§ 3.13 p.m.
§ BARONESS WOOTTON OF ABINGERMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether it is a fact that the members of the National Steel Corporation are to be paid salaries of over £20,000 and, if so, why they are to be remunerated so much more highly than the members of the Boards of other nationalised industries.]
§ LORD SHACKLETONMy Lords, as my right honourable friend the Minister of Power announced in another place on March 15, the Government have decided that the annual salary range normally applicable to members of the National Steel Corporation should be as follows: deputy chairmen, £20,000 to £24,000; 1075 full-time members, £15,000 to £19,000; part-time members, £1,000. In view of the Government's incomes policy, the salary ranges for deputy chairmen and full-time members will be cut by 121½ per cent. for a period of two years from the date of establishment of the Corporation, giving reduced salary ranges of £17,500 to £21,000 and £13,125 to £16,625 respectively. The Government's decision takes account of special circumstances in the steel industry, including its existing salary structure; the fact that it is a manufacturing industry in which the National Steel Corporation will not have a monopoly, and the need to provide a ceiling high enough to enable salaries of lower levels of management to be equated with those of their opposite numbers in the private sector.
§ BARONESS WOOTTON OF ABINGERMy Lords, I thank my noble friend for his Answer. May I ask him whether he really believes that, for sums of the order of £20,000 and upwards, he will buy a personnel which is significantly superior to that which can be bought for half that amount? And, if so, are we then to draw the inference that the members and chairmen of other nationalised industries are of second-rate quality?
§ LORD SHACKLETONThe answer to the first part of the noble Lady's supplementary question is: Yes, my Lords. We believe that the best way to obtain (I do not think I used the term "buy") the most able and competent people to run this industry is by paying these salaries, which are related to those applying in the industry at the moment. They are not as high, I may say, as are paid in certain sections of industry.
As regards the second part of the noble Lady's supplementary question, my right honourable friend the Minister of Power referred to this in another place on April 4, and said that it is not yet possible to say when it will be appropriate to carry out a review of the salaries of board members of other nationalised industries. The timing of that review, and the review itself, will have to take into account the needs of the industries, movements in other salaries and the Government's prices and incomes policy.
§ BARONESS WOOTTON OF ABINGERMy Lords, is my noble friend expressing 1076 the view that a Labour Government which has a traditionally socialist policy must at all times make its pattern of incomes conform to that of a capitalist society?
§ LORD SHACKLETONMy Lords, the noble Lady is not aware, apparently, that she is not living yet in a fully socialist society. This is an old dilemma for the social democrat, as she knows. If we want to get the best people to make a success of a nationalised industry in a mixed economy—and I hope that everybody believes in the importance of the success of this industry—we believe that it is necessary to pay something which is approximate to "the rate for the job."
§ LORD ST. HELENSMy Lords, do the Government intend to follow up their conversion by reducing taxation, so that these men can take home a little bit of their large salary?
§ LORD BLYTONMy Lords, is my noble friend aware that the precedent for this kind of salary was set by the Conservative Party in the case of the railways at £24,000 a year? Although I think this sum is fabulous, could he say why, whereas in the case of a dustman or a lorry driver who receive £10 or £11 a week if he gets an increase it is inflationary, in this case it is not?
§ LORD SHACKLETONThere is, of course, no increase here, because many of the leaders and managers in the steel industry are at present receiving salaries of this kind. Since this is a new rate for a new job, I do not believe that it in any way conflicts with the prices and incomes policy. But, as was brought out by the question asked by the noble Lord, Lord St. Helens (I apologise for not answering it: I though it was rhetorical), it may be some comfort that a great deal of what is earned will in fact return to the Exchequer.
§ LORD POPPLEWELLMy Lords, will my noble friend ensure that persons so appointed will be people who believe in public ownership and not such individuals as we heard referred to a little while ago—namely, the deputy chairman of the Organising Committee, or whoever he may have been, who expressed a complete doubt about public ownership?
§ LORD SHACKLETONMy Lords, I must say that I have no doubt that anybody who takes a job in the Steel Corporation will be determined to make a success of it. Perhaps I ought to point out to the noble Lord that it is not a question only of the salaries of the very top management—and to some extent these are partly status symbols, in view of the taxation rates: it is, in fact, the relativity of salaries throughout the whole organisation, including those at lower managerial levels.
§ LORD BYERSWhile not disagreeing with the noble Lord about the necessity of paying high salaries to get high quality, may I ask whether this is one of the reasons why the Cabinet on the whole get less than £10,000 a year each?
§ LORD SHACKLETONMy Lords, I must say I feel very sensitive personally on this.
§ BARONESS WOOTTON OF ABINGERMy Lords, my noble friend has reminded me that we are not living in a fully socialist society. May I assure him that he leaves me in no doubt on that score?
§ LORD NUGENT OF GUILDFORDMy Lords, is the noble Lord aware that he has just made a serious point in referring to lower managerial salaries? Is he aware that the lower managerial officials in other nationalised industries are very much of the same calibre as those in the steel industry and that unless the top salaries are raised theirs cannot be raised with them?
§ LORD SHACKLETONMy Lords, I hope that most of the points I make are serious. This is certainly a matter which will be considered in relation to any reviews. 1 think the whole question of salary rates between different industries is a very complex one. Speaking as one who has been involved in salary-fixing, I think it is striking to note the very wide range of differences between different industries.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, is the noble Lord aware that in the Soviet Union the Soviet Government pay top executives even higher salaries?
§ BARONESS GAITSKELLMy Lords, may I ask the Minister whether I am 1078 wrong in assuming that a Labour Government, for the foreseeable future, accepts a mixed economy, capitalist, private and public enterprise?
§ LORD SHACKLETONMy Lords, I am grateful to the noble Lady. Certainly for the foreseeable future a Labour Government will continue, while we have a mixed economy, to believe in it. I am afraid I missed the point made by the noble Viscount.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, it was about the salaries of the top executives in the Soviet Union.
§ LORD SHACKLETONMy Lords, I remember that at one time the difference in pay between a Russian Marshal and a Russian private was eight times that between a British Field Marshal and a British private soldier.
§ LORD PARGITERMy Lords, in view of what has been said in the past about leap-frogging in wage levels, may I ask whether the arguments that are now being used will be taken notice of by the Government in connection with other people's salaries?
§ LORD SHACKLETONMy Lords, I must reply that this is not leap-frogging. My noble friend could not have listened to what I said. These are rates that have been prevailing; and in this industry the rates are higher than in others. I urge noble Lords on this side of the House who have doubts—and I can well understand the argument that these salaries are excessive; though, happily, they are modified by the taxation system—to remember that this is essential in order to get the best people to make a success of this publicly owned industry.
§ LORD PARGITERMy Lords, may I make it clear to my noble friend that I was not arguing about what the salary was, but that what was said by some noble Lords this afternoon would indicate that other people ought to be put up to the same level—that would not be my view—in other nationalised industries.
§ LORD SHACKLETONMy Lords, I apologise. I did not realise how helpful by noble friend was being.