CO-OPERATION IN INDUSTRY

HL Deb 14 June 1961 vol 232 cc182-241

2.17 p.m.

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 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 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 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 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 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 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 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 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 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 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 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 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.

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.

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- 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 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. 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, 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 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 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 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. 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, 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 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 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- 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 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 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 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 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.

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 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 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 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 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 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 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 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 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. 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 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 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 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 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 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 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 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 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 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 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 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- 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 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 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 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 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 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.