CO-OPERATION IN INDUSTRY

HL Deb 14 June 1961 vol 232 cc242-80

Debate resumed.

5.40 p.m.

EARL BALDWIN OF BEWDLEY

My Lords, I share the feeling of depression of the noble Lord, Lord Melchett, at some of the speeches we have heard, but we can perhaps take comfort from the fact that no speaker has come out strongly against co-operation in industry, and so far so good. I myself am also in favour of a better spirit of cooperation in industry. A learned letter to The Times a few weeks ago told us that unofficial disputes in the motor industry reflect the failure of a centralised collective bargaining system to adjust itself to a changed power structure in industry. That is all right; it may well be so; but my own more old-fashioned thoughts about factory life will come out better in rather more old-fashioned language, and I am afraid that that is the only way in which I can approach this subject—which is entirely personally.

Recently I was shown a printed sheet that had been circulating in Western engineering factories. It is headed "More Pay For You." It suggests to its readers that they are not well paid for their long and hard work. It reminds them that they have only two weeks' holiday, and that their employers have two months; and it comments on their last rise in pay thus: Seven shillings a week to a skilled man. That's all they think you are worth. But what about the bosses? Do they put their pay up by seven bob a week? Not on your life! Look at the figures of just three companies. Then there follow the names of three colossal engineering companies, and against them some colossal figures. A little short, sharp arithmetic then appears to prove that the directors are getting startlingly good wages. And all this is circulated in an engineering factory.

The sheet goes on: Not bad going. Makes another seven bob a week for the chap who does the real work look pretty silly doesn't it? These bosses are so busy taking £301,000 a year each out of the business, driving around in company cars and having plenty of lunches on the company's account that they feel they can only spare us seven bob. The sheet ends with a call for general agitation, of course.

It is easy enough to scoff at literature like this, but it does catch on quite well here and there in the ugly spots of industry. When I saw that circular I could not help measuring the spirit of it against that which used to prevail in the steelworks where I was employed for some time before the last war. For it seemed plain to me that the trouble was not really one of wages and conditions —not, in fact, material at all. It was purely emotional. If men had simply struck work for higher wages, longer holidays, shorter hours and softer work, then the steelworkers that I knew a generation ago would not have stayed at the job one week. I am well aware that in those years it was not so easy for a man to strike, with between 1 million and 3 million unemployed, and I am also aware that this chronic distemper is occurring in trades of which, unfortunately, I have had no experience.

My knowledge of workmen—and it is on that qualification that I am venturing to address your Lordships—is limited to a year's sojourn in steel and tinplate works in South Wales and by ten years in, and finally in the management of, hot rolling mills in the West Midlands. But all that was between 1923 and 1935, which is rather a long time ago. Nevertheless, I cannot but believe that the lessons that I learnt there when I was young are just as applicable here and now. The basis of them is that whatever the centralised collective bargaining system may be, or whatever Governments may or may not do with industry, or whatever the pay and whatever the hours of work, as the noble Viscount, Lord Amory, said, there is no substitute whatever for a trustful understanding between the men and the management from the top to the bottom. I am sorry that it sounds trite. I am sure it is true, but I am afraid it is not always recognised.

Although I speak with utter conviction, yet I speak also with diffidence, because the factory where I worked was only a small one (though it was part of a large combine) employing about 300 men. But I knew that factory intimately, I knew practically every one in it by name and nickname, and many of them —and this made it more fun—by individual temperament also. It was incon- ceivable that there should ever be more than a passing misunderstanding between us. I must mention that this factory had a long and harmonious tradition that had been built up by my forbears.

This all had such an effect on me that to this day, after five-and-twenty years' absence from the steelworks, whenever there comes a spell of exceptionally hot weather and I am sitting in my cool home or on these luxurious Benches here, the scene fades and I can fancy myself back under the baking corrugated iron roof of those deafening mills, watching my friends on their 8-hour shift, plying their tongs between the lines of blazing furnaces and the hot polished rolls, the skin scorched off their brows and noses, streaming with sweat and gasping in a temperature that almost shrivels the lungs inside them. I can still fancy standing watching them as I used to, and wondering how long those heroes can carry on. We were forced to come to a stop on very rare occasions, for the heat was really more than flesh could go on taking. And who then could do anything but praise them for the much they had done? Those men never went slow or walked out—only once, under distant orders in 1926, when the quarrel was none of theirs.

Anyone who has known a spirit of co-operation such as existed in those mills in one of the hardest trades in the country—and the iron and steel trade has had a very good record in this respect—is bound to ask why such a spirit cannot exist in those other, less hard, trades. It seems to me that there are some directors and managers who expect a fountain of goodwill to come springing up from the bottom of its own accord and rise to the top. All my past observation tells me that the spirit of an organisation must have its origin only at the top, and the state of things at the top, good or bad, inevitably percolates in some form or other right through the firm and affects everyone concerned. I have seen it so often

So my first thought when I hear of bad labour relations is not, "What is wrong with these men?" but, "What is wrong with the management?" The very size of modern firms and factories, and of trade unions, too, makes it far harder to maintain a bridge than a barrier between masters and men. Barriers are erected more easily than bridges, too. For this reason, I think it is important that industrial leaders should give the subject their personal, profound and prolonged attention. Years of hard climbing tend to toughen a man. I believe that many in the higher places, and in those not so high, have allowed themselves, in the press of material advancement, to forget what they should not forget. Too often, in fact, those very qualities that took them so surely to the top were those also that helped to separate them in outlook from the lads they left behind them.

For my part, I know that when I was at last translated from daily contact with the men in my firm to seats in board rooms far away, I felt at first very much out of place, and it took me some time to settle down in the new high atmosphere. But then gradually the process of oblivion began. I might never have realised what was happening to me had it not been for another translation within three or four years—by no means uncommon at the time—into the ranks of one of the Services, where I remained, rather to my surprise, for fifteen months. During that time I was able to observe from my juniors in age and my seniors in rank—for there was no one below me in rank during all that period—how to get the best out of juniors or the worst out of men. It was an invaluable experience. I will not say any more about it except to adapt Dr. Johnson's words on a man about to be hanged: Depend upon it my Lords, when a railway director—which is what I was at the time—finds himself reduced to the ranks it concentrates his mind wonderfully". In other words it brings him in middle age in to very close contact with life below the salt in a way that can never be imagined from above. It gives him an entirely fresh view of those in authority that he had never visualised truly before and can never thereafter forget.

It is evident that this problem of human relations in industry, as in the Services, ought not to be just left to sort itself out, even with the help of Government mediators, trade union chiefs and professional welfare officers, however conscientious they may be. It must be done right inside the factory. But it may be said that in the relentless routine of a manager's desk, there is not time to spare for such things. Well, there should be time. If there is not, then it must be searched for until it is found. Human beings, my Lords, are far too important to be cancelled out by clocks and obliterated by pieces of paper. Time and motion study experts are constantly being employed to discover where in the factory operators are losing time and wasting motion. Why should not the boss himself submit to a similar investigation to reveal why he has no time to set to rights a perennial source of loss to his business?

The cynical use of sticks and carrots, as these are called, is not the only way to stimulate wage-earners and profits. What human being was ever totally mercenary or totally rational? We are all compounded of nerves, prejudices, affections and pride, with quick resentments, stubborn loyalties often at odds with our material interests. More damage can be done in a works by neglecting to take account of that than some business men seem to have any idea of. I have seen fine-brained workmen changed into enemies of authority by tactless handling. The valuable type that has to make its mark in life regardless of consequence, wants special handling. I have seen so many ruined. The proper study of management is surely man, though, oddly enough, the two words do not grow from the same root.

What I have said, I know, offers no panacea for these sore spots in industry. I know that very well. The trouble is wide and deep, some of it is political, some economic, some perhaps is part of the psychological problem of youth. I have been able to face it on only one narrow, personal front. If my words have sounded out of date and sentimental, I can only say that I think they are sound business common sense because I have seen what I have seen. Much is wrong at the bottom, plenty of shirking, trickery, envy, hatred, greed—all that is well known. What is not so well known is that perfunctory or even genuine benevolence at the top is no longer adequate in the present state of industry. I think that the leaders should step off the chromium-plated treadmill and then learn, and see that their officials learn thoroughly at all grades, the ancient lesson of how to do as they would be done by.

If they are shy of the word "sympathy" there is a more fashionable one that can be used. It means nearly the same and sounds much more manly. The scribes call it empathy. In my experience most men demand little more than that. They demand it unconsciously. They need understanding. Receiving it, they can put up with much. But denied it, though they may have all the synthetic welfare and profit-sharing schemes in the world laid on for them, their hearts are very likely to turn sour.

Directors of industrial companies and trade union chiefs might do worse than hang up on their boardroom walls the words of Queen Elizabeth I in Parliament in 1586: I have had experience of this world, and I know what it is to be a subject and what it is to he a sovereign. In that pregnant phrase about having been a subject lies the secret, my Lords, of what I should like to think is meant by "a more powerful, purposeful, and dynamic spirit of co-operation in industry".

5.55 p.m.

VISCOUNT MASSEREENE AND FERRARD

My Lords, this Motion, which I consider a matter of extreme importance, has come at a most opportune moment. In all the economic debates we have had in this House, in some of which I have partaken, we have always ranged over all the usual financial arguments about the bank rate, gold reserves, exports, imports, balance of payments, et cetera. I cannot ever remember having heard labour mentioned. It has always occurred to me that it was rather a subject that was taboo in this House. Yet labour is the basic factor on which the economic stability of this country depends. I, for one, am extremely pleased that owing to the act of the noble Viscount, Lord Amory, in putting down this Motion, we now have an opportunity to talk about it.

Though my interests are chiefly agricultural, about ten years ago I started a small factory, and I therefore have a certain amount of experience of direct contact with labour. For myself I must say that I have never had any trouble at all with labour. Labour does rather appear to be a sacred bull which is so ensconced in the aura of its own sanctity that it appears to be oblivious of the economic hazards piling up around it. What are these hazards? If I could just repeat them briefly it might help. First of all, our balance-of-payments position is the worst since 1951; our productivity has not increased at all since last year, and it is also only 20 per cent. higher than in 1954. Yet, my Lords, every year the unions appear to consider that their members are entitled to a wage increase, irrespective of the productivity of industry. In fact if world trade had not been in our favour last year we should have been an extra £400 million to the bad on our balance of payments. If that sum is added to the £344 million deficit on our balance of payments it gives a figure amounting to almost two-thirds of our gold and -dollar reserves. We need only two or three years of that bad trading, and we shall be "broke". There is no argument about it.

For instance, if we compare our position with that of Germany it makes extremely dismal reading. Germany consumes in wages, salaries and dividends only 58.5 per cent. of her gross national product, against our 66 per cent. She invests in capital equipment 23 per cent., against our 15 per cent., and she exports 25 per cent., against our 21.5 per cent. Now why is this? The Germans are certainly not superior to us in any way. Surely the answer can only be in the words of this Motion: that they have a "purposeful and dynamic spirit of co-operation in industry," against which they have no time for restrictive practices or unofficial strikes. The "60-dollar question" is, as we have heard to-day: how are we to cultivate this spirit in British industry?

Her Majesty's Government have done a great deal to help industry. They have extended export credit guarantees, and the range of Government services to exporters. They have supported industry in setting up the Export Council of Europe and in reconstituting the Dollar Export Council to form the Western Hemisphere Export Council. They have, in fact, done a great deal to help industry compete in the world's markets. But all these efforts, admirable though they are in themselves, can do little to arrest the economic decline in this country unless all parties in industry combine for the common good. If only the British worker could be made aware of the simple economic facts, so that he would not be led astray by those attempting to destroy the industrial life of the nation and thereby his own livelihood! As I have stated before in this House, the real danger this country has to face is an economic threat, rather than a military one. The Soviet aim is to capture our world markets, and one of their ways of achieving this aim is to damage our industrial structure by unofficial strikes.

My Lords, I wonder whether any statistician has ever compiled the annual losses to Britain arising out of restrictive practices and strikes? Apart from the cost in man-hours there is, as we have heard, the loss in breach of contracts and the loss of orders due to lack of confidence in the ability to deliver on time. Especially does this apply to shipbuilding. Further, I would remind your Lordships of the report of last year's tally clerks' strike at the London Docks. The Report ended with the words, "To await the next occasion with indifference is to court disaster". Well, "the next occasion" came only a few weeks ago. And what happened? The Transport and General Workers' Union, the world's largest union, allowed its authority to be filched by a Communist, Mr. Jack Dash, of Stepney. Mr. O'Leary, one of the union leaders, stated that London as a place for sending cargoes has the worst reputation in the world. I have an interest in tramp-shipping—we are, in fact, launching a new ship in a few days—and I can thoroughly endorse Mr. O'Leary's views. We all try to avoid the Port of London.

How are we to bring home to the British working man the deadly peril in which he stands?—and it is deadly. I know that some people will think I am crazy to say so, but we are balancing on a tightrope. How are we to make him understand this? How can we make him understand that every unofficial strike, and some official ones, ultimately have to be paid for by himself? We have heard a great deal in this debate about management. Can management put this over to the working man? I rather doubt it, because management is still slightly suspect. Of course, my experience is only in very small firms, where owner and management are often one and the same thing; you have personal relationships; you know all your people by name, and you usually get on very well together. But industry is controlled by vast organisations, and I really doubt whether, in these vast organisations, management can have the human relationships to get this over.

In the past 20 years or so management has become a far more complicated business, with all the advances in technology and science. We now have courses at universities, technical colleges and the British Institute of Management, and all these various organisations which in the technical field are doing a great job, but when it comes to human relationships I believe (perhaps I shall be laughed at) that the best managers are born. You cannot, for instance, create an artist by teaching. You can teach any man to daub in oils, but you cannot turn him into an artist; it is either in him or it is not. And I think that in all walks of life where leadership or originality is required, a man either has it in him or he has not. It may, of course, be that we are tending in some ways to become too technical. I realise that I am going against the whole attitude of the debate in saying this. I quite agree that in policy making, in high executives, of course the more technical you can be the better; but when it comes down to the shop floor it is essential to have that human understanding or charm—call it what you like. I think it is necessary to have sometihng that cannot be taught in any technical college. I only hope that managing directors when they are choosing the managers for the shop floor, are not entirely swayed by academic prowess.

Management is doing a great deal in issuing factory news-sheets, holding discussion groups, and acts of that sort, to try to improve relations. But I personally think that if the big companies could try to explain the simpler points of their balance sheets to the workers it would be a great help, because the average worker—I speak to him quite a lot—sees that I.C.I. or some huge concern has made so many millions profits; he thinks, "Why cannot I have that?". If only it could be explained to him where that money goes; that after company tax is paid it goes to shareholders who have to pay their tax and surtax; that so much goes to reserve, and that, in the end, probably three-quarters of it goes back to the State for the benefit of the worker. If only we could try to explain these things to him! The average human being is extremely fair-minded, but these things have to be got over to him.

The body of all bodies who could help most in this is the trade union movement —the T.U.C. itself. I personally think the T.U.C. owes a great debt to the nation. If we take the 1906 Trades Disputes Act, on which I have just checked in the Library, we see that it is extremely widely drawn, and is so drawn as to remove all labour fears; and no lawyer, however, clever, could ever turn it against labour. This what I may call rather lavish over-immunity from the law has, I am sorry to say, in the interval inflicted grave damage on the community. I understand that last year alone we lost 3 million working days through unofficial strikes. What the bill is in thousands of millions of pounds over the last ten years I have no idea.

The unofficial strike, as we have heard to-day, is a breach of trust and contract. I can describe it only as a conspiracy to the restraint of trade. In the Trade Union Acts the trade unions are supposed to support trade. Firms or private individuals who embark on breaches of contract are sued in the courts, but since the unions, owing to the 1906 Act, are above the law, they are really the most privileged body in the State, and the community has every right to expect them to use their power with responsibility and control their followers. If they cannot, or will not, then we revert to the jungle, and everyone is licensed to cheat. The resulting chaos will not only destroy the unions but will destroy the great strides in social progress that we have made in the last 20 years for the working classes.

It may well be that the time is coming when a closer legal definition of the right to strike will be necessary. It should be only a very circumscribed right, because otherwise it becomes a right to wreck the whole community. No employer wishes to upset the solidarity or the bargaining power of the so-called working classes. The unions, provided they stick to their job and keep order in their own house, are an extremely necessary part of the State. But all we ask is that they do remember the common good. Before I end, I would, therefore, appeal to the unions to hunt out the traitors from their ranks. Be tough; be ruthless—because the stakes are extremely high. If we do not have a new spirit of co-operation in industry there cannot fail to be a disaster, and we shall have a terrible post-mortem. I also appeal to Her Majesty's Government to remember that in such an event they will equally be held to blame, for not getting the economic facts over to the people and awakening them to their danger. We have heard a lot about the guilty people of the 1930s who failed to tell the people the true facts of rearmament. I only hope that we shall not have any guilty men of the 1960s, who failed to tell the people the true economic facts.

6.20 p.m.

LORD CASEY

My Lords, I apologise for being one of those who seek to extend this debate into an awkward hour. I am also well aware of your Lordships' wholesome allergy against having to listen to someone who has no actual present-day knowledge and experience of the matter at issue, and I admit at once that I have quite inadequate knowledge and experience of the temper of industrial relations in the United Kingdom to-day. But, in spite of that, there are one or two things in regard to which I would crave indulgence to address your Lordships for a relatively short time.

Perhaps I might be allowed a nostalgic reference to a distinguished Australian professor, Elton Mayo, who I believe it is fairly generally admitted made a great contribution to some of the basic factors on which modern industrial relations are based when he was head of the Department of Industrial Research at Harvard, almost a generation ago. Listening to the noble Viscount, Lord Amory, and to other noble Lords who have spoken this afternoon, it seemed to me that the things that were established by Elton Mayo nearly a generation ago may have become overlain in the course of the last generation. I am not going to develop that aspect. But Elton Mayo's work. I am sure, will be well known to the Ministry of Labour; and if one is right in believing that some of Elton Mayo's original research work has been forgotten, or has become overlain, then perhaps the Ministry of Labour might consider the possibility, or the advisability, of restating some of the principles that he made to emerge nearly a generation ago.

But the main thing that I wish to take up a little of your Lordships' time in speaking about this afternoon is the question of automation, about which I do not remember having heard much more than a passing reference in the speeches that I have listened to to-day. I believe that the problem of the progressive adoption of automation in this country is likely to—I think it will almost inevitably—have a profound effect on industry and on industrial relations in this country in the future. I do not think we need spend time in an effort to define automation, other than to say that it is the application of modern science and technology to the processes of industrial production.

I know that the subject is by no means unknown to your Lordships. It has been discussed in both Houses of Parliament, I think principally in 1956 and 1957, and it has been the theme in recent times of a great many articles by people who know their subject, and of a long and, to me, extremely useful survey put out by the Financial Times in late January of this year. As I think your Lordships are well aware, automation must entail some displacement of human labour, particularly unskilled labour, and the substitution for that labour of mechanical, scientific and technological equipments.

It has been said that automation is the delayed second barrel of the Industrial Revolution. I believe it to be almost beyond dispute that the prosperity and the competitive position of the United Kingdom is involved in the rate at which automation is implemented in this country. I am given to understand that, given the experience of years, it can be implemented over a very wide spectrum of commerce and industry in this country. After discussions in recent times with responsible leaders of industry on the employers' side and also on the organised labour side, I have the impression that automation is being put into practice in this country only relatively slowly—I believe a great deal more slowly than in the United States, probably more slowly than in Soviet Russia, and also possibly more slowly than in West Germany and Japan: in other words, that the great industrial competitors of the United Kingdom may be getting ahead of this country in this field.

Responsible people with knowledge of this subject have said that the faster automation is adopted in this country the better, although the faster it is adopted the greater will be the problems of re-adjustment of labour and of coping with redundancy in respect of unskilled labour. But if automation is adopted more slowly, then it may be that Britain's competitive position in the world will be menaced. So it would appear that for the future a rather nice and delicate balance is called for in respect of the rate of adoption of automation.

I believe it is true and right to say that organised labour in this country is in favour of the progressive adoption of automation, and probably at a greater speed than it is now being adopted, but with the understandable and proper proviso that the interest of the workers is foreseen and protected. No doubt that means that in the minds of organised labour, and I think of most of your Lordships, provision should be made for financial adjustment in respect of displaced men who become redundant, either through severance pay or possibly, as has been suggested by some noble Lords this afternoon, by a contract of employment that takes into account the possibility of a man's being displaced through automation in the future.

But although organised labour may be said to be favourable to automation, that does not mean that in the present temper, as I understand it, of the labour movement in this country, the adoption of automation in individual plants is not going to cause trouble, possibly through what has been described by one noble Lord this afternoon as some lack of discipline in the labour movement at the works level. That there will be difficulties and troubles caused by the progressive adoption of automation I think is almost inevitable. For one thing, I think the incentive schemes that exist in this country in a variety of forms are likely to disappear in those plants where automation is adopted. This, in itself, will cast a strain on industrial relations. As we know, in the past, or up to the present, in a works that is not automated the rate of production depends largely on the efforts and scope of the individual workers; whereas in the future, with automation, the rate of production will depend very much more indeed on the machine than on the man who minds the machine.

May I quote to your Lordships one or two statements that I think are profoundly relevant to the point about automation? Mr. Lewis Wright, the chairman of the Production Committee of the T.U.C., has quoted the T.U.C. as saying: Unions would like to see automation introduced at a pace that is not too fast as to put a breaking strain on industrial relations machinery, and in its ability to cone with the inevitable problems of change, and not too slow as to jeopardise industry's competitive efficiency and thereby threaten employment. As I have extracted that, it seems to me to be something that could be quoted outside of its context, and I believe that it contains the germ of the truth of the point I am endeavouring to make. As I have said, I have been informed that in the United States automation is going ahead relatively fast. At the Annual Congress of American Industry, organised by the American National Association of Manufacturers in December of last year, only a few months ago, it was stated that the American national interest required an official public policy to be made known, to create an environment receptive to technological change.

A quotation that I think is important, from the Russian point of view, is what Mr. Khrushchev is quoted as having said in his report to the Twenty-First Congress of the Communist Party in 1959, He is quoted as saying: Integrated mechanisation and automation of production processes constitute the chief and decisive means for ensuring further technical progress in the [Russian] economy. Those seem to me to be two essential quotations in this connection. I will give your Lordships one more. Mr. Leon Bagrit, whose name, I believe, is well known in this country in connection with automation, has said: There is no doubt that the Soviet Union is basing its hones of overtaking the West by being quicker off the mark in the adoption of these new techniques than the capitalist countries—and it is entirely tin to us whether their calculations prove right or wrong". I realise that the discussions have been going on for some little time between the representatives of the employers and of organised labour with the Ministry of Labour, no doubt with the purpose of giving advice to the Government in due course and of making recommendations as to action by the Government. For myself, I find it rather difficult to see what Her Majesty's Government can do in this regard, other than give automation their blessing and make certain recommendations, both to employers and to organised labour, no doubt with a sympathetic reference to how redundancy of unskilled labour can be coped with.

I am afraid that I am not adequately informed as to whether a matter of this sort, the Government's attitude towards automation, is a subject that in this country can be dealt with best by legislation or by the quiet influence of the Minister of Labour. But I believe, from the discussions I have had in recent times, that some statement of the Government's attitude is clue. I have no doubt that it will come, I should hope before very long; and when that time comes, I expect the employers to listen with a very attentive ear to ascertain whether the Government make reference to the possibility of any accelerated depreciation as some sort of "sweetener" to offset part of the high cost of establishing automation in a plant. I have no doubt that, at the same time as the Government speak on this matter, in due course, the trade unions will have an anxious ear listening, for mention of compensation for displacement of redundant labour. At any rate, I believe that Her Majesty's Government cannot say nothing on this subject. I believe the time has come when, in the national interest, a statement of Government policy is called for.

The situation may well be advanced beyond the things I have been trying to say to your Lordships this afternoon. But if they have not advanced beyond the stage where I am advised they are now, then I believe that the time is ripe for a Governmental attitude to be stated if we are to avoid dislocation on a considerable scale in industrial relations. My Lords, I have spoken, as I indicated when I started, not on the temper of industrial relations in this country to-day, but on how they may be affected, and I myself believe that by automation they will be affected profoundly in the years that lie ahead, when I hope that the speed at which automation is introduced will be fairly rapidly increased.

6.35 p.m.

LORD MERRIVALE

My Lords, before passing on to the more general considerations I should like to mention that this very afternoon discussion is taking place on the occasion of the Golden Jubilee of the British Manufacturers' Association on the problems and benefits of co-operation in the electrical manufacturing industry over the last fifty years. I mention this to show that there is at least one industry which takes the question of co-operation, or which has taken the problem of co-operation, very much to its heart. My noble friend Lord Amory may have had in mind the fruits of this co-operation when he wrote on February 1, 1958—and I will quote him: In the last decade we in the United Kingdom have established the basis for a period of tremendous economic expansion. British industry is therefore well equipped to meet the world's growing needs for electrical equipment on competitive terms, so that the United Kingdom may contribute in full measure to economic developments throughout the world. My Lords, with regard to the economic development of this country, and particularly with regard to key industries, such as, for instance, the electrical industry, I think there is a very urgent need for a co-operative effort by manufacturers to determine the future trends of a growth in demand as well as the future market potential. Here I believe that trade associations can play a very large and useful part, for I believe it to be essential that there should be interchange of information between the firms of any one industry if one is to avoid excessive price warfare and unstable trading conditions, which may lead to over-investment in productive capacity or price-cutting—and this may be done purely to obtain temporary advantages. Therefore I feel that the essential link in this context lies with the trade associations, which can act as a go-between, so that sufficient and reliable information is available to the firms concerned under the necessary conditions of trust and confidence. This can easily be achieved within the limits laid down by the 1956 Restrictive Trade Practices Act, which defines and limits the extent to which co-operation between manufacturers is permissible with- out registration and ultimate reference to the Restrictive Practices Court.

To pass on to the management-employee aspect of co-operation, I should like to refer to the lack of liaison which exists between certain employers' associations. For instance, I should like, as an example, to refer to a recent case which arose in January of this year where the national joint industrial council for the electrical contracting industry—that is, comprising the National Federated Electrical Association and the Electrical Trades Union—awarded a shilling increase in the hourly rate to electricians without consulting the industries that could be affected by this increase. In this case this increase, made, as I said, without adequate consultation with other industries which would be affected, caused embarrassment to the cable-making industry, the Federation of Civil Engineering Contractors and the Engineering Employers' Federation. For after that increase cable jointers were receiving 7d. an hour less than electricians—and I should like to remind your Lordships that the work and trade of an electrician and a cable jointer are very similar indeed.

The problem of management-employee co-operation varies to a fair extent from one industry to another. I think it is a particularly arduous problem with those industries which employ a large proportion of casual or, shall I say, mobile labour—such industries as the building, civil engineering and the electrical contracting industries. For instance, one firm of which I know had on its payroll last year an average of 4,500 employees, and yet during that year took on and dismissed over 6,000 employees. In cases like this, where one is mainly considering unskilled or casual labour, the problem of loyalties can indeed be a complicated one, while, at the same time, a management is faced with the difficult problem of inspiring in the mind of the employee a sense of belonging to or being part of the firm.

In this respect, my Lords, there is no doubt that more could be done to initiate newcomers into the importance of their work in relation to the general pattern of production of the firm. These courses (I believe that in one instance, anyhow, they are known as induction courses) serve as an introduction to the firm for a newcomer. Apart from having explained to him his part in the general picture, and receiving general information on the firm itself—its history, its activities and particulars of the executive personnel—the newcomer will also take a greater interest in the firm which he has joined if these courses include a form of communication by visual means, such as the display of films, showing the work which the firm undertakes, other than the work with which the employee would be concerned, but which has a bearing on his own particular work. If, also, printed matter, including photographs, is available to him, he can then better understand the importance of his particular job in the context of the complete production of that firm.

I think that from the time a man joins a firm, as has been said before, it is essential that there should be good communication within that firm. Again, I particularly have in mind casual labour. The employee may have a short contract: it may be for nine months, for instance. I think it is essential, particularly with regard to good and conscientious workers, that, especially towards the latter part of their period of employment, they should be kept informed as to what steps are being taken by the company to give them further work at some other site. I believe I am right in saying that in this respect a number of firms are very lax, and that the employee has little or no knowledge of what will happen to him when his term of contract comes to an end. Another sphere where a speedy or good communication is essential is in dealing with grievances or complaints. If they cannot be considered or dealt with immediately, and there is unavoidable delay, then I think it is essential that the firm should state the reasons to the employee and keep him au fait as to what steps will be taken or are being taken. In other words, my Lords, as I have stressed before, there should be good communication at all levels of employment.

I also believe that more could be done with regard to the setting up and the convening of joint consultative committees. By that, I mean domestic committees comprising shop-floor or factory management representatives and employees' representatives. These committees should meet at regular intervals, so that formal but friendly discussions can take place on questions of mutual concern, including small complaints which may, if not brought out and settled, cause friction. The managing director, advised by his personnel officer through the supervisor and the engineer in charge, must be able to keep his finger on the pulse of management-employee relations. I would say that one of the keys to satisfactory relations may be found in the adequate training in human relations of those persons concerned with the shop floor—that is, the foreman or the supervisor, and the engineer in charge. I think it is very important that they should be adequately trained in the art of human relations. Consider one industry, the motor industry, and two somewhat similar firms in that in, dustry—the Ford Motor Company and Vauxhall Motors. It is interesting to note, with regard to Vauxhall Motors, what a first-class industrial relations officer and adequate joint consultation can achieve. I think those are two of the main reasons why there has been so little trouble indeed at Vauxhall Motors.

Finally, my Lords, I should like to say a few words on the importance of what I would call the social life of a company. By that, I mean the provision by a firm for its employees of adequate sporting and recreational facilities. I have particularly in mind the provision of an attractive social club. I believe that, with regard to a number of firms, greater efforts could be made to attract to their clubs, and to a bigger participation in their sporting events, not only the office worker but also the factory operator—in other words, to get the two types of employee. Not so long ago, when I visited one particular firm —that is, Chiswick Products, Limited—I remember how struck I was by the excellent management-employee relations which were apparent in that firm. This seemed to me, in the short time I was there, to be due mainly to good communication within the firm, the realisation of the benefits to be derived from joint consultation. But it was also, and not least, due to the provision of adequate recreational facilities, apart from sporting facilities, which were provided in extremely pleasant surroundings. I am sure that that club contributed to a good understanding between management and employees, if only because during the evenings a very large number of members of the firm were there with their families.

I would end by saying that I do not believe that it is only financial incentives and bonus schemes, ideas for increased production or the lowering of costs, that offer a solution to the problem of adequate management-employee co-operation. Perhaps the solution lies more in those aspects of liaison, communication, joint consultation, and also the social life of the club which has been mentioned by other noble Lords and myself.

6.52 p.m.

LORD LINDGREN

My Lords, at this late hour I do not intend to delay your Lordships for as long as I think this important subject really deserves. Expressions of gratitude have been made to the noble Viscount for placing this Motion on the Order Paper, and I should like to join in those expressions, because the more we talk about this sort of thing, the better chance we have of getting it into perspective a little more, as has been shown this afternoon. While one is talking of gratitude, may I also compliment the noble Lord, Lord Fleck, on his maiden speech? We were introduced on the same day, and therefore it is nice to hear a maiden speech made so successfully—successfully because of his fundamental knowledge of the subject about which he is talking, and because he sincerely believes in it. May I also congratulate the noble Earl, Lord Baldwin? It is the first time I have heard him in this House. I worked very closely with his brother at one period during the lifetime of the Labour Government, and got to be quite fond of him. I appreciated the noble Earl's speech to-day and I wish to come back to it, because I agree with it fundamentally.

A great deal has been said, particularly by Lord Melchett, about depression. It is said that we are not getting on fast enough; nothing is being done. Well, that is far from the truth. Management in industry generally has given a considerable amount of time, thought and energy to the development of good industrial relations, and while newspapers give headlines to disputes and to problems, and to troubles, other industries which go on correctly and properly, in which harmony exists all the year round, year in and year out, such as the industry to which the noble Earl, Lord Baldwin, referred—the steel industry—and the boot and shoe industry, are not news, so they do not get into the Press.

Also this afternoon a great deal of advice, particularly to the trade union movement, has been given. We are all, perhaps, looking at this problem from the point of view of our own knowledge and experience. I start from the point from which the noble Earl, Lord Baldwin, started: that if anything is wrong, it is more often wrong at the top than it is at the bottom. The noble Earl referred to his Army experience. I do not think he claimed that it was very distinguished, but he is sitting next to a distinguished soldier. It is equally true in the Services that if there is anything wrong in any unit, it is more often than not the top which is wrong than anything down below.

If you are going to have a good unit within the Services, it depends not only on command but also on the N.C.O. who is vital within it. The same applies within industry. The "N.C.O." within industry—the fellow who has the relationship directly with his mates on the floor—is fundamental. This is where industry is falling down at the present time. Industry is falling down not altogether through its own fault; it is due to the success of the trade union movement, the efforts of our educationists, and the greater opportunities we are now giving, in grammar schools and universities, to the average boy and girl going through our schools.

The lads who went into apprenticeships 30 to 40 years ago finished their time, and then changed over to another job because they did not work in the same industry where they served their time. When I say "served their time", I do not mean within Her Majesty's Prisons, but within the industry in which they did their apprenticeships. They were then picked out because they had the quality of leadership, and they became the foremen, the works managers, and the rest. That type of fellow is to-day going from the primary school to the grammar school, and then on to university; or, if not to university, he is going straight into some technical side of industry. So that within industry itself we are losing what used to be the training ground of the "N.C.O." who came through it.

If we acknowledge that, I am sure there is not a noble Lord in this House who would say that, just in order to provide a good foreman or works manager, we ought to cut down our educational system and go back to the old days, recognising that we are going to cream off the grammar school types who are going into the technical side of industry to make their contribution. Industry calls for their services because of the greater development of clerical, technical and professional work in industry as compared with the ratio of workers on the shop floor. Industry has to understand or appreciate that it has to provide its N.C.O.s from within its own ranks, and has to pay special attention to the training of those personnel. I know we have undertaken training over some considerable time. The Ministry of Labour did a considerable amount with Training Within Industry schemes during the war, and some industries are themselves doing it at the present time. But it is the fact that many industries are not paying the attention to it which they should; and as regards supervisors they are doing what the noble Lord, Lord Lucas of Chilworth, referred to: employers in the Birmingham area are, by enhanced payments, poaching or enticing general workers to industry and away from other organisations.

Reference has been made to unofficial strikes and difficulties within industry. Here, again, whilst the trouble is put on to the Communists and the trade unions, management must take its responsibility too. Reference was made just now to the Services. There is a type of lad in the Army who is a sergeant four times and a private five. We get the same sort of lads within industry; they go up and down erratically, lacking a sense of responsibility, although there is leadership and ability in them. Very often industry panders to the fellow who has the big mouth and issues threats, and takes little notice of those who go on putting their case calmly and quietly. I agree that there is a certain lack of discipline within industry. No one in this House would like to go back to the industrial discipline which we had in the interwar years, in which the discipline sprang from the fear that a worker's cards would be with his pay packet on the Thursday or the Friday when he drew his pay. Nobody wants to see that.

We admit that within the trade union movement we have not yet learned to use the power and authority which comes from full employment wisely and well. Very often industry answers quickly if there is an unofficial stoppage. The trade unions do their best to negotiate beforehand and I know that often there are good reasons why the management cannot come together as quickly as trade union officials would like, though in many trade unions the officials are over-worked and, I agree with the noble Lord, Lord Lucas of Chilworth, under-paid as well. But when there is a stoppage, the management come to heel quickly and then they will say to the trade union officials, "Can you tell these boys to go back to work and we will start talks with you to-morrow morning?" But it was just as easy for them to talk with the trade union officials before the strike started.

It is not only the employers and workmen in the engineering industries who find trouble. Such respectable people as the teachers have had to strike, although it stretches the trade union concept a long way to say that the National Association of Schoolmasters is a trade union. That body is not recognised as one which can participate in negotiation over rates of pay. The National Union of Teachers are threatening to strike because the powers that be are not moving in regard to discussions on salaries and conditions of employment as quickly as they ought to do, or as the teachers think they ought to do.

The noble Viscount who moved this Motion quoted agriculture as an industry in which the personal relationships between masters and workmen, employers and employed, are of the best. That was supported fully by my noble friend Lord Walston, and agriculture is a good example. I would agree that relations in agriculture as a whole are perhaps the best of all industries. It is equally true that productivity and efficiency within the agricultural industry have risen at a greater rate and to a higher extent than in any other industry. But the worker in the industry has not got a lot out of it, and, as my noble friend Lord Walston tells me, the farmers have not got very much out of it, either. So if efficiency and productivity and harmony mean a high standard of life, why has it not become so in the agricultural industry?

Reference has been made to the motor car industry, and compliments have been paid to the Minister of Labour on the work he has been doing. I think that that is good work. I am sorry that none of my medical colleagues is present, because I think that the physical reactions of the workers play some part in industrial disputes. Rarely, if ever, do we get disputes, particularly unofficial stoppages, in the pattern shop. If there is trouble, where does it generally start?—with the "tin bashers", the tinsmiths. And I have a strong suspicion that the type of work they do, the vibration and noise, has some relation to their reaction.

I must make some reference to what the noble Lord, Lord Lucas of Chilworth, said about shop stewards. We can all overstate a case—I may have been guilty of that myself many times—but in the main: the shop steward movement does a first-class job. The shop stewards are men who take on the responsibility for and co-ordination of the relationship between management and their fellow-workers in the workshop. They are unpaid and, more often than not, they do this work at their own cost, because they are missing shop bonuses and floor bonuses, unless there is a collective arrangement with their colleagues by which the shop stewards get their share.

These men do a good job of work faithfully on behalf of their colleagues and fellow trade unionists and on behalf of the management. All we hear about are the shop stewards who cause a considerable amount of trouble by getting out of hand. The start of this is often because the ordinary fellow in the trade union movement does exactly the same as many of us do in our own organisations, whether they be a tiddley-winks club, a church, or a bowling or cricket club. We keep away from the annual general meeting because we may become secretary or may be put on the committee. The same applies when there are elections of shop stewards. It is the fellow who is prepared to do the job who gets put into it, irrespective of his ability.

Perhaps we can draw an analogy between two types of firms in the same industry. The noble Lord, Lord Merrivale, referred to Vauxhall's and to other motor car firms. Here we have the same type of work and the same type of men; but there are two different types of reaction to the relationship within the works. I think that arises because the management has handed over to the shop stewards, who have been prepared to be threatening. The noble Viscount opposite said that the trade union movement had to be ruthless with some of these people. May I say that, after all, it is the responsibility of management to manage? They cannot expect the trade union movement to do the disciplinary work of management. What they have every right to expect from the trade unions is that the trade unions should use their knowledge and experience in order to see, if they can, that the right persons are put into these jobs.

Frankly, this question falls into two categories. First of all, there are national negotiations over wages and salaries, and for conditions for industry as a whole. The relationship between the employee and the employer within a works ought not to be mixed up in any way or allowed to interfere with the over-all negotiating power of the trade union movement nationally. The job of joint consultation—the shop stewards, the works management committees and the rest—is to implement the national agreements in the local conditions of the shops in which they work. Of course there are bound to be individual variations, and it is in that individual variation, adapting the local conditions without in any way undermining the national agreements, that they come into work.

The noble Lord, Lord Fleck, said that joint consultation was an attitude of mind, and with that I entirely agree. You cannot suddenly try to adopt joint consultation within industry and expect it to be an immediate success. The fellow who is brought into consultation from the floor thinks of three things generally—clocking on, clocking off, and the condition of the lavatories; and generally they are three subjects which are put down for joint consultation when they meet. The average fellow who goes to work does so for the pay-packet he is going to get on Friday night; if there were no pay-packet, he would not go to work. You cannot expect him to have the overall knowledge of why things happen within the organisation. Management, as management, may get impatient when a person at a low level starts asking silly and awkward questions, the answers to which he could find if he would take the trouble to go to Somerset House or somewhere else. Part of the jab in joint consultation, and part of management's real function, is to impart knowledge to the employee in order that he may begin to understand not only the function that he performs, but where his function fits in with others and how the system works.

The noble Lord, Lord Lucas of Chilworth, quoted a newly appointed chief of one of our nationalised industries—and here I think is an example of unintentional bad joint consultation and bad public relations. Public relations and joint consultation with industry, as well as management and employers, trade unions and the rest, depend on the Press; and the Press can be helpful or unhelpful. I picked up the other morning a national newspaper and saw: The Beeching Plan. Fares up—Staff Cut. That is the last thing that ought to come from the head of a large organisation. Here is an industry in a large section of which men—fellows I was working with not long ago—are working 50 weeks of the year, seven days a week, and somebody comes along and says: "You are overstaffed. Staff has got to be cut". There are undoubtedly places where there is more staff than there ought to be, and his statement was probably an indication of the fact that it is necessary to bring the industry into a shape and size more commensurate with the plan the Government has in mind. But if you are talking to fellows—and they think only about themselves—who have been working 50 weeks in the year, seven days a week, and say: "There is going to be a staff cut", they say: This bloke has come in at £24,000 a year, but he doesn't know anything about it"—that is not quite what they would say, but it is the effect of it.

These questions of staff cuts ought not to be made known by public announcements on the wireless, television or in the Press. There should be consultation with the trade union before it is done, and an understanding come to, so that the trade union can work out what will happen in regard to redundancy arising from staff cuts. Then the trade union can go to its members and have talks with the joint consultation committee at the floor level and say: "This is what we propose to do, and this is what the effect of it will be. The persons who are going to lose their job will be found work somewhere else", or this, that and the other; or "We have an agreement in regard to x weeks for x years of service," or whatever it is.

My last point, in so far as management is concerned, is this—and here I think there have been great strides in managerial relationships, with joint consultation. There was, and in many instances still is, far too often the approach of management which invites consideration of a scheme of reorganisation, readaptation, or what-have-you. They would go to a committee, whether a local departmental committee, a works council, a panel, or whatever they call it in the particular industry, and say: "This is what we propose to do. Will you consult with us on its implementation?" The intention is good, but fundamentally that is the wrong way to do it. What they should say is: "Here is a scheme. Let us have your criticisms before we implement it." One ought not to go to work on a basis of joint consultation with a fait accompli. It ought to be on the basis of: "We think this is the best way to do it. You criticise it and amend it, and we will put it in on the basis of our joint consultation."

I close as I began, by thanking the noble Viscount, Lord Amory, for giving us the opportunity of this discussion. I doubt whether we have made any vital decisions or given anyone a great deal of help in regard to the matter, but I think it is all to the good that we should discuss these vital subjects. May I say, on behalf of the trade union movement, that we are fundamentally with any and every employer for the greatest degree of consultation we can get. After all, a worker spends the major portion of his life when he is awake in the workshop, and the better he can enjoy that, the better it is for his general health, as well as for his peace of mind. Equally, so far as efficiency is concerned, no worker, skilled or unskilled, likes doing a job inefficiently; he would far rather do it efficiently and to the greatest effect. Therefore, the greater degree of unanimity we can have, the better it will be, not only for the workers in the industry and in the country as a whole, but for everyone throughout the land.

7.19 p.m.

THE PAYMASTER GENERAL (LORD MILLS)

My Lords, I should like to join in thanking my noble friend Lord Amory for initiating this Motion and for the helpful terms in which he expressed it. He has raised questions of vital importance to our wellbeing. The basic considerations are, of course, the state of industrial relations between employers and employees and between the employers' organisations and the trade unions. The problem of improving our national efficiency is one of the vital things in our lives to-day. It is true that new discoveries and new techniques are at our command, and that we are making use of them; but they are also available to other countries. It is not enough merely to improve our own efficiency; we must keep abreast of what others are doing; and we cannot do this if our industrial relations are not improved.

I know that the question of the continuous increase in wages and the connected inflationary conditions are very controversial subjects. It is, nevertheless, a subject about which there is much misunderstanding among the trade unions, on the one hand, and employers on the other. There is no settled method of assessing the factors which should determine the needs of employees in regard to wages and the ability of industry to pay, either on the basis of present prices or by varying the prices to meet the situation. Whether rates are settled by direct negotiation, through the established statutory councils or by arbitration tribunals, the issues seem to be determined by bargaining and compromise. It has been my experience that there is nearly always an absence of facts, but it has also been my experience that even if the facts are there, they tend also to be ignored. I think it might be useful if I reminded your Lordships of what the International Confederation of Free Trade Unions had to say, which provides the background against which unions demands are made. It was this: Trade Unions will demand wage increases in order to catch up with increases in the cost of living and with rises in productivity, in order to improve the ratio of wages to profits, or in anticipation of productivity rises. In those rare conditions under which wage increases may lead to inflationary price rises, trade unions can be expected to be careful in their wage demands since inflation is generally harmful to workers' interests. There is nothing wrong in that: that is a good statement.

It has been my experience that in spite of the examples we have before us of the evils of inflation, there is really little that is constructive in the approach to the question of wages either by management or by the workers' representatives: rather the pressure of events influences the outlook and the actions of the parties. The employers, on the one hand, will assert that it is rising wages which are causing inflation; the workers will say that wages are constantly chasing prices, and that when prices are rising as a direct result of something outside their control, trade unions cannot agree to withhold wage demands. It is because these two divergent views cannot be reconciled that appeals for wage restraint generally have little result. The truth is that in inflationary times the tendency is for rises in wages to follow increases in the cost of living, and for the cost of living to go up again following increases in wages. The workers have got used to having regular inreases, and that becomes dangerous when such increases are at the same time greater than the amount of increase in national productivity.

Another matter which I think should concern us is the tendency for wage increases in one industry to be imitated by others. That is the doctrine of comparability and that, in my view, is speeding up inflationary tendencies in the economy. I remember the noble Lord, Lord Citrine, saying that he could not get an answer to a question lie put forward. It was one referring to the general increase in national productivity, or to increases in individual industries, and the payments which should therefore flow to the workers in the individual industries who were showing the greater increases. I think the answer is a clear one. People who increase their productivity deserve higher wages, but at the same time, we cannot ignore the effect if general wage increases exceed the increase in national productivity.

I think all those concerned in industry want to retain free collective bargaining but, of course, that becomes a cause for inflation if the results are higher than they should be over whole industries compared with the increase in productivity. If a country were unique in suffering continuous price inflation, it would presumably have constantly to devalue its currency. But since the war what has happened is that all countries have been suffering from inflation, and we have therefore been spared the necessity of devaluing our own currency. But there are signs that other countries are improving their position more than we are. We cannot afford to slip back, and if industry cannot do its share in solving the problem of inflation, then, of course, Governments must have recourse to other methods, and there are unwanted repercussions on certain sections of the people.

The noble Viscount, Lord Amory, said—I am afraid with some justification—that all those concerned with industrial problems are too complacent, and then he proceeded to put forward some constructive suggestions. Whether they are capable of realisation is another matter. The noble Viscount suggested that the trade unions, employees and the Government should work out some system whereby basic advice and guidance should be made available, possibly through the Council on Productivity, Prices and Incomes, which would provide a guiding light as to what the country could afford. The reception of the reports from this independent body, indeed the absence of co-operation with it, does not augur too well for any acceptance of its indications. It seems quite unlikely that any free negotiations between the parties most concerned could follow. The people who had to pay, and even the Government, if they became concerned, would, I suggest, be shackled by the basic advice and guidance for which the neutral body was responsible.

I have already said that, in the long run, if the aggregate increases go beyond what the country can afford to pay the Government must resort to remedies. I apologise to the noble Viscount for mentioning this matter again, because it was taken up by others of my noble friends. But in replying for the Government I would say that I do not think that a tax on the employee would make for better industrial relations, and I know the noble Viscount shares that view. But, as I say, the matter was mentioned and therefore I think that I, too, should give the Government's view. Nor, I would add, would profits tax, or increasing what the employer ought to pay, help either. I am very much afraid that while the existing state of affairs may be described as ramshackle, it is capable of being made to work by a cultivation of better industrial relations.

The noble Viscount, in referring to arbitration, supported the idea of voluntary arbitration but thought the results should be binding. My noble friend would like arbitrators to say what is fair and reasonable and not practise conciliation. I would remind him that many of the arbitration courts consist of representatives of the employers and the trade unions, with or without an independent chairman, so in the very nature of things I do not think that conciliation can be excluded. How can they get away from the problem of attempting to reconcile two divergent points of view? It is well known that the workers and their representatives are often loth to resort to arbitration. It is equally well known that employers are not enthusiastic about it either. I have often wondered why. I believe that the real reason is that it generally follows the same line as negotiation between the parties themselves—compromise. I suppose one prefers one's own compromise to the other fellow's.

The noble Viscount referred to the problem of unofficial strikes. I fully agree with him as to the moral and material damage to all concerned, not least of all to the economy of the country by such frustrating and generally unneccessary actions. I agree that we should all do our best to try to get a realisation of the evil effects of such action on the men themselves, on the trade unions and on the country as a whole. I agree, too, that by education we should try to get over the importance of the sanctity of contracts, but it has been my experience that contracts once made between employers' organisations and trade unions are kept. I think the noble Viscount had in his mind the unofficial strikes by certain sections of men. But I do not agree that that is a matter that could, or should, be dealt with by legislation. It is just by improving our industrial relations that we shall deal with problems such as that.

Then the noble Viscount referred to the day-to-day relations between firms and their employees. It has been my experience that too many firms are quite content to take their chance, trusting to the loyalty and good sense of those they employ; or they appoint a personnel officer and leave it to him to try to work out the problems. In many cases management are concerned principally with the methods and the machines they employ and too little with the qualities and the failings of the men and women who work with them. The company with which I was concerned for most of my working life never had a direct strike; and I am convinced that it was because at all levels we studied the needs and the conditions of the people who were in the jobs. We pioneered improvements long before public opinion brought them universally into use.

I believe that those businesses which deal with industrial relation problems at the highest level generally do not suffer from strikes; and they are generally high in the scale of efficient firms. It is necessary at all stages that management and men should understand the value of good relations and take the trouble to explain to the foreman and to the operatives the need for changes in their particular spheres. Now machinery for joint consultation in the shop is of course of the greatest importance and it should be used continuously and properly. But I was very glad that the noble Lord, Lord Lindgren, mentioned the question of the foreman. In these days of specialisation, of planning, of automation, the position of the foreman has in a great many cases been left ill-defined, and he is the representative on the shop floor who is in daily, constant touch with the men. As the noble Lord said, he can in many cases iron out the difficulties so that they do not result in industrial disputes.

I remember I was so impressed with that myself that I got together with some industrial friends of mine and persuaded or helped them in my own City of Birmingham to get together and start a National Institute of Supervisors, whose job was to train for foremanship, to make the foremen understand what they were supposed to do and to equip them to understand the requirements of the people who work for them and with them. I do not think we should forget that our British industry is composed of a mass of large and small firms, in which the small firms still predominate, but in all I think the need for good labour relations is paramount. My noble friend referred to the need for consultation on all matters affecting the workers, particularly on the appearance of redundancies—a most important matter—and on the question of profit-sharing or co-partnership which, in my view, is growing and is to the benefit of those who are practising it; and on the question of notice being linked with the length of service—in my experience this is now largely practised, perhaps in different ways in different establishments—but I should say that the improvement in that respect is continuous.

I was happy that the noble Viscount, like so many other noble Lords, paid a tribute to my right honourable friend the Minister of Labour in bringing employers and unions together to discuss common problems calmly and constructively. In the early part of this year, as has already been mentioned, he brought together leading employers and trade union officials in the motor industry. This is the first occasion in recent times that employers and trade union officials in a single industry have met under the chairmanship of the Minister of Labour to discuss the whole range of their industrial labour relations problems. I suppose it is too early yet to say what the result of those talks will be—they look promising—but the final test will he whether they get down to the establishments, to the men in the shops; that is, whether what they say at the top is reflected down below.

I think I should just mention also the importance of the Minister of Labour's Joint Advisory Council, which is composed of representatives of the British Employers Confederation, the Trades Union Congress and the nationalised industries. They have started a long-term programme of examination into a series of problems affecting relationship between employers and workers. It is considering such subjects as redundancy, the selection and training of supervisors (which I am very glad to see), communications on both the employers' and the trade unions' sides, consultations between management and workers, recruitment and, what is most important, induction procedures.

If these moves are not successful in bringing about improvement in labour relations, the noble Viscount suggested that perhaps the only alternative was a Royal Commission. I am doubtful whether that is a good idea. I doubt, too, whether it is very practicable. It would have to range very wide. The composition of the Commission would be such that people would have to be on it who understood every aspect of this very complicated problem, and I think this is a problem which we do far better to thrash out in industry, and I believe the will to do it is growing.

VISCOUNT AMORY

My Lords, I agree with the noble Lord. I think it is very much second best, and I hope we shall not have to resort to it.

LORD MILLS

I thank the noble Viscount. The other point that the noble Viscount, Lord Amory drew attention to was the question of the Minister of Labour's responsibility. He suggested that it might be wise to divide his responsibility for conciliation from his other great responsibilities. The noble Viscount will know from his own experience that all Ministers are faced at times with conflicts between their different spheres of responsibility, and I think it is important to keep the function of the Minister's conciliation in perspective.

Most issues between employers and their workers are settled by themselves—we never hear of them. Many industries, too, have their own arrangements if they fail to come to an agreement—they have their own courts of arbitration to which they resort. It is only a relative minority of cases that comes to my right honourable friend the Minister of Labour. I think it would be a pity to disturb the present situation. Those in dispute come to the Minister because of his standing and because over the years successive Ministers of Labour have built up a tradition of fairness and skill in settling disputes which is respected in industry. I do not think it would be wise to seek to destroy an arrangement which works so well in practice.

May I just refer briefly to the other noble Lords who contributed to this debate—I am aware of the time and I will not keep you much longer, especially as I had to be at a dinner myself at half-past seven, but, as the noble Lord, Lord Citrine, said, he too had a tendency to over-develop things in which he believed. I think it is a very good quality. We had a very interesting and helpful speech and he talked to his trade union friends in a way which was outspoken but which I am sure could not give offence. He realised both the strengths and the weaknesses of the trade union movement. He stressed this question of communications and said that the position was lamentable. I think he was probably right, and I entirely agree that one thing that can do more than most to better industrial relations is to talk to each other on all subjects, not just to do things without anybody else knowing.

One thing to which I should like to draw attention is that he spoke about hire purchase as if it were a bad thing. I do not think hire purchase in itself is a bad thing. It enables many people to have some of the aids to life which they would not otherwise have. It is only when hire purchase gets out of hand that it is bad. The system in itself is not bad. He also spoke about training and made a very useful contribution on that subject.

I must add my congratulations to those of other noble Lords upon the maiden speech of the noble Lord, Lord Fleck. It was a maiden speech which I thought was valuable and very sincere and reflected his own great experience of the subject on which he was speaking. He referred to the fact that the time lost by unofficial strikes was only one-tenth of 1 per cent. That is true. But I think we were all shocked and surprised at the damage done by the tally clerks' strike, which was one of them. The percentage figure does not by any means reflect the damage which the country suffers. The other theme which the noble Lord developed was that of a code for industry. He referred to the Mond-Turner negotiations of several years ago. I think that this point is worth considering, though I know the difficulties are great. But it may be that my right honourable friend, the Minister of Labour, will have a look at it and see if, in the course of his discussions, there is any value in that suggestion.

The right reverend Prelate the Lord Bishop of Sheffield spoke of spending the whole of his working life in industrial places. At this late hour I want to refer to only one thing—namely, that you could not expect co-operation in the shops if there was incompetence in management. I think that is very true. He also spoke about segregation; but I am afraid that that is a fact of life and we have to find a way to compensate for it, or a way to get to know people, even though at the end of the day we separate from them.

The noble Lord, Lord McCorquodale of Newton, has devoted great thought, great time and great energy to this problem of improving industrial relations. He gave us a very interesting account of the British Employers' Confederation Conference, and I was glad to hear that, in his view and those of his colleagues, free collective bargaining was most likely to serve our best interests, and should not be abandoned but should be subject to constant review and, where necessary, modification. He also said that in the headlines we heard only of the bad news, never of the good news. He drew attention to the fact that personnel management was a matter for the top management, and said that if the top were not interested in personnel management we could not hope to improve labour relations.

The noble Lord, Lord Walston, talked about profit-sharing but he made one remark which struck me: co-operation means being in the same boat together. Then he went on, however, to take us to Utopia—whether in a boat or not, I was not quite clear—where everybody would do everything out of a sense of duty, and that we were quite wrong to relieve management, or anybody else who was reaching the £2,000 a year level, through the surtax reduction. I think he was a little hard, too, in saying that our economy was based on profiteering and usury. However, I do not propose to pursue that aspect.

The noble Lord, Lord Lucas of Chil-worth, started his remarks by asking: how are we going to earn our daily bread? Then he went on to talk about the apathy of both sides of industry. While making a plea for youth in industry, he went out of his way to attack the old. I thought that a little unfair. As the noble Lord, Lord Lindgren, pointed out, he attacked the shop stewards. I thought that was also unfair because the shop steward system is one thing and its abuse by some people is another.

The noble Viscount, Lord Massereene and Ferrard, gave us a very interesting account of the efficiency and difficulties of the electrical industry. But he used a phrase which I thought was an apt one: that we ought to combine for the common good. He said that the danger to-day is an economic threat and not a military one. He also stressed the desirability of education and training, and elaborated on the question of communications. The noble Lord, Lord Casey, talked about automation, and he said that a nice and delicate balance is required as to the rate at which it is introduced. I think that is true. He also said one thing which, though it did not exactly puzzle me, I feel he ought to have elaborated a little. He said that incentive schemes are likely to disappear. While that may be so, I am sure that, in the long run, the workers concerned with automation will be better off in many ways.

I am sorry that I attributed to the noble Viscount, Lord Massereene and Ferrard, just now, the reference to the electrical industry; I apologise to him. That was, of course, the subject of Lord Merrivale's speech. Lord Merrivale was the first one to mention foremen, and I was glad he did so because I think they play a vital part in attaining this better understanding. He also referred to adequate sporting and social activities. As a matter of fact I think that that is pretty well catered for. I remember in my own company—it must be 40 years ago—the time when it was difficult for a man to get employment unless he could be a useful member of the brass band. Then I must congratulate, if I may, the noble Lord, Lord Lindgren, on a very helpful speech. He made a very solid contribution to what we all have our heart in, the improvement of industrial relations. I do not quarrel with his remark that if anything is wrong it is likely to be at the top, because it has been my experience that if you get bad management, workers are not satisfactory; if you get good management, they are. As I said, I think we have had a very useful debate. It has lasted a long time, but I think it has been worth it.

8.2 p.m.

VISCOUNT AMORY

My Lords, I agree with my noble friend Lord Mills: We have had an interesting and thoughtful debate, and I should like to thank noble Lords who have taken part. I would join in the tribute of congratulation to my noble friend Lord Fleck on his maiden speech. The noble Lord, Lord Citrine, apologised for the fact that he had to leave. Otherwise, I should have liked to apologise to him again that, through clumsy wording, I have caused him to misunderstand what I said on two quite important things. I should like to repeat, if I may, that I am not in favour of compulsory arbitration but in favour of voluntary arbitration; and the only point I made about results being binding was that there should be voluntary agreement in advance that the results should be binding, not that they should be compulsorily so by Statute. On the other matter of payroll tax, I am not an advocate of such action at all, but I was simply quoting an extreme example of the kind of action that Governments might be forced to take, if inflation became out of control, in order to syphon off excessive consumer demand. As the noble Lord, Lord Mills said, in the event of such inflation the Government would be forced to take action to syphon off consumer demand.

I should like to say what a pleasure it was to hear noble Lords like Lord Citrine and Lord Lindgren speaking on subjects on which they have had such tremendous first-hand experience. I would join in what the noble Lord, Lord Mills, said about the pleasure with which we listened to Lord Lindgren's remarks towards the end of the debate. The noble Lord, Lord Walston, asked me a question; which I feel I had better answer. He said: "With a market economy should not trade unions be free to demand as high wages as they can get?" I understand the point completely. I would say, Yes; but in conditions of inflation it would not be to their advantage to do so, because in fact they would be endangering the basis of full employment. I should like to say how interested I was in the thoughtful speech of my noble friend Lord Melchett, and to thank my noble friend Lord Mills for the very helpful contribution that he made on behalf of the Government at the end of our debate. If the deep thought reflected in our discussions this afternoon may help to stimulate thought on these important matters throughout the community, then I think that our debate will have been well worth while. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.