were continually causing trouble. As a result of legislation—the Industrial Courts Act, I think it is called, or some such analogous name—ballots can now be taken under the auspices of the Registrar. The outcome is that the Communists have been cleared out and, perhaps for the first time, ballots take place on a basis which enables the average member to vote to the extent and in the nature that he wants.
My Lords, I am sorry that the noble Viscount took this line, because it "knocks cock-eyed" my sequence. That is a great handicap. I find in your Lordships' House, those of your Lordships who do speak endeavour, in advance, to understand your subject very well, and to prepare what you are going to say. As I look at my notes, I find myself in the position of having to slice out sections which I should dearly love to keep in.
SEVERAL NOBLE LORDS: Go on!
LORD CITRINE: No, I will not do that. I have a tendency to overdevelop things in which I deeply believe, and I do not want to do that.
VISCOUNT AMORY: May I interrupt? I do so only to say to the noble Lord that I am so sorry if I have in any way thrown him off his balance. I am just wondering whether he misunderstood me over what I said in regard to a payroll tax. I hope he did not think I was advocating that. I should regard it with consternation if it were to be carried out. I mentioned it as an example of the kind of direct action that I fear Governments might he forced back to if inflation got out of hand and no other action was taken. But I want to make it absolutely clear that I personally would regard such a device with consternation. That is why I was emphasising the importance of voluntary arrangements to tackle these problems, which would make that kind of thing entirely unnecessary. I am very grateful to the noble Lord for giving me an opportunity of, as I hope, removing a misunderstanding.
LORD CITRINE: I should be very sorry to misrepresent the noble Viscount, whom I have known quite well and have very greatly respected from the date of our first meeting on a trip from New Zealand to San Francisco over 30 years ago. I am not inclined to just pick up a sentence, so I will very carefully read what he said previously; and I am sure all of us are indebted to the noble Viscount for what he has just said.
I ask myself time and time again how we are going to achieve what is called for in this Motion. I do not think there are any new methods available to us. It is a matter of plodding on with the ones we see are good in particular places, and where we have some experience to guide us. It is an uphill task, and a difficult one, as all educational measures eventually prove to be. But personally I am not discouraged by what one has seen in the post-war period in the way of consultations which have taken place at national level—bodies like the National Production Advisory Council, the National Joint Council, the meetings at the Ministry of Labour between the employers and the trade unions, the Training Council, and so on. I think

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all those are to the good and represent, if your Lordships could realise it, a very great change of mind on the part of trade unionists at the top level. It is not so noticeable at the workshop level, and that, of course, is where the problem really arises. I cannot see British industry succeeding (I am not talking of the short-term view but of the longer-term view) without a spirit of co-operation such as the Motion calls for. I believe that there is a wealth of knowledge and a wealth of good will in working people if there is a chance of giving it expression; and I think that it behoves all of us to try to counter, if we possibly can, the misrepresentation that tends to frustrate that spirit from gaining expression.
One of the things that appals me is that in this post-war period of the twentieth century, when all these measures are available for consultation, we still have employers who will not recognise bona fide trade unions. The other day I received from the Trades Union Congress a six-monthly account of what it is doing. I was appalled to find from that statement that the National Union of Bank Employees and the Guild of Insurance Officials are still at variance with particular banks. I do not like referring to names, but I do not want to appear to stigmatise banks as a whole, and so I had better give them. They are: Martins, the National Provincial, the Westminster and the Yorkshire Banks; and certain insurance companies: the Commercial Union, the North British, the Friends' Provident Century and the London and Lancashire. I do not know that all of those companies were parties to the discussions with myself, but over 30 years ago I had discussions on this subject with the insurance companies. I am not sure of all of them, but they were with the insurance companies. To me, it is shocking to find still in this position people who ought to be concerned, not merely with the results and the convenience to themselves of their action, but with the wider influence it has. It encourages people to think that employers deal only with trade unions when they are forced to deal with them, when, by weight of numbers or power to cause trouble, they are ready to sit down in conference. That is not my conception
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of the relationship to-day by any means, as all your Lordships know; but what is being done, and the way in which such a refusal to negotiate can be exploited, I think, is bound to do a great deal of damage.
Company relations with employees have been improved enormously, but I should just like to throw out this thought. Nowadays, everybody realises the need for technical training. We have had debates in this House, and there is a National Training Council which has been set up and which is actively at work. But would it not be a good thing to go one stage further? Where young workers are concerned, whether they are apprentices or not, should it not be an elementary duty to instruct those apprentices in the policies of the company by whom they are employed, the purposes of the company and the labour policy of the company, rather than allow the minds of those young people to be filled up with all kinds of stories and distortions? I think that is something that might be thought about.
It is about time that I ceased to bore your Lordships, but we are here on a subject that traverses such a wide range that it is almost impossible for me, who have been saturated in it for so long during my life, to avoid it. As far back as 1919, Ernest Bevin and I, separately and without any kind of communication one with the other, put forward a proposal for a "General Staff" for labour. We did that quite separately. It was one of those remarkable instances, where he and I thought the same without any measure of co-operation whatever. It was extraordinary. But the present General Council was (what shall I say?) some kind of a product from that thought, but it has never been carried out to the extent that could really provide a decisive leadership in the Trade Union Movement. The Trades Union Congress leadership has been weakened at almost every successive Annual Conference in recent years. I have sat in the balconies and writhed time after time when I have seen a wise and constructive policy put from the platform and defeated by the delegates on the floor. I could give many instances of that sort of thing happening, and I think it is lamentable, because I do not believe that really broadminded policy can ever come from the bottom. It must come

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from the top, from people who are capable of viewing the whole field and have the relevant information to guide them in their decisions. I believe that leadership of that kind on the employers' and the trade unions' side is an essential of our modern organisation in industry.
Therefore I should hope that the first principle, as I see it, would be to reestablish the leadership of the Trades Union Congress. They have a new Secretary, a man who was appointed in my day, a man of high education with a double First at Oxford. He is a man who has the courage to express himself, however unpopularly; a man who will have an uphill battle to try, bit by bit, to re-establish that leadership which I think has gone so much by the board. I realise that this may entail some voluntary sacrifice on the part of the individual unions in regard to their autonomy. I know that this is a problem not for this House but for the trade unions themselves, but I also know what a great effect this leadership would have on the economy of this country, on the relations between employers and trade unions, and on the workpeople. Because of that, I do hope that the unions will concern themselves with the matter.
In three months' time I shall have been a member of the same trade union, now a little under the limelight, for 50 years. It does not seem like 50 years to me, but the calendar shows that it is 50 years. I think that must be my excuse for making suggestions to my trade union colleagues who will have to face up to a problem which is a real one; and those other aspects of the question raised by this Motion of the noble Viscount, which he mentioned in introducing it, can only adequately be dealt with if some measure of reorganisation on the trade union side is undertaken.
3.33 p.m.
LORD FLECK: My Lords, I rise to support the Motion which has been introduced by the noble Viscount. As this is the first time that I have ventured to address your Lordships' House, I crave the indulgence so generously and traditionally given to one in my position this afternoon. Many of your Lordships, in coming to this House, come fortified with the disciplines and the customs of another Parliamentary place.
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I have had no such experience, and therefore I ask a great measure of indulgence when I speak to your Lordships this afternoon. Another tradition of your Lordships' House, I understand, is that a maiden speech should, if possible, deal with an uncontroversial subject. I think that this Motion, asking for purposeful, and even dynamic, co-operation can surely be classed as as uncontroversial as any Motion could well be, and I hope that I shall not offend that tradition of your Lordships' House.
The Motion seems to me to be very timely. It is true, as the noble Viscount said, that there is no bitterness in industry to-day. We are, fortunately, very free from that. But while there is no bitterness, there are quite a lot of discontents, so it is wise, I think, that we should try, by this purposeful co-operation, to remove a number of those discontents. We are fortunate that to-day the old-fashioned lock-outs are practically non-existent. I use the word "practically"; there are some that are somewhat near lock-outs, but basically, I think, they are practically non-existent. But we cannot say the same about strikes because, as we know, strikes seem to be showing a tendency to spread to different classes of workers. However, let us, as the noble Lord who spoke last said, bear this in due proportion.
If we look at it statistically, I believe that there was only something of the order of one-tenth of 1 per cent. lost time by way of stoppages during the whole of 1960. That is a very good record and one that, statistically, we can look upon with a degree of complacency. Nevertheless, having said that, I would say that the most objectionable thing, and the most troublesome thing, about these strikes, lock-outs (if there are any), and apprehended strikes and lock-outs, is the interruption of the rhythm of production. That is the thing that makes them so objectionable and so costly, as was indeed mentioned by the noble Viscount when introducing his Motion.
I am not going into the same kind of detail as the last noble Lord did in his remarks on the noble Viscount's introductory speech. Rather would I address myself to possible ways and means of improving this purposeful cooperation that we are all so much seeking. Right at the base, the foundation,

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of increased co-operation I would put this matter, already referred to, of communications and joint consultation. It is vital to the whole industrial structure that these communications and joint consultations should be in operation not only when there are troublesome questions to be dealt with but continuously throughout the whole course of the year and the whole course of our industrial activity. That is not only the time when we deal with troublesome questions—and undoubtedly such will have to be dealt with—but it is the time when we can, and should, deal with the prospects and the thoughts that are in the minds of all levels of management. I try these days to refrain from using the word "employers" or the word "employees" Most of us are employees: what we are dealing with is different levels of management and different levels of operations. Therefore we should pursue this policy of joint consultation continuously, and throughout all our operations.
Joint consultation is a simple concept. It has the further virtue that if it is applied sincerely it is seen to be applied sincerely. That fact has a very far-reaching effect on our industrial people throughout the whole of our industrial structure. It is very valuable, from that point of view, that sincerity in joint consultation comes to the top and it is easily seen whether the operations are being conducted sincerely or not. I would add that joint consultation is not only a science; it is an art. It has to be studied carefully; it has to be applied with wisdom, and it has to be applied with great skill. I hope that your Lordships will not take it amiss if I say that joint consultation can really be bracketed with charity in the Epistle to the Corinthians: we can truly say that joint consultation will be good only if it "suffereth long and is kind, is not easily provoked, and thinketh no evil".
Now a word about the way this joint consultation actually works. I would say straight away that no one is clearer than I am about the wisdom and the necessity of using the trade union channel. That is essential throughout our whole industrial structure, but I ask my trade union friends not to insist that the trade union channel is the only one for joint consultation. There are others to which I
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would ask them to give consideration—channels that would not be in any way in opposition to the trade union channel, but complementary to it. I have in mind works councils, which, in my experience, permit a continuing system of joint consultation of great intimacy between all levels of management and all levels of the people who work and produce in industry. I know that there are criticisms of works councils. Obviously, they have some limitations. We cannot use them in dealing with matters that are the subject of agreements or negotiation with the trade unions, but there is any amount of other matters for which these councils can be used. They can be very effective in keeping the various levels of management in touch with what is going on in each other's minds and with what are the likely things for the future.
I would go on to another matter, which was mentioned by the noble Viscount—that is, financial co-operation. I am one of those people who thoroughly believe that after a person has served in an industry for more than a thresh-hold period he has a right to regard himself as belonging to that industry. Therefore I believe that, if there are any rewards from that industry, a portion of them should be given to the person concerned, in addition to the normal good wages or salary that is indicated by our normal social and economic structure. So that I am a believer in profit-sharing. This afternoon is not the time to indicate the details or to make any suggestions about what kind of profit-sharing scheme should be used. There are many. Some are good; some not so good. Some are simple, some sophisticated; and, of course, all apply to different kinds of industry. But whether they are simple or whether they are sophisticated, I believe that they are a very good thing for extending the system and spirit of co-operation for which the Motion before us asks.
Besides giving a sharing in the proceeds of industry, profit-shaving has the further good effect that, used skil-fully, it can be a medium for instructing the great bulk of people in industry in some of the basic financial facts which are so important to our industrial structure. The noble Lord who has just con-eluded his speech seemed to be rather despondent about the rate at which good education can permeate the minds of

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our industrial friends. I think that profit-sharing and the use of the facts of profit-sharing help to instil into the minds of people working in industry the facts about such essential factors as depreciation and obsolescence, which are at the root of the proper financial structure of industry. To me, these two things—profit-sharing and good communications—if applied vigorously and sincerely, can be used to produce and extend a greater spirit of co-operation in industry.
I am a little more uneasy about my final point, because I find a great deal of truth in what the noble Lord says about the possibility of developing a code for industry. If a code could be developed, a code containing the expression of our industrial processes, as well as a good selection of our desirable industrial practices and examples, it would be a most useful thing. I know that it is difficult, but again I would refer to the work that was done by the Mond-Turner conference. As your Lordships will remember, that was born in 1927, just after the General Strike, and the people concerned not only Mond (who became Lord Melchett) and Turner, but their respective friends, did a tremendous amount of work to try and evolve such a code. They did it by serious and consistent studies. They worked once every week together and produced documents of great importance. Fortunately, I have been able to get a copy of their Report, which is now very scarce. It was published by the T.U.C. at the price of one penny—a very good example of good literature at a reasonable price.
They divided industry into eight heads and any number of sub-heads, and they tried to work out a code and put it on paper. Their scheme was imaginative and all-embracing. These are just some of the suggested headings they had: organisation of industrial relations; international industrial relations; disposal of proceeds and services—they did not hesitate to try and say something about the rewards of industry to the individual—and, finally, finance. It was a noble effort but, as the noble Lord, Lord Citrine, said, it came to very little. Helpful as the discussions were, their results were generally disappointing.
I will not go into an analysis of all the reasons that led to that disappointing result, but I suggest to your Lord-
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ships that now, practically 30 years afterwards, it is worth while to try again. The circumstances are different to-day from what they were then. First of all, there is the effect, which I am sure we shall all agree is by no means negligible, of the industrial education that has gone on since then. I suggest that we have a background of better-informed people by whom this kind of examination might be conducted. Further, since then we have set up departments in a great number of our universities and colleges of advanced technology; and we have professors, lecturers and readers who specialise in industrial relations and their proper place in our society.
I wonder if, as a first step, before we try to bring in the panoply of a Royal Commission to examine this matter, we could recruit, under the guidance of the Minister of Labour, some reasonable number of these university people who have been studying this matter, to see if they could not bring forward a draft document which would indicate some broad measure of industrial philosophy. We want an industrial philosophy. The industries of this country have rather grown up without any particular philosophy behind them, but I think the time is right when the formulation of an industrial philosophy is worth attempting. There are at least ten universities in this country, including colleges of advanced technology, which have departments designed specifically to endeavour to forward good industrial relations. The kind of things that I think it would be worth while trying to formulate is reasonable holidays, reasonable hours of work; and others—even before we come to the difficult question of trying to formulate how much any of us should be paid.
I conclude, my Lords, by repeating that I believe that the influence of your Lordship's House can be used to extend the work of good joint communications and, I would hope, of financial co-operation. These are two well-tried schemes which have been in operation in various degrees and forms, and in many places. I agree entirely with the noble Lord, Lord Citrine, that matters of this kind need to be further inserted into our industrial structure; and I believe that your Lordships' influence, expressed, as I am sure it will be, can be most effective in

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doing that. On the other matter of trying again for a conference similar to the Mond-Turner conference, that is something which I certainly recommend for your Lordships' consideration. I believe that further good discussions in the light and background of present-day education and industrial structure would be most effective in helping to bring about the dynamic and increased co-operation which the Motion requests.
3.53 p.m.
THE LORD BISHOP OF SHEFFIELD: My Lords, it is with embarrassment that I rise from this Bench to follow three speakers who, in their several ways, have rendered such distinguished service to the industrial life of this country, but I find some comfort, because it falls to me to congratulate the noble Lord who has just sat down after a maiden speech distinguished for its content, quality and mastery of the subject. It makes one realise how advantageous it is to the Members of this House that someone with his experience in industry should be among us to speak to us from time to time, and how valuable it is to the nation that men of that experience can speak here for the public to listen to. My embarrassment is that I want, on the one hand, to avoid falling into pious platitude, and on the other, not to appear to express views on a subject in which I 'have no direct responsibility. I have, however, spent the whole of my working life in the industrial areas of this country and count among my friends and acquaintances many men who are happily involved in its industrial life.
There can be no question about our general agreement with the terms of the Motion which the noble Viscount, Lord Amory, has moved. What we want to consider is whether there are any practical ways in which by word, and ultimately by practice, we can develop the purposeful and dynamic spirit of co-operation, which obviously is not 100 per cent. at the present time. First of all, I think the noble Viscount is probably right in saying that certain failures in our industrial life are not due primarily to the mechanism in industry, but to the lack of the spirit. But good will by itself is not enough; it has to be worked out and embodied in the order and pattern of things and
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expressed in and through particular concrete arrangements of the situation. It is easy to think and say, as is sometimes thought and said, that things are not going very well, and chaps are not pulling together: "Let us get someone—a Bishop, if he is not too stiff in the joints—to put over a 'pep' talk about it". But I think that that kind of thing is of little use, and sometimes it is positively harmful. The really important thing, surely, is that the channels through which the spirit of co-operation might flow strongly should not be blocked, or ill-designed, and the pattern of human relationships and the economic pressures and basic structures should not be unfriendly to the spirit of co-operation.
In a society where the appeal is primarily or exclusively to self-interest, even enlightened self-interest, we can hardly hope to get good co-operation. Where the generally accepted concept of man is that he is a predatory individual, rather than a responsible member of society, co-operation is bound to be the exception rather than the rule. I think that the whole of industrial history makes that abundantly plain. If members of an affluent society think (and I believe that some members do) that the only end is to live and work to produce more and consume more, I rather think we "have had it". I would suggest that one weakness, as I think, in our society to-day which is a part cause of the lack of purposeful and dynamic co-operation is that, by and large, it has not a clear picture of the kind of society it is trying to create. There is no generally held conviction of the principles on which it must rest or of the moral and spiritual resources on which it must draw in order to keep the whole body healthy, co-ordinated and running smoothly in top gear.
I would venture to suggest that this must be the foundation of the kind of general code for which the noble Lord, Lord Fleck, appealed so strongly a few moments ago. I believe—your Lordships may think this is a pious hope of my profession—that the only long-term alternative to the compulsive force of Communism is a concept of society and of human relationships which springs from the Christian doctrine of man add the duty of neighbourliness. I would mention four ways in which I think we

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might encourage the spirit of co, operation. One has already been mentioned forcefully by the noble Lord, Lord Fleck—namely, the need to develop more and more consultation within industry. The mechanics of consultation, of course, vary from industry to industry and from firm to firm. There is still the handicap of a great deal of suspicion and distrust in motives. There is also very often a lack of free and open speech, and it is obviously desirable, whether through the works council or in informal ways, that there should be great freedom in the two-way traffic in suggestions and ideas which might lead to further improvements in human relationships, or even in the mechanism in industry.
It was said to me, many years ago now, by a friend whom I consulted about a man with whom I was asked to work: "He does not often see a new idea, but when he does he hates it." I fear sometimes there is a good deal more of that temper of mind in our British life than we realise, and sometimes even in British industry. In industry at national level, like that proposed only last week in regard to casual dock labour, consultation is rather rare. As the noble Lord, Lord Fleck, has just said, too often it happens only when things are running badly and there are matters in dispute.
May I dare to suggest that there might be more study in trade unions of the problems and techniques of management, as well as vice versa, of course, and by both employers and trade unionists of the scientific techniques, the problems of automation, and the whole expertise of human relationships? It is, after all, written in the constitution of the trade union movement that they should have a concern for "the protection and development of trade." In years gone by, that involved of necessity concentration upon wages and conditions of work. To-day, this leads into a consideration of the whole business of industry and its management. It would have a stimulating effect on management, would it not, if they were to spend more on research into the problems and techniques of management. I think this has already been mentioned, but I would venture to suggest that there is still too much complacent amateurism in management. "We pick it up as we go
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along", they say; "we learn by our mistakes". But it may be that others have to pay for those mistakes. There is a great deal of that sort of thing in the institution to which I belong, so I do not find it difficult to recognise it in other places. It is abundantly clear that where slackness or incompetence in management is recognised as such on the shop floor, you cannot expect to have a full, purposeful and dynamic spirit of co-operation.
To somebody outside, the wage structure seems much of a mystery. One would ask whether the extraordinary confusion and what appears to be the irrationality of differentials are really helpful to co-operation. If we want, as we do, more skills and finer technical ability, then, surely, the wage structure should both foster and express it. Does it in fact do so at the present time? There is all this elaboration of bonuses and payments for overtime above basic wages, which is an irrationality that is bound to affect co-operation, as well as having unfortunate social consequences outside industry.
Here I would venture to make an observation which rather applies to us all in our different spheres of life. Are we not these days finding ourselves being driven by new mechanisms to try to do too much with too little thought, making snap decisions which get us round the next corner but pay no attention to the corner which is round the next corner? Yet, surely, in every department of life it is becoming needful for people to sit back to see things in their true perspective and to think out long-term policies. I should have thought that one sphere where it is becoming extraordinarily urgent for the co-operation of all sections of industry was in this complicated business of wage structure and its secondary bearing on social life and industrial efficiency. I should like to mention the importance of training in this connection. Here is a field, as has been said already in the debate, where co-operation between employers and trade unionists is already yielding substantial results. So far as I know, no growth in industry has been more marked than the thought and the money being spent in training at all levels. It is still very unequal as between industries, and within firms within particular industries.

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Might I venture two suggestions? The disparity between the wages paid to apprentices and those which their fellows can get in unskilled jobs is a disincentive to training and apprenticeship, especially when the disparity continues after apprenticeship is over. I think it is too much to expect ordinary school-leavers to make the right longterm choice in such circumstances, especially when parents, as they sometimes do, urge them to take the job with the largest pay packet, and not to bother too much about training and apprenticeship. I believe that is an urgent matter which can be solved only by consultation and co-operation at top levels between employers and trade unionists.
The second thing I should like to say in connection with training is that a vocational training, 'as it is called, can be too narrowly vocational, too limited to one particular craft, or even to one particular firm. If that happens it is almost bound to fail in its long-term objective. I understand that in one Communist country, at any rate, the vocational training includes a fairly thorough teaching in the Communist theory and way of life. Surely it is desirable in our own country to include in the training courses of industry, in the life of industry and in the curricula of technical colleges, a wide survey of industry, and also a study of the principles which belong to our heritage and are the basis of our democratic society. Youth in industry, as has been said lately, needs a faith to live by, but that faith must have a cutting edge and deep roots. Here, I believe, is a place where the Church, in all humility, can learn, and is learning, to co-operate.
My last point is a rather difficult one to express shortly and fairly. I have a feeling, based on a certain amount of factual matter, that better co-operation in industry is handicapped by segregation in society. We read that in the United States the black population and the white population, in spite of a great deal of preaching and a Federal policy of supporting de-segregation, is in fact highly segregated as a result of housing development, both by policy and by private enterprise.
In this country one hundred years ago, in the West Riding of Yorkshire, where
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I live and work, the mill owner lived by his plant, and if he and his family were reasonably decent people they had at least some social intercourse with their employees, although the terms may have been rather feudal and paternal. But to-day, though within the works there are increasingly good relationships between those working there at all levels, as soon as the day's work is over they leave the works to travel in different directions, sometimes quite a long way. Their families do not meet, their wives do not think of their men's jobs other than in terms of the wage packet, and their children go to different schools. Moreover, in a good many new housing areas the local authorities are very reluctant, for understandable reasons, to build up a mixed community. I recognise that it is not easy to correct these tendencies in our social life. But I am quite certain that any increase in social segregation is bound to hinder co-operation in industry.
My Lords, I have talked too long. In conclusion I would just say that I believe the contribution of the Church, if I may refer to it, is not to hand out pious platitudes from the pulpit, or advice, but rather a readiness on our part to try to understand the whole shape and pattern of industrial life and work and to encourage the lay members of the Church, whether men in management, technicians or men on the shop floor, to see in their field of work also their field of Christian service. In the end, as I have said, we should have in our country a strongly shared conviction of the kind of community we are trying to build, the kind of men and women we want the rising generation to become and a recognition of the kind of moral and spiritual demands which that aim must entail.
4.44 p.m.
LORD McCORQUODALE OF NEWTON: My Lords, I think we are all very much indebted to Lord Amory for initiating this most interesting and valuable debate. I personally owe him an apology because I could not get out of a meeting in the City this afternoon and therefore missed the bulk of his speech, and will have to wait till to-morrow to read it in Hansard. We have had an extremely valuable contribution from Lord Citrine, who speaks from a wealth

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of knowledge probably unexcelled in this country. I well remember—probably we all do—when he was Secretary of the T.U.C. in probably its greatest days up to now. We all enormously enjoyed the intervention of Lord Fleck, and I, for one, hope that this means he will often come and give us the benefit of an experience unrivalled in administration and scientific matters concerning industry. If he would not mind my saying one thing to him, I would point out that he said that consultation should of course be through trade union channels wherever they are appropriate. I hope he will persuade some of his industrialist friends that the reverse also is the ease, and that they should support their employers' organisations in industries in the same way as the trade unions. I believe it is extremely valuable that we should have a proper counterpart. This was said by no less a man than Mr. Ernest Bevin himself.
I have just come back from a week at the Governing Body debates at the International Labour Conference in Geneva, and go back again the day after to-morrow. This Conference is discussing almost identical subjects to those we are discussing to-night. We are discussing the rôle of trade unions and employers' organisations in the development of industry throughout the world. Already it is quite obvious from the reports that this is going to be one of the most valuable conferences that the I.L.O. have held. It followed a conference which I also had the privilege of attending and which was organised by the British Employers Confederation—a private conference on voluntary collective bargaining to which we invited about 100 employers and officials of employers' organisations, and also eight or nine professors from the universities who had made industrial matters their special concern—the very people Lord Fleck was talking about. We had a most interesting and valuable discussion.
The question we asked these gentlemen was: is the system of collective bargaining which each industry has developed in this country the most satisfactory, subject to modification here and there, for to-day's industrial conditions? I am betraying no secrets when I say that at the end of the conference—we had split up into six or seven separate
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groups—the general consensus of opinion was that voluntary collective bargaining should not be abandoned in any way; that it was the right system for this country, but of course it needed constant modification and bringing up to date in the light of the circumstances prevailing. The Press notice that we issued after the Conference and which is worth while repeating in this connection was that the broad conclusion reached was that the present system of negotiation of terms and conditions of employment, industry by industry, is the most appropriate system for this country. Yet it will require constant review and modification from time to time to meet the problems which will be created by the increasing prosperity of which this country is clearly capable.
So, my Lords, I wish to discuss for just a few moments the subject set us by Lord Amory in the sphere of our present collective bargaining. I must say I myself was in entire agreement with the conclusion reached at this conference. I think it would be disastrous to tear up what has been built up over so many years, when we would be quite in the dark as to whether we might put something in its place which would be alien to the British temperament and not work at all. Therefore I say we must look for this co-operation that Lord Amory seeks in the light of present procedures.
What do we want to co-operate about? is the first question that we should ask. Surely our object is to improve the standard of living of all our people in industry and those who depend on industry from outside—in general we might say, I suppose, the workers, although my noble friend Lord Fleck was quite right about the difficulty of saying "employers" and "workers", when we are all both, we hope. Workers seek higher remuneration and shorter hours and therefore more leisure, while employers, management, seek higher output and lower costs. Now both these claims together can be met only by more efficient machines and better and improved methods. The co-operation we should seek, therefore, is to see that these improved machines and better methods are installed and operated to the best possible means. It may well be that problems will be thrown up by so doing. Problems of redundancy arise from time

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to time with new machinery, and give much disquiet, but in the conditions of full employment in which we live at the present time it should certainly not be beyond the wit of employers and trade union organisations to fix up together reasonable and fair redundancy agreements which should satisfy the people.
Some say, of course, that pay and conditions are not the only incentives. There are great numbers who take much pride and interest in their work and achievements, especially, probably, the skilled worker, and the skilled worker more especially still in many of the modern processes that are starting up all around us. But the great majority of our people in industry are employed in straight-line production, in assembly and in repetitive work, and it is not easy for men or women to have the same pride in this type of work as motivated the old craftsman in his production.
What I think we here all wish to see is that the regulation of pay and conditions, output and productivity should be settled by voluntary collective bargaining, but voluntary collective bargaining with broad national interests in the minds of both sides. Now this is not easy. I had meant to cross swords with the noble Lord, Lord Citrine, but he is not here at the moment, about his remarks concerning apathy. He said the average workman in this country did not take any notice of inflation or the necessity for exports. I do not believe that is true to-day, with all our modern education; but if it is true, it is a grave condemnation of both employers and trade unions for not having educated their people better. This is one of the things which we must tackle, but I believe the position is not quite so black as he painted it.
My Lords, a very great deal of cooperation exists in industry to-day. I speak from some knowledge because I am privileged to be at the moment President of the British Employers' Confederation, and I know from firsthand how much co-operation—day to day co. operation, co-operation that never becomes news—is being carried on in many individual enterprises and in a great number of industries collectively. I think we must remember all the time, when discussing industrial conditions, that good news, agreements entered into
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and kept, troubles settled, production increased, is not news so far as our Press is concerned. It is when we have bad news, disputes, unofficial strikes, that the headlines appear; and a balance is not easily kept by those who really do not know the facts. But of course there is a not inconsiderable fringe where the spirit of co-operation is certainly, to use Lord Amory's words, not dynamic.
I wonder whether I might mention one aspect of the case which is being carried on at the present moment and which I do not think has been referred to up to now, unless my noble friend, Lord Amory, referred to it. I think we should all applaud the initiative, courage and enterprise of the present Minister of Labour. He is doing a very remarkable thing in a quiet way. In spite of considerable initial opposition, he called the leaders in certain industries in which troubles have been most prevalent recently to meet under his own chairmanship to see whether something could be done about it. The result of his initiative in the motor industry, the first industry he tackled and possibly the most difficult industry in the country, has been quite remarkable. I know certain industrialists in that industry who are, and I use the word literally, astounded at the result which came out of these discussions, and indeed, they have already had a very good effect. The strike which was going on in the Pressed Steel works at Swindon and which was being so harmful to the industry was largely settled by the intervention of the trade union leaders when they had come away from this Conference with the Minister, and I think a message might well go out from this House of Godspeed to the Minister in this new initiative.
There are various other industries which we hope he will tackle with the same success. In addition I would say that the British Employers Confederation are having cordial unofficial talks with the T.U.C. at the present time on the subject of unofficial strikes. I would not claim that we have made much progress yet. We have had only unofficial discussions, but the talks are continuing and I hope and believe they will prove useful.
To get the dynamic spirit of co-operation with which this discussion deals we

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must seek it, I think, in two ways: first, by more co-operation between trade unions and their counterparts the employers' organisations in the various industries, and, secondly, by more cooperation between individual companies and their workers on the shop floor. I should like very briefly to comment on each and will not keep your Lordships very long. There is, of course, a considerable degree of co-operation between trade unions and employers' organisations at the top—between the B.E.C. and T.U.C.—the Industrial Training Council and the N.J.A.C. and through many other channels—and nearly all the trade union leaders are ready to speak with favour on the concept of co-operation in industry. There are, of course, exceptions which I need not emphasise and there is the Communist element, about which Lord Citrine spoke so eloquently, and which I need not go into, except to say I agree with everything he says—they are wholly hostile to co-óperation.
What I should like to see in the different industries—among the employers' organisations and trade unions—is more co-operation of the kind that there is in what I might call the most developed industries. There are many subjects, not only training and apprenticeship, which the right reverend Prelate mentioned, but health, welfare, safety, pensions and the like, about which the trade unions and the employers can talk and co-operate for the good of all, and the more that type of co-operation is developed at that level, I am sure the 'better for all.
When we come to the shop floor I cannot help thinking that the problem is largely one of leadership. There is always bound to be a conflict in the minds of the people between loyalty to their unions and loyalty to their companies. We would appear to be short of leaders who are able to get the best out of their employees, their work-people, without any sanction or compulsion. The more that we can, in one way or another, train up to management leadership in industry, the better we shall find co-operation on the shop floor.
Might I say one word about the problem of personnel management? I believe one of the bad things that came out of the war—it was essential during the war: it grew up and was carried over
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into the peace—was the idea that personnel management was a thing apart, that it was a section of industry all by itself, that it did not come into contact with the rest of the organisation. My strongly held belief is that the problem of personnel and personnel management in any industry and any factory is the responsibility of the top management and cannot be shelved on to any subordinate. The manager of a factory, the managing director of a firm, if he is to run a good show, must interest himself in and take responsibility for the personnel management and the proper care of the workpeople in the firm. To-day top technical advice can be hired, administration can be taught, and machines do a great deal of it in the office. But the management of the men and women an the shop floor is the criterion of success in industry; and that, I believe, is the function of the top man in that firm.
On the other side, may I say just this: emphasis must be laid, I believe, on the sanctity of agreements entered into, either on the floor or at industry level. And there are to-day some dangerous ideas about this. The whole principle of collective bargaining breaks down if agreements that have been entered into are not to be observed. Unofficial strikes—often they may be Communist inspired—are a result of the breaking down of agreements, and every one of them operates directly opposite to the agreements entered into by or on behalf of the people who are breaking them. Thus we get a weakening of respect for the sanctity of agreements. I have heard it argued in high places that procedure agreements in industry are only good agreements if everybody affected by them is prepared to observe them; otherwise, they should be done away with. All I can say is, that in industrial affairs, just as in national and international affairs, if the sanctity of agreements no longer holds then chaos results.
The last word I wish to say is this—I am sorry to have kept your Lordships so long. We in industry are aware—I am sure this applies just as much to the trade union side as to the employers' organisations—that we are still wrestling with and by no means have found the solution of the problems inherent in full employment. We all rejoice in the full

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employment that we have in this country at the present time. But we must all concentrate, both sides of industry, everyone engaged in it, in seeking to solve those problems of full employment and keeping a stable price level at the same time, for if we do not solve them then we shall no longer have full employment.
4.35 p.m.
LORD WALSTON: My Lords, it is not really my position, as an even "newer boy" in your Lordships' House, to comment on the speech of the noble Lord, Lord Fleck, but I hope that he will forgive my doing so, because it is rare indeed to find experience coupled with knowledge, and knowledge coupled with wisdom and, above all, a combination of those three, coupled with the ability to express the fruits of all of them. It is rare, even in this House, to find it, and we are indeed fortunate to have had the opportunity to listen to the noble Lord. I hope that we shall have many more opportunities to hear him on the very many subjects, including my own subject, agriculture, with which he is so well acquainted.
I find myself in great agreement with many of the things which have been said by all the noble Lords who have so far spoken. Such reservations as I have are mainly for omissions rather than for the points which have been put forward, It is obviously right, as so many Lords have stressed, that there should be a really effective channel of communications: that all engaged in industry, at whatever level it may be, should know what is going on, what the objectives are, what the problems are and what the proposed solutions are. That must be one of the main ways of beginning to achieve the objectives of the noble Viscount.
I was very glad to hear the noble Viscount himself say that, valuable though profits-sharing is, important though it is, it is nothing more than cementing the existing relationship; it is bringing together the things which must already be there, and by itself, if those other things are absent, it can achieve nothing, other than being a welcome end of year bonus which is accepted gratefully perhaps, but without any real significance. It is this cementing of the right relationship that is the important thing.
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How can that be achieved? How can we achieve that all engaged in our production effort—and when I talk of industry I include agriculture—really feel that we are in the same boat together? Because that is what co-operation must mean.
The noble Viscount said: let us not be too traditional in our approach; let us adopt new methods; let us look ahead. Perhaps rather paradoxically, I would say the opposite. I feel that we do need more of some of the things which we had in the past but which to-day have disappeared from our national life and from the general scene of the whole world. There is no need to go very far hack into history to realise that in those days we had true co-operation in out communities. Obviously, in tribal days there had to be co-operation, otherwise the tribe would not have survived. Even in feudal days there was a form of co-operation, for the same reason: that the welfare of the manor, of the village, of the group, depended on cooperation. There were antagonisms, there were jealousies, of course. That will always happen. But there was an underlying belief and acceptance of the fact that, unless all members of that particular group worked together and gave of their best, the group would not prosper and might not even survive.
There was also the underlying feeling that it was the duty of all to do that, and that the rewards, when they came, were going to be equitably distributed. As time went on, that feeling faded—it naturally would as society grew into larger units. But it was reinforced and supported by what the right reverend Prelate so rightly mentioned, the growth of an ethical and moral spirit, in fact the growth of a Christian spirit. There was a feeling, which grew up then, and stayed with us for a long time, that all our commercial and industrial undertakings should be governed by the just price, that there was such a concept as the just price, and that it was that which should be adhered to by all just men—and in those days it was the ambition of every man to be considered by his neighbours a just man.
If I may digress for a moment to a rather smaller but still important level, I am very proud that it was the Labour Party which, after the war, brought into existence, in peace time, this concept in

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fact without any philosophical talk about it, of the just price, particularly in agriculture and in many primary products, of fixing prices not according to the ups and downs of supply and demand, but according to what was agreed to be the right figure for obtaining the right amount of production, and giving a fair and reasonable return to the producer, and all concerned in the production, without the exploitation of the consumer, as might well have occurred then—and did in certain cases—because of shortages.
It is an interesting fact, as the noble Viscount mentioned, that one of our industries to-day which has a great spirit of co-operation is farming. That is due to many factors. It is of course due, as he rightly pointed out, to the very close contact there always is between the farmer and the people who work for him. Undoubtedly, that is one of the most important factors. There is another. There is a real acceptance by those who work on the farm, whether it is the farmer himself or the farm workers, that their prosperity, even to-day, depends upon the prosperity of the boss. If he farms badly, if his workers work badly, they know that they will suffer.
There is also the fact, I believe, which was mentioned by the right reverend Prelate, that in a village community you have the identification of home life with work. Work does not mean that you simply go away from home in order to earn money, return at the end of a week with your pay packet and shut your mind to it. In the village you find a complete identification between home and work. Furthermore, the farm worker knows perfectly well that if he does a bad job—if he does not plough a straight furrow, if the drill misses a colter, it will be seen for the whole of the year, not only by himself and everybody who works with him, but by the whole of the village, and by the people who go by. Conversely, if he does a good job that also will be seen. There is this feeling of identification which is so essential, and a genuine co-operation in what is being done. But it is, broadly speaking, only in agriculture and in a few rather similar rural occupations that this spirit still persists to-day to any large extent.
We find a clue to this problem in the fact that there is this divergence between
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town and country. It is not simply a matter of size, though that obviously has a great deal to do with it. What in fact was the reaction of the farm worker who, shall we say, 100 years ago, left his village to go and work in industry in one of the nearby, or one of the faraway, towns? He found himself there working impersonally, working at a job he really did not understand, probably with a management who did not bother to explain it to him; and what is more, he found himself living in a society which basically was founded on the principle of the survival of the fittest. If you got on well, if you did your job, you made money. If something overtook you, or you fell on evil days, you were out on poor relief or on such charity as you could find or pick up.
What is more, he found that the whole idea in the new world in which he was living was based, in relation to its economic beliefs, on supply and demand and the free play of the markets. If he was unfortunate enough to find himself in an area of surplus labour within industry, at the same time his wages would fall right down. If, on the other hand, he found himself in an area of labour shortage and more than enough work was coming into the factory he was able to extract higher pay. That was the way it worked then, and to a large extent that is still the way it works to-day.
I know full well that, even in those days, there were progressive and warmhearted employers. Marty of them were to be found among supporters of the Liberal Party. To-day, also we have an increasing number of examples—of which I.C.I. is outstanding—of this new and enlightened attitude towards labour. But it is still an attitude, although enlightened, of enlightened self-interest. It is an attitude which still accepts basically the price mechanism and the free play of the markets. It is still an attitude —our whole society is based on this—where, although we frown on the profiteer who happens to have cornered the supply of wheat at a time of famine and grows rich from the death by starvation of other people, we do not frown on the other people who, though not in such a dramatic way, are able to enrich themselves because they happen to have something which is in short supply and which other people want. We not only

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do not frown on them, we extol them and regard them as pillars of society.
Perhaps I may be allowed to quote some remarks made by Lord Amory himself about me a few weeks ago, on May 17 [OFFICIAL REPORT, Vol. 231 (No. 82), col. 666]—he may remember these remarks. His words, in relation to myself, were:
"The noble Lord told us that the sale of some of his investments had been much more profitable to him than the Production of agricultural commodities. Of course the noble Lord there was having a practical example of the advantages of having something to sell that people really want to buy very badly. He found himself in the market and he had the good fortune to own investments for which there was a strong demand. He can acquire virtue, if he sold those investments, from having met that demand."
I do not think that is an unfair quotation, because I believe that that typifies the attitude of not only noble Lords opposite, but of so many other people also. The whole of our society to-day is based on having something which other people want, whether it is labour or goods, and cashing in on it. That is the way in which our society has been built up, and to-day it is upon that concept that our values are based.
At one point in his opening speech today the noble Viscount mentioned the response to example of people. He said that we must give them leadership and example. He is right. But this is the example that we are giving to people to-day. This is the example that the leaders of our society, as well as our Government—I am not saying that it is only the Government; it is society as a whole which accepts it—are giving. If it is right for me, when I have investments which other people want, to extract the highest price the traffic can bear, why is it not right for my trade union friends, when they have labour to sell, to extract the highest price the traffic will bear? If it is right for one, it must be right for the other. I submit to your Lordships that it is right for neither: that so long as we have a society which is based upon that principle, we shall never get any true spirit of co-operation.
What shall we do about it? How can we deal with it? We must not be over-idealistic. I grant that there are as many beams in our eyes on this side as there
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are in the eyes of your Lordships opposite. Perhaps you will allow me to point out one or two of your beams, and you will have an opportunity to point out the beams in our eyes. The recent Budget reduced surtax. But it has still failed to meet the real needs of people in poverty and distress, the pensioners. The reason given for the surtax reduction was incentive to production. I shall not argue whether or not it is that but it is an example, not of justice, not of the just price, not of what is right to be done but of purely material incentive, of pandering to the worst motives that we have, rather than to the higher ones.
At Election time itself we know that many things are said which may not truly represent what people think. But I do not think I am unfair in saying that this truly represents the attitude of our present Government and of the Conservative Party. We were told in posters all over the country, not only
"You've never had it so good,"
but also
"Don't let Labour ruin it".
That, again, is pure materialism. It is simply carrying on and bearing out all these bad things which have been growing in this country over hundreds of years, which have been undoing the real spirit of co-operation which there used to be, and which have been overriding the moral, Christian ethics on which our life and our society ought to be based. I am all in favour of joint consultation, of profit-sharing, and of those other things which I group together as being enlightened self-interest—and that there is no reason to turn your back on enlightenment, even if it is self-interested. Let us have them; let us encourage them. But let us realise what they are, what they truly are: they are merely palliatives.
My Lords, I am convinced that we shall never get this true spirit of cooperation, which I am sure all noble Lords are sincere in saying they desire, unless we are prepared to renounce the theory (although we know that in practice we cannot immediately renounce it) of the free play of the markets, and all that that implies; and unless we, as a society, condemn an economy which is based on profiteering—as it is—and on usuary, as it is when you lend money

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you do not need at the highest rates of interest you can get. Do ont let us mince words or deceive ourselves or other people. That is how our society and economy is working to-day. Until we, the capitalists, employers, and employees, the whole lot of us, say, "This is wrong. We have inherited this, and we must live within the ambit of it for the time; but we accept that it is wrong and we shall do what we can to make it right," there will be no true advance towards this spirit of cooperation.
As a more positive act we must, in my submission, having renounced these other things, accept the concept of the just price of labour, goods and services. And we must, by our example, try to create a society where honour is given, not to those who grow rich by the manipulation of the profit motive and the law of supply and demand, but to those who, in whatever capacity and at whatever sacrifice—even if they make no money for themselves whatever—serve their country and serve the community. That is the only way, my Lords, in which, in my view, we can achieve the true spirit of co-operation in industry.
4.55 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I should like to join other noble Lords in thanking the noble Viscount who introduced this Motion for giving us the opportunity of expressing our views upon what is and must be to-day, and will remain until we can get out of some of our present difficulties, the most terrible problem we have in this country: how we are going in the future to earn our daily bread. The noble Viscount, quite rightly, calls for a new dynamic co-operation in industry. As I agree with a great deal that has been said—I think I agree with every speaker, except, with great respect, the noble Lord, Lord Walston; I find myself in disagreement with much that he said, but that will not surprise him— I do not want to devote the few remarks that I intended to utter, to going over the ground that has been so well traversed.
I should like to deal with two points. We shall never get dynamic co-operation on bolt sides of industry until we have increased the dynamic spirit in those two sides. I found myself really in agreement with the noble Lord when he rather
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hinted—or did something more than hint —at the apathy on both sides of industry. In The Times leading article of yesterday a statement made by Dr. Beeching, the newly appointed Chairman of the British Transport Commission, was quoted. He said:
"It is now necessary to modernise the managerial structure and the manner in which the system is operated in relation to a very different pattern of consumer requirements."
That could well be said by every chairman of every big company in this country. It is true. We are behind, and I am going to suggest one or two reasons, including one main reason, why. Dr. Beeching went on to say that one of the first things he had to do was
"to bring in"—
mark you, my Lords, bring in—
"a 'sprinkling of good people' from outside to fill some of the jobs at the top".
The railways are the largest industrial concern in this country, with three-quarters of a million employees and with capital which I find it hard to calculate. They have not enough brains in that organisation to fill the top managerial posts—
LORD LINDGREN: My Lords, will the noble Lord excuse my interrupting? Those in the industry would not accept that.
LORD LUCAS OF CHILWORTH: I am not arguing about whether you accept it. I am talking about what Dr. Beeching said, whether you accept it or not. That is what he said. And he is being paid £24,000 a year to say it.
LORD LINDGREN: Not quite.
LORD LUCAS OF CHILWORTH: Well, gross. At least it took him only a week to find that out. What an indictment against what I would call the patronage system for appointing tike heads of the greatest industrial concern in this country! But, my Lords, this goes on right the way through industry.
When the noble Viscount spoke in a debate in your Lordships' House about a month or so ago, he followed me when I pleaded hard for a relief of surtax upon the up-and-coming managerial young man. The noble Viscount agreed with me and, to stop other people asking him, he asked himself the question: Why had he not done the same thing

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when he was Chancellor of the Exchequer? That was rather adroit, I thought. Then he gave the answer, which again he borrowed from my speech—again, I thought, very adroitly. After I had pointed out that this concern which Mr. Beeching now runs had lost £500 million of the taxpayers' money and that the noble Viscount, when he was Chancellor of the Exchequer, had to put in £100 million above the line and find it out of current taxation in his Budget, he said, "You see, that was why I could not do it". I do not doubt that that was the truth. But the point that I want to make is this: as good as it is to give that monetary encouragement to youth, there is something more that must be done, and it can be done by no other body than industry itself.
My Lords, I have just said some strong words about the patronage system of appointments to public boards. I condemn the same system in industry. In this country we are building up a race of professional directors who play the game of musical chairs from one company to another, not dreaming for one moment that they are frustrating those who have to carry on after them. The one great deterrent to those holding managerial positions in industry is that they are always hitting their heads up against a ceiling that is fixed for them by those who should retire from the boardrooms of industry long before they do. I can say this, my Lords, because I have arrived at that age. I am not one of those people who, when they have reached 65 years of age, think that that is the most useful period of their life. At 65 years of age you do not have the dynamic spark that you had at 45 years of age.
There are an increasing number of men in industry and in various other spheres who, when they retire at 60 or 65 years of age and are asked what they are going to do, reply: "I'm going to pick up a few directorships"—and they do not for the purpose of contributing anything to the dynamic purposes of industry but to collect a few fees and those other emoluments which will assist them to sustain that standard of life to which they think some Divine Providence has been pleased to call them. But they never think of the frustrations of the youngsters. The best-run
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concerns that we have in British industry are those where the members of the boards come up from the bottom. They are executive directors. The noble Lord, Lord Fleck, has on his board a minimum number of ornaments and the greatest possible number of those who have been rewarded for their hard work and their dynamic spirit.
I remember the arguments we had about this matter when the Companies Act was going through Parliament. When we wanted to reduce the retiring age in the Companies Act to 60, I was astonished to hear so many noble Lords who had come to the conclusion that they were in the full flood of manhood for so many years afterwards. It is just not true. I would say, quite sincerely, that we have got to give to the young the rewards for having that dynamic spark that the noble Viscount wants so much. It is to the young hat we must look for the future of this country. We must see the managerial future of this country in the young who have worked themselves up from the bottom—not those who have drifted in from the top.
What did Dr. Beeching go on to say, rather pathetically? He said, "I do not know where I am going to find them". He wants only a sprinkling. The trouble is that there has been no real effort towards management training in industry. The job of training has not been done and in these concerns the top managerial jobs and some of the top directorates are unfortunately filled not with what I would call managerial experts, but with financial manipulators. There are times, my Lords, when, as I read some of the chairmen's speeches in this country, I wonder what those men are there for: whether it is for financial juggling or whether it is to do a first-class job of production and of merchanting in this country and all over the world—because that is the only thing that is going to matter in the future.
Then we come to the other side, the necessity to have a dynamic purpose in labour. I am sorry the noble Lord, Lord Citrine, is not here, but as there is here another distinguished member of the Trade Union Movement, the noble Lord, Lord Lindgren, I can say this quite frankly in front of him. I found myself very much in agreement with what the noble Lord, Lord Citrine, said. He called for leadership in the Trade Union

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Movement. I think his words were that he wants to bring back the leadership of the Trades Union Congress. The trouble with the Trade Union Movement in this country, as opposed to what it was years ago, is that it has abdicated its leadership. I can say that because I have worked with trade unionists. I was Chairman of a National Joint Industrial Council in the industry which has been so troublesome and which the noble Lord, Lord McCorquodale of Newton, mentioned. I had on my Council men of the calibre of Jack Tanner and Arthur Deakin. My Lords, they were industrial statesmen.
I am going to say this in all friendliness to my friends in the Trade Union Movement: if the modern trade union leader would think of himself as an industrial statesman and not as a Party politician, if he would get down to this problem of inspiring the workers of this country with the spirit that the noble Viscount wants and which I quite agree is latent in the workers of this country, instead of wasting his time with the fatuous and mythical pursuit of a unilateral disarmament policy, it will reflect greater credit on the country and more advantage to those he is supposed to serve.
Now, my Lords, these things have got to be said—because that is one of the troubles. Years ago, the Trade Union Movement abdicated its responsibility, and hence the growth of the greatest menace that we have in our industrial system—the shop steward movement. And to-day they are in power. I live not very far from a hotbed of it. When figures of strikes in this country are compared to those in other countries it is nonsensical. Only when you take the industries in which these strikes occur, and then take the good industries in this country which have never had a strike, do you get some sense of proportion. The noble Lord, Lord McCorquodale of Newton, mentioned the motor industry. Its record of industrial harmony is disgraceful. The worst time in the motor industry for industrial unrest was when we were building up a huge export business in America. That was the time for the shop stewards in the British, Motor Corporation and the Pressed Steel Company to get busy.
Then take the case of shipbuilding. Here is a vital industry, and in an article
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in The Times a few days ago the question was asked: "What's gone wrong?" Here are we, the greatest maritime nation in the world, and we have a net deficit in our shipping accounts. A handful of men in an unofficial strike paralysed the greatest port in the country, London, for a month. What did it do? According to the figures, I suppose well calculated by the London Chamber of Commerce, it cost the Port of London Authority alone £400,000 in dues; it cost 35 shippers £1·3 million; and the incalculable loss of prestige to the City of London cannot be measured in figures. And what was done to stop that strike? That was a strike of a mere handful of workers. Then there was the other strike at Liverpool. So, my Lords, when somebody really takes comfort in quoting figures about strikes, those figures do not mean anything to me.
Now, my Lords, the trade union leaders of this country have got to get back the confidence of the workers. I know that it is difficult, because the employers do not always play the game. I remember, at the height of the sellers' market, the employers in Birmingham outbidding each other with fabulous sums for labour. If you make an agreement on wages as a good employer, it is just as necessary for you to honour that agreement vis-à-vis your fellow manufacturers, as it is for a union or the employees to honour their bargain vis-à-vis the employers. But one of the things I can never understand—perhaps the noble Lord, Lord Lindgren, will tell me—is this. One of the cornerstones of the trade union movement is "the rate for the job". That is the very thing they fail to do with their own officials. Do they expect to get a good calibre of man when they pay something akin to charity? A man who can command a good wage gains a certain respect, and I think that is the first thing the trade union movement should put right.
There is one other thing that I think the trade union movement has to get down to—and here, may I say that I applaud, with the noble Lord, Lord McCorquodale of Newton, the action taken by the present Minister of Labour. Thank goodness! we have a Minister of Labour who will do something other than sit on his seat and twiddle his thumbs, hoping that the Angel Gabriel will do the job for him. But the one

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thing we have to do with the workers of this country is to persuade them to give up these restrictive practices in our big and vital industries. I know that I am treading on dangerous ground, but that is not a thing I am afraid of doing. You cannot pass the laws we have passed, and rightly passed, to eliminate the restrictive practices among the producers of this country, and leave the other side just to play fast and loose.
But it is possible to persuade workers to give up these practices. In all my negotiations with the trade unions, in an industry which was an unorganised rabble, we never had a disagreement. We never had a disagreement; we never had a strike; and we did not have one line of demarcation in the agreement. If you can get an agreement through that—or if I could do it, ignorant and inexperienced—with men of the calibre of Arthur Deakin, Jack Tanner, Tom Williamson, and all those people, surely experienced negotiators can do it to-day. But the effort must be made. If we do not get the restrictive practices out of the shipbuilding industry, there will not be a shipbuilding industry in this country. And what will they do then?
The British worker is not such a fool as not to listen to reasoned argument. But I would say to him, quite sincerely, that the argument is not put to him properly. One or two noble Lords said that there is no bitterness. My Lords, the one great objective of all shop stewards in this country is to engender bitterness between the workers and the employers. That is what they are there to do. The trade unions must get back the initiative; that is our only hope. And no sensible employer of labour in this country will do anything other than help the trade unions to do so. There is no antagonism between the good employer and the good trade union leader. These men are waiting. They are on the sidelines, and if ever in this country we are unfortunate enough to have anything like the rate of unemployment which we had in the bad days between the wars, I tremble to think what will happen; because the whole conception of Communistic faith is to feed on poverty and depression.
I end by saying this. I am one of those who believe—land I have held stead-
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fastly to this view that we shall never see another shooting war. The war we have to face will be a bitter struggle of efficiency in the economic field. That will be the war of the future, and it will not stand for one second the policy which the noble Lord, in all sincerity and good faith, has put forward. When we look 'at the tasks which are ahead of us, at our balance-of-payments and exports position, at our industries fabricating and selling the best in the world, at prices that are competitive with the world, surely we see that that spirit has not been lost. While I believe that the trade union movement and the employers' association can do a lot, it rests with the individual employer and the individual trade union not to stir up differencies but find every possible way of healing any wounds there may be. The real object of the trade union movement is to work hand-in-glove with the employers to make us more productive of goods of a higher quality at a lower price in the markets of the world. I agree with the noble Viscount that this is the time for greatness and leadership, from the Prime Minister downwards in politics and from our industrial leaders, both on the side of the manufacturers and on the side of the trade unions.
5.23 p.m.
LORD MELCHETT: My Lords, I should like to support the plea of the noble Viscount, Lord Amory, for a reexamination of our wage negotiation systems. Surely there is no issue of greater importance to industry at this time than to find a more satisfactory method of settling wages disputes and negotiations, which come up at regular intervals, and especially disputes and difficulties such as those mentioned by the noble Lord, Lord Lucas of Chilworth. Before I continue, I should like to add my words of congratulation to the noble Lord, Lord Fleck, for the interesting and important speech which we heard earlier this afternoon and to say how much I also hope that we shall hear him in your Lordships' House on many occasions in future.
I cannot think of any single field in which the "purposeful and dynamic spirit" which the noble Viscount is looking for, could be arrived at than this difficult field of our method of sharing the national production which goes into

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personal wages or incomes. My own feeling is that we want to move fairly rapidly towards some form of national wages policy—I should prefer to call it, national policy on incomes—because this seems to be the one major factor in our economy over which we have no satisfactory control. For my own part, I should be happy to see such a policy integrated with a policy which covered profits; and from what the noble Viscount said, in moving his motion this afternoon, I believe that this also is in his mind.
The noble Lord, Lord Fleck, in expanding to your Lordships what he described as the industrial philosophy which he thought was needed in this country, made it clear that he anticipated, in his particular case by means of profit-sharing, that there would be some measure of control or agreement on the distribution of profits to capital as a counter-balance to the agreement which one would look for in the amount that was taken out of the whole "cake" in the form of incomes vis-à-vis wages and salaries. The noble Viscount Lord Amory, indicated that the use of taxation, particularly of profits tax, by the Government could be another factor which might help to offset any restraint which was sought from those taking their incomes directly out of employment. I should have thought that if that line of reasoning could be developed, it would go some way to meeting the point raised by the noble Lord, Lord Walston.
I think that I must say here that the noble Lord was less than fair to my Party, and to the Government, in the general implications he made about the philosophy which we have. Maybe we support the general profit motive and believe in competitive enterprise. I think that we all do, but I do not think that it is driven to quite the length the noble Lord would have us believe. Certainly, after listening to some of the speeches made this afternoon from the Cross Benches and from my noble friends on this side of the House, I think it is clear that, though we support a system of competitive enterprise, it is not pursued to the exclusion of the general interests of all sections of the community. For the noble Lord to turn to his trade union colleagues and say that, since the Conservative Party and the leaders of industry are extracting every ounce out of the
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national economy through taking profits when they are available to the exclusion of other interests, labour is free to extract the highest possible price for its services, is, I should say, at this stage of our development, a very dangerous philosophy indeed.
LORD WALSTON: My Lords, I was not encouraging the trade unions to do that in any way. I was simply emphasising the point, which the noble Viscount had made, that an example is frequently followed, particularly the example of leaders; and when there is apparently the example of leaders of industry charging what the traffic can bear, one cannot be surprised, although one does not approve of it, if trade unionists and labour also follow that example. I certainly do not want noble Lords to think that I am encouraging that form of action in any way on either side.
LORD MELCHETT: My Lords, I am glad that the noble Lord has made that clear. On the whole, I do not think that in industry and commerce the effort, to the exclusion of all other considerations, is to extract the highest price the traffic will provide. But when we come to the whole field of incomes which are largely in the hands of people earning up to about £1,000 a year, for them to be able, by the collective pressure of their organisations and the power of their bargaining position, to hold up whole sections of industry and at times the whole economy—and often this is done by quite small numbers in a dispute— seems to me one thing that is dangerous and in need of re-examination. For this reason, I am attracted by the proposal which the noble Viscount Lord Amory, touched upon in his speech.
It seems to me that there is one common factor which has come out from this debate this afternoon and which was also most evident in the debate in your Lordships' House last October on the Motion of the noble Lord, Lord Shackleton, on industrial management. The fact to which I refer is that most noble Lords seem to be agreed that the economic and industrial conditions of to-day are very different from the conditions in which most of our systems and techniques of management and labour organisation grew up, and that particularly in the last fifteen years the whole scene has changed enormously. It seems

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clear that not everyone has become adjusted to the new circumstances. Indeed, there are still a number of people who really do not believe in them. They are a little anxious that the conditions of to-day are not going to last, and they are constantly looking over their shoulders and wondering whether some of the difficulties and horrors of slumps and so forth of the pre-war years are going to return.
The factors that I have in mind are the highly-developed and advanced social conscience, which I think has become widespread throughout the community and is demonstrated in both political and industrial life; the fact that full employment has become a major part of Government policy—and I think one can say Governments of both sides; and that the Welfare State is an established fact and has, of course, had a great influence on people's thinking, their way of life and their general outlook. But I should have thought that of almost greater importance than any of these is the fact that there has been a large measure of stability, which has been partly the product of a greater understanding of economic affairs and the fiscal and monetary policies which have been adopted, both on a national and an international scale. Finally, as the noble Lord, Lord Fleck, pointed out to your Lordships this afternoon, people are much better educated. There is a complete generation of people now in employment who have had the benefits of a much wider and better standard of education, both on a general level and industrially, than was available in the years before the war.
For all these reasons it seems to me that there should be a much greater opportunity now of getting the type of co-operation to which the Motion draws attention, particularly in this difficult field of creating what is a fair share for income to absorb, than there was in earlier years. I hope that this general idea or proposal will commend itself to Her Majesty's Government, because I think that the Chancellor of the Exchequer, in the recent Budget, has shown himself to be open to new ideas. He has introduced the so-called economic regulatory taxes, which are aimed at controlling economic life without having to
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resort exclusively to the severe use of monetary controls.
Nevertheless, it appears that the difficulty of coping with the constantly increased pressure for incomes and the resulting inflationary pressure which this starts off, are still a major gap in the whole machinery which is available to the Government. I do not think this is something that can be dealt with by legislation. It must be a field in which co-operation, understanding and negotiation will provide the only reasonable solution. Some of your Lordships may have noticed that a rather important Report was recently issued by the O.E.E.C. (it was, in fact, initiated by the 0.E.E.C., and has now been dealt with by the successor body, the O.E.C.D.), which has examined this very problem of the income or wage push inflationary spiral for all European countries. The inquiry was conducted by an international team, and there was almost complete unanimity (there were one or two reservations, but not important ones) that it was of the first importance for Western European countries to examine this problem and try to move towards some form of agreed wages or income policy.
I mention this particularly because the noble Lord, Lord McCorquodale of Newton, seemed to indicate that the recent Brighton Conference had come down conclusively in favour of the retention of collective bargaining, partly because they thought this was the system best suited to this country. When one has in mind what the future of the economy of this country is likely to have to contend with, as the noble Lord, Lord Lucas of Chilworth, demonstrated to your Lordships, and the fact that we are going to have to compete with, and co-operate more closely with, our European neighbours, I think this is an added reason for looking at the thing not purely from the point of view of what may suit the industries of this country best, but from that of how we are going to stand in competition with other countries and, particularly those close to us in Europe.
I should like to conclude by saying that of all the debates I have attended in your Lordships' House in recent years on really broad, important subjects this is probably the most important. But I am afraid that also up to now it has left me

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with the deepest sense of depression. Listening to the noble Lord, Lord Citrine, I had the feeling that from his great experience in the trade union movement he felt there was little hope of getting much co-operation; that the bitter history of the past, the battles for reasonable conditions and reasonable rates of pay, were so deep-rooted that it was now going to be (I think he said) almost impossible to get people to sit down and collaborate and work out new systems for the next ten or fifteen years ahead.
I was also a little depressed by the speech of the noble Lord, Lord McCorquodale of Newton, because his definition of the objectives of organised labour (I hope I am not misquoting the noble Lord) were shorter working hours, higher wages and more leisure; and that those on the management side of industry were lower production costs and greater output. If we are going to narrow the issues down to those very material and narrow points, and not concentrate on what we are really trying to get out of life and what we are trying to give people in their working lives, then I should have thought it was a most depressing outlook. I am, however, much encouraged by the type of industrial philosophy advocated by the noble Lord, Lord Fleck, and by the outlook which was put forward by the noble Viscount, Lord Amory, in introducing the Motion. They both said, I think, that it is a depressing outlook for this country if we have to face a constant battle and have to resort to the use of the power of organised labour, on the one side, or, on the other, the power of the Government to try to force a measure of unemployment or restrictions indirectly through monetary controls, and that we can look forward to a reasonable way of life and reach prosperity, and get the best out of industry and the resources available, only if we can get a real spirit of co-operation.

BUSINESS OF THE HOUSE
LORD NEWTON: My Lords, perhaps I may intervene for one moment to inform your Lordships that the noble Lord, Lord Birdwood, will not now be moving his Motion set down for to-day, in view of the lateness of the hour at which it would have been likely to come on.

CO-OPERATION IN INDUSTRY
Debate resumed.
5.40 p.m.
EARL BALDWIN OF BEWDLEY: My Lords, I share the feeling of depression of the noble Lord, Lord Melchett, at some of the speeches we have heard, but we can perhaps take comfort from the fact that no speaker has come out strongly against co-operation in industry, and so far so good. I myself am also in favour of a better spirit of cooperation in industry. A learned letter to The Times a few weeks ago told us that
"unofficial disputes in the motor industry reflect the failure of a centralised collective bargaining system to adjust itself to a changed power structure in industry."
That is all right; it may well be so; but my own more old-fashioned thoughts about factory life will come out better in rather more old-fashioned language, and I am afraid that that is the only way in which I can approach this subject—which is entirely personally.
Recently I was shown a printed sheet that had been circulating in Western engineering factories. It is headed "More Pay For You." It suggests to its readers that they are not well paid for their long and hard work. It reminds them that they have only two weeks' holiday, and that their employers have two months; and it comments on their last rise in pay thus:
"Seven shillings a week to a skilled man. That's all they think you are worth. But what about the bosses? Do they put their pay up by seven bob a week? Not on your life! Look at the figures of just three companies."
Then there follow the names of three colossal engineering companies, and against them some colossal figures. A little short, sharp arithmetic then appears to prove that the directors are getting startlingly good wages. And all this is circulated in an engineering factory.
The sheet goes on:
"Not bad going. Makes another seven bob a week for the chap who does the real work look pretty silly doesn't it? These bosses are so busy taking £301,000 a year each out of the business, driving around in company cars and having plenty of lunches on the company's account that they feel they can only spare us seven bob."
The sheet ends with a call for general agitation, of course.

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It is easy enough to scoff at literature like this, but it does catch on quite well here and there in the ugly spots of industry. When I saw that circular I could not help measuring the spirit of it against that which used to prevail in the steelworks where I was employed for some time before the last war. For it seemed plain to me that the trouble was not really one of wages and conditions —not, in fact, material at all. It was purely emotional. If men had simply struck work for higher wages, longer holidays, shorter hours and softer work, then the steelworkers that I knew a generation ago would not have stayed at the job one week. I am well aware that in those years it was not so easy for a man to strike, with between 1 million and 3 million unemployed, and I am also aware that this chronic distemper is occurring in trades of which, unfortunately, I have had no experience.
My knowledge of workmen—and it is on that qualification that I am venturing to address your Lordships—is limited to a year's sojourn in steel and tinplate works in South Wales and by ten years in, and finally in the management of, hot rolling mills in the West Midlands. But all that was between 1923 and 1935, which is rather a long time ago. Nevertheless, I cannot but believe that the lessons that I learnt there when I was young are just as applicable here and now. The basis of them is that whatever the centralised collective bargaining system may be, or whatever Governments may or may not do with industry, or whatever the pay and whatever the hours of work, as the noble Viscount, Lord Amory, said, there is no substitute whatever for a trustful understanding between the men and the management from the top to the bottom. I am sorry that it sounds trite. I am sure it is true, but I am afraid it is not always recognised.
Although I speak with utter conviction, yet I speak also with diffidence, because the factory where I worked was only a small one (though it was part of a large combine) employing about 300 men. But I knew that factory intimately, I knew practically every one in it by name and nickname, and many of them —and this made it more fun—by individual temperament also. It was incon-
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ceivable that there should ever be more than a passing misunderstanding between us. I must mention that this factory had a long and harmonious tradition that had been built up by my forbears.
This all had such an effect on me that to this day, after five-and-twenty years' absence from the steelworks, whenever there comes a spell of exceptionally hot weather and I am sitting in my cool home or on these luxurious Benches here, the scene fades and I can fancy myself back under the baking corrugated iron roof of those deafening mills, watching my friends on their 8-hour shift, plying their tongs between the lines of blazing furnaces and the hot polished rolls, the skin scorched off their brows and noses, streaming with sweat and gasping in a temperature that almost shrivels the lungs inside them. I can still fancy standing watching them as I used to, and wondering how long those heroes can carry on. We were forced to come to a stop on very rare occasions, for the heat was really more than flesh could go on taking. And who then could do anything but praise them for the much they had done? Those men never went slow or walked out—only once, under distant orders in 1926, when the quarrel was none of theirs.
Anyone who has known a spirit of co-operation such as existed in those mills in one of the hardest trades in the country—and the iron and steel trade has had a very good record in this respect—is bound to ask why such a spirit cannot exist in those other, less hard, trades. It seems to me that there are some directors and managers who expect a fountain of goodwill to come springing up from the bottom of its own accord and rise to the top. All my past observation tells me that the spirit of an organisation must have its origin only at the top, and the state of things at the top, good or bad, inevitably percolates in some form or other right through the firm and affects everyone concerned. I have seen it so often
So my first thought when I hear of bad labour relations is not, "What is wrong with these men?" but, "What is wrong with the management?" The very size of modern firms and factories, and of trade unions, too, makes it far harder to maintain a bridge than a barrier between masters and men. Barriers are

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erected more easily than bridges, too. For this reason, I think it is important that industrial leaders should give the subject their personal, profound and prolonged attention. Years of hard climbing tend to toughen a man. I believe that many in the higher places, and in those not so high, have allowed themselves, in the press of material advancement, to forget what they should not forget. Too often, in fact, those very qualities that took them so surely to the top were those also that helped to separate them in outlook from the lads they left behind them.
For my part, I know that when I was at last translated from daily contact with the men in my firm to seats in board rooms far away, I felt at first very much out of place, and it took me some time to settle down in the new high atmosphere. But then gradually the process of oblivion began. I might never have realised what was happening to me had it not been for another translation within three or four years—by no means uncommon at the time—into the ranks of one of the Services, where I remained, rather to my surprise, for fifteen months. During that time I was able to observe from my juniors in age and my seniors in rank—for there was no one below me in rank during all that period—how to get the best out of juniors or the worst out of men. It was an invaluable experience. I will not say any more about it except to adapt Dr. Johnson's words on a man about to be hanged:
"Depend upon it my Lords, when a railway director—which is what I was at the time—finds himself reduced to the ranks it concentrates his mind wonderfully".
In other words it brings him in middle age in to very close contact with life below the salt in a way that can never be imagined from above. It gives him an entirely fresh view of those in authority that he had never visualised truly before and can never thereafter forget.
It is evident that this problem of human relations in industry, as in the Services, ought not to be just left to sort itself out, even with the help of Government mediators, trade union chiefs and professional welfare officers, however conscientious they may be. It must be done right inside the factory. But it may be said that in the relentless routine of a manager's desk, there is not time to spare for such things. Well, there should
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be time. If there is not, then it must be searched for until it is found. Human beings, my Lords, are far too important to be cancelled out by clocks and obliterated by pieces of paper. Time and motion study experts are constantly being employed to discover where in the factory operators are losing time and wasting motion. Why should not the boss himself submit to a similar investigation to reveal why he has no time to set to rights a perennial source of loss to his business?
The cynical use of sticks and carrots, as these are called, is not the only way to stimulate wage-earners and profits. What human being was ever totally mercenary or totally rational? We are all compounded of nerves, prejudices, affections and pride, with quick resentments, stubborn loyalties often at odds with our material interests. More damage can be done in a works by neglecting to take account of that than some business men seem to have any idea of. I have seen fine-brained workmen changed into enemies of authority by tactless handling. The valuable type that has to make its mark in life regardless of consequence, wants special handling. I have seen so many ruined. The proper study of management is surely man, though, oddly enough, the two words do not grow from the same root.
What I have said, I know, offers no panacea for these sore spots in industry. I know that very well. The trouble is wide and deep, some of it is political, some economic, some perhaps is part of the psychological problem of youth. I have been able to face it on only one narrow, personal front. If my words have sounded out of date and sentimental, I can only say that I think they are sound business common sense because I have seen what I have seen. Much is wrong at the bottom, plenty of shirking, trickery, envy, hatred, greed—all that is well known. What is not so well known is that perfunctory or even genuine benevolence at the top is no longer adequate in the present state of industry. I think that the leaders should step off the chromium-plated treadmill and then learn, and see that their officials learn thoroughly at all grades, the ancient lesson of how to do as they would be done by.
If they are shy of the word "sympathy" there is a more fashionable

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one that can be used. It means nearly the same and sounds much more manly. The scribes call it empathy. In my experience most men demand little more than that. They demand it unconsciously. They need understanding. Receiving it, they can put up with much. But denied it, though they may have all the synthetic welfare and profit-sharing schemes in the world laid on for them, their hearts are very likely to turn sour.
Directors of industrial companies and trade union chiefs might do worse than hang up on their boardroom walls the words of Queen Elizabeth I in Parliament in 1586:
"I have had experience of this world, and I know what it is to be a subject and what it is to he a sovereign."
In that pregnant phrase about having been a subject lies the secret, my Lords, of what I should like to think is meant by "a more powerful, purposeful, and dynamic spirit of co-operation in industry".
5.55 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, this Motion, which I consider a matter of extreme importance, has come at a most opportune moment. In all the economic debates we have had in this House, in some of which I have partaken, we have always ranged over all the usual financial arguments about the bank rate, gold reserves, exports, imports, balance of payments, et cetera. I cannot ever remember having heard labour mentioned. It has always occurred to me that it was rather a subject that was taboo in this House. Yet labour is the basic factor on which the economic stability of this country depends. I, for one, am extremely pleased that owing to the act of the noble Viscount, Lord Amory, in putting down this Motion, we now have an opportunity to talk about it.
Though my interests are chiefly agricultural, about ten years ago I started a small factory, and I therefore have a certain amount of experience of direct contact with labour. For myself I must say that I have never had any trouble at all with labour. Labour does rather appear to be a sacred bull which is so ensconced in the aura of its own sanctity that it appears to be oblivious of the economic hazards piling up
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around it. What are these hazards? If I could just repeat them briefly it might help. First of all, our balance-of-payments position is the worst since 1951; our productivity has not increased at all since last year, and it is also only 20 per cent. higher than in 1954. Yet, my Lords, every year the unions appear to consider that their members are entitled to a wage increase, irrespective of the productivity of industry. In fact if world trade had not been in our favour last year we should have been an extra £400 million to the bad on our balance of payments. If that sum is added to the £344 million deficit on our balance of payments it gives a figure amounting to almost two-thirds of our gold and -dollar reserves. We need only two or three years of that bad trading, and we shall be "broke". There is no argument about it.
For instance, if we compare our position with that of Germany it makes extremely dismal reading. Germany consumes in wages, salaries and dividends only 58·5 per cent. of her gross national product, against our 66 per cent. She invests in capital equipment 23 per cent., against our 15 per cent., and she exports 25 per cent., against our 21·5 per cent. Now why is this? The Germans are certainly not superior to us in any way. Surely the answer can only be in the words of this Motion: that they have a "purposeful and dynamic spirit of co-operation in industry," against which they have no time for restrictive practices or unofficial strikes. The "60-dollar question" is, as we have heard to-day: how are we to cultivate this spirit in British industry?
Her Majesty's Government have done a great deal to help industry. They have extended export credit guarantees, and the range of Government services to exporters. They have supported industry in setting up the Export Council of Europe and in reconstituting the Dollar Export Council to form the Western Hemisphere Export Council. They have, in fact, done a great deal to help industry compete in the world's markets. But all these efforts, admirable though they are in themselves, can do little to arrest the economic decline in this country unless all parties in industry combine for the common good. If only the British worker could be made aware of the simple economic facts, so that he would

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not be led astray by those attempting to destroy the industrial life of the nation and thereby his own livelihood! As I have stated before in this House, the real danger this country has to face is an economic threat, rather than a military one. The Soviet aim is to capture our world markets, and one of their ways of achieving this aim is to damage our industrial structure by unofficial strikes.
My Lords, I wonder whether any statistician has ever compiled the annual losses to Britain arising out of restrictive practices and strikes? Apart from the cost in man-hours there is, as we have heard, the loss in breach of contracts and the loss of orders due to lack of confidence in the ability to deliver on time. Especially does this apply to shipbuilding. Further, I would remind your Lordships of the report of last year's tally clerks' strike at the London Docks. The Report ended with the words, "To await the next occasion with indifference is to court disaster". Well, "the next occasion" came only a few weeks ago. And what happened? The Transport and General Workers' Union, the world's largest union, allowed its authority to be filched by a Communist, Mr. Jack Dash, of Stepney. Mr. O'Leary, one of the union leaders, stated that London as a place for sending cargoes has the worst reputation in the world. I have an interest in tramp-shipping—we are, in fact, launching a new ship in a few days—and I can thoroughly endorse Mr. O'Leary's views. We all try to avoid the Port of London.
How are we to bring home to the British working man the deadly peril in which he stands?—and it is deadly. I know that some people will think I am crazy to say so, but we are balancing on a tightrope. How are we to make him understand this? How can we make him understand that every unofficial strike, and some official ones, ultimately have to be paid for by himself? We have heard a great deal in this debate about management. Can management put this over to the working man? I rather doubt it, because management is still slightly suspect. Of course, my experience is only in very small firms, where owner and management are often one and the same thing; you have personal relationships; you know all your people by name, and you usually get on very well
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together. But industry is controlled by vast organisations, and I really doubt whether, in these vast organisations, management can have the human relationships to get this over.
In the past 20 years or so management has become a far more complicated business, with all the advances in technology and science. We now have courses at universities, technical colleges and the British Institute of Management, and all these various organisations which in the technical field are doing a great job, but when it comes to human relationships I believe (perhaps I shall be laughed at) that the best managers are born. You cannot, for instance, create an artist by teaching. You can teach any man to daub in oils, but you cannot turn him into an artist; it is either in him or it is not. And I think that in all walks of life where leadership or originality is required, a man either has it in him or he has not. It may, of course, be that we are tending in some ways to become too technical. I realise that I am going against the whole attitude of the debate in saying this. I quite agree that in policy making, in high executives, of course the more technical you can be the better; but when it comes down to the shop floor it is essential to have that human understanding or charm—call it what you like. I think it is necessary to have sometihng that cannot be taught in any technical college. I only hope that managing directors when they are choosing the managers for the shop floor, are not entirely swayed by academic prowess.
Management is doing a great deal in issuing factory news-sheets, holding discussion groups, and acts of that sort, to try to improve relations. But I personally think that if the big companies could try to explain the simpler points of their balance sheets to the workers it would be a great help, because the average worker—I speak to him quite a lot—sees that I.C.I. or some huge concern has made so many millions profits; he thinks, "Why cannot I have that?". If only it could be explained to him where that money goes; that after company tax is paid it goes to shareholders who have to pay their tax and surtax; that so much goes to reserve, and that, in the end, probably three-quarters of it goes back to the State for the benefit of

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the worker. If only we could try to explain these things to him! The average human being is extremely fair-minded, but these things have to be got over to him.
The body of all bodies who could help most in this is the trade union movement —the T.U.C. itself. I personally think the T.U.C. owes a great debt to the nation. If we take the 1906 Trades Disputes Act, on which I have just checked in the Library, we see that it is extremely widely drawn, and is so drawn as to remove all labour fears; and no lawyer, however, clever, could ever turn it against labour. This what I may call rather lavish over-immunity from the law has, I am sorry to say, in the interval inflicted grave damage on the community. I understand that last year alone we lost 3 million working days through unofficial strikes. What the bill is in thousands of millions of pounds over the last ten years I have no idea.
The unofficial strike, as we have heard to-day, is a breach of trust and contract. I can describe it only as a conspiracy to the restraint of trade. In the Trade Union Acts the trade unions are supposed to support trade. Firms or private individuals who embark on breaches of contract are sued in the courts, but since the unions, owing to the 1906 Act, are above the law, they are really the most privileged body in the State, and the community has every right to expect them to use their power with responsibility and control their followers. If they cannot, or will not, then we revert to the jungle, and everyone is licensed to cheat. The resulting chaos will not only destroy the unions but will destroy the great strides in social progress that we have made in the last 20 years for the working classes.
It may well be that the time is coming when a closer legal definition of the right to strike will be necessary. It should be only a very circumscribed right, because otherwise it becomes a right to wreck the whole community. No employer wishes to upset the solidarity or the bargaining power of the so-called working classes. The unions, provided they stick to their job and keep order in their own house, are an extremely necessary part of the State. But all we ask is that they do remember
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the common good. Before I end, I would, therefore, appeal to the unions to hunt out the traitors from their ranks. Be tough; be ruthless—because the stakes are extremely high. If we do not have a new spirit of co-operation in industry there cannot fail to be a disaster, and we shall have a terrible post-mortem. I also appeal to Her Majesty's Government to remember that in such an event they will equally be held to blame, for not getting the economic facts over to the people and awakening them to their danger. We have heard a lot about the guilty people of the 1930s who failed to tell the people the true facts of rearmament. I only hope that we shall not have any guilty men of the 1960s, who failed to tell the people the true economic facts.
6.20 p.m.
LORD CASEY: My Lords, I apologise for being one of those who seek to extend this debate into an awkward hour. I am also well aware of your Lordships' wholesome allergy against having to listen to someone who has no actual present-day knowledge and experience of the matter at issue, and I admit at once that I have quite inadequate knowledge and experience of the temper of industrial relations in the United Kingdom to-day. But, in spite of that, there are one or two things in regard to which I would crave indulgence to address your Lordships for a relatively short time.
Perhaps I might be allowed a nostalgic reference to a distinguished Australian professor, Elton Mayo, who I believe it is fairly generally admitted made a great contribution to some of the basic factors on which modern industrial relations are based when he was head of the Department of Industrial Research at Harvard, almost a generation ago. Listening to the noble Viscount, Lord Amory, and to other noble Lords who have spoken this afternoon, it seemed to me that the things that were established by Elton Mayo nearly a generation ago may have become overlain in the course of the last generation. I am not going to develop that aspect. But Elton Mayo's work. I am sure, will be well known to the Ministry of Labour; and if one is right in believing that some of Elton Mayo's original research work has been forgotten, or has become overlain, then perhaps the Ministry of

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Labour might consider the possibility, or the advisability, of restating some of the principles that he made to emerge nearly a generation ago.
But the main thing that I wish to take up a little of your Lordships' time in speaking about this afternoon is the question of automation, about which I do not remember having heard much more than a passing reference in the speeches that I have listened to to-day. I believe that the problem of the progressive adoption of automation in this country is likely to—I think it will almost inevitably—have a profound effect on industry and on industrial relations in this country in the future. I do not think we need spend time in an effort to define automation, other than to say that it is the application of modern science and technology to the processes of industrial production.
I know that the subject is by no means unknown to your Lordships. It has been discussed in both Houses of Parliament, I think principally in 1956 and 1957, and it has been the theme in recent times of a great many articles by people who know their subject, and of a long and, to me, extremely useful survey put out by the Financial Times in late January of this year. As I think your Lordships are well aware, automation must entail some displacement of human labour, particularly unskilled labour, and the substitution for that labour of mechanical, scientific and technological equipments.
It has been said that automation is the delayed second barrel of the Industrial Revolution. I believe it to be almost beyond dispute that the prosperity and the competitive position of the United Kingdom is involved in the rate at which automation is implemented in this country. I am given to understand that, given the experience of years, it can be implemented over a very wide spectrum of commerce and industry in this country. After discussions in recent times with responsible leaders of industry on the employers' side and also on the organised labour side, I have the impression that automation is being put into practice in this country only relatively slowly—I believe a great deal more slowly than in the United States, probably more slowly than in Soviet Russia, and also possibly more slowly
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than in West Germany and Japan: in other words, that the great industrial competitors of the United Kingdom may be getting ahead of this country in this field.
Responsible people with knowledge of this subject have said that the faster automation is adopted in this country the better, although the faster it is adopted the greater will be the problems of re-adjustment of labour and of coping with redundancy in respect of unskilled labour. But if automation is adopted more slowly, then it may be that Britain's competitive position in the world will be menaced. So it would appear that for the future a rather nice and delicate balance is called for in respect of the rate of adoption of automation.
I believe it is true and right to say that organised labour in this country is in favour of the progressive adoption of automation, and probably at a greater speed than it is now being adopted, but with the understandable and proper proviso that the interest of the workers is foreseen and protected. No doubt that means that in the minds of organised labour, and I think of most of your Lordships, provision should be made for financial adjustment in respect of displaced men who become redundant, either through severance pay or possibly, as has been suggested by some noble Lords this afternoon, by a contract of employment that takes into account the possibility of a man's being displaced through automation in the future.
But although organised labour may be said to be favourable to automation, that does not mean that in the present temper, as I understand it, of the labour movement in this country, the adoption of automation in individual plants is not going to cause trouble, possibly through what has been described by one noble Lord this afternoon as some lack of discipline in the labour movement at the works level. That there will be difficulties and troubles caused by the progressive adoption of automation I think is almost inevitable. For one thing, I think the incentive schemes that exist in this country in a variety of forms are likely to disappear in those plants where automation is adopted. This, in itself, will cast a strain on industrial relations. As we know, in the past, or up to the present, in a works that is not automated

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the rate of production depends largely on the efforts and scope of the individual workers; whereas in the future, with automation, the rate of production will depend very much more indeed on the machine than on the man who minds the machine.
May I quote to your Lordships one or two statements that I think are profoundly relevant to the point about automation? Mr. Lewis Wright, the chairman of the Production Committee of the T.U.C., has quoted the T.U.C. as saying:
"Unions would like to see automation introduced at a pace that is not too fast as to put a breaking strain on industrial relations machinery, and in its ability to cone with the inevitable problems of change, and not too slow as to jeopardise industry's competitive efficiency and thereby threaten employment."
As I have extracted that, it seems to me to be something that could be quoted outside of its context, and I believe that it contains the germ of the truth of the point I am endeavouring to make. As I have said, I have been informed that in the United States automation is going ahead relatively fast. At the Annual Congress of American Industry, organised by the American National Association of Manufacturers in December of last year, only a few months ago, it was stated that the American national interest required an official public policy to be made known, to create an environment receptive to technological change.
A quotation that I think is important, from the Russian point of view, is what Mr. Khrushchev is quoted as having said in his report to the Twenty-First Congress of the Communist Party in 1959, He is quoted as saying:
"Integrated mechanisation and automation of production processes constitute the chief and decisive means for ensuring further technical progress in the [Russian] economy."
Those seem to me to be two essential quotations in this connection. I will give your Lordships one more. Mr. Leon Bagrit, whose name, I believe, is well known in this country in connection with automation, has said:
"There is no doubt that the Soviet Union is basing its hones of overtaking the West by being quicker off the mark in the adoption of these new techniques than the capitalist countries—and it is entirely tin to us whether their calculations prove right or wrong".
I realise that the discussions have been going on for some little time between
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the representatives of the employers and of organised labour with the Ministry of Labour, no doubt with the purpose of giving advice to the Government in due course and of making recommendations as to action by the Government. For myself, I find it rather difficult to see what Her Majesty's Government can do in this regard, other than give automation their blessing and make certain recommendations, both to employers and to organised labour, no doubt with a sympathetic reference to how redundancy of unskilled labour can be coped with.
I am afraid that I am not adequately informed as to whether a matter of this sort, the Government's attitude towards automation, is a subject that in this country can be dealt with best by legislation or by the quiet influence of the Minister of Labour. But I believe, from the discussions I have had in recent times, that some statement of the Government's attitude is clue. I have no doubt that it will come, I should hope before very long; and when that time comes, I expect the employers to listen with a very attentive ear to ascertain whether the Government make reference to the possibility of any accelerated depreciation as some sort of "sweetener" to offset part of the high cost of establishing automation in a plant. I have no doubt that, at the same time as the Government speak on this matter, in due course, the trade unions will have an anxious ear listening, for mention of compensation for displacement of redundant labour. At any rate, I believe that Her Majesty's Government cannot say nothing on this subject. I believe the time has come when, in the national interest, a statement of Government policy is called for.
The situation may well be advanced beyond the things I have been trying to say to your Lordships this afternoon. But if they have not advanced beyond the stage where I am advised they are now, then I believe that the time is ripe for a Governmental attitude to be stated if we are to avoid dislocation on a considerable scale in industrial relations. My Lords, I have spoken, as I indicated when I started, not on the temper of industrial relations in this country to-day, but on how they may be affected, and I myself believe that by automation they will be affected profoundly in the

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years that lie ahead, when I hope that the speed at which automation is introduced will be fairly rapidly increased.
6.35 p.m.
LORD MERRIVALE: My Lords, before passing on to the more general considerations I should like to mention that this very afternoon discussion is taking place on the occasion of the Golden Jubilee of the British Manufacturers' Association on the problems and benefits of co-operation in the electrical manufacturing industry over the last fifty years. I mention this to show that there is at least one industry which takes the question of co-operation, or which has taken the problem of co-operation, very much to its heart. My noble friend Lord Amory may have had in mind the fruits of this co-operation when he wrote on February 1, 1958—and I will quote him:
"In the last decade we in the United Kingdom have established the basis for a period of tremendous economic expansion. British industry is therefore well equipped to meet the world's growing needs for electrical equipment on competitive terms, so that the United Kingdom may contribute in full measure to economic developments throughout the world."
My Lords, with regard to the economic development of this country, and particularly with regard to key industries, such as, for instance, the electrical industry, I think there is a very urgent need for a co-operative effort by manufacturers to determine the future trends of a growth in demand as well as the future market potential. Here I believe that trade associations can play a very large and useful part, for I believe it to be essential that there should be interchange of information between the firms of any one industry if one is to avoid excessive price warfare and unstable trading conditions, which may lead to over-investment in productive capacity or price-cutting—and this may be done purely to obtain temporary advantages. Therefore I feel that the essential link in this context lies with the trade associations, which can act as a go-between, so that sufficient and reliable information is available to the firms concerned under the necessary conditions of trust and confidence. This can easily be achieved within the limits laid down by the 1956 Restrictive Trade Practices Act, which defines and limits the extent to which co-operation between manufacturers is permissible with-
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out registration and ultimate reference to the Restrictive Practices Court.
To pass on to the management-employee aspect of co-operation, I should like to refer to the lack of liaison which exists between certain employers' associations. For instance, I should like, as an example, to refer to a recent case which arose in January of this year where the national joint industrial council for the electrical contracting industry—that is, comprising the National Federated Electrical Association and the Electrical Trades Union—awarded a shilling increase in the hourly rate to electricians without consulting the industries that could be affected by this increase. In this case this increase, made, as I said, without adequate consultation with other industries which would be affected, caused embarrassment to the cable-making industry, the Federation of Civil Engineering Contractors and the Engineering Employers' Federation. For after that increase cable jointers were receiving 7d. an hour less than electricians—and I should like to remind your Lordships that the work and trade of an electrician and a cable jointer are very similar indeed.
The problem of management-employee co-operation varies to a fair extent from one industry to another. I think it is a particularly arduous problem with those industries which employ a large proportion of casual or, shall I say, mobile labour—such industries as the building, civil engineering and the electrical contracting industries. For instance, one firm of which I know had on its payroll last year an average of 4,500 employees, and yet during that year took on and dismissed over 6,000 employees. In cases like this, where one is mainly considering unskilled or casual labour, the problem of loyalties can indeed be a complicated one, while, at the same time, a management is faced with the difficult problem of inspiring in the mind of the employee a sense of belonging to or being part of the firm.
In this respect, my Lords, there is no doubt that more could be done to initiate newcomers into the importance of their work in relation to the general pattern of production of the firm. These courses (I believe that in one instance, anyhow, they are known as induction courses) serve as an introduction to the firm for a newcomer. Apart from having

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explained to him his part in the general picture, and receiving general information on the firm itself—its history, its activities and particulars of the executive personnel—the newcomer will also take a greater interest in the firm which he has joined if these courses include a form of communication by visual means, such as the display of films, showing the work which the firm undertakes, other than the work with which the employee would be concerned, but which has a bearing on his own particular work. If, also, printed matter, including photographs, is available to him, he can then better understand the importance of his particular job in the context of the complete production of that firm.
I think that from the time a man joins a firm, as has been said before, it is essential that there should be good communication within that firm. Again, I particularly have in mind casual labour. The employee may have a short contract: it may be for nine months, for instance. I think it is essential, particularly with regard to good and conscientious workers, that, especially towards the latter part of their period of employment, they should be kept informed as to what steps are being taken by the company to give them further work at some other site. I believe I am right in saying that in this respect a number of firms are very lax, and that the employee has little or no knowledge of what will happen to him when his term of contract comes to an end. Another sphere where a speedy or good communication is essential is in dealing with grievances or complaints. If they cannot be considered or dealt with immediately, and there is unavoidable delay, then I think it is essential that the firm should state the reasons to the employee and keep him au fait as to what steps will be taken or are being taken. In other words, my Lords, as I have stressed before, there should be good communication at all levels of employment.
I also believe that more could be done with regard to the setting up and the convening of joint consultative committees. By that, I mean domestic committees comprising shop-floor or factory management representatives and employees' representatives. These committees should meet at regular intervals, so
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that formal but friendly discussions can take place on questions of mutual concern, including small complaints which may, if not brought out and settled, cause friction. The managing director, advised by his personnel officer through the supervisor and the engineer in charge, must be able to keep his finger on the pulse of management-employee relations. I would say that one of the keys to satisfactory relations may be found in the adequate training in human relations of those persons concerned with the shop floor—that is, the foreman or the supervisor, and the engineer in charge. I think it is very important that they should be adequately trained in the art of human relations. Consider one industry, the motor industry, and two somewhat similar firms in that in, dustry—the Ford Motor Company and Vauxhall Motors. It is interesting to note, with regard to Vauxhall Motors, what a first-class industrial relations officer and adequate joint consultation can achieve. I think those are two of the main reasons why there has been so little trouble indeed at Vauxhall Motors.
Finally, my Lords, I should like to say a few words on the importance of what I would call the social life of a company. By that, I mean the provision by a firm for its employees of adequate sporting and recreational facilities. I have particularly in mind the provision of an attractive social club. I believe that, with regard to a number of firms, greater efforts could be made to attract to their clubs, and to a bigger participation in their sporting events, not only the office worker but also the factory operator—in other words, to get the two types of employee. Not so long ago, when I visited one particular firm —that is, Chiswick Products, Limited—I remember how struck I was by the excellent management-employee relations which were apparent in that firm. This seemed to me, in the short time I was there, to be due mainly to good communication within the firm, the realisation of the benefits to be derived from joint consultation. But it was also, and not least, due to the provision of adequate recreational facilities, apart from sporting facilities, which were provided in extremely pleasant surroundings. I am sure that that club contributed to a good understanding between

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management and employees, if only because during the evenings a very large number of members of the firm were there with their families.
I would end by saying that I do not believe that it is only financial incentives and bonus schemes, ideas for increased production or the lowering of costs, that offer a solution to the problem of adequate management-employee co-operation. Perhaps the solution lies more in those aspects of liaison, communication, joint consultation, and also the social life of the club which has been mentioned by other noble Lords and myself.
6.52 p.m.
LORD LINDGREN: My Lords, at this late hour I do not intend to delay your Lordships for as long as I think this important subject really deserves. Expressions of gratitude have been made to the noble Viscount for placing this Motion on the Order Paper, and I should like to join in those expressions, because the more we talk about this sort of thing, the better chance we have of getting it into perspective a little more, as has been shown this afternoon. While one is talking of gratitude, may I also compliment the noble Lord, Lord Fleck, on his maiden speech? We were introduced on the same day, and therefore it is nice to hear a maiden speech made so successfully—successfully because of his fundamental knowledge of the subject about which he is talking, and because he sincerely believes in it. May I also congratulate the noble Earl, Lord Baldwin? It is the first time I have heard him in this House. I worked very closely with his brother at one period during the lifetime of the Labour Government, and got to be quite fond of him. I appreciated the noble Earl's speech to-day and I wish to come back to it, because I agree with it fundamentally.
A great deal has been said, particularly by Lord Melchett, about depression. It is said that we are not getting on fast enough; nothing is being done. Well, that is far from the truth. Management in industry generally has given a considerable amount of time, thought and energy to the development of good industrial relations, and while newspapers give headlines to disputes and to problems, and to troubles, other industries which go on correctly and properly, in
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which harmony exists all the year round, year in and year out, such as the industry to which the noble Earl, Lord Baldwin, referred—the steel industry—and the boot and shoe industry, are not news, so they do not get into the Press.
Also this afternoon a great deal of advice, particularly to the trade union movement, has been given. We are all, perhaps, looking at this problem from the point of view of our own knowledge and experience. I start from the point from which the noble Earl, Lord Baldwin, started: that if anything is wrong, it is more often wrong at the top than it is at the bottom. The noble Earl referred to his Army experience. I do not think he claimed that it was very distinguished, but he is sitting next to a distinguished soldier. It is equally true in the Services that if there is anything wrong in any unit, it is more often than not the top which is wrong than anything down below.
If you are going to have a good unit within the Services, it depends not only on command but also on the N.C.O. who is vital within it. The same applies within industry. The "N.C.O." within industry—the fellow who has the relationship directly with his mates on the floor—is fundamental. This is where industry is falling down at the present time. Industry is falling down not altogether through its own fault; it is due to the success of the trade union movement, the efforts of our educationists, and the greater opportunities we are now giving, in grammar schools and universities, to the average boy and girl going through our schools.
The lads who went into apprenticeships 30 to 40 years ago finished their time, and then changed over to another job because they did not work in the same industry where they served their time. When I say "served their time", I do not mean within Her Majesty's Prisons, but within the industry in which they did their apprenticeships. They were then picked out because they had the quality of leadership, and they became the foremen, the works managers, and the rest. That type of fellow is to-day going from the primary school to the grammar school, and then on to university; or, if not to university, he is going straight into some technical side of industry. So that within industry itself we are losing what used to be the

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training ground of the "N.C.O." who came through it.
If we acknowledge that, I am sure there is not a noble Lord in this House who would say that, just in order to provide a good foreman or works manager, we ought to cut down our educational system and go back to the old days, recognising that we are going to cream off the grammar school types who are going into the technical side of industry to make their contribution. Industry calls for their services because of the greater development of clerical, technical and professional work in industry as compared with the ratio of workers on the shop floor. Industry has to understand or appreciate that it has to provide its N.C.O.s from within its own ranks, and has to pay special attention to the training of those personnel. I know we have undertaken training over some considerable time. The Ministry of Labour did a considerable amount with Training Within Industry schemes during the war, and some industries are themselves doing it at the present time. But it is the fact that many industries are not paying the attention to it which they should; and as regards supervisors they are doing what the noble Lord, Lord Lucas of Chilworth, referred to: employers in the Birmingham area are, by enhanced payments, poaching or enticing general workers to industry and away from other organisations.
Reference has been made to unofficial strikes and difficulties within industry. Here, again, whilst the trouble is put on to the Communists and the trade unions, management must take its responsibility too. Reference was made just now to the Services. There is a type of lad in the Army who is a sergeant four times and a private five. We get the same sort of lads within industry; they go up and down erratically, lacking a sense of responsibility, although there is leadership and ability in them. Very often industry panders to the fellow who has the big mouth and issues threats, and takes little notice of those who go on putting their case calmly and quietly. I agree that there is a certain lack of discipline within industry. No one in this House would like to go back to the industrial discipline which we had in the interwar years, in which the discipline sprang
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from the fear that a worker's cards would be with his pay packet on the Thursday or the Friday when he drew his pay. Nobody wants to see that.
We admit that within the trade union movement we have not yet learned to use the power and authority which comes from full employment wisely and well. Very often industry answers quickly if there is an unofficial stoppage. The trade unions do their best to negotiate beforehand and I know that often there are good reasons why the management cannot come together as quickly as trade union officials would like, though in many trade unions the officials are over-worked and, I agree with the noble Lord, Lord Lucas of Chilworth, under-paid as well. But when there is a stoppage, the management come to heel quickly and then they will say to the trade union officials, "Can you tell these boys to go back to work and we will start talks with you to-morrow morning?" But it was just as easy for them to talk with the trade union officials before the strike started.
It is not only the employers and workmen in the engineering industries who find trouble. Such respectable people as the teachers have had to strike, although it stretches the trade union concept a long way to say that the National Association of Schoolmasters is a trade union. That body is not recognised as one which can participate in negotiation over rates of pay. The National Union of Teachers are threatening to strike because the powers that be are not moving in regard to discussions on salaries and conditions of employment as quickly as they ought to do, or as the teachers think they ought to do.
The noble Viscount who moved this Motion quoted agriculture as an industry in which the personal relationships between masters and workmen, employers and employed, are of the best. That was supported fully by my noble friend Lord Walston, and agriculture is a good example. I would agree that relations in agriculture as a whole are perhaps the best of all industries. It is equally true that productivity and efficiency within the agricultural industry have risen at a greater rate and to a higher extent than in any other industry. But the worker in the industry has not got a lot out of it, and, as my noble

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friend Lord Walston tells me, the farmers have not got very much out of it, either. So if efficiency and productivity and harmony mean a high standard of life, why has it not become so in the agricultural industry?
Reference has been made to the motor car industry, and compliments have been paid to the Minister of Labour on the work he has been doing. I think that that is good work. I am sorry that none of my medical colleagues is present, because I think that the physical reactions of the workers play some part in industrial disputes. Rarely, if ever, do we get disputes, particularly unofficial stoppages, in the pattern shop. If there is trouble, where does it generally start?—with the "tin bashers", the tinsmiths. And I have a strong suspicion that the type of work they do, the vibration and noise, has some relation to their reaction.
I must make some reference to what the noble Lord, Lord Lucas of Chilworth, said about shop stewards. We can all overstate a case—I may have been guilty of that myself many times—but in the main: the shop steward movement does a first-class job. The shop stewards are men who take on the responsibility for and co-ordination of the relationship between management and their fellow-workers in the workshop. They are unpaid and, more often than not, they do this work at their own cost, because they are missing shop bonuses and floor bonuses, unless there is a collective arrangement with their colleagues by which the shop stewards get their share.
These men do a good job of work faithfully on behalf of their colleagues and fellow trade unionists and on behalf of the management. All we hear about are the shop stewards who cause a considerable amount of trouble by getting out of hand. The start of this is often because the ordinary fellow in the trade union movement does exactly the same as many of us do in our own organisations, whether they be a tiddley-winks club, a church, or a bowling or cricket club. We keep away from the annual general meeting because we may become secretary or may be put on the committee. The same applies when there are elections of shop stewards. It is the fellow who is prepared to do the job who gets put into it, irrespective of his ability.
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Perhaps we can draw an analogy between two types of firms in the same industry. The noble Lord, Lord Merrivale, referred to Vauxhall's and to other motor car firms. Here we have the same type of work and the same type of men; but there are two different types of reaction to the relationship within the works. I think that arises because the management has handed over to the shop stewards, who have been prepared to be threatening. The noble Viscount opposite said that the trade union movement had to be ruthless with some of these people. May I say that, after all, it is the responsibility of management to manage? They cannot expect the trade union movement to do the disciplinary work of management. What they have every right to expect from the trade unions is that the trade unions should use their knowledge and experience in order to see, if they can, that the right persons are put into these jobs.
Frankly, this question falls into two categories. First of all, there are national negotiations over wages and salaries, and for conditions for industry as a whole. The relationship between the employee and the employer within a works ought not to be mixed up in any way or allowed to interfere with the over-all negotiating power of the trade union movement nationally. The job of joint consultation—the shop stewards, the works management committees and the rest—is to implement the national agreements in the local conditions of the shops in which they work. Of course there are bound to be individual variations, and it is in that individual variation, adapting the local conditions without in any way undermining the national agreements, that they come into work.
The noble Lord, Lord Fleck, said that joint consultation was an attitude of mind, and with that I entirely agree. You cannot suddenly try to adopt joint consultation within industry and expect it to be an immediate success. The fellow who is brought into consultation from the floor thinks of three things generally—clocking on, clocking off, and the condition of the lavatories; and generally they are three subjects which are put down for joint consultation when they meet. The average fellow who goes to work does so for the pay-packet he is

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going to get on Friday night; if there were no pay-packet, he would not go to work. You cannot expect him to have the overall knowledge of why things happen within the organisation. Management, as management, may get impatient when a person at a low level starts asking silly and awkward questions, the answers to which he could find if he would take the trouble to go to Somerset House or somewhere else. Part of the jab in joint consultation, and part of management's real function, is to impart knowledge to the employee in order that he may begin to understand not only the function that he performs, but where his function fits in with others and how the system works.
The noble Lord, Lord Lucas of Chilworth, quoted a newly appointed chief of one of our nationalised industries—and here I think is an example of unintentional bad joint consultation and bad public relations. Public relations and joint consultation with industry, as well as management and employers, trade unions and the rest, depend on the Press; and the Press can be helpful or unhelpful. I picked up the other morning a national newspaper and saw:
"The Beeching Plan. Fares up—Staff Cut."
That is the last thing that ought to come from the head of a large organisation. Here is an industry in a large section of which men—fellows I was working with not long ago—are working 50 weeks of the year, seven days a week, and somebody comes along and says: "You are overstaffed. Staff has got to be cut". There are undoubtedly places where there is more staff than there ought to be, and his statement was probably an indication of the fact that it is necessary to bring the industry into a shape and size more commensurate with the plan the Government has in mind. But if you are talking to fellows—and they think only about themselves—who have been working 50 weeks in the year, seven days a week, and say: "There is going to be a staff cut", they say: This bloke has come in at £24,000 a year, but he doesn't know anything about it"—that is not quite what they would say, but it is the effect of it.
These questions of staff cuts ought not to be made known by public announcements on the wireless, television or in the Press. There should be consultation
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with the trade union before it is done, and an understanding come to, so that the trade union can work out what will happen in regard to redundancy arising from staff cuts. Then the trade union can go to its members and have talks with the joint consultation committee at the floor level and say: "This is what we propose to do, and this is what the effect of it will be. The persons who are going to lose their job will be found work somewhere else", or this, that and the other; or "We have an agreement in regard to x weeks for x years of service," or whatever it is.
My last point, in so far as management is concerned, is this—and here I think there have been great strides in managerial relationships, with joint consultation. There was, and in many instances still is, far too often the approach of management which invites consideration of a scheme of reorganisation, readaptation, or what-have-you. They would go to a committee, whether a local departmental committee, a works council, a panel, or whatever they call it in the particular industry, and say: "This is what we propose to do. Will you consult with us on its implementation?" The intention is good, but fundamentally that is the wrong way to do it. What they should say is: "Here is a scheme. Let us have your criticisms before we implement it." One ought not to go to work on a basis of joint consultation with a fait accompli. It ought to be on the basis of: "We think this is the best way to do it. You criticise it and amend it, and we will put it in on the basis of our joint consultation."
I close as I began, by thanking the noble Viscount, Lord Amory, for giving us the opportunity of this discussion. I doubt whether we have made any vital decisions or given anyone a great deal of help in regard to the matter, but I think it is all to the good that we should discuss these vital subjects. May I say, on behalf of the trade union movement, that we are fundamentally with any and every employer for the greatest degree of consultation we can get. After all, a worker spends the major portion of his life when he is awake in the workshop, and the better he can enjoy that, the better it is for his general health, as well as for his peace of mind. Equally, so far as efficiency is concerned, no worker, skilled or unskilled, likes

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doing a job inefficiently; he would far rather do it efficiently and to the greatest effect. Therefore, the greater degree of unanimity we can have, the better it will be, not only for the workers in the industry and in the country as a whole, but for everyone throughout the land.
7.19 p.m.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, I should like to join in thanking my noble friend Lord Amory for initiating this Motion and for the helpful terms in which he expressed it. He has raised questions of vital importance to our wellbeing. The basic considerations are, of course, the state of industrial relations between employers and employees and between the employers' organisations and the trade unions. The problem of improving our national efficiency is one of the vital things in our lives to-day. It is true that new discoveries and new techniques are at our command, and that we are making use of them; but they are also available to other countries. It is not enough merely to improve our own efficiency; we must keep abreast of what others are doing; and we cannot do this if our industrial relations are not improved.
I know that the question of the continuous increase in wages and the connected inflationary conditions are very controversial subjects. It is, nevertheless, a subject about which there is much misunderstanding among the trade unions, on the one hand, and employers on the other. There is no settled method of assessing the factors which should determine the needs of employees in regard to wages and the ability of industry to pay, either on the basis of present prices or by varying the prices to meet the situation. Whether rates are settled by direct negotiation, through the established statutory councils or by arbitration tribunals, the issues seem to be determined by bargaining and compromise. It has been my experience that there is nearly always an absence of facts, but it has also been my experience that even if the facts are there, they tend also to be ignored. I think it might be useful if I reminded your Lordships of what the International Confederation of Free Trade Unions had to say, which provides the background against which unions demands are made. It was this:
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"Trade Unions will demand wage increases in order to catch up with increases in the cost of living and with rises in productivity, in order to improve the ratio of wages to profits, or in anticipation of productivity rises. In those rare conditions under which wage increases may lead to inflationary price rises, trade unions can be expected to be careful in their wage demands since inflation is generally harmful to workers' interests."
There is nothing wrong in that: that is a good statement.
It has been my experience that in spite of the examples we have before us of the evils of inflation, there is really little that is constructive in the approach to the question of wages either by management or by the workers' representatives: rather the pressure of events influences the outlook and the actions of the parties. The employers, on the one hand, will assert that it is rising wages which are causing inflation; the workers will say that wages are constantly chasing prices, and that when prices are rising as a direct result of something outside their control, trade unions cannot agree to withhold wage demands. It is because these two divergent views cannot be reconciled that appeals for wage restraint generally have little result. The truth is that in inflationary times the tendency is for rises in wages to follow increases in the cost of living, and for the cost of living to go up again following increases in wages. The workers have got used to having regular inreases, and that becomes dangerous when such increases are at the same time greater than the amount of increase in national productivity.
Another matter which I think should concern us is the tendency for wage increases in one industry to be imitated by others. That is the doctrine of comparability and that, in my view, is speeding up inflationary tendencies in the economy. I remember the noble Lord, Lord Citrine, saying that he could not get an answer to a question lie put forward. It was one referring to the general increase in national productivity, or to increases in individual industries, and the payments which should therefore flow to the workers in the individual industries who were showing the greater increases. I think the answer is a clear one. People who increase their productivity deserve higher wages, but at the same time, we cannot ignore the effect if general wage increases exceed the increase in national productivity.

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I think all those concerned in industry want to retain free collective bargaining but, of course, that becomes a cause for inflation if the results are higher than they should be over whole industries compared with the increase in productivity. If a country were unique in suffering continuous price inflation, it would presumably have constantly to devalue its currency. But since the war what has happened is that all countries have been suffering from inflation, and we have therefore been spared the necessity of devaluing our own currency. But there are signs that other countries are improving their position more than we are. We cannot afford to slip back, and if industry cannot do its share in solving the problem of inflation, then, of course, Governments must have recourse to other methods, and there are unwanted repercussions on certain sections of the people.
The noble Viscount, Lord Amory, said—I am afraid with some justification—that all those concerned with industrial problems are too complacent, and then he proceeded to put forward some constructive suggestions. Whether they are capable of realisation is another matter. The noble Viscount suggested that the trade unions, employees and the Government should work out some system whereby basic advice and guidance should be made available, possibly through the Council on Productivity, Prices and Incomes, which would provide a guiding light as to what the country could afford. The reception of the reports from this independent body, indeed the absence of co-operation with it, does not augur too well for any acceptance of its indications. It seems quite unlikely that any free negotiations between the parties most concerned could follow. The people who had to pay, and even the Government, if they became concerned, would, I suggest, be shackled by the basic advice and guidance for which the neutral body was responsible.
I have already said that, in the long run, if the aggregate increases go beyond what the country can afford to pay the Government must resort to remedies. I apologise to the noble Viscount for mentioning this matter again, because it was taken up by others of my noble friends. But in replying for the Government I would say that I do not think that a tax on the employee would make for
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better industrial relations, and I know the noble Viscount shares that view. But, as I say, the matter was mentioned and therefore I think that I, too, should give the Government's view. Nor, I would add, would profits tax, or increasing what the employer ought to pay, help either. I am very much afraid that while the existing state of affairs may be described as ramshackle, it is capable of being made to work by a cultivation of better industrial relations.
The noble Viscount, in referring to arbitration, supported the idea of voluntary arbitration but thought the results should be binding. My noble friend would like arbitrators to say what is fair and reasonable and not practise conciliation. I would remind him that many of the arbitration courts consist of representatives of the employers and the trade unions, with or without an independent chairman, so in the very nature of things I do not think that conciliation can be excluded. How can they get away from the problem of attempting to reconcile two divergent points of view? It is well known that the workers and their representatives are often loth to resort to arbitration. It is equally well known that employers are not enthusiastic about it either. I have often wondered why. I believe that the real reason is that it generally follows the same line as negotiation between the parties themselves—compromise. I suppose one prefers one's own compromise to the other fellow's.
The noble Viscount referred to the problem of unofficial strikes. I fully agree with him as to the moral and material damage to all concerned, not least of all to the economy of the country by such frustrating and generally unneccessary actions. I agree that we should all do our best to try to get a realisation of the evil effects of such action on the men themselves, on the trade unions and on the country as a whole. I agree, too, that by education we should try to get over the importance of the sanctity of contracts, but it has been my experience that contracts once made between employers' organisations and trade unions are kept. I think the noble Viscount had in his mind the unofficial strikes by certain sections of men. But I do not agree that that is a matter that could, or should, be dealt with by legislation. It is just by improving our

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industrial relations that we shall deal with problems such as that.
Then the noble Viscount referred to the day-to-day relations between firms and their employees. It has been my experience that too many firms are quite content to take their chance, trusting to the loyalty and good sense of those they employ; or they appoint a personnel officer and leave it to him to try to work out the problems. In many cases management are concerned principally with the methods and the machines they employ and too little with the qualities and the failings of the men and women who work with them. The company with which I was concerned for most of my working life never had a direct strike; and I am convinced that it was because at all levels we studied the needs and the conditions of the people who were in the jobs. We pioneered improvements long before public opinion brought them universally into use.
I believe that those businesses which deal with industrial relation problems at the highest level generally do not suffer from strikes; and they are generally high in the scale of efficient firms. It is necessary at all stages that management and men should understand the value of good relations and take the trouble to explain to the foreman and to the operatives the need for changes in their particular spheres. Now machinery for joint consultation in the shop is of course of the greatest importance and it should be used continuously and properly. But I was very glad that the noble Lord, Lord Lindgren, mentioned the question of the foreman. In these days of specialisation, of planning, of automation, the position of the foreman has in a great many cases been left ill-defined, and he is the representative on the shop floor who is in daily, constant touch with the men. As the noble Lord said, he can in many cases iron out the difficulties so that they do not result in industrial disputes.
I remember I was so impressed with that myself that I got together with some industrial friends of mine and persuaded or helped them in my own City of Birmingham to get together and start a National Institute of Supervisors, whose job was to train for foremanship, to make the foremen understand what they were supposed to do and to equip them to
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understand the requirements of the people who work for them and with them. I do not think we should forget that our British industry is composed of a mass of large and small firms, in which the small firms still predominate, but in all I think the need for good labour relations is paramount. My noble friend referred to the need for consultation on all matters affecting the workers, particularly on the appearance of redundancies—a most important matter—and on the question of profit-sharing or co-partnership which, in my view, is growing and is to the benefit of those who are practising it; and on the question of notice being linked with the length of service—in my experience this is now largely practised, perhaps in different ways in different establishments—but I should say that the improvement in that respect is continuous.
I was happy that the noble Viscount, like so many other noble Lords, paid a tribute to my right honourable friend the Minister of Labour in bringing employers and unions together to discuss common problems calmly and constructively. In the early part of this year, as has already been mentioned, he brought together leading employers and trade union officials in the motor industry. This is the first occasion in recent times that employers and trade union officials in a single industry have met under the chairmanship of the Minister of Labour to discuss the whole range of their industrial labour relations problems. I suppose it is too early yet to say what the result of those talks will be—they look promising—but the final test will he whether they get down to the establishments, to the men in the shops; that is, whether what they say at the top is reflected down below.
I think I should just mention also the importance of the Minister of Labour's Joint Advisory Council, which is composed of representatives of the British Employers Confederation, the Trades Union Congress and the nationalised industries. They have started a long-term programme of examination into a series of problems affecting relationship between employers and workers. It is considering such subjects as redundancy, the selection and training of supervisors (which I am very glad to see), communications on both the employers' and the

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trade unions' sides, consultations between management and workers, recruitment and, what is most important, induction procedures.
If these moves are not successful in bringing about improvement in labour relations, the noble Viscount suggested that perhaps the only alternative was a Royal Commission. I am doubtful whether that is a good idea. I doubt, too, whether it is very practicable. It would have to range very wide. The composition of the Commission would be such that people would have to be on it who understood every aspect of this very complicated problem, and I think this is a problem which we do far better to thrash out in industry, and I believe the will to do it is growing.
VISCOUNT AMORY: My Lords, I agree with the noble Lord. I think it is very much second best, and I hope we shall not have to resort to it.
LORD MILLS: I thank the noble Viscount. The other point that the noble Viscount, Lord Amory drew attention to was the question of the Minister of Labour's responsibility. He suggested that it might be wise to divide his responsibility for conciliation from his other great responsibilities. The noble Viscount will know from his own experience that all Ministers are faced at times with conflicts between their different spheres of responsibility, and I think it is important to keep the function of the Minister's conciliation in perspective.
Most issues between employers and their workers are settled by themselves—we never hear of them. Many industries, too, have their own arrangements if they fail to come to an agreement—they have their own courts of arbitration to which they resort. It is only a relative minority of cases that comes to my right honourable friend the Minister of Labour. I think it would be a pity to disturb the present situation. Those in dispute come to the Minister because of his standing and because over the years successive Ministers of Labour have built up a tradition of fairness and skill in settling disputes which is respected in industry. I do not think it would be wise to seek to destroy an arrangement which works so well in practice.
May I just refer briefly to the other noble Lords who contributed to this
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debate—I am aware of the time and I will not keep you much longer, especially as I had to be at a dinner myself at half-past seven, but, as the noble Lord, Lord Citrine, said, he too had a tendency to over-develop things in which he believed. I think it is a very good quality. We had a very interesting and helpful speech and he talked to his trade union friends in a way which was outspoken but which I am sure could not give offence. He realised both the strengths and the weaknesses of the trade union movement. He stressed this question of communications and said that the position was lamentable. I think he was probably right, and I entirely agree that one thing that can do more than most to better industrial relations is to talk to each other on all subjects, not just to do things without anybody else knowing.
One thing to which I should like to draw attention is that he spoke about hire purchase as if it were a bad thing. I do not think hire purchase in itself is a bad thing. It enables many people to have some of the aids to life which they would not otherwise have. It is only when hire purchase gets out of hand that it is bad. The system in itself is not bad. He also spoke about training and made a very useful contribution on that subject.
I must add my congratulations to those of other noble Lords upon the maiden speech of the noble Lord, Lord Fleck. It was a maiden speech which I thought was valuable and very sincere and reflected his own great experience of the subject on which he was speaking. He referred to the fact that the time lost by unofficial strikes was only one-tenth of 1 per cent. That is true. But I think we were all shocked and surprised at the damage done by the tally clerks' strike, which was one of them. The percentage figure does not by any means reflect the damage which the country suffers. The other theme which the noble Lord developed was that of a code for industry. He referred to the Mond-Turner negotiations of several years ago. I think that this point is worth considering, though I know the difficulties are great. But it may be that my right honourable friend, the Minister of Labour, will have a look at it and see if, in the course of his discussions, there is any value in that suggestion.

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The right reverend Prelate the Lord Bishop of Sheffield spoke of spending the whole of his working life in industrial places. At this late hour I want to refer to only one thing—namely, that you could not expect co-operation in the shops if there was incompetence in management. I think that is very true. He also spoke about segregation; but I am afraid that that is a fact of life and we have to find a way to compensate for it, or a way to get to know people, even though at the end of the day we separate from them.
The noble Lord, Lord McCorquodale of Newton, has devoted great thought, great time and great energy to this problem of improving industrial relations. He gave us a very interesting account of the British Employers' Confederation Conference, and I was glad to hear that, in his view and those of his colleagues, free collective bargaining was most likely to serve our best interests, and should not be abandoned but should be subject to constant review and, where necessary, modification. He also said that in the headlines we heard only of the bad news, never of the good news. He drew attention to the fact that personnel management was a matter for the top management, and said that if the top were not interested in personnel management we could not hope to improve labour relations.
The noble Lord, Lord Walston, talked about profit-sharing but he made one remark which struck me: co-operation means being in the same boat together. Then he went on, however, to take us to Utopia—whether in a boat or not, I was not quite clear—where everybody would do everything out of a sense of duty, and that we were quite wrong to relieve management, or anybody else who was reaching the £2,000 a year level, through the surtax reduction. I think he was a little hard, too, in saying that our economy was based on profiteering and usury. However, I do not propose to pursue that aspect.
The noble Lord, Lord Lucas of Chil-worth, started his remarks by asking: how are we going to earn our daily bread? Then he went on to talk about the apathy of both sides of industry. While making a plea for youth in industry, he went out of his way to attack the old. I thought that a little unfair. As the noble Lord, Lord Lindgren, pointed
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out, he attacked the shop stewards. I thought that was also unfair because the shop steward system is one thing and its abuse by some people is another.
The noble Viscount, Lord Massereene and Ferrard, gave us a very interesting account of the efficiency and difficulties of the electrical industry. But he used a phrase which I thought was an apt one: that we ought to combine for the common good. He said that the danger to-day is an economic threat and not a military one. He also stressed the desirability of education and training, and elaborated on the question of communications. The noble Lord, Lord Casey, talked about automation, and he said that a nice and delicate balance is required as to the rate at which it is introduced. I think that is true. He also said one thing which, though it did not exactly puzzle me, I feel he ought to have elaborated a little. He said that incentive schemes are likely to disappear. While that may be so, I am sure that, in the long run, the workers concerned with automation will be better off in many ways.
I am sorry that I attributed to the noble Viscount, Lord Massereene and Ferrard, just now, the reference to the electrical industry; I apologise to him. That was, of course, the subject of Lord Merrivale's speech. Lord Merrivale was the first one to mention foremen, and I was glad he did so because I think they play a vital part in attaining this better understanding. He also referred to adequate sporting and social activities. As a matter of fact I think that that is pretty well catered for. I remember in my own company—it must be 40 years ago—the time when it was difficult for a man to get employment unless he could be a useful member of the brass band. Then I must congratulate, if I may, the noble Lord, Lord Lindgren, on a very helpful speech. He made a very solid contribution to what we all have our heart in, the improvement of industrial relations. I do not quarrel with his remark that if anything is wrong it is likely to be at the top, because it has been my experience that if you get bad management, workers are not satisfactory; if you get good management, they are. As I said, I think we have had a very useful debate. It has lasted a long time, but I think it has been worth it.
8.2 p.m.
VISCOUNT AMORY: My Lords, I agree with my noble friend Lord Mills: We have had an interesting and thoughtful debate, and I should like to thank noble Lords who have taken part. I would join in the tribute of congratulation to my noble friend Lord Fleck on his maiden speech. The noble Lord, Lord Citrine, apologised for the fact that he had to leave. Otherwise, I should have liked to apologise to him again that, through clumsy wording, I have caused him to misunderstand what I said on two quite important things. I should like to repeat, if I may, that I am not in favour of compulsory arbitration but in favour of voluntary arbitration; and the only point I made about results being binding was that there should be voluntary agreement in advance that the results should be binding, not that they should be compulsorily so by Statute. On the other matter of payroll tax, I am not an advocate of such action at all, but I was simply quoting an extreme example of the kind of action that Governments might be forced to take, if inflation became out of control, in order to syphon off excessive consumer demand. As the noble Lord, Lord Mills said, in the event of such inflation the Government would be forced to take action to syphon off consumer demand.
I should like to say what a pleasure it was to hear noble Lords like Lord Citrine and Lord Lindgren speaking on subjects on which they have had such tremendous first-hand experience. I would join in what the noble Lord, Lord Mills, said about the pleasure with which we listened to Lord Lindgren's remarks towards the end of the debate. The noble Lord, Lord Walston, asked me a question; which I feel I had better answer. He said: "With a market economy should not trade unions be free to demand as high wages as they can get?" I understand the point completely. I would say, Yes; but in conditions of inflation it would not be to their advantage to do so, because in fact they would be endangering the basis of full employment. I should like to say how interested I was in the thoughtful speech of my noble friend Lord Melchett, and to thank my noble friend Lord Mills for the very helpful contribution that he made on behalf of the Government at the end of our debate.
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If the deep thought reflected in our discussions this afternoon may help to stimulate thought on these important matters throughout the community, then I think that our debate will have been well worth while. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.