NATIONAL PRODUCTIVITY YEAR

HL Deb 12 July 1962 vol 242 cc393-452

4.24 p.m.

LORD CROOK rose to call attention to the plans for National Productivity Year; and to move for Papers. The noble Lord said: My Lords, in moving the Motion which stands in my name on the Order Paper this afternoon, I would declare that the objective is to secure the interest of your Lordships and, through your Lordships, of others outside in the National Productivity Year which is to be launched in London on November 14, in Scotland on November 16 and in Wales on November 21. The campaign has been initiated by the British Productivity Council, which your Lordships will know is a non-political body supported alike by employers in industry and by the trade unions; and, indeed, the trade union movement has supplied this year's chairman. I am gratified, as I am sure the British Productivity Council will be, that some of the distinguished leaders of industry who sit on the Benches in front of me will be supporting this Motion this afternoon, and that, when they return from a meeting in another place, some of my colleagues, including a distinguished past chairman and a distinguished past general secretary of the Trades Union Congress will be supporting from this side of the House.

The twelve months campaign, my Lords, has been designed to enlist every interested organisation, whether employer, professional, management or trade union, in an effort to raise the standard of industrial efficiency, especially where that standard is below the average. The objects of the Year, which have been set out in detail and are six in number, are briefly these: first, to strengthen the determination of all organisations concerned with industry to take an active part in improving the country's efficiency and in maintaining its place among the leading industrial nations of the world; secondly, to foster a more favourable climate of opinion to better methods and their proper use; thirdly, to bring clearly before everyone the nature and value of services that exist to help him; fourthly, to promote discussion and research into the needs of industry; fifthly, to encourage mutually agreed co-ordination among bodies, to secure an even more concentrated and purposeful contribution to the problems of industry; and, finally, to bring into being a means of regular consultation and discussion, which will continue after the Productivity Year is over. A large part of the effort, of course, will be to make known information which is already available to help management, with the co-operation of the unions, to do a better job.

The unions are joining in, of course, not only in the interests of the country, but because they know that where inefficiency prevails the workers often pay for it in the form of insecurity in their jobs, poor pay or inefficient working conditions. In other words, the greater industrial efficiency which the greater industrial organisations have aimed at all along is seen by unions as a way of providing a basis for higher standards of living. They know that efficiency on the production line and the skilful use of scientific research will not automatically lead to the achievement of trade union objectives, but it is equally true that they know that, inevitably, they come into the reckoning at some stage. So the unions and the employers are together in the work of the British Productivity Council which, through its 120 local committees, keeps industry informed of a widening range of management and production techniques and looks at questions of practical relevance, whether quality control or low cost automation, ranging not only over the large manufacturing industries but also over agriculture, office work, and retail distribution.

My Lords, the problem of the Common Market and the work of the National Economic Development Council clearly come into this picture. As to the Common Market, I am content to say that any view on productivity which I express here to-day remains as true whether or not we eventually go into the Common Market. As to the N.E.D.C., again I am content to record that they recently set British industry a tentative average gross target of 4 per cent. a year for the period between 1966 and 1970. That was in line with the 4T per cant, gross figure put forward by the O.E.C.D. for the ten years 1960 to 1970. That is a growth which involves an average increase in productivity of 3.3 per cent. per annum and we, who in the fifties had an increase of only about 2 per cent. a year, have a very large target ahead of us, because industry roust budget for an increase of something like 4 per cent. in the latter half of the ten-year period if we are to achieve the objective.

With an annual increase in the manpower, the working population, of this country of only about one-half of one per cent.—and that, I believe, is expected to slow down—clearly our economic growth will depend mainly on increased output from each worker. Now the output per worker in this country, as all your Lordships will know, has gone up since the last war by an increasingly significant amount compared with the position between the two wars. But as the Treasury's June Bulletin for Industry points out, other industrial countries have generally attained a faster growth than ours; and when the Minister speaks for the Government later in this debate I shall not be surprised if he tells us that we have to increase our exports by 10 per cent. to secure even our present economic status. That belief I base on the recent statement of the Minister of State, Board of Trade, who has told us that to-day we are selling £10 million worth of goods by export each day, and that we need to sell £11 million to feel reasonably secure on our economic front.

Your Lordships do not need me to remind you that our exports depend on a number of factors: raw material resources, design, quality, reliability, credit facilities and salesmanship will occur to the minds of all of us immediately. But I want to talk about something else on which productivity depends, because it depends, in addition, on human beings—the abilities and skills of human beings, and their relationships with each other. As to these human beings, the excellent report of the Ministry of Labour Working Party on the manpower situation, which was presented to the National Joint Advisory Council in January and which many of your Lordships will have read, put forward a broad general conclusion that our manpower resources are limited and that they are likely to remain so, and that therefore it is vital that the best possible use should be made of the available resources if we are to maintain an expanding and competitive economy.

To me, a basic prerequisite is clearly the right degree of skill in all sections of the labour force, whether operatives, craftsmen, supervisors or managers; and adequate training and proper selection at all those levels is of great importance. It is too often suggested that the responsibility for training rests on the Government. Of course, in part it does, just as it depends upon the educational system; but to a large extent the job is one for industry itself. Not, of course, my Lords, that it is good enough for the labour force merely to be highly trained: confidence and harmonious relationships within firms are just as essential to secure full efficiency and increasing productivity. Strikes, which are really a sign of a breakdown in relationships, obviously mean a standstill in production; but lack of confidence between management and workers, even if it does not result in strikes, may make it impossible for management to introduce those changes in methods of production which are necessary for the economic growth of the firm or the factory.

May I therefore venture to detain your Lordships for a few minutes by offering some observations on the factors which may, we hope, have attention during this Productivity Year? They are commonplace things to the leaders of industry sitting in front of me, and probably to most of your Lordships, but they are not thought of by far too many outside, to whom we want to reach out and whom we want to cause to think. Your Lordships would probably agree that a feature of post-war industry has been the differing performance in terms of growth, activity and relationships, not only between different industries but (and perhaps this is even more important) between different firms within a given industry. There is no simple explanation for this. Many theories have been put forward, and more can be put forward; but it is arguable (and this, at least, I suggest to your Lordships, is supported by some studies in this field) that a major factor making for success, whether we are talking on an industry or on a firm basis, is the forward-looking approach of management to all its problems—and that applies in the field of relationships just as much as it does in matters of marketing, finance and technology.

I suggest to your Lordships that in far too many of the smaller firms, in particular, solutions to problems of relationships are sought on a basis of improvisation or expediency. The long-term effects of managerial decisions are ignored. Not only is a considered personnel and employment policy, which is a guide to management action, essential both to good relationships and to production efficiency: I suggest it is also essential that such a policy should be taken into account in relation to other managerial policies and decisions. For instance, I suggest that the managerial policy on the recruitment of labour is of paramount importance. High labour turnover arising from poor recruitment and selection can adversely affect productivity. I am sorry to say that relatively few firms of the type to which I refer even bother to calculate their labour turnover rate. When a vacancy occurs, the thought is: "Well, let us get another one like Bill", and insufficient attention is paid to matching the requirements of the job with the attainments and the aptitude of the applicant.

I think that what we have to try to put over during this Productivity Year is that the recruitment of the wrong fellow will not only reduce productivity and cause worry and dissatisfaction to the individual himself when he realises that he is unable to do his job efficiently, but that this worry and dissatisfaction can, and probably will, be infectious and will affect the morale of all his fellow workers. If proper selection procedure had been operated, such a man would have been rejected for this particular work, and might well have been placed satisfactorily in another job. Equally, productivity suffers, I suggest, if the newcomer is not quickly assimilated into the firm. Many of your Lordships with industrial experience will know how many things can be done to that end. A short induction course, an informal welcoming interview, a short talk on various aspects of the firm's work, and so on, can all be given, even in the first few weeks, in the smallest of firms and organisations.

Another subject which I am encouraged to mention is work study, if only because during our debate on the Navy Estimates yesterday the noble Lord, Lord Carrington, made some mention of it in respect of the Navy. This is another means of increasing productivity. I suggest that the highest productivity is what the people could do, if they liked, during that part of their lives which they should like to spend at work. That means that work study must induce willingness on the part of the worker. As well as the technical factors of time and motion, work study must take into consideration the factors which affect people's thinking and their feelings. The intangible satisfactions and dissatisfactions of doing the job are, I suggest to your Lordships, just as important as the pay packet at the end of the week, and recognition of this fact may well be vital. Skilled work study will take into consideration all the factors which motivate the human attitude to a particular piece of work, and by eliminating the stresses and strains, whether they are physical or whether they are emotional, create a climate conducive to highest productivity.

There is also, of course, the problem of communications and consultation within industry, about which I have ventured to speak to your Lordships on a number of occasions in the past, although in a rather different context from to-day's. What I ventured to say previously was that the scale and complexity of modern industry make it more important than ever that management should be able to get its decisions down rapidly and clearly right to the shop floor. It is equally necessary that management should be in touch with the problems and the attitudes of their employees, so that the decisions they take are informed and fully considered.

These, I think, are the essential problems of communications. They are particularly important, of course, in industries like the motor industry, where production is constantly altered to meet changes in demand. Communications vitally affect relations between management and workers. Strikes, I suggest, after all these years, are often caused not by a real conflict of interest between management and workers, but by a lack of understanding of the facts. It may be a lack of appreciation of the facts on the part of the workers as to what management policy is, or it may be a lack of knowledge on the part of management of employees likely reactions to proposals that they are going to make. Many needless misunderstandings could, I think, be avoided if management consulted workers in advance on matters which affected their interest. Most of our industries, of course, as all your Lordships know, have longstanding machinery for joint consultation, and I am convinced that, if used properly, this can make a valuable contribution to good industrial relations and to productivity.

Another subject which I and some of my colleagues on this side of the House have ventured to raise with your Lordships, in debates in different contexts, has been that of security of employment. A growing economy requires that some industries Shall expand, that others shall contract, and, consequently, workers have to change their jobs. It is natural that workers should place increasing emphasis on security of employment. Fear, which may frequently be groundless, of working onself out of a job can lead to various consequences of a serious kind for productivity, whereas well-planned and equitable redundancy arrangements can assist materially to reconcile the clash between the desire for security and necessary economic change.

A very informative article on this subject, which I imagine a number of your Lordships who are interested in these matters will have read, appeared in the Sunday Times last week, entitled "Taking Fear out of the Factory". It was written by the President of the Institution of Engineers and Ship Builders in Scotland, who wrote from 25 years' experience of his life there. I do not necessarily agree with all his views, or with all that he said, but I venture to quote to your Lordships some words written by a man who has had a great deal of experience. He said: … the vital problem of productivity which is at the root of the country's economic problems, is psychological. … The fear of unemployment, redundancy, and insecurity, are still the most dominant obsessions of the wor- king man. … Consequently, with profitability in the guise of a vampire, with no contract of employment, and no legislation to control his benefits in event of redundancy, the average worker cannot be expected to do other than fear the impersonal forces which create economic instability".

I think that those are very useful words to read to your Lordships, without unduly placing reliance on them, or without necessarily expressing complete agreement with everything that the writer says. Because I am sure that if more employers would give some thought to these redundancy arrangements—for instance, if they would only bother to get books which are produced by the Government for them: books like Security and Change, published last year by the Ministry of Labour, and its companion booklet, Positive Employment Policy—they would at least be seeking some help for themselves in the job of work which they have to do, and which they ought to know that they must do.

My Lords, may I take one look at management training? In the past, most firms looked to their apprenticeship schemes to provide their managers; but the changed educational system has made this increasingly difficult to-day, when so many of the brightest boys go to universities. At the same time, the scientific and technological developments are such that the industrial manager must be appropriately qualified. This means that firms are recruiting their future managers from universities and colleges of advanced technology, rather than from within the firm. These men are highly competent in their particular scientific discipline, but they need to be given training and experience in the effective co-ordination and motivation of others who will serve under them; that is, in the practice of management. The productivity of the shop-floor worker is, of course, dependent upon the proper organisation of men, materials and machines. Future managers need an understanding of production management, and particularly of the factors which affect people's will to work.

It is little use training managers, however, if you do not train the man who, in these days of large scale industry, is regarded as the "boss" by the man who meets him on the floor. And to most men the "boss" is the foreman. It is the foreman who has to interpret the management's decisions to the workers on the shop floor, and who has to make sure that they are carried out. So that it is his efficiency which has a material effect on the quantity, quality and costs of production. His manner, his behaviour and his treatment of the men are of vital and paramount importance in industry. However good the intentions of the management, they can, be completely frustrated if the foreman "boss" has not the good leadership to give on the floor.

I am sure your Lordships were as disturbed as I was to read the Report of the Ministry of Labour Committee on the Selection and Training of Supervisors, which found that the majority of firms still do not systematically train their foremen. Indeed, the Committee concluded its findings in this way: There is an urgent need for more and better training of supervisors in the interests of greater efficiency and improved relationships between managements and employees.

In fact, my Lords, sound arrangements for training are an essential feature of any scheme which is going to improve industrial efficiency and (productivity. Good training ensures that operations are carried out without waste of time and materials, and that the goods produced are of a high standard. What is more, I suggest to your Lordships, it enables industries to profit swiftly from technological developments and to create an adaptable and occupationally mobile labour force. May I be forgiven if I say that sometimes I feel that there should be some training for some employers in this country? They should earn how to plan their businesses and their approach to customers.

I have no doubt that the great leaders of industry who sit on the Benches opposite may well have been as concerned as I was to read the Report of the National Convention of the Export Council last November, where the export effort of industries ranging from heavy engineering to consumer goods was under discussion. In the course of this conference it became increasingly clear to everybody that many opportunities for the sale of British goods were not fully exploited because of the lack of knowledge of the European markets, the inadequacy of the sales techniques used by British firms, and the insufficient attention given by them to the patterns of demand in those countries. I am bound to add, however, that it was often found that in matters of price and delivery dates British manufacturers were as competitive as any on the Continent. It was their relative lack of success in Europe, due to their failure to use the right kind of approach, which worried the conference.

LORD McCORQUODALE OF NEWTON

My Lords, I should not like the noble Lord's interesting speech to be misrepresented outside in any way. Of course, we can do better on the Continent, but the record over recent months of British industries and their exports is quite remarkable.

LORD CROOK

My Lords, I should be the first to accept that. I do not for one moment want it to be thought that I am decrying anything. When one is trying to help towards greater production, one does not want to decry the great efforts made on both sides of industry and I am very glad that the noble Lord reminded me. I am sure that many of your Lordships saw the account in the Press, in the last week or two, of the executive on one of the stands at the Stockholm Conference who saw three persons, whom he knew to be three big buyers from a foreign country, looking with great interest at the products on his stand. He went down to them and said, "If one of you can speak English, perhaps I can help you". I think that the noble Lord to whom I just gave way will understand this, because of his interest in his own organisation.

I was glad to see the good report which the Federation of British Industries presented as the result of the working party, which must have been at work months before the exhibition in question. I thought that the Daily Telegraph, in an editorial last week, summed up that report rather well, much better than I could. I doubt whether I should have liked to say in your Lordships' House what they put as their title—"Insolent Insularity." They go on to say: There is nothing at all funny about the findings of a working party set up by the Federation of British Industries to investigate Foreign Languages in Industry . It seems that 40 per cent. of the British firms dealing with companies in non-English speaking countries have no one on their staff qualified to write or to speak in the language of their foreign correspondents. That is the kind of difficulty we are facing. We all know that the great firms, which are represented, if I may use the phrase, by noble Lords who are to speak later on in the debate, do not suffer from this kind of problem. What we have to try to do is to get those other firms, who think that everybody must follow on where they begin, to take some interest in the job of work they have to do.

We were overtaken by the United States in production in 1885—we do not have to worry about admitting that; and Sweden overtook us in 1940. What we have to do, whether we go into the Common Market or not, is to see that France, Germany, Italy, Holland and Belgium, who are close behind us, do not overtake us in the next few years. That is the kind of background which calls for the launching of this National Productivity Year and which justifies my asking your Lordships to express agreement with this Motion. I do not think that the first five objects of the National Productivity Year will be of any use unless the sixth is made completely effective; because the sixth is the one that will allow for the continuance of effort in the years beyond, and for that permanent increase in productivity of which you and I know this nation to be capable.

My Lords, I should like to end, if I may, by quoting words that are better than my own; the first and last paragraphs of the letter from the National Productivity Year's Patron, His Royal Highness the Duke of Edinburgh, who says: No amount of economic juggling can alter the fact that in the long run our solvency depends upon the efficiency of our industries and upon our national productivity. His Royal Highness ends by saying: The whole nation stands to gain from the success of this venture particularly if it can inspire a spirit of co-operation and joint endeavour which alone can help this country to overcome the challenge of the future. I beg to move for Papers.

4.57 p.m.

LORD MCCORQUODALE OF NEWTON

My Lords, I am sure that all your Lordships will agree with me that we are very much indebted to the noble Lord, Lord Crook, for his initiative in bringing forward this Motion on the National Productivity Year and on what I might describe as the courageous and exciting programme which the British Productivity Council have formulated for this year, which is planned to start in November. I would say to the noble Lord, if I may—and I hope he will forgive me—that two or three times in the course of his most interesting and effective speech, with which I cordially agreed, he took the opportunity of mentioning leaders of industry sitting "on the Benches opposite". I would suggest to him that leaders of industry are sitting on the Benches around him just as much as on the Benches on this side of the House, because the leaders of industry are not only employers, although there are some distinguished employers, including the noble Lord himself, sitting on the Benches opposite but also the leaders of the trade union movement.

The Chairman of the National Productivity Council has described this Year, this Opportunity Year, this National Productivity Year, as the biggest cooperative effort ever made by British industry in peacetime. That is a big claim, but I hope and believe that at the end of the year we shall be able to justify it in reality. I am sure that all of us, especially those actively engaged in industry, are glad to see that it is industry itself which is running this campaign; it is not something foisted on us from outside. It is industry, by and large—industry, commerce, agriculture, employers and trade unions—all those engaged in productive effort in the country, who are organising this Year.

The noble Lord, Lord Crook, finished his speech by reading two sentences from the admirable letter with which His Royal Highness the Duke of Edinburgh has prefaced the booklet which has been put out by the British Productivity Council on National Productivity Year. I wonder whether I may quote one more sentence to your Lordships—the second—in order to whet your appetite for getting this booklet from the Printed Paper Office outside. His Royal Highness says: In order to maintain, let alone improve, our standard of living we have got to export our manufactured goods in the face of very tough competition from other highly industrialised and industrious countries. We can only compete with success if we can maintain a high standard of efficiency and productivity. The only alternative is lower wages and salaries, and no one in their senses wants that to happen. I think that is very true.

I do not wish to keep your Lordships too long, but I should like to say a word or two about the constitution of the British Productivity Council itself. I had the privilege some years ago to be its Chairman, nominated by the employers organisations. My vice-chairman at the time was that very distinguished trade union leader, Mr. Lewis Wright, from the textile world; and he succeeded me the following year as Chairman. If J may, in this House, I should like to express my warm appreciation to him for the great help he was to me at that time. For the British Productivity Council is a joint organisation in every sense of the word, to which, as the noble Lord, Lord Crook, has said, both employers and trade union organisations belong. I might add that they both pay substantial subscriptions to the Council, and I am glad to say that, so far as the employers are concerned, they go through without criticism at our annual meetings.

At the present time Mr. Harry Douglass is the very distinguished Chairman—and I suppose there is no better known or more highly regarded name in the trade union movement to-day than Harry Douglass. The vice-chairman is a colleague of ours in this House, the noble Lord, Lord Netherthorpe, known throughout the whole agricultural world as an intimate friend of industry and of agriculture, who will be representing the employers interests. Thus, we have the creation of this Productivity Year or a start being made under the chairmanship of a distinguished trade union leader and the final execution carried out under the vice-chairmanship of a well-respected member of the employers' organisations.

The British Productivity Council functions mainly through no fewer than 120 local joint committees of employers and trade unionists throughout the country. It is in collaboration with these most excellent local committees, whose work we cannot praise too highly, that there have been set up local National Productivity Year committees, again, of course, with joint membership from the employers and the trade unions. It is remarkable to think that over 100 of these special local National Productivity Year committees have been set up throughout the country in the last few months. It is only two or three months since the movement started; and that we have over 100 going already is a highly meritorious success and one which shows the enthusiasm of those who are conducting this campaign.

It is, I gather, the intention of these committees that, aided by the support of the central council, they should carry out practical activities in their areas to encourage a quicker appreciation by all in industry of the benefits of advanced techniques of productivity and the advantage to be gained by all in industry from the application of these techniques. The scope of these National Productivity Year committees will be widened by the enrolment on the committees of many experts on these matters of industrial techniques.

I think I should say that many other organisations are also supporting and participating in this Year. No fewer than 116 bodies connected with industry in one way or another have promised their support. This support is particularly important, because it brings together for the first time in our work in the productivity world all those services and professional skills on which industry relies, and it widens the impact of the local committees, which were in existence as local committtees of the Productivity Council before the project was initiated but will now be widened by the inclusion of these experts.

It is certainly not the intention of the British Productivity Council, as the parent body, or of any of the local committees, or, I believe, of anybody associated with this campaign, in any way to denigrate the massive achievements of British industry in general. That is why I am sure the noble Lord, Lord Crook, did not mind my intervention. A great number of firms in this country have an efficiency second to none in the world. There is no doubt that our skilled operatives still maintain that superiority which is the envy of so many. The main object of the Year, as is the main object of the British Productivity Council's general work throughout the country, is to make the methods which have proved so successful in these industries available to all the rest. Publications of the British Productivity Council's Target and the National Productivity Year's Bulletin that are being issued month by month as the Year develops are full of such references and reports from industry; and we hope that in the National Productivity Year many more firms will be encouraged to display their own techniques and methods to their fellows in the country.

The noble Lord, Lord Crook, has talked much, and very wisely, this afternoon of industrial relations, and I would heartily endorse what he says. Just as industry is constantly changing to meet changing demands and opportunities, so must we be ready in industry to adapt and modernise our industrial relations; not to stick to old attitudes and old methods, but to establish and maintain as fully as we can a feeling of confidence in those engaged on the shop floor, in each other and in the management; and for both management and leaders of the operatives to endeavour to understand each other's difficulties and problems. I am not going to follow the noble Lord, Lord Crook, into his extremely interesting analysis of the problems. There is much room for further study of industrial relations. One problem before the country at the present time is why most disturbances in the form of unofficial strikes appear to happen in industries with a very high level of earnings. But there are many other problems that I do not wish to pursue this afternoon. I would, however, say this: that I believe most profoundly—and I am sure the noble Lord, Lord Citrine, and others will agree with me—that man management is the most important function of top management in industry in this country.

If I might keep your Lordships fox two or three minutes more, I should like to mention briefly the object, as I see it, of the whole campaign, which is the improvement, and continued improvement year by year, of our industrial productivity. There are those who say: "Some people talk too much about industrial productivity. What is the object of productivity in an industry which has too much production already? Is not talk about increased productivity in the textile world, or in agriculture, out of place?"

The answer to that is that the reason why the textile industry has declined is increasing productivity and production overseas, at a rate with which we cannot compete, and the higher the efficiency that we can maintain in our textile world, the more of the trade shall we be able to hang on to than we otherwise should. It is not a fallacy to suggest that higher productivity is needed in every industry.

To accomplish this higher productivity, it seems to me that what we need are three things: better machines, better methods and techniques, and better training of our operatives. Those three, and those three together, will give us the higher efficiency that we need. How are we to get the best machines? To get an ever more rapid increase in our machinery programme throughout industry, I believe we need the help of the Government. We are definitely lagging behind America, Germany and other industrial countries in Europe in the replacement of our machinery and plant. It is rare to find in this country firms with plant less than five years old: it is a commonplace in some of the countries overseas. The culprit here in great measure is the Government. Last night I was preparing notes, from which I was going to talk, about the necessity for the Government to relax their stringent demands on writing off machinery. Then this morning, in the Daily Telegraph—and, I have no doubt, in other newspapers—came reports from America that American business was granted yesterday earlier tax relief for depreciation of their, machinery and equipment. The article went on to say: The cuts will encourage modernisation of industry and help to make it more competitive in world markets. If that is true of America, it is just as true of this country, and even more so, because they are already more lenient to industry than our Government are in the way of allowances for depreciation. Mr. Dillon, Secretary of the Treasury, went on to say: Faster economic growth is essential if we are to reduce unemployment and provide jobs for the millions of workers now coming into the labour force. He thought that the Treasury would get their money back very quickly by increased production.

I am convinced that the radical adjustment of depreciation allowances would work wonders in the modernising of our plants. There are so many firms, especially the smaller ones, who take it as more or less axiomatic that, because Government taxation allowance for depreciation is, say, over twenty years, or upon a diminishing value of 10 per cent. per annum, that is the proper rate, when in effect it is very often far too slow. I would urge the Chancellor of the Exchequer—and I trust the noble Earl who is to reply will convey our views to him—that he could not do more at the present time to encourage the efficiency of industry than to follow the example of our friends in America and give easement on this problem to industry. So much for our machinery.

To get the best methods and techniques known, is, of course, the object of this National Productivity Year and the work of the Productivity Council. I do not wish to go further into that. The noble Lord, Lord Crook, and I have endeavoured to explain how we hope it will work. But both objects will be of no avail unless we train properly all those engaged in industry, commerce and agriculture. Everybody needs training if he is to do his job properly, even, I believe, we Members of your Lordships' House. I would agree very strongly with the noble Lord, Lord Crook, in the comments he made about training of supervisors and management. I have been privileged to be chairman of the National Training Council, which is now going from strength to strength under my successor, Mr. Lowthian, and I would urge the support of all in industry for the work of that Council. The Industrial Training Council, of both employers and workpeople, have declared that everyone needs training of some sort in industry. That applies to the woman in industry just as much as to the man, and I hope that lesson will be learnt. The establishment of training officers under the Industrial Training Council has shown to those industries which have applied for them the merits of proper training methods in industry, and I trust that their work will receive proper support.

I have kept your Lordships too long. I believe, and strongly believe, that the National Productivity Year merits, and will receive, your Lordships' support and approval. It will receive, I am sure, the same support from industry generally, both employers and trade unions. If that is the case, I am confident that in the end it will prove itself to be an outstanding success in the advancement of efficiency and well-being of our country.

5.15 p.m.

LORD GEDDES OF EPSOM

My Lords, the noble Lord, Lord Crook, and the noble Lord, Lord McCorquodale of Newton, in following him, have so far dealt with this subject on very broad lines. I am going to ask your Lordships' pardon at the beginning for following a much narrower path, and for perhaps being less reasoned and a little more emotional. The noble Lord, Lord Crook, said that this was a matter which dealt with human beings. Of course, this is indisputably the fact and, unfortunately—or fortunately, rather—workers have not yet been fitted with electronic brains, and therefore they react emotionally and not reasonably, as they are expected to do.

The noble Lord, Lord Crook, quoted from the Foreword of Aim for Prosperity, and I want to re-quote a very short phrase. It is: … if it can inspire a spirit of co-operation and joint endeavour … I believe that, unless that can be inspired, then we shall not succeed in our British Productivity Year.

I want to deal with some of the difficulties which I think exist in achieving that co-operation. The main difficulties, I think, are the attitudes of mind of workers and employers. Your Lordships may not believe this is true, but I have met employers who strike an attitude of mind which prevents them from really studying this problem dispassionately and in the correct manner. They say that they have a simple solution to the country's economic and industrial ills. The simple solution is that all that need be done is for the worker to work harder; that he should ask for no more pay; that all the wicked lines of demarcation which exist in trade unions should be automatically removed, and that management should be left free to do what it thinks is right, and not to be interfered with by consultation with the workers; in fact, that it would be very much better for this country, and very much easier to increase productivity if there were no trade unions at all, and particularly if there were not full employment.

As with many foolish statements, there is a germ of truth in this. It is, of course, true that if the worker no longer had security, if the worker had to face the possibility of prolonged periods of unemployment, if he had to go back again to the queue for the dole, he undoubtedly would accept conditions and wages which he will not accept at the present time. It is equally true that this would bring prosperity to the few. It most certainly would not produce the prosperous nation that the Government have said is their aim. I am sure that almost all the economists in this House, and most of them outside, would be shocked to hear me say this. I believe that it is not only what a 1s. will buy but how many shillings there are. If they are shocked about this, may I remind them that in my young days a worker could get six pints of beer for 1s., but he was not prosperous; he was the very reverse of prosperous. Therefore, we must take into account not only a desire to give the worker the opportunity to produce more; we have not only to encourage him to participate and co-operate in increasing productivity, but we have also to give him incentives to do so.

The worker's normal reaction to productivity schemes is to be against them. This is wrong, and I am not challenging that it is so. I am not saying it is right; I am merely saying that it is a fact. The very words "increased production" and, to a lesser extent, of course, "productivity" bring to the mind of most workers industrial consultants, stop watches and all that sort of thing, and reaction against them. The worker reacts against them because in the long run his experience is that it results in fewer jobs; and it is no use anybody's believing that the worker in this country is going to co-operate in anything which is likely to bring about the loss of his job or of his mate's job. It is almost like asking the condemned man to be his own executioner in order to save the executioner's fee; and that is asking rather too much.

It is certainly asking too much of the worker, in groups, en masse, or the individual, to get round the table with management and discuss with them the possibility of increasing production for the sole purpose of reducing labour costs. Labour costs have got to be reduced, of course—it is part of the need of this nation to become more competitive. But if we are going into the National Productivity Year and employers and management are going to approach the problem of increasing production and productivity on the basis, and only on the basis, of reducing labour costs they are not going to succeed. In any case, it does not follow that if they reduce labour costs they are necessarily going to increase their productivity, because you do not increase productivity by saving time; you increase it only by using the time you save profitably.

Therefore I think we must face the fact that if we are going to get this essential increase of production and productivity, if we are going to gat the co-operation of the workers in this effort, we must concede to them the right to have some reward and benefit in that increased productivity. I know that the normal answer to this is that they will, in any case, improve their position; they will, in any case, be rewarded by the general increase in the prosperity of the nation as a whole. I am sorry, my Lords, but in my experience this is far too remote a proposition to put to the ordinary worker. It may be that he ought to be satisfied with this; it may be that he ought to feel he is making a contribution to the well-being of everybody else. But I am sorry: my experience is that we are all a little self-interested, and this includes workers and employers, because there are some employers who are self-interested too and who believe that the essence of increased productivity is increased profits. I do not deny their right to get increased profits, but it is when we come to the sharing of increased production and productivity that the problem arises. It is simple when it is a question of payment by results, where the increased production and output of the individual can be measured. It is then only a question of getting down to facts, examining them, putting a price on the facts and coming to an agreement. That is a simple thing.

The difficulty arises where productivity is going to increase by the use of new machines, by replacing labour by machines, and where, in the view of the employer, the main contribution is capital. The employer says: "This is my capital; I have put these machines in. The increase in productivity arises from them; therefore the profits of them should rightly come to me." He forgets that in many cases—and this is particularly true where the machine is put in as a result of self-financing—the worker has contributed to that capital as well. But that is not the whole point. I have heard said so many times that where you save muscle, as it were, where you introduce a machine which relieves tedium, the worker has not got to work so hard. "Therefore", it is said, "what is he grumbling about? What we are doing for him is excellent"—the employer forgetting, more often than not, that when you reduce physical labour you increase the need for mental effort and you, again more often than not, add to the worker's responsibility.

How, then, are you going to reward the worker or find a reasonable division of the spoils, if I can use that word, where increased productivity arises purely and simply from capital? I want to use an extreme case to illustrate my point. I admit that it is an extreme case. I saw recently on the television screen a giant earth-moving machine. I cannot remember the statistics, but they were almost incredible. This machine cost over £1 million. It lifted, I think, 30 tons of earth at a grab. It moved the earth from here to there, standing still. When it wanted to go a little further, it picked itself up and walked along. It seemed to me to do everything but talk to the driver.

This is, of course, the whole point of it. This machine, magnificent in design and almost science-fiction, cost an enormous amount of money and, therefore, necessarily had to give a return on capital. Yet in the long run, it had to be worked by a man. The man had to tell the machine what to do, and not the machine tell the man. How do you reward this man? Is he just another machine operator? Or because it is a big machine do you give him a little more money? Do you give Him a shilling an hour more? Do you give half-a-crown or £1 an hour more? Is that as silly as it sounds?—because, remember, if this man is not operating this machine properly, the loss of production is very much greater than if he were using a small machine. If he uses it negligently the cost of repair is very much greater than it would be for a smaller machine. If it is out of order, the loss of output is enormous. In many cases he is replacing a number of trained drivers. How do you reward him? Do you say to him: "This is capital outlay. This machine has cost me a million pounds and you have made no contribution to that million pounds; therefore the profits are mine"?

That is said, my Lords. This is an attitude of mind on the part of employers, and I suggest that it is one of the difficulties, one of the obstacles, to getting the co-operation which is so essential if this Year is going to succeed. Nobody is going to deny, certainly not in this House and I think not outside, that the prosperity of this country, of the nation, employer, worker, man, woman and child depends entirely upon the efficiency of our industry and upon the worker himself making a contribution to the efficiency of that industry. He has a part to play. Of this there can be no question.

Neither could it be denied that the worker is suspicious—unnecessarily suspicious—of attempts to increase production and productivity. I do not mind what is going to be said to me as a result of what I am now going to say, but too many workers in this country at the present moment look upon full employment as God given and not something which to some extent is fortuitous and to some extent is the result of careful planning. In any case, it is something which has to be safeguarded and treasured. Too many of them believe that this can go on and that they have nothing to worry about. I do not believe this is true. I believe that if they are not careful they will lose the enormous advantages of full employment, and unless the worker is prepared to cooperate with the employer in this Year that is coming, then we are not going to succeed.

I am going to deal only very briefly with two further difficulties that I see. I have already referred to the muddle- I headed view, if you like, of the worker that he wants a reward in return for increased production. A pay pause and expanding production are not bed folk; they are incompatible from a worker's point of view, whatever may be the economic reason for the one or the other; they are completely incompatible. You cannot hope that the workers will go into this National Productivity Year with the enthusiasm that they ought to have in their own interest, if you are going to tell them at the outset that, whatever may be the result of the increased productivity, there is going to be a pay pause. I appreciate that the Chancellor of the Exchequer is in the difficulty that he does not want to lift the pay pause until he gets increased production; but my view is that he will not get increased production until he lifts the pay pause. That is the dilemma. One can only hope that the Chancellor will see his way clear, in the light of the improved economic position of the country, to do something about this problem, because I believe that unless something is done there is very little hope indeed of getting the co-operation which is so necessary.

Finally, I am quite sure that we are facing a situation which, difficult though it may be, can be overcome. But it cannot be overcome, in my submission, by trying in the first place to deal with it on the basis of what some middle management call the stupidity of the worker. It cannot be overcome by putting the blame on the worker. The employer cannot whitewash himself with the sins of the worker. What he can do is try to overcome the difficulties with patience.

May I spend just two minutes in referring to what I believe is one of the most remarkable exercises in industrial relations in recent years? I refer to the agreement at the Esso Foundry at Fawley. This was a remarkable agreement; there can be no question whatever about it. Anybody who knows anything about it can do nothing but marvel that this was achieved. But how was it achieved? If anybody thinks that this Rome was built in a day, he is very wrong indeed. This was brought about by patient negotiation, not in the four months in which it was negotiated but over nearly two years before the plan was put on the table. It was carefully prepared, carefully conceived and then put across after the most careful planning by those responsible; and, as a result, it was accepted. This is not a pattern for industry; everybody cannot apply the Fawley experiment; the conditions are not the same. I quote it only because I believe it to be an example of what can be done if only an employer is enlightened enough and if only he is patient enough. He can overcome, as they did at Fawley, almost every prejudice that is existing in the trade union movement. Finally, if I appear to have been talking to enlightened employers about something they already know, I would only say that if all employers in this country were enlightened there would be no need for a British Productivity Year.

5.35 p.m.

LORD BAILLIEU

My Lords, I think we are greatly indebted to the noble Lord, Lord Crook, for his action in putting this Motion on the Paper to-day. He spoke to us in simple moving terms, and he left me with a strong impression that he felt wholeheartedly that a National Productivity Year was essential to this country. My noble friend Lord McCorquodale of Newton, a past Chairman of the National Productivity Council, has told us something of the work of that Council and he has stamped on this effort its non-Party, co-operative character. That, I think, is fundamental. We have just listened to the noble Lord, Lord Geddes of Epsom, who has been at pains to take us behind the scenes and let us see something, or understand something, of the mind of labour in approaching this problem of productivity. That is all to the good.

I do not intend to take up very much of your Lordships' time, except to say that I regard the National Productivity Year as one of great importance for the future of this country. I propose, not following Lord Geddes of Epsom, to make some general observations; to point out some simple truths which seem to lie within the context of those observations, and to invite your Lordships' concurrence.

The first question I would ask myself is: why do we want a Productivity Year? I am going to suggest that we want a Productivity Year because we are a trading nation. We live by trade, by which I mean all that vast and somewhat intricate complex of production, of commerce and finance through which our island life is nourished and maintained. We must buy; that is, we must import the bulk of our food and raw materials in order to feed our people and to sustain their industry. We must sell; that is, we must export goods and manufactures and services in order to pay for these imports. And we must do this in a very highly competitive world. If we fail, then our standard of living will fall; we could be faced with mounting unemployment; we could find the amenities we have cherished so closely and our way of life vitally endangered. I think we can say, therefore, that our future happiness, and our way of life as a people, depend upon the efficiency and productivity of British industry; and, I would add, of British commerce and finance.

There is no doubt about the need for greater productivity: that is self-evident, I think. If we are to improve our place in the great league of industrial nations that is vital. We have only to look at what we face—the continental United States, Russia, the Common Market and Japan, with a population twice our own—to realise that we face a situation of great challenge and uncertainty in the coming ten years. But may I say this to your Lordships? In the advanced industrial countries of to-day, more and more of us are concerned not with pure machine minding but with distribution or the service trades, and in my view we must apply our productivity methods and assessments as much to the retail shop, to wholesaling or to the office, as to the factory. These may be more difficult to assess and to measure, but there is no reason why we should not try. They remain a field of great productive endeavour from which I am certain we may harness a fruitful return.

Whilst effective action, therefore, in the field of productivity requires the cooperation of all elements—and we have all emphasised that to-day—I should like to say here, as one concerned with industry, that I recognise fully the special responsibilities which devolve upon management in this challenge. In my view, management will need to have, and to promote, during the coming years, a greater understanding of the changing rôle of management—I cannot elaborate this point to-day; hut we have only to look at what has happened in the last ten, fifteen or twenty years to realise that this is essential. It will have to promote a greater understanding of the possibilities and limitations of new scientific technique. And that is not only a question of understanding; it is a question of communication, as was emphasised by the noble Lord, Lord Geddes of Epsom, to your men, to your staff and to your management. It must promote, thirdly, a greater understanding of the effects of political, economic and social development upon the business enterprise. They are hearing upon us the whole time, and it is our job to interpret (them, to assess them and to communicate and to expand. And, fourthly, management will require a greater understanding of the problems of management succession, and of education and training for management.

In all these spheres, my Lords, I regard management as having special responsibility. There is here a vast field for human endeavour and industrial statesmanship. I think that this challenge will always he with us, and I agree that the solution devolves specially upon management. I would go further and say that the individual manager, whatever apparatus of management he may have around him and may command, must have the capacity to seize an opportunity, to accept the responsibility for exploiting it, and he able to explain what he is doing. This capacity will decide whether the potential developments inherent in Government policies and in new advances in knowledge, will, in fact, be transferred into worthwhile human gains in the coming decade.

But, above all, I believe that it is people that really count. We all know the good manager when we see him. Apart altogether from technical qualifications, we find in him a special critical faculty, an elusive quality which some of us call "hunch". This gift springs from long experience. If it is not born in a man, it certainly springs from carrying greater responsibility at all levels. It expresses itself in those qualities of mind and character that we always recognise and admire in the best managers.

To the extent that the managers of this decade are men of that quality, we shall find that the opportunities before us are attacked with understanding and responsibility. This, I think, will prove to be the ultimate measure of our success in management, in providing genuine leadership, in creating that inner harmony, that sense of common purpose, that feeling of belonging which is the touchstone of efficiency and, I would add, of industrial peace. This again, in my view—and this is the keynote of my speech—provides the principal key to increasing productivity which constitutes, I believe, the central challenge to this generation; and this, given understanding and responsibility, we may expect to achieve without turning ourselves into mechanical robots or placing progressively heavier physical burdens upon our people. I am sure that Productivity Year will receive your Lordships' full and undoubted support.

5.45 p.m.

LORD CITRINE

My Lords, circumstances have arisen which necessitate my attending elsewhere in a short time, and I am deeply indebted to my noble friend Lord Peddie who has permitted me to speak in the place which normally would have been assigned to him in this debate. I expect that this is one of the least contentious Motions that has ever been before your Lordships' House. There has not been a single speech, nor is there likely to be, which will really deprecate the policy now being pursued by the British Productivity Council in organising this National Productivity Year.

I was a member of this Council, as at one time were other Members of this House who are now present, and I knew from the beginning what an uphill task it was to arouse the British people generally, whether in industry or elsewhere, out of their habitual mood of complacency which convinces them in almost every sphere, even in the realm of sport, despite the many examples to the contrary, that they can never be beaten. I think the last thing in the mind of the British worker is that because of some superiority of organisation, some better technique of management, or possibly some more intelligent working on their part, other countries can get ahead of us and so imperil both the prosperity of the country and his standard of life. This is emphatically an effort of good will, a recognition by those who are responsible for its organisation. In that connection I would include the British Employers' Confederation, the Trades Union Congress and other bodies who are associated with the Council. It is an effort of real good will to try to do something which they regard as absolutely essential. In my opinion they have devised a wise method of instilling their doctrine of the necessity for greater productivity, by a system of local visits.

References have been made in the debate to the attitude of mind of certain employers. I am bound to say that in the course of my lifetime, particularly my trade union experience, there has been marked progress in that attitude of mind. I do not think there is a large firm in the country to-day whose labour policy, in particular, is not entirely in advance of anything that could have been contemplated 30 years ago. Their example should be instilled into others, because, after all, British industry is not concerned mainly with big firms; it still remains the fact that from the point of view of employment the small firms in bulk employ the greater number of people. That is why I think the system of local visits by workers and management from works to works of different firms, who see processes that they have never seen before, and which are quite unfamiliar to them, will do a great deal to break down that wall which used to insulate—and, I am afraid, still does—so many firms in this country.

We are all aware that apart altogether from the competition which inevitably ensues in the overseas market, there is also keen competition between firm and firm in the same locality, and in the country generally. The inevitable result of that in the past was a measure of secrecy which more or less kept at arm's length competitors in the same business. I know one or two big firms who are still in that semi-secret state of mind. But, broadly speaking, that no longer can be said to be the rule. So I feel this system of local visits is an excellent plan.

One very encouraging feature of visits abroad by delegations of employers and trade unionists is that they will make them realise that because a thing is British, or because a method is tradi- tionally British, it is not necessarily the best in the world. They will discover that other countries, particularly in the post-war period, have advanced their methods to such an extent as to furnish a very good example for those who are permitted to see them. In iron and steel, in shipbuilding, and I am proud to say in electricity supply, it has become an attitude of mind to send people abroad, not merely as individuals for special purposes, but as delegations too, as well as to exchange employees. Such activity must broaden the minds of those concerned; and if on their return they do their duty, they are bound to impart their experiences to those with whom they work.

Reference has been made by noble Lords to the period of severe competition that lies ahead of us, whether we go into the Common Market or whether we remain outside it. There can be no greater truism, and I only wish that a little thinking were more generally indulged in by the people of this country as to what that really means. We must have a national effort on this, a stirring of people out of the attitude of mind which makes them feel, in the good old British way, that things will come out all right somehow, if only we leave them alone. The habit of muddling through, about which we heard so much in the two World Wars, is the sort of attitude I have in mind.

How is this united effort to be made? The noble Lord, Lord Geddes of Epsom, has referred to this matter from a different point of view, but, at national level, there is complete understanding of the problem on the part of both the employers, through their organisations and as individuals, and the T.U.C. and its members. I would go further and say that at national trade union level (speaking in general terms, because there are still trade unions who will not follow the policy of the T.U.C. in these matters) there is, broadly speaking, no problem in the realm of co-operation. They are already convinced and at local level also most active trade union officials understand the importance of efficiency on the part of the various industries and firms.

However, when it comes to the workshop, how many individual men really give any thought to this subject at all? I am afraid not very many. There are some, of course, who do give it thought, but it seems to me that this is easily the most difficult phase of this problem—to get over the importance of increased national productivity. That is where the effort must be concentrated. It has stood out for a decade or more, and possibly for a generation, that the enlightened policy that is pursued by the best of the trade unions towards modern industry very seldom reaches down to workshop level. There is a defect in this regard in trade union structure and organisation which must be overcome, and it is no use blaming the employers all the time because they have lapses in the same direction.

The noble Lord, Lord Crook, who moved the Motion set out very clearly the essential points. I took them down as: better industrial relations; joint and intimate consultation; effective training; and better communication to the workshop floor. I feel the noble Lord is unquestionably accurate in his choice because these points are essential in every respect. But there is another essential which was referred to by the noble Lord, Lord Geddes of Epsom. When we talk of the productivity of a country, let us try to visualise what we mean. There are many different industries, whose efficiency varies one from another. I would not be exaggerating if I said that there are hundreds of thousands of firms in this country to-day, and they are the people who, from day to day, carry out the work of what we call national productivity. The essential element which I have in mind—and which Lord Geddes Of Epsom mentioned without any collaboration with me, so it is a thought that is common to us both—is that it must be made clear, beyond any possibility of doubt, that working people are going to share adequately and equitably in the prosperity that is envisaged as a consequence of better productivity. For generations individual firms have used methods to stimulate workers into giving greater effort for the particular firm. But, to my knowledge, never before has there been any breadth of conception comparable to this, when we think in terms of the country as a whole and its economic future. However, once again I think that it will be difficult to get that breadth of perspective over to the average man. I regard it as imperative that the individual workman should realise that there is no doubt whatever about his direct share in the rewards that come with increased prosperity.

If I might now turn to the Government's wages policy, I regard it as an insurmountable handicap at the moment—I am not at this point talking about the wages pause, because that is a quite different thing, but their wages policy, which seeks to limit the rewards that firms and industries can offer to their workers. It tries to set those rewards within a limit of 2½ per cent. of national productivity. I would say that that is far too remote to be a real stimulus to the average workman. And it is not only remote, but is completely inadequate in amount. It is a real handicap to those industries which can reasonably call themselves prosperous in conducting their negotiations and maintaining good relations with their employees. I have had some direct experience of this, which circumstances do not permit me to make public but they are there just the same. I would say that there are many firms that may feel that in trying to be loyal to the Government's broad policy they are in fact running a grave risk of antagonising their own workers. I do not believe this policy can be maintained indefinitely; I see signs of it giving way already, and I think it is a very bad thing for a Government to have to give way on a policy through duress when it is something they will not do out of breadth of view or perhaps more generous spirit.

When we were debating the question of the nurses salaries, the noble and learned Viscount the Lord Chancellor, in reply to my question, when I asked him what there was left for trade unions to put forward as reasons for increased wages or salaries, said, "Increase the size of the cake"—a very logical, a very understandable point of view. Here is a case where everybody is trying to increase the size of the cake, but let us always be sure that in any propaganda or publicity about that we have strictly in mind the importance of the workers getting a share. It has long been a bugbear of trade union thought that there is difficulty, sometimes, even in prosperous industries, in getting the workers adequately rewarded; and sometimes there have had to be strikes before that could be achieved. I hope there will be no misunderstanding on that.

Here, through this National Productivity Year, there seems to me to be an opportunity for an all-out effort on the part of everybody to do that; to see, first, that the productivity of the country is vastly augmented and, secondly, that the workpeople are properly rewarded. The literature which has been put forward shows how wide this cooperative effort is, much wider than anything before, as the noble Lord, Lord Crook, has already said, and all men who have the welfare of our people at heart will wish them well in the year that is ahead of us. But always remember, my Lords, that it is a sustained effort that is required here, and not an effort concentrated into merely a single year.

6.2 p.m.

LORD MARKS OF BROUGHTON

My Lords, I join the noble Lords who have preceded me in this debate in thanking the noble Lord, Lord Crook, for his timely and important Motion. We meet on common ground on both sides of the House, for we all have at heart the prosperity of the country and the raising of the standards of life of the people of these islands. Any debate which highlights the problems of productivity must he useful, as it helps to focus public attention on these problems; to inform and to form public opinion.

I am sure that this House will welcome the initiative of the British Productivity Council in declaring 1962–63 a National Productivity Year. Personally, I should have preferred "he declaration of a National Productivity Decade, for it takes a much longer period for a new pattern of industry to evolve. But to my mind it is not sufficient to think of increasing productivity only in terms of industry by industry; the approach should rather be factory by factory; for it is only on the floor of the factory that real success in this campaign lies. The search for increased productive efficiency, in common with the understanding of human relations, must be regarded as a constant challenge which demands constant study, education and application. ! This, of course, is an immense task; but with all the resources of publicity available—television, cinema, radio, the Press—the task can be facilitated.

We all want our economy to grow. For this we need a healthy demand at home Which will help us in our drive for exports. If we as a nation are competitive, we shall grow. We shall grow in a way which we can sustain without damage to the balance of payments, because the goods will be available at the right price. But we must not delude ourselves with the idea that the proclamation of a target figure can make us grow. We can grow only if we make ourselves fully competitive; and that means concentrated effort at factory level to exploit the wealth of new and efficient techniques which the scientific and technological revolution of our time is making available. The challenge to industry is to achieve still higher productive efficiency, batter quality and lower prices, in order to stimulate sales at home and abroad. Are not these, my Lords, the aims of the National Productivity Year?

I make no apology for referring to the methods of my own firm in meeting this challenge. After my (maiden speech, your Lordships were anxious that I should tell you something more about the business with which I am connected. In 1947, at a time when British industry had not yet recovered from the effects of war, my firm found it necessary to establish a production engineering department. The department was designed to assist our manufacturers in the progressive modernisation of their plant, and to adapt themselves to the latest technical advances. Production engineering may seem a surprising activity for a retailer, but we found it absolutely essential to create a department capable of advising our manufacturers on factory administration, lay-out and production problems. This approach is an important aspect of our campaign to achieve better and better values. The truth is that, whereas once Napoleon may have been right in his gibe that we were a nation of shopkeepers, to-day we need to be a nation of manufacturers.

May I give some examples in widely different fields, of what can be achieved by up-to-date methods in expanding production, improving quality, lowering prices and making us competitive? In the bakery industry a veritable revolution in production techniques is taking place. There have been remarkable in- creases in production with the same labour force, due to the use of electronic baking techniques, continuous mixing and mechanical handling. In the hosiery and knitwear industry, for instance, by employing modern plant incorporating electronic controls, suppliers have been able very substantially to increase their production with the same labour force.

HATRA—that is, the Hosiery and Allied Trades Research Association—has produced mechanical devices whereby fabric qualities can be more precisely controlled. This also means less waste, as more perfect merchandise will result from machinery using these aids. In the footwear industry there have been many advances in shoemaking techniques during the last eighteen months, thanks to the intensive research and development carried out, not only by SATRA and other trade associations but by the shoe machinery companies, as well as by progressive firms in the industry itself. Manufacturers, in using these techniques, have been able to double their production with the same labour force while improving quality. Of course, all this leads to lower prices for the consumer, and in this modest way to raising the standard of life.

These are but a few examples which describe definite modern trends of productivity. They can be paralleled in all the other fields in which we operate. I would not weary your Lordships with a lengthy account which might be only repetitive, but they all lead to the same goal—greater production per man-hour. Many of our manufacturers are taking advantage of the fascinating possibilities and opportunities created by scientific research and modern technology. It is thanks to these developments that my company us now able, once again, to embark on a new lower-price campaign over a wide range of goods, despite the handicap of increased purchase tax. It has been made possible by the ready co-operation of our suppliers, who are naturally interested, as we are, in expanding their output.

The policy which I have described is neither novel nor original. Its value and importance lie in its application, which might serve as an example and which might profitably be pursued in other spheres of industrial activity. But such a policy requires much capital investment- ment. Machinery must be renewed if production as to keep abreast of the astonishing pace of modern invention-inventions which can render a machine obsolete within a very few years. I hope that, as he promised eight months ago, the Chancellor of the Exchequer will give the most sympathetic attention to the means by which capital investment and technical progress can be encouraged. I agree entirely with the noble Lord, Lord McGorquodale of Newton, who referred to the news this morning of the approach of the United States Government towards the problem of depreciation of machinery. If we in this House have no influence, perhaps influence from abroad may help the Chancellor to make up his mind.

In encouraging technical progress the research associations of the Department of Scientific and Industrial Research can be of very great service, because of the fund of knowledge and technical "know-how" which they have at their disposal—though not all firms are fully aware of how much they have to offer. I feel sure that the National Productivity Year can do much to publicise the resources at their command. The application of modern industrial technique depends, it has been said before, on enlightened management and a close, understanding and sympathetic relation between management and labour; for without this even technical progress will not get us very far.

Finally, maximum efficiency and increased productivity are the result of an attitude of mind which is determined to eliminate all waste of effort at every stage of production and distribution. This is indeed the attitude of mind which lies at the basis of technological advance. But it can be just as fruitful in Government administration as in industry, because it depends on the same fundamental principles of simplification and rationalisation. I wish that the Government could be persuaded to subject their own administrative methods to the most vigorous scrutiny, with a view to reducing their overhead costs and helping to relieve the heavy burden laid upon industry by taxation. The National Productivity Year Handbook says: Nothing is more effective than the practical example provided by leading firms, large and small. May we not look to the Government as well for such an example?

My remarks to-day have referred chiefly to manufacturing industry, because that is the field in which I have been most closely concerned. I need not stress its importance, because it produces one-third of our gross national product. I am convinced that in this field a new spirit is emerging, particularly among firms which are eager to seize the immense opportunities created by the second Industrial Revolution through which we are now passing. I am sure that this is the spirit which the National Productivity Year is intended to encourage, but it will take more than a year to bear full fruit. I should like to repeat that what we need is not only a National Productivity Year but a National Productivity Decade. If, my Lords, I have wearied you with my own experiences, I beg forgiveness. I believe that the example which we are trying to set, if followed by the nation, will make us so competitive that we should have no fear of entering the Common Market, or any other market.

6.20 p.m.

LORD WALSTON

My Lords, we are grateful to my noble friend Lord Crook for giving us the opportunity of discussing this important subject, and we are also grateful to him for his own speech. He said so much that was wise and so much that was worth saying; but, above all, I should like to emphasise his remarks on the need for understanding between management and those who actually work on the factory floor. Indeed, the noble Lord, Lord Marks of Broughton, mentioned this fact; and my noble friend Lord Geddes of Epsom told us very many things which were well worth saying in this respect. I am tempted to pursue that particular aspect of the problem, but I shall not do so; many who have more and far wider experience than I, have already spoken to this, and possibly others will too.

I shall instead confine my remarks almost entirely to agriculture, because I believe agriculture has quite a lot to teach industry in this respect, particularly in the relationship of employer to; employee. I know that agriculture has very many advantages. It works in small units; there is close contact; the life of the farmer and that of the people who work for him are very largely shared; there is complete understanding of the problems. But it is, my Lords, I think significant that agriculture is the outstanding industry where industrial disputes do not anise, and this in spite of the fact that the agricultural wage is still, to all intents and purposes, the lowest in the country, and in spite of the fact that the standard of living, although rising, is still far lower than many of us think it should be.

However, in spite of these things, it is interesting to look at some of the achievements of agriculture in the last ten years. In passing, and without introducing a discordant note into this debate, I should like to say how sorry I am to see that among the sponsors, among the vice-patrons, whoever they are, of this National Productivity Year there is no representative of the agricultural industry—no President of the National Farmers Union and no representative from the National Union of Agricultural Workers. I do hope that, before the Year really gets under way, that omission can be repaired.

I do not want to weary your Lordships with many figures, but, after all, figures are the only way in which we can assess progress. I should like to quote, first of all, from a paper called the District Bank Review, written about a year ago by Mr. Ford Sturrock, the director of the farm economics branch of the School of Agriculture at Cambridge. He points out that between 1950 and 1960 the numbers that worked in agriculture had fallen by about 20 per cent., whereas output had expanded by 17 per cent. This implies, in his words, an increase in output per man of more than 40 per cent., or over 4 per cent. per year. And again quoting Mr. Sturrock, that is an achievement which would be envied by some manufacturing industries.

Now a few more individual figures from this particular industry. In the old days of hand labour in sugar beet, an important crop in the eastern counties, it required 200 man hours an acre to grow and harvest a crop of sugar beet. The Cambridge University Survey shows that that has now been more than halved. It is down to 98 man-hours on the most recent figures, and in certain instances where greater mechanisation has been practised it is still lower than that. With regard to the harvesting of wheat, in the old days, with the old-fashioned binder (or what is now the old-fashioned binder, though it is still used by many people), it required 43 man-hours to harvest an acre of wheat. If a combine harvester is used in normal conditions, with no great accent on efficiency, 13 hours, as opposed to 43, are required; whereas on the better farms that figure has been reduced still further, to 8 hours. In my own case, I am confident that in this coming year I shall be able to reduce it to 5 man-hours per acre. Compare that with the 43 of the farm of ten or fifteen years ago.

If we look at the dairy industry, just shortly after the war, in 1949, when cows were machine-milked but milked in a cowshed, it required 180 man-hours per annum. In 1962, with the more modern yard and parlour, still machine-milking, that figure of 180 has been virtually halved to 95. If I may, emboldened by the noble Lord, Lord Marks of Broughton, I should like to quote just a few figures for my own farm. In the last ten years, the wage rates for agricultural workers have risen by 60 per cent., but the actual wages paid because of reduction in the number of men have risen by 22 per cent., whereas the gross product during that period has risen by 42 per cent. This, my Lords, is by no means an exceptional farm; it is what can be found in many places throughout the whole country. So I do suggest to your Lordships that agriculture has a record of which it can be proud in this matter of productivity. And not only that; it has quite a bit from which other industries could perhaps profit if they took a look at what goes on in the small units in out of the way places.

One more comparison, since our minds are now so much on Europe and the possibilities of the Common Market. If we compare the net output per man engaged in agriculture in this country with that of the man in Holland, West Germany and France we find that even the relatively efficient Dutch worker produces rather less than half, in value, of what the English worker produces, and the West German or French worker produces rather less than one-third. So as far as our production in this country is concerned, I feel we have a record of which we can be proud. But if we pursue this matter a little further, the picture takes a curious turn in the opposite direction. I have on previous occasions spoken to your Lordships about the margin which exists between the price the farmer receives and the price the consumer has to pay. A certain number of figures have been bandied backwards and forwards on this subject, so I thought I would look a little closer into just one commodity, wheat, and try to trace it through a little further and see what happens to it in this country, and compare the situation with that of some of our neighbouring European countries. Some very curious facts emerged from this. It was not a simple problem to arrive at these statistics, but I have done my best to do so accurately and objectively, with the help of many others.

It appears that the average price of wheat in this country delivered to the mills in 1961—these figures are taken from the Corn Trade Review, the Board of Trade returns, and so on—averaging up imported wheat from Argentina, Canada, the United States and Australia with domestic wheat, turned out to be £26 6s. 3d., the lowest of four countries. Holland came next with £26 14s. 0d. About two-thirds of the Dutch wheat is imported, and one-third is home-produced at a higher price. France came next with rather over £34; and Germany was the highest at £37 2s. 0d. If you then look at the sale price of flour ex-mill, and of wheat by-products—offals—making appropriate allowances for the extraction rates, which vary slightly from country to country (I will not give the actual figures because I think that would be tedious for your Lordships), you will see that we do not produce flour as cheaply.

It is the Dutch who produce the cheapest flour in the end, balanced off with offals. The margin of gross profit over the price of wheat bought by the millers is, in Holland, 28.6 per cent.; in Germany, slightly more, at 29.6 per cent.; in France, slightly higher, at 35.6 per cent. and in the United Kingdom, the highest of all at 41.1 per cent. In other words, although we have the advantage of buying the cheapest wheat of any of these four countries, there is—I hesitate to use the word "inefficiency", but at any rate, something which happens between the time that wheat enters the mills as wheat and the time it leaves as flour and offals which causes the outgoing price, the selling price, to be 41 per cent. higher than the incoming price, whereas these other countries can, presumably, operate at some sort of satisfactory profit on a range of from 26 to 35 per cent.

I would remind your Lordships that OUT wheat industry underwent a drastic reconstruction in the early thirties, when with the object of increasing the efficiency of our milling industry, many small country mills were closed down. It seams to me that possibly one of the things the National Production Year could achieve would be to investigate closely why our millers require a considerably larger margin of profit than any of their Continental competitors. If it is said that it is purely a matter of wages, while wages are extremely difficult to compare, I would point out that the wages in this country for a 42-hour week vary from £9 3s. 6d. to £13 14s., while in Holland the average wage (including social security, paid by the employer) for a 48-hour week is £13 2s. There may be a difference, plus or minus, of a few per cent. but it is not very large in either case.

Having got that far, I thought it would be interesting to take a look at the bakery industry. I was extremely interested to hear the noble Lord, Lord Marks of Broughton, mention the great advances which had been made in the bakery industry in recent months, because the picture I have from these figures is a very different one. I would make it clear that when I am talking about bakery, I am talking solely of ordinary bread, and not of biscuits, cakes or fancy rolls. If you compare the price of one ton of standard flour, of ordinary wheaten flour, of 72 to 75 per cent. extraction, which is used for bread-making, with the price of bread made from that ton of flour, again with appropriate adjustments for the weight of bread that is made (because in some cases you get a heavier weight than in others) you find a most extraordinary picture. You will find that the French baker operates on a margin of 11.4 per cent. I think that this is a somewhat misleading figure, because, even though that is the correct figure, comparing bread with wheat, he expects to make a profit on some of his fancy sidelines—brioches and croissants. The actual fact is that, so far as bread is concerned, he can produce bread at a margin of 11.4 per cent. of the price he pays for flour. The Dutch baker is less efficient than the French. He operates on a margin of 45.8 per cent.—quite a reasonable one, I should imagine. But if you look at the English baker, you will find the staggering margin of 118 per cent.

These figures are obtained from the appropriate trade sources and from the Board of Trade. No doubt there will be explanations of all of them. I know that English bread is more inclined to be wrapped in cellophane, if people think that it makes the bread better. It may be pre-sliced; and some of it, though by no means all, is delivered. All this, of course, costs money. Much of the bread is able to stay relatively fresh for a matter of 48 hours. There are many factors which enter into this question of margins, but I suggest to your Lordships that here is something which is of great concern to everybody in this country.

While increased productivity, from the point of view of exports to South America, or wherever it may be, is of importance, if we can achieve, without being unduly harsh on any of the people engaged in these operations, some reduction of this widespread margin, so that (putting it again in the simplest words) our millers and our bakers require a margin no larger than the Dutch millers and Dutch bakers, we shall have gone a considerable way towards reducing the cost of living of the ordinary man and woman in the street and towards increasing, in one form or another, our actual productivity. My Lords, I hope that in the course of this year matters of this sort will be looked at closely and critically, not with the idea of "whitewashing" but of arriving at all the true facts, to see whether we can organise this important industry in such a way that the British farmer continues to receive the same price for his wheat as he has done in the past, and as do the Dutch and French farmers, and that the British housewife does not have to pay any more for her flour and bread than do her fellow housewives in Holland and France.

6.39 p.m.

LORD LUKE

My Lords, we have had most interesting contributions to this debate, and I hope that the noble Lord, Lord Crook, will feel that he has some reward for his initiative in introducing the Motion. I should like to join with all noble Lords who have indicated our gratitude to him for having done so. He himself produced a most interesting speech, and among the many things he said he drew our attention to human relations and the right climate leading to confidence between all sections in industry. The noble Lord, Lord Baillieu, mentioned good management with understanding. The noble Lord, Lord McCorquodale of Newton, dealt with trading and industry. And the noble Lord, Lord Citrine, in what I thought was a remarkable speech, produced equitable distribution of reward resulting from increased productivity.

I mention these points, which I picked out from the speeches of noble Lords, because I shall keep them all in mind, and I hope that other noble Lords, whether they have taken part in this debate or not, will also do so, because I maintain that all of us have a part to play in this Productivity Year, nationally or locally. We all need to keep these rnatters—and, indeed, all the matters mentioned in this debate—in mind. It is a most important subject and an important co-operative effort, as the noble Lord, Lord McCorquodale of Newton indicated, the object being to bring to the forefront of our minds the opportunities for greater efficiency which we may be missing, and to suggest ways and means of putting this right. I take it not as just one more exhortation, but as an open invitation to take a sensible and searching look at ourselves; to take serious note of how we measure up to what others, perhaps more successful than ourselves, are doing—and by "others" I mean other nations and other organisations—and, more important still, after we have taken a look, to take some action to raise our own standards. This is, of course, as has already been mentioned, largely an attitude of mind. The noble Lord, Lord Geddes of Epsom, mentioned communication. And that is the whole crux of the matter: getting to know and keeping up to date through taking the trouble to observe. The National Productivity Council are making it easy and inviting for us, by conferences, discussions, demonstrations and exhibitions; there is plenty of opportunity for all of us to take a course or courses of information and instruction. All this is designed to bring all who are in practical production of any kind into contact with all that is going on in research. I think this effort, if it is gone into properly, will help to answer the aspersions, both at home and abroad, that we have lost our talent in this country for vitality and attention to detail and for taking trouble in our operations. I do not think this is at all a true accusation of our inventiveness, our pioneering and our research, because in this we are still leading the world. But it may well be true of our application of new inventions and ideas, and we should check up on this. It may be our misfortune that this leads from our disinclination to make changes until they are forced upon us. I think we have a case in point in the changing patterns of trade overseas. I think we are slow to change our thoughts and methods in this respect. We are slower in adaptation.

I am glad that the noble Lord, Lord Marks of Broughton, mentioned production engineering, because I think we are all aware of the good effects which can flow from business efficiency experts, who can take an objective view of any operation in business administration and prescribe a more efficient way of doing it. The noble Lord, Lord Marks of Broughton, may have his own experts, but others of us have used these people from outside. I think there is a tendency among some people to accuse these experts of being only experts in telling other people how to run their business, as if there were something derogatory about it—a sort of, "You mind your business, and I'll mind mine." This again stems from the view that we can do no wrong. There, I maintain, is a very important danger signal for us, and a moment for humility in our own organisations.

It comes to this: that we are all so immersed in our own affairs, too close to it all, that we often need the specialist's eye from outside to diagnose for us. I think that is true of any organisation, whether it is in business or anywhere else. And the older the organisation, the more necessary this help from outside becomes. It is a healthy exercise to get an efficiency view from outside; to see ourselves as others see us, and not be shocked about it. Productivity Year is a calculated look at ourselves, and with some sturdy action to follow where the cap fits. I think that in this none of us is exempt; it goes right up and down the line throughout the country.

Like the noble Lord, Lord Marks of Broughton, who wanted the campaign to go on for ten years (I think he has something there; I do not know about ten years, but perhaps five years), I have a criticism. It concerns the title Productivity Year. "Productivity" ought to have, and I am not entirely convinced that it has, a sufficiently all-embracing meaning. I fear there is a tendency to consider this as meant only for those in actual production, and I can imagine people in other walks of life considering themselves to be outside and not affected by this; that Productivity Year does not apply to them. But that is quite untrue. I suggest that a better title (I know that it is a little late, but I am bringing this out because I feel strongly about it) would be "Efficiency Year which can embrace production and all other aspects of our national life in one, including human relations, which were dealt with by the noble Lord, Lord Crook. I apologise to the Productivity Council for the impertinence of this suggestion, but I make it in the spirit of wanting their campaign to have every chance of success and to capture the imagination of all.

Many noble Lords, like myself, are no doubt already members of locally formed councils for promoting this national efficiency year, as I prefer to call it; but I hope that those who are not will all join, because I am sure that we all have a part to play. I hope that we may make an impact all over the country in order to ensure the success of this most worthy campaign.

6.48 p.m.

LORD SHACKLETON

My Lords, the attendance is getting a little thin, but I think this has been a very high quality debate and we can regard ourselves as a select group of enlightened employers and enlightened trade union leaders. I should like, first of all, to congratulate my noble friend Lord Crook, who is so extremely well qualified to have introduced this debate, not only from his many years experience as a trade union leader, but also from having for many years sat in one of the hottest seats of industry as Chairman of the National Dock Labour Board.

I think this has been one of the best, if not the best, of the debates that we have had on this subject; and the noble Lord, Lord McCorquodale of Newton has taken part in most of them. In this debate there have been many speeches of high quality. The only thing that worries me is what they lead to, and how—I do not want to call them our fine words, but the wise words from all noble Lords on both sides of the House, can be given effect to, other than having just a small mention in the newspapers. I expect The Times will give us a bit of publicity, and that will be that. Clearly, the Government have a responsibility in this matter. I entirely agree with those noble Lords who say that this is a responsibility for industry and for all of us. But the Government, to a greater extent than at times they are prepared to admit, set the framework in which we operate.

Although I do not wish to be Party-political to-day, I must say that there have been factors in Government policy—and this is apt to come from either side—which may be damaging to confidence, and may be extremely damaging to good relations in industry. I was a little disappointed that the attractive pamphlet on productivity which has been issued still glosses slightly over our situation. It says that there has been a considerable increase in the whole national level of output per man, particularly in the last ten years. I suppose we can say that it is a "considerable" level. It might have been better to say that it is far below the level that this Government, or, indeed, the last Government, would have hoped. We should have said this without seeking to make Party-political points. We can rely on Party-politicians, including myself, to make these points at the right time, but I think we could have had slightly rougher statements in this document. But I do not blame the Government for that because they did not produce it.

At the same time, it is not true that this country will fall away and be faced with disaster if we do not achieve the production levels we want. It means, however, that, over the years, we shall be a declining nation, and like a declining business morale tends to sink, inventiveness tends to go, energy tends to go, and the whole dynamic of it goes. Our problem is somehow to get some dynamism into our industrial life in those areas where it is lacking. I entirely agree with the noble Lord, Lord McCorquodale of Newton, and others, who point to the extremely notable leadership of certain firms—certain large firms and, indeed, contain small ones. I sometimes think that they carry almost too heavy a load in the leadership which they give. It is notable how much of a lead firms like I.C.I. and Shell, and some of the other big companies give—and, indeed, the firm of the noble Lord, Lord Marks of Broughton. Yet we still see large sections of industry who fail to follow that lead, who are content to be all right, who are content with figures which enable them to carry on, and who somehow fail to be driven out by competition.

I was very interested in the figures given by my noble friend Lord Walston Personally, I am a little suspicious about figures on margins, and figures on markups as well, which at times are not always truly comparative. There will, of course, be more opportunity for comparison if we go into the Common Market. It is a fact that recently the Government have concerned themselves with certain sections of industry, like the shipbuilding industry, and there have been, over a period of years, a number of investigations which have revealed situations that could not easily be put right, which it was difficult for that particular industry to put right and which, (to some extern, depended for their progress on a change in national outlook and a greater supply of educated management.

I should like to make the few remarks I have to make mainly on this question of the responsibility of management. I do not know how we can put across all the things that the best management have to know. One has to appreciate also the extreme variety, not only in standards of management, but in the obligations imposed on management. One of the difficulties in the spirit of industrial seminaries, (the British Institute of Management conferences, and so on, is the enormously wide spectrum, and the fact that certain things that will be familiar and relevant in one field will have relative little significance to others, possibly even in the same field, but doing slightly different work, or being of a different type of organisation.

One of the things the British Institute of Management have been stressing in their publicity in connection with this year has been the importance that management should examine itself. It is extraordinarily difficult for management to look at itself. It gets very quickly into a pattern of its own. We all tend to sit, and even if we do not sit but run round at high speed, we tend more quickly to fall into a sort of pattern. One of the problems is how we are going to enable a more critical approach to find the time and the energy to overcome this. I have one very short suggestion which I would press very hard at all times, and that is that management—and I am talking purely in terms of management—ought to take much longer holidays. It is a fact that managements do not take the time off. They are proud about not doing so. They are proud about taking papers home at the weekend—and you have to take papers home because very often you cannot get peace in the office. But I should like to see all managements taking very much longer holidays than they do. I believe this would be a contribution to increased productivity. That is my own particular solution.

But how can one develop the critical approach? Here, whether it comes from the British Institute of Management or the British Productivity Council, I should like to see more experimental techniques and the development of the built-in critical machinery which some firms have and which enables them all the time to review the work. This means not only reviewing the exact trading success and the cost of an activity, as is done in such detail and so effectively by most firms (although some firms do not even do this), but reviewing it from other criteria also. Where organisation and methods have been introduced there is still, I am afraid, far too much tendency to concentrate on the "M" side and not enough on the "O" side. Too many firms—and I speak with personal painful experience on this—fail to look at the very top. They fail to look at even their own board structure or top management structure, where the trouble may lie, not through faults of individuals but because of a faulty organisation.

Turning to the techniques of individual managements, I would say that we have had some rather moving remarks from noble Lords, particularly my noble friend Lord Geddes of Epsom, on the problem of personal relations. Here, again, one has somehow to get across an understanding both of modern techniques and of what human relations are. Too many personnel managers rely on statistics, and frequently the wrong statistics. They concentrate too much on turnover, the negative side, and not enough on the labour retention figures; and where they tend to move to a purely personal relationship, a warm, possibly patronistic approach, they do not know the statistics. Somehow these two have to be blended; they have to understand that in man management (and this, I might also stress, includes woman management as well; although, in my opinion, the management of women in industry is usually done better by a man) there must be a greater degree of understanding of the nervous strains to which men and women are subjected to-day. In my view, not enough use is made of proper medical techniques in examining people whose work is falling off. This applies particularly among managers. Very often decline in management performance can be put right in a number of ways; first of all by help; secondly, by a large bonus; and only in the last resort does the question of demotion, or, ultimately, actual medical treatment, become necessary.

I do not know how quickly we can get these understandings across, but of one thing I am quite sure: that is that the universities must—and we have said this before—play a bigger part in management education. I should have hoped that, as part of the National Productivity Year, there would have been some drive and emphasis on the academic side in developing not only management techniques and understanding but also the (training to which a number of noble Lords have referred. This, of course, involves more money for social services and social science faculties; and here, once again, we come back to the Government. For it is a lamentable fact that the social science side is still greatly inadequate for even the minimum amount of research that is necessary.

I look regularly at the various social science research projects which are illustrated, I think, in a special D.S.I.R. publication; and when one looks at the immense detail that is necessary in this sort of work to get anywhere at all, it is quite obvious that we are hardly touching the surface of this particular problem. But somehow, I believe, this can be done, and I think we can do this by realising that certain basic attitudes have changed, and are already changing; that management's position is not that of a purely father figure; that they must refrain from feeling a strong sense of being badly treated when they think something they have done is received with ingratitude. There is still a little too much expectation that people ought to be grateful for what is done by their bosses—and this is true at all levels. But gradually as we train people in the human side (and this is the case from experience) so, in fact, will they be able to use the more sophisticated tools which are quite useless at the moment to the unsophisticated management.

Several noble Lords—I think it was the noble Lord, Lord Luke particularly—have referred to the point that "Productivity" should cover the widest possible field. There is an impression that those who are not engaged in manufacture are indifferent to productivity. That has been suggested by many people, who sometimes say that the distributive trades are too large, and that they are not efficient enough. The noble Lord, Lord Marks of Broughton knows just how efficient distribution can be, and that productivity is just as important—indeed, perhaps more important—among firms on the distribution side who are progressive and determined to face up to the growing and intense competition which exists in distribution and some of which is not quite so evident in manufacture. It is obviously extremely important that there should be a high level of efficiency, or productivity, whether it is in the cutting of bacon, packaging or, the layout of goods.

The advent of supermarkets and specialised organised outlets for all sorts of goods is encouraging the development of modern productivity techniques and the same thing must apply to Government—local government and national Government. My noble friend Lord Crook of course made some interesting remarks about improvements in productivity, in the use of organisation and methods in the Navy and, indeed, all the Services. Here, again, I think the Government are able to give something of a lead by helping to make these techniques known. But, my Lords, I am disappointed that in this Year there are going to be no signs of boldness and experiments in regard to new industrial management techniques.

We have recently had a very disappointing Jenkins Report, clinging on to an old-fashioned view which I should have thought is becoming increasingly outdated, of the rôle of the shareholders. However, undoubtedly, it was valuable from its narrow field. But is it really impossible, short of living in a Communist country, to experiment more rapidly in new forms of industrial democracy? There are some experiments in this country—and I happen to be connected with one, and II can only say that, whatever its faults, it works—and there is a degree of participation which I believe could, with benefit, be extended much more widely. Would it not be possible even for the Government to talk to some of the nationalised industries, or to some small section, and say, "Will you not experiment and achieve greater individual participation?." There are dangers and difficulties; they have to work hard; it takes a long time; it needs infinite patience, and it entails risks. But certain important experiments have been carried out, and I should have liked to see something of the kind being tried in this country during this Year.

There is only one final thing I would say. All our efforts in regard to productivity will be of no value at all unless we can get a situation in this country and, indeed, in the world in which there is much greater liquidity of resources. If we look at the figures of the increase of national production over the last few years, we see how closely they follow the problems of balance of payments, and it is undoubtedly true that there is still in this country a great deal of unused resource, and there are many firms (who would be able to stimulate greater production if they were more confident and the Government were able to follow a more expansionist policy. This is not the time to go into the question of financial policy, but I am sure that, unless we can tackle this problem internationally, much of our efforts in this direction will in fact be very largely wasted.

7.8 p.m.

EARL WALDEGRAVE

My Lords, I am sure that not only we in this House but the whole country are grateful to the noble Lord, Lord Crook, for putting down this Motion which has given us the opportunity to discuss this important National Productivity Year. It is an extremely important project. The noble Lord, Lord Crook, opened this debate this afternoon on a very high plane. His speech had a very wide range, and this has been followed all the way through the debate by the distinguished speakers who have taken part. Indeed, there is considerable difficulty in replying to a debate such as this. I am very conscious indeed that I am neither a great trade union leader nor a great leader of industry. I have to attempt to reply, for instance, to the noble Lord who sits behind me, who has been a pioneer in quality control, and who is one of the supreme exponents of the application of productivity to shopkeeping, to which both Napoleon and he himself have referred.

Though I think I could also agree with the noble Lord, Lord Shackleton, who said that this may have been one of the best debates on this subject we have had in this House up to this point, I would agree with him up to this moment of time. Your Lordships House does excel at this kind of debate, where we have the advantage of speeches from great leaders of industry, whether they be trade unionists or industrialists. I, for one, think it is very pleasant that our House can distinguish itself in this way and fulfil a very important rôle in Government in being able to do so. I am sure that our discussions will have served to underline the importance of National Productivity Year, even though the noble Lord, Lord Luke, thinks that we have the wrong title. There is much jargon in all these matters, and I think that, with Lord Luke's help, we shall be able to correlate productivity with efficiency and understand what we mean.

I am glad that at the beginning of this debate almost every noble Lord who spoke referred to the very admirable, moving and cogent words which Prince Philip used in the foreword of this pamphlet. National Productivity Year is essentially, as has been said, a campaign by industry (the noble Lord, Lord McCorquodale of Newton, was the first, I think, to emphasise this point), and, I would add, by agriculture and, indeed, the whole economic community. The noble Lord, Lord McCorquodale of Newton, said that industry itself is doing this and it is just as well that Government does not interfere too much. This enables the campaign to be non-political, a co-operative effort, an effort backed by the T.U.C. and the employers' organisations; it enables this project to have the support of all the professional and technical organisations. This could not be so if the project were more directly Government sponsored.

May I say here that of course Government Departments will be co-operating, where appropriate, in their capacity, as they often are, of providers of services or as very large employers of labour. Generally they will participate in the local National Productivity Year committees just like any other big industry or employer of labour. But certain Departments, of course, will do more than that. The Department of Scientific and Industrial Research—and I was glad the noble Lord, Lord Marks of Broughton, paid tribute to that Department—will, through the research associations which it runs with industry, be arranging conferences to discuss work done to increase productivity.

Productivity is a rather diffuse and intangible subject. It covers such a wide field and so many spheres of activity. But it is one of the most important problems that face our country to-day. An improvement in our national efficiency is the key to our competitive power, our rate of growth and our future prosperity. This is not just a matter for a few technical experts, or for a few industries only: it is a matter which concerns us all. As I have said, so far as the Government are concerned, they will continue to do all that is possible to create conditions throughout the economy in which greater productivity can be achieved.

A number of noble Lords, quite legitimately and in no highly critical spirit, because the Party or controversial aspect has been kept well away from this debate, have raised points in regard to the economic framework set by the Government. The noble Lord, Lord Shackleton, felt that the Government might do more. I cannot and do not want to go into these details at this moment, but the Record of this debate will be before my colleagues, and these points will be read and seriously considered. I hope that in this way they will be met., But it is right to remind your Lordships that the National Economic Development Council which has been set up by the Government has started its work of examining ways and means of improving our economic performance and growth. But in the last analysis it is, as the noble Lord, Lord Marks of Broughton, said, on the factory floor, in the office, and, I would say, on the farm as well, that greater productivity can be achieved. Without the greatest efforts to raise efficiency, by management and workers in all these places, all that the Government can do will be frustrated, and all the framework that the Government have set will be ineffective.

I will not go over again what the noble Lord, Lord McCorquodale of Newton, said, with his experience of the actual work of the British Productivity Council. Not only is he a Vice-Patron of this Year, but I believe that he is a past chairman of the Council. I agree with everything he said: I think that great credit must go to the Council for the increased awareness that exists today throughout the country of the many ways in which greater productivity can be achieved. I was glad that he paid a tribute to Mr. Harry Douglass, to Sir Charles Norris and to Lord Nether-thorpe, whom we could have wished to see in his place to-day. They have all had much to do with this Council.

The aim of the Council, and the aim of the National Productivity Year, will be to focus attention on all possible means that lie within the capacity of management and workers throughout the country to raise efficiency and lower costs. It is therefore particularly encouraging that the Council have secured widespread support for this project, so that it will be a really co-operative effort in which trade unions, employers' associations, the regional and local representatives of nationalised industries and Government Departments, local authorities and professional and other organisations will play a part. It is in the many activities which will be arranged throughout the length and breadth of the country by these bodies and the local productivity groups that the plans will have their major impact. I am confident that the many events that are being planned during the Year will make a very real contribution to the achievement of the task of increasing our productivity. The Government warmly welcome the initiative of the British Productivity Council in this major non-political undertaking and wish it every success.

At this late hour your Lordships will not wish me to try to reply in detail to every noble Lord who has spoken. But some of the points that have been raised seem to me so interesting and important that I feel I must attempt, at any rate out of courtesy, to reply to them, though briefly. The noble Lord, Lord Crook, in his remarkable speech with its very broad range, asked me one specific question. In answer to that question, I do not dissent from the statement, made, I think, by the Minister of State to the Board of Trade, that our exports will have to increase by 10 per cent. if we are to achieve our target. I have only one very slight criticism—indeed I think the noble Lord's speech was the only speech during this debate in which there was an interjection from anybody else. I do not want to overstress this, but I should like just briefly, and courteously, I hope, to touch on that particular point on which the interjection was made.

I agree that we must avoid complacency at all costs, but also we must not overstress the case in our comparisons. I was interested, when I was studying these figures, to note that over the past ten years output here has increased by 2½ per cent. per annum, of which the 2 per cent. increase is an increase in output per head and the other ½ per cent. is due (to the increase in the population. I was interested also to compare, in the rather striking graph on page 4 of the pamphlet, the outputs of other countries. I think that we must not necessarily be too pessimistic about the picture that is shown. I should like to quote also from the Bulletin for Industry which the noble Lord, Lord Crook, himself quoted. It says: There have been special circumstances favourable to growth in some countries. In France, where even by 1950 industrial production was scarcely higher than in 1929, there was much ground to make up, and it has been possible to exploit latent potentialities in productivity. In Germany, where there was still some under-employed capital and much unemployed labour in the early fifties, additional reserves of labour were available also in the relatively large agricultural and handicraft sector of the economy and in the immigrants from the East, who constituted an exceptionally mobile and productive element. At the same time defence expenditure and overseas aid were also a smaller burden on the economy than in Britain. I think that for a balanced picture and for the record, the noble Lord, Lord Crook, would not mind my reminding him of that.

We must also remember that we, perhaps more than some other countries, are more mature economically, and that a greater proportion of our gross national product must come from the services which, by their very nature, are not likely to be able to increase quite so rapidly as the manufacturing or production side. This has been clearly demonstrated in the United States of America. But I fully agree with the noble Lord, Lord Crook, on what he said about the Common Market: that, whether or not we go into the Common Market, probably our economic survival, and certainly our prosperity, must depend largely on how efficient we are.

The noble Lord, Lord McCorquodale of Newton, in his contribution, made one point which is interesting and does sometimes confuse especially the workers. With regard to increased production, for example, in textiles, a man might say, "How can this be right, when we are already suffering from overproduction?". But surely here it is fair to say that there is some slight confusion of thought. I detected this once or twice in the debate. There is a difference between productivity and production. We must not confuse the two. Higher productivity should mean a reduction in costs and a raising of quality; it is, therefore, highly beneficial at any level of output. It must also help more than anything else to extend the size of the market and, therefore, to help to correct any so-called over-production.

There were most important contributions from the noble Lords, Lord Geddes of Epsom, Lord Baillieu and Lord Citrine. I entirely agree that probably the most important factor in the success of the drive for national efficiency is the solution of the human problems and of the misunderstandings which still arise and always have arisen but which we hope will be minimised. The National Productivity Year is aimed at removing all these misunderstandings which exist on both sides of industry. I am sure that the noble Lord, Lord Geddes of Epsom, who said when he opened his remarks that he was starting out on rather a narrow path, would not wish his remarks to be taken or accepted as any form of pessimism, because indeed he ended his admirable speech with an example of an extremely forward thinking and remarkable achievement, the Esso Fawley Agreement. This, as he said, was achieved as the result not of any flash in the pan, not of any bright idea, but of long and patient negotiation, which is how these things must come about. He was right in saying that unless we can get the human relations right, and unless we can get both the management and the man who is working the great earth-moving machine to realise that he does have some part in the whole of this productivity campaign, we shall not succeed.

It interested me that the noble Lord, Lord Baillieu, said that at this stage we must turn our attention in the development of this country, perhaps more than we had in the past, to the distributive and service trades. I am sure that this must be right. I was interested, too, in this connection in the contribution made by the noble Lord, Lord Marks of Broughton. The noble Lord, Lord Citrine, who warned me that he would have to leave, mentioned that he was one of the people who—properly from his point of view, I concede—was critical of Government policy. He queried whether the wages policy was understood by the worker, and whether the workers realised that they could, and should, get their share by increasing productivity. These are remarks that will go forward to my colleagues and Ministers who are involved, and they will be studied with the care which they deserve.

Now if I may, I must turn for a moment to the noble Lord, Lord Walston, to whose contribution I was looking forward because, as an agriculturist myself, I hoped that he would speak about agriculture, and indeed he did. I expected that when he spoke about agriculture he would be able to say that the record not only of productivity but of industrial relations in agriculture was a fine one. He said that. But the sugar came before the pill, and it was in the middle of his speech that he said, "Now I am going to take a curious turn in the opposite direction". I think that I quote his words aright. He took "a curious turn in the opposite direction", and we heard some interesting figures about margins. I have taken down his figures and I will study them, and perhaps we can talk about them or correspond about them later. All I will do at the moment is to borrow words from the noble Lord, Lord Shackleton, and say that one can sometimes be a little suspicious of these figures about margins, but only gently suspicious. I have not examined them; I will examine them in due course.

The noble Lord, Lord Luke, answered the aspersion that we have lost our talent. You do not get far if you start on a campaign in a spirit of pessimism. Change sometimes comes rather hard to us in this country. But if we realise that we must change, and if we are confident that we have not lost our talent, then we shall succeed, even in these most difficult matters. We have taken the point in regard to "efficiency" and "productivity", but I think that the noble Lord is too late to change the title either of the Council or of the Year. But I have no doubt that the Council and the organisers of the Year will bear in mind what he has said.

The noble Lord, Lord Shackleton, said that management ought to take much longer holidays. With that view I would entirely agree, and I say that quite seriously. I think it is very nearly time we took a short holiday now ! But this is not merely a joke, but is a matter of some importance. I remember, during the war, how when one was working very hard—I personally was working in an administrative capacity in one of the Armed Services; I was not fighting, but I was fighting with a pen—one felt that one ought to give everything one had and one took no holiday but worked seven days a week. This was not an efficient way of working. There were certain commanders who turned us out to play, and I am sure that they got better work out of their troops, whether they were clerks or soldiers, than the commanders who kept us at it day and night.

Lord Shackleton is an old enough politician to know that there is no gratitude in politics. It was Disraeli who said that one got no thanks in government, because if things went wrong people blamed the Government, but if things went right they thanked God. I am sure that the noble Lord, Lord Shackleton, does not suppose that anything has happened recently to alter the truth of that great adage.

My Lords, I have referred to most of the speakers, and I would leave to the end what I think has been the most important point that many speakers have raised—that is, the question of human relations. I fully agree with the importance which has been attached to this point by so many noble Lords, and particularly the noble Lord, Lord McCorquodaile of Newton. It is no good trying to increase productivity, it is no good trying to introduce better machines or new techniques, unless everyone concerned knows What is being done, and why. Surely this is the very point which the British Productivity Council and the National Productivity Year must stress and are stressing. This is what it is all about, and it must be made clear to all.

My Lords, I am sure that the suggestions and comments which have been made by noble Lords will be carefully examined, as I have said before, by all who have the responsibility in Government and by those responsible outside for carrying through this project. So far as points have been raised which affect the country's productivity, but which are not within the field of the present plans for the National Productivity Year, my right honourable friends will, I am sure, pay attention to the comments which have been made—for example, Lord McCorquodale of Newton's point on taxation, and Lord Marks of Broughton's point on depreciation allowances, and so on. I will not attempt to answer them now, but these must be taken into consideration by those whose responsibility it is to consider them.

In conclusion, I would stress the need for the efforts which the organisers of the National Productivity Year are making to be supported at every level and in every quarter throughout the country, so that their plans can achieve their full effect. I am sure that this support will be forthcoming; and if by our debate here we have helped in any way—and I really think we have—to make this more certain, we shall have achieved a very great deal.

LORD CROOK

My Lords, there remain just two things for me to do briefly: first, to thank all those noble Lords who have been so kind as to take part in what I feel has been an excellent debate; and, second, to ask your Lordships' permission to withdraw the Motion.

Motion for Papers, by leave, withdrawn.