Lords Sitting of 28 June 1971

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Blackburn.

STATE BREWERIES
2.35 p.m.
LORD JACQUES: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are "ready to consider any viable proposal for transferring the ownership and management of the State Breweries to a suitably constituted local body, such as a trust", in accordance with the declaration of the then shadow Home Secretary in January, 1970.]
THE MINISTER OF STATE, HOME OFFICE (LORD WINDLESHAM): My Lords, the Government have considered this possibility but concluded that a trust set up for this purpose with public funds would not be viable.
LORD JACQUES: My Lords, I thank the noble Lord for that reply. Is the noble Lord aware that the State scheme
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is both compact and efficient; that it uses its efficiency to keep down prices, so much so that the Carlisle beer is the best value of all beers in the country? Would it not be practical to vest the control in a local body which was appointed by the Minister and which could be subject to the same criteria as the nationalised industries?
LORD WINDLESHAM: My Lords, this proposal was considered by the Government and we came to the conclusion that it would not be practical to vest control in a trust using public funds on the lines envisaged by the noble Lord and indeed by my noble and learned friend on the Woolsack at an earlier stage. It is true that prices are low and the quality of the beer is good, but it is also true that the return on capital is only of the order of 4 per cent., as opposed to something nearer 10 per cent. for the brewery industry as a whole.
BARONESS BACON: My Lords, is the noble Lord aware that the State scheme makes nearly £300,000 profit and that when it is sold off by the Government there will be a rush by breweries to buy it? Would he not agree that, while changes are probably needed in the State scheme, these changes could have been brought about without a sell-out to other breweries?
LORD WINDLESHAM: My Lords, we do not believe that this is the case. The Bill has been debated very thoroughly in another place and will be discussed in your Lordships' House on Friday. My honourable friend the Parliamentary Secretary has explained in some detail

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what the economics of a proposal of this kind would be.
LORD POPPLEWELL: My Lords, would the noble Lord say what in the opinion of the Government should be the return on capital? He has indicated that the return here is only 4 per cent. Since my noble friend indicates that there is a profit of £300,000, may I ask what, in the opinion of the Government, the percentage should be?
LORD WINDLESHAM: My Lords, it does not seem to us to be very good economics for the Government to receive a return of 4 per cent. on assets which can be realised, when to borrow money the Government are paying between 8 and 9 per cent.
LORD JACQUES: My Lords, is the Minister aware that it would be possible to increase the prices and therefore increase the profit of 4 per cent., and still have the cheapest beer in the country? Furthermore, before I sit down may I ask whether the noble and learned Lord on the Woolsack is now open to transfer, and could he be transferred before the Bill is discussed here, so that his considerable talents might be used in a good cause?
LORD WINDLESHAM: My Lords, what my noble and learned friend on the Woolsack said was that a proposal of that kind should be considered; and indeed it was very thoroughly considered for the reasons which the noble Lord opposite has just given. Prices have been increased recently and I have no doubt that they are now closer to prices for beers in the North of England as a whole.
LORD NUGENT OF GUILDFORD: My Lords, is my noble friend aware that in view of the low return of 4 per cent on the capital involved, it should be possible to command a purchase price which would give a good return to the taxpayer, because the valuation will be drawn up on the basis of an 8 per cent. or 9 per cent. return? Therefore it will be far better value than the excessively low return which is being obtained now.
LORD STONHAM: My Lords, that would be so if the valuation obtained were vastly higher than the £4·7 million which is suggested in the Explanatory
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Memorandum. Can the noble Lord say what, in the Home Office consideration of this matter, are the particular elements in the sale of beer which make arrangements which have been suitable in other industries totally unsuitable in a State management scheme?
LORD WINDLESHAM: My Lords, to be frank, we regard this scheme as an anachronism. It was introduced over fifty years ago, in 1916, by the Lloyd George Government, when there was a great deal of drunkenness in the shipyards in Cumberland and the surrounding area. The scheme has remained in existence ever since. If it were desirable for the State to own public houses, presumably the State would own public houses in other parts of the country.
LORD HOY: My Lords, why does the noble Lord speak so derogatively of 4 per cent. return on capital, when in fact this is a figure the Government are aiming at in regard to wage increases?
LORD WINDLESHAM: My Lords, if the noble Lord thinks that that is a sound economic observation he must take part in the debate we are going to have on the Bill. The Second Reading will take place on Friday and I have no doubt we shall be discussing these matters at some length.
LORD STONHAM: My Lords, would the noble Lord say that any institution which has operated for sixty years is an anachronism and therefore must be abolished? What about the Monarchy?
LORD BARNBY: My Lords, would the noble Lord agree that since it has recently been announced that the average depreciation in the value of money over the last five years was 3 per cent., 3 per cent. deducted from 4 per cent. means that the return is only 1 per cent. per annum?
LORD JACQUES: My Lords, is this scheme so successful that it must be destroyed because it is too dangerous a precedent?
LORD WINDLESHAM: No, my Lords; I do not think that the noble Lord, Lord Stonham, and those who have had experience of this scheme would regard it in that light. It is not being destroyed in that sense. There are assets here: £4·7 million of public money is

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tied up in public houses and in the brewery in Carlisle. It seems to us that this is not the best way of using public funds.
LORD POPPLEWELL: My Lords, would the Minister agree that the sale of these State breweries is really in response to the activities of the brewers, who have always been among the first type of people to receive benefit from the Tory Government when they have been in power?
A NOBLE LORD: And they have paid for it.
LORD WINDLESHAM: My Lords, there is no connection between that observation and the Government's Bill. As I have said, there is a measure before Parliament; it will be before your Lordships' House on Friday of this week. We shall have a Second Reading debate and then Committee and subsequent stages later. Perhaps we could develop some of these arguments rather more fully then than in the course of question and answer.
LORD DOUGLASS OF CLEVELAND: My Lords, if the Government argument is that a profit of only 4 per cent. has been made in a nationalised industry and therefore it should be sold off to private enterprise, does the same argument apply to all nationalised industries?
LORD WINDLESHAM: My Lords, the main reason why the Government have come to the conclusion that these assets should be disposed of is that this is not an appropriate area of activity for the Government to be involved in. The lack of profitability is secondary to that.
LORD SLATER: My Lords, in view of the attitude of the Minister in the course of his replies, basing his argument on the 4 per cent., no doubt he is well aware that the Government have fixed a return between 4 per cent. and 7 per cent. in particular types of industry—
SEVERAL NOBLE LORDS: Question!
LORD SLATER: This is the question. Is the Minister aware that they have fixed 7 per cent., whereas outside industry has been claiming 10 per cent.? If it is the policy to break up this national asset, can he say whether it will be left to open tender? Shall we be given the names of the people responsible for making the tenders?
LORD WINDLESHAM: My Lords, I should like to give the noble Lord the information. There is a good deal of it and it is quite detailed. But perhaps the best time to do so would be in the course of our debates on the Bill.

NORTHERN IRELAND: ROYAL COMMISSION'S PROPOSALS
BARONESS BACON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will request the Royal Commission on the Constitution to publish their recommendations about Northern Ireland before the rest of their Report.]
LORD WINDLESHAM: My Lords, it is for the Commission themselves to decide whether there would be any advantage in submitting any of their recommendations before they are in a position to the present their Final Report.
BARONESS BACON: My Lords, does the noble Lord recall that during the recent debate he said that the presentation of the Report of the Commission might be some considerable time ahead because of the very wide range of areas which they had to consider? Do I take it from his reply that in the event of the Commission having the Northern Ireland part of their Report ready before the other parts, there would be no objection by the Government to their publishing that part before the rest of their Report?
LORD WINDLESHAM: My Lords, that is a matter for the Commission to decide. The question to which they would have to address themselves is whether or not it would be right and desirable and helpful to treat the Northern Ireland aspect of their inquiries as separate from the remainder. The Commission's terms of reference, as the noble Baroness will know, were to review the relations between the several countries, nations and regions of the United Kingdom as a whole. That is what the Commission are doing. But it is up to them to decide on how they should proceed.
LORD BYERS: My Lords, may I challenge the Minister? This is a matter of

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advantage. The question of advantage is a political decision. In the light of the circumstances in Northern Ireland, is this not a decision which must be made by the Government and not by the Commission?
LORD WINDLESHAM: My Lords, I am told that the constitutional position with Royal Commissions is that it is their own responsibility to decide whether to report on all aspects at once or whether there are advantages to be gained in reporting on one aspect in advance. There are other considerations; for example, the fact that Northern Ireland has its own Parliament is one of the things the Commission were particularly concerned with at the time they were set up—as to whether or not there should be some form of regional Parliament. To isolate the Northern Ireland aspect might be difficult. But it is for the Commission to decide.
LORD SHACKLETON: My Lords, would the noble Lord consider further the point made by the noble Lord, Lord Byers? Would it not be possible, if necessary, after discussion with the Commission, to amend their terms of reference? Is the noble Lord aware that we recognise that this may not be a convenient course, but in view of powerful arguments in regard to a critical situation, would he consider discussing this matter with his right honourable friend, with a view to at least considering such an amendment, or a discussion with the Royal Commission, while at the same time ensuring that this is not made any sort of excuse for the holding of local elections?
LORD WINDLESHAM: My Lords, I think we have to be a little careful before making suggestions—whatever the strength of feeling—to Chairmen of Royal Commissions. Royal Commissions are independent bodies; they have to be independent of Government. But the Chairman of the Royal Commission on the Constitution is a Member of your Lordships' House. I am sure he will be aware of these considerations. I should also say that the Prime Minister of Northern Ireland, Mr. Faulkner, in his speech on the opening of Parliament on June 22, made it quite clear that there is no question of sitting back and waiting
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for the Commission to report before any action is taken. Noble Lords will have noted the ideas which he put forward for discussion, concerning functional committees of Parliament. So things are moving ahead.
BARONESS BACON: My Lords, is not the fact that changes are taking place in Northern Ireland now an added reason why the Commission should report first of all on Northern Ireland, so that the wires are not crossed, and so that the Northern Ireland Government and Her Majesty's Government have the benefit of the Report of this Commission?
LORD WINDLESHAM: My Lords, that is exactly the sort of consideration one would expect the members of the Royal Commission to be aware of. But whether or not it is right to separate one part of a Commission's terms of reference from the others is a delicate question. There are two ways of looking at it, and no doubt the Commission will be considering them both.
LORD BROCKWAY: My Lords, accepting the view that this is a constitutional matter for the Commission, are there not many precedents where Governments have associated themselves with Commissions with a view to getting a report on a matter of such urgency as now exists in Northern Ireland?
LORD WINDLESHAM: My Lords, I can assure the House that the Chairman of the Royal Commission is aware of these considerations and of the issues of public policy in this country and Northern Ireland. But I do not think it would be right for the Government to lean on a Royal Commission, however strongly we may feel about it, to try to get them to act in a way which Parliament or the Government may think appropriate. It might be convenient at a particular time but whether, in the end, society would benefit from this sort of interference with the work of a Royal Commission is open to doubt.
LORD STONHAM: My Lords, could the noble Lord simply answer the question asked by my noble friend Lady Bacon? If the Commission, without being leaned on, are able to have this section of their Report ready, are the Government in favour of its publication?
LORD CONESFORD: My Lords, is it not the greatest mistake, if one desires an early Report from a Royal Commission, to vary its terms of reference?
LORD WINDLESHAM: My Lords, I can really do no more than repeat what I said before: that it is for the Commission to decide. I believe that whatever the Commission may decide will prove acceptable to my right honourable friend.

PEDESTRIAN CROSSINGS ON TRUNK ROADS
2.52 p.m.
THE EARL OF ALBEMARLE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they would consider providing zebra crossings under a light standard on those national roads by-passing market towns so that the aged, afflicted or blind rural footpassengers can cross safely (maybe with heavy shopping bags, or at other times to and from market towns) for their lawful purposes.]
LORD MOWBRAY AND STOURTON: My Lords, the policy adopted by my right honourable friend allows for the provision of pedestrian facilities on any road where traffic and pedestrian numbers warrant them. Zebra crossings are his responsibility on trunk roads but they are not normally suitable where speeds are over 40 m.p.h. The numerical standard can be relaxed where the proportion of elderly or infirm pedestrians is high. Where the street lighting is not good enough supplementary lamps can be provided.
THE EARL OF ALBEMARLE: My Lords, I thank my noble friend for that Answer. I do not think it is completely satisfactory and I should like to ask him this supplementary question. Is my noble friend aware that there is an inadequacy of crossings in proportion to the number of vehicles and the much greater number of foot passengers using the Queen's highway? Further, is he aware that his Answer to the Question asked by the noble Lord, Lord Segal, on June
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8, about there being many lighted crossings in the cities and towns, begs my question about national by-pass roads having too few crossings for safe access to market towns?
LORD MOWBRAY AND STOURTON: My Lords, I think we are getting slightly confused. I thought I had given an Answer which indicated that my right honourable friend was able to do all the things for which my noble friend had asked. If there is a need, the local authorities can make a suggestion to my right honourable friend and he will look at it. On trunk roads, the local authorities can draw his attention to such a need, and if the noble Earl has any particular place in mind I should be only too happy to facilitate its being looked at again. Pelican crossings with flashing amber lights are a possible alternative, and equally well one could have subways or overpasses. The Department is completely open minded: where there is a need we will find a way.
THE EARL OF ALBEMARLE: My Lords, my Question was pointing out that the national highways are not suitably provided with crossings and I want the Government, who look after the national by-pass roads, to do something about it.
LORD MOWBRAY AND STOURTON: Yes, my Lords, but the Government get information from the local authorities where there is found to be a need. My right honourable friend is only too pleased to have his attention drawn to any such necessity. All I have said is that where traffic is travelling at over 40 m.p.h. it is not normally found to be a good safety factor to have zebra crossings because the tendency is for other accidents to occur. But there are other ways of overcoming the difficulty.
LORD DAVIES OF LEEK: My Lords, is the noble Lord aware that some of us are more than grateful to the noble Earl for daring to put down a Question about the rights, safety and destiny of the poor pedestrian? Is the noble Lord further aware that in this cacophonic jungle in which we are now living, with road signs and little men and women dancing up and down, and lights saying "Wait" or "Go", the human being does not seem to count at all? Will he please approach the powers-that-be to restore the rights of

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a pedestrian to walk across the roads in dignity without the fear of being crushed by the juggernauts of modern transport?
LORD MOWBRAY AND STOURTON: My Lords, if the noble Lord, Lord Davies, waits for a green man to light up it will be quite safe for him to cross.
LORD NUGENT or GUILDFORD: My Lords, is my noble friend aware that experience has shown that an increase in the number of pedestrian crossings has the effect of causing danger rather than increasing safety? Is he aware that a considerable increase in the number of crossings results in worse observance of the safety factor of zebra crossings and therefore is at the expense of the pedestrian rather than adding to his safety? Is he further aware that it was a Labour Government in 1951 who had the courage to reduce the total number of zebra crossings by something like two-thirds, in order to give real safety to the remaining one-third?
LORD MOWBRAY AND STOURTON: Yes, my Lords; I think everything the noble Lord has said is most helpful. Pelican crossings are coming in to a greater extent. The question asked by the noble Earl referred particularly to trunk roads, and with all respect we have a criteria of safety. If there are zebra crossings and very few pedestrians, the crossings tend not to be observed by motorists who know that stretch of road, and when the odd pedestrian suddenly emerges he may be in greater danger.
LORD POPPLEWELL: My Lords, would it not be more sensible to deal with this problem not by way of zebra crossings, because they are dangerous on the national roads, but to provide subways or overhead footpaths?
LORD MOWBRAY AND STOURTON: Yes, my Lords; if the numbers warrant the provision of footbridges and subways they are certainly much better.
BARONESS WOOTTON OF ABINGER: My Lords, will the noble Lord bear in mind that it is extraordinarily difficult to carry a pram over a footbridge?
LORD MOWBRAY AND STOURTON: Yes, my Lords, and in such a case we should probably recommend a subway.

ANGUILLA: STATUS AND ADMINISTRATION
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what proposals have been made by Mr. Joseph Godber, Minister of State for Foreign and Commonwealth Affairs, for a settlement of the dispute between St. Kitts-Nevis and Anguilla regarding the status of Anguilla.]
EARL FERRERS: My Lords, the basis of the proposals made to the Government of the Associated State and to the Anguilla Council by my right honourable friend the Minister of State for Foreign and Commonwealth Affairs, was that Her Majesty's Commissioner should be given adequate powers to establish a satisfactory administration for a period of years in Anguilla, in consultation and co-operation with the people of Anguilla. The Anguilla Council have accepted these proposals. The State Government has not felt able to do so.
LORD BROCKWAY: My Lords, is the noble Earl aware that many of us welcome this proposal, although we hope that it would be under the auspices of the United Nations rather than of the Foreign and Commonwealth Office? May I also ask the noble Earl whether he would make this suggestion to the Secretary of State? In view of the fact that this issue is now arising among other associated groups in the Caribbean would it not be desirable to have discussions with the representatives, with a view to establishing federal, or even confederal, relationships rather than the present unitary States?
EARL FERRERS: My Lords, I am grateful to the noble Lord for the welcome he gave to my Answer. With regard to his supplementary question, I would only say that the situation which has arisen in Anguilla and the results which have eminated from it are not likely to be taken as a precedent for other similar happenings which may occur in the Caribbean. It is perfectly true that in the long term confederation or federation could be a possible outcome, but that would not, of course, solve the present and immediate problem.
LORD BROCKWAY: But is not the noble Earl aware that this matter is already arising in other associated groups? It has arisen in Barbuda and in another group. And is it not desirable, before this situation develops to a crisis, as it did in Anguilla, that there should be discussions regarding the arrangements between these islands?
EARL FERRERS: My Lords, Her Majesty's Government are always open to these discussions, but the noble Lord will know that in other parts of the world confederations and federations have not always produced the best results that can be obtained.
LORD SHEPHERD: My Lords, in the light of the noble Earl's first Answer, can he say what legal authority Her Majesty's Government have for carrying out their responsibilities in Anguilla?
EARL FERRERS: My Lords, the position with regard to Anguilla is that we are now involved in it; therefore it is up to Her Majesty's Government to find a solution to this particular problem. We hoped that this would have been done by consultation and with agreement. But as the noble Lord will know better than most, that has proved impossible over the course of the last few months. Her Majesty's Government have acted entirely under the West Indies Act 1967.
LORD SHEPHERD: My Lords, it is true that Her Majesty's Government have acted under the West Indies Act, but that was because there was agreement between the Government of St. Kitts-Nevis and Anguilla and the people of Anguilla. Now I understand a new situation is arising in which one of the parties dissents from the actions of Her Majesty's Government. From the noble Earl's original Answer it is clear that the Government are placing themselves in a new position in regard to Anguilla. I was asking on what legal basis does their authority arise?
EARL FERRERS: My Lords, the situation is that Her Majesty's Government have only recently—and by recently I mean within the last week or so—been apprised of the opinions of the
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parties concerned. Therefore a new situation has arisen. It is upon this new situation that Her Majesty's Government intend to act, and within the Act to which I have referred.
LORD SHEPHERD: My Lords, am I to construe from that reply that the Government intend to take legal authority?
EARL FERRERS: My Lords, I would not be prepared to go beyond what I have already replied.
LORD BROCKWAY: My Lords, the noble Earl used the phrase that the present arrangement is to be "for a period of years". What is the "period of years" which the Government have in mind?
EARL FERRERS: My Lords, a period of years can mean only what is says, and I should not be prepared to anticipate. I do not think the noble Lord, Lord Brockway, would expect me to say whether it would be for two, five, ten or twenty years.
LORD SHEPHERD: My Lords, in view of the uncertainty over this matter, I wonder whether the noble Earl would give an undertaking that he will consult—perhaps through the noble Earl the Leader of the House—with his noble friend at the Foreign and Commonwealth Office for a statement to be made before Parliament rises.
EARL FERRERS: My Lords, the noble Lord has referred to uncertainty. I have not meant to be unhelpful, but he will appreciate that the situation is necessarily a trifle uncertain because of the results that have only just come through. I will give the undertaking to the noble Lord that Parliament will be fully informed before action is taken.
LORD STONHAM: My Lords, since the Government's legal position in this matter seems somewhat doubtful, can the noble Earl say what the Government's intentions are if, as seems possible, their proposals are resisted physically?
EARL FERRERS: My Lords, I think that would have to wait until the circumstances arose. It is a somewhat hypothetical question.

STEEL INDUSTRY
EARL ST. ALDWYN: My Lords, with the leave of the House, my noble friend Lord Drumalbyn will be making a Statement on the British Steel Industry at a suitable moment after 3.30 p.m.
LICENSING (ABOLITION OF STATE MANAGEMENT) BILL
Brought from the Commons on Friday last, and printed (pursuant to Standing Order No. 46); read 1a.
ALDRIDGE—BROWNHILLS URBAN DISTRICT COUNCIL BILL
Read 2a, and committed to the Committee on Unopposed Bills.

PROCEDURE OF THE HOUSE
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Lord Gardiner be added to the Select Committee.—(The Earl of Listowel.)
On Question, Motion agreed to.

INDUSTRIAL RELATIONS: CODE OF PRACTICE
3.6 p.m.
LORD DRUMALBYN LORD DRUMALBYN rose to move, That this House takes note of the Consultative Document on the code of industrial relations practice. The noble Lord said: My Lords, as the foreword by my right honourable friend, the Secretary of State for Employment, states, the purpose of the code is to set standards and to give practical guidance for employers, trade unions and others concerned with industrial relations. The principle underlying it is that industrial relations are best conducted by collective bargaining between employers and strong and representative trade unions. The foreword also states that the proposals presented in the consultative draft are initial proposals which are presented for the fullest possible discussion and consultation, in the light of which the final
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draft will be submitted for the approval of Parliament before the end of this year.
By "industrial relations" I do not mean to suggest that the code covers "industry" only in the narrow sense. It applies wherever people are at work—in large or small establishments and in all sectors of employment. So in framing the code we have been thinking not only of the large manufacturing or assembly plant, but also of all forms of activity in which employment is provided, from the coalmine to the shop on the corner, whatever may be the end product or service—farms, hospitals, orchestras, research establishments, offices and warehouses, to name just a few. Of course it is true that conditions vary widely between different types of workplace and that some detailed requirements which fit one may be inappropriate in another, but the basic principles set out in the draft code—for example, the need for adequate communication and consultation and for effective methods of settling individual grievances and of dealing with disciplinary matters—apply everywhere.
Some people on first reading of the draft code may feel that it is no more than a collection of platitudes; that it contains no new or revolutionary ideas; and that it is likely to be ineffective any way. The recommendations are certainly not platitudes. There are some progressive employers who already do most of what it proposes; some, indeed, who do all and more. But there are a great many who do not. The aim of the code is to raise the general standard to the level of the best. To achieve that will undoubtedly take time. But it would be a mistake to underestimate the longer-term effects of a code which will carry the authority of Parliament and which will set out, in a simple and convenient form, what is generally agreed to be good practice. In that sense I think it would be no exaggeration to describe the code, taken as a whole, as a revolutionary document.
As your Lordships know, under Clause 4 of the Industrial Relations Bill the provisions of the code will be admissible in evidence before the Industrial Court and the industrial tribunals, but it will not be possible for anyone to bring an action on the ground that its provisions have not been complied with. The code

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can be invoked only in the Industrial Court or the industrial tribunal when applications have been made under the provisions of the Bill dealing with unfair industrial practices or breaches of duty. But where, for example, a complaint is made that a firm or a trade union has engaged in an unfair industrial practice, the extent to which the complainant—or the other party—has complied with the provisions of the code in his own conduct may be taken into account in assessing any compensation to be paid.
While it is important to be clear about the part that the code may play in legal proceedings under the Bill, it would be wrong to give this aspect too much emphasis. After all, the purpose of the legal framework of the Bill is to underpin the voluntary system which must remain the basis of our industrial relations. Many employers, no doubt, will never find themselves before the Industrial Court or an industrial tribunal. The real importance of the code lies in the guidance it gives for day-to-day conduct of industrial relations and, as I have said, as a means of bringing about a progressive improvement in standards.
May I say a word about the structure of the draft code? It is, I think, reasonably straightforward. It starts by setting out the central responsibilities of those concerned with industrial relations—management, trade unions, employers' associations and the individual employee. In the very first paragraph it declares that the primary responsibility for good industrial relations rests firmly on management. The draft then covers those employment policies which are essential to good relations between management and employees. Among other things it emphasises the need for soundly based payment systems, the absence of which is responsible for so many disputes; and it lays down guidelines for avoiding redundancies and for dealing with them if they become necessary.
The next section deals with communication and consultation—both vitally important. Some may feel that it does not go far enough in recognising the right of employees and their representatives to share in the decision-making process. Others will be equally convinced that it is right for management to retain the final decision on the managing
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of the business. Whatever developments we may see in the field of decision-making, there can surely be no doubt about the need for those who make the decisions to take their employees—whether white collar, coloured collar or no collar at all—into their confidence, so far as is prudent and practicable, and so to enlist and retain their co-operation in a comon endeavour. Section D, on collective bargaining, is of crucial importance to industrial relations. It covers such matters as bargaining units, trade union recognition, collective agreements and procedures for settling disputes, with which we have become very familiar in the last few weeks. The concluding sections deal with shop stewards and with the procedures for individual grievances and disciplinary matters. They take into account the Report of the Commission on Industrial Relations on the facilities afforded to shop stewards—a subject which was referred to the Commission on Industrial Relations in November, 1969.
I do not intend at this stage to go into detail about the contents of the draft code. To do so would take a great deal of time. It would be impossible to deal with it comprehensively, and if one did not deal with it comprehensively one would be accused by one person or another, from their different points of view, of not dealing with matters of great consequence. But I should like to mention some provisions which are relevant to points raised by noble Lords during our debates on the Bill. The noble Lord, Lord Byers, raised at Committee stage the question of works councils. He will see that paragraph C7 provides that any establishment with more than 250 employees should have a consultative committee. That committee should discuss the widest possible range of subjects of concern to employees. Since effective consultation depends upon both sides having the right attitude of mind, we feel that it is more likely to be achieved without statutory compulsion.
The noble Earl Lord Halsbury, and the noble Lord, Lord Platt, have urged the inclusion in the Bill of a provision ensuring that a professional employee should not be required to take any action which would conflict with his professional code of conduct. Paragraph A 17 has been inserted in the draft code to deal with this preoccupation. The need to safeguard

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the position of minorities and, in particular, of professional employees in relation to bargaining units is referred to in paragraph D 5. The question of proof of dismissal was raised by the noble Lord, Lord Shackleton. Paragraph G 4 requires that both formal or final warnings and dismissal should be recorded in writing and a copy given to the employee concerned and, if he so wishes, to his employee representative or trade union official.
We had a lengthy discussion during the Committee stage of the Bill on workers' participation in management. The initial draft code does not lay down precise guide-lines, for the very good reason that there is no general agreement at present on any system of participation that could be uniformly or even generally applied. But there is a great deal in the draft about joint consultation and joint action, and I think most of us had strong sympathy with what my noble friend Lord Amory said:
" I believe wholeheartedly in joint consultation, but I go further. I should be disappointed if joint consultation, when practised sincerely over a period, did not lead to participation in management in some ways."—[OFFICIAL REPORT, 27/4/71; col. 1133.]
The problem is to find the appropriate ways in widely varying circumstances. The Consultative Document sets out the Government's initial proposals on what the code should say. We hope that there will be the widest possible discussion of them during the coming months. If people disagree with what is in the document, we want to hear about it. We shall welcome constructive criticism and positive suggestions, so that the revised version of the code, which is to be laid before Parliament later this year, can reflect the widest possible measure of agreement on what should be regarded as the best practice.
I am, of course, aware of the T.U.C.'s initial response to the initial draft. Of course, if the T.U.C. had drafted a code, it would not have been in quite the same terms. There would have been differences of emphasis and no doubt even of substance. In the same way a code drafted by the C.B.I. or the Industrial Society would. I am sure, have differed in many respects from a code drafted by the T.U.C. as well as from the Consultative Document we are discussing.
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Nevertheless, I cannot help feeling that the T.U.C.'s response is disappointing and less generous than I would have expected. After all, they must have known that the code would be drafted by people who have acquired a profound knowledge and sympathetic understanding of industrial relations in the course of bringing the two sides of industry together and helping to sort out their differences. To anyone who had looked at what the draft code actually says, the epithets, "shabby" and "paternalistic" must seem strange and rather wounding epithets to use about it. The trade unions have much to gain from the code; by helping to eliminate bad management, it can substantially improve the working conditions of their members. I find it hard to understand why a responsible body which places so much store on consultation should not, even in the first instance, be prepared to consider the draft constructively on its merits and to let us have the benefit of their advice, which Her Majesty's Government will greatly welcome. I very much hope that it will be forthcoming.
Our debate to-day really begins the process of public examination and discussion on these important proposals. In conclusion, I repeat that the Government are anxious that they should be debated as widely as possible, and I can certainly assure your Lordships that the views and suggestions put forward to-day will be carefully considered by my right honourable friend the Secretary of State for Employment. My Lords, I beg to move.
Moved, That this House takes note of the Consultative Document on the Code of Industrial Relations Practice.—(Lord Drumalbyn.)
3.18 p.m.
LORD DIAMOND: My Lords, I wonder whether I might, a little unusually, preface my remarks by a very short procedural point. Towards the end of last week, one or two of your Lordships approached me with regard to today's debate, obviously under the impression that this was part of our normal debate on the Bill itself, and therefore in the belief that if they wish to take part in the debate all they need do is to rise in their places at the proper time and not put their names down in advance. I assume that it is not against your Lordships' traditions and practice that,

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in these circumstances, noble Lords should feel themselves free to speak or not to speak, irrespective of whether they have put their names down on a list in advance. I understand that one noble Lord has already done so.
EARL ST. ALDWYN: My Lords, I think it might be for the convenience of the House if I cleared up this point. The procedure whereby we have a list of speakers is purely for the convenience of your Lordships. It does not in any way inhibit any noble Lord from speaking in a debate in respect of which a list has been drawn up. It is merely a guide so that people know when a certain noble Lord is going to speak. That is all.
LORD BYERS: My Lords, may I ask the Chief Whip: it is correct, is it not, that if noble Lords who have not put their names down are going to speak they should speak in what is normally called the gap?
EARL ST. ALDWYN: My Lords, this is the more normal procedure, although by arrangement with the noble Lords immediately concerned, and by informing other noble Lords in other parts of the House, over a period they can come in at a place other than the gap. But the gap is certainly the normal place.
BARONESS GAITSKELL: My Lords, I am not quite clear about what is intended. Does it mean that anybody can jump up at any time in the middle of the list of speakers, or does it mean that they come in at the end?
EARL ST. ALDWYN: There is on the list a gap between the main body of speakers and the two noble Lords winding up at the end, and that is the place where noble Lords usually come in.
LORD DIAMOND: My Lords, I am most grateful to the noble Earl for helping me on that point, which I thought it proper to raise, very shortly.
My Lords, I am sure that my first duty, and indeed pleasure, is to thank the noble Lord, Lord Drumalbyn, for introducing this code in a short speech, and he will understand that I think it entirely appropriate that on this occasion the Government speech should be short and the other speeches not necessarily so short,
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because the Government are now starting this process of consultation. We welcome that, and we recognise the responsibility that this is the first occasion on which such consultation is taking place. I am most grateful to the noble Lord for what he said about his willingness, and the willingness of the Government generally, to listen to points which will be made during this debate, and indeed during the national debate which will take place, I very much hope, from now onwards, until the final code is put before Parliament in its revised and, I have no doubt, much improved form. What I want to do this afternoon is first to give a measure of welcome to the code, and to explain why I thought it right to do that; then to offer comments on some of the major principles which are to be read from the code; then to comment shortly on a few individual points which emerge from the wording of the code itself; and then, if I might be so hold, to conclude by drawing attention to what I think the future course might be.
First, then, let me give a welcome—a muted welcome, but nevertheless a welcome—to the code, and let me explain the reasons why I think it right to do this. In the first place, I invite your Lordships who have not yet had the opportunity of doing so to read the Foreword, which seems to me to be written by someone who really understands what industrial relations are about. I cannot praise too highly some of the sentiments incorporated in the Foreword, which of course is written by the Secretary of State himself. I will read only three short parts of sentences. The first is in the first paragraph, where there is a reference to
" the development of policies to improve human relations in all types of employment ".
My Lords, I do not think it could be put more succinctly or better than that. That is what it is all about: it is about improving human relations in employment, and the more we understand that the more we will understand the complexities and the way to approach a solution.
The Foreword goes on to refer to the need for
" strong representative trade unions ".
That I should also like to endorse very much indeed, as I do the comments made by the noble Lord when referring

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to this. Then, two lines further on it refers to
" adequate safeguards for the free association of workers…".
That is a most important freedom, the freedom of association, whether for workers or for any others of us, assuming there are any of us here who are not workers. I do not include myself in that category for the moment—not while this Bill is on, at all events. It is a most important statement, and one which we have been trying very hard from this side to make sure the Government were fully apprised of—the need not to interfere with this fundamental freedom, the free association of workers. So I say that in my view, at all events, the Foreword is written with full understanding of what the issues are and of what the approach should be. I only wish that the Secretary of State had had time to write the rest of the code. Obviously he could not have done; but, dear me, the rest of the code is a very different document indeed. Still, one gives credit where credit is due, and I think great credit is due to the Secretary of State for that.
Another reason why I welcome the code is that it is written in plain English. I am not making the usual uninformed and rather silly attack on draftsmen who have to draft complicated legal texts in legal language. I have had too many Finance Bills to deal with to be as stupid as that. But it is true, nevertheless, that, whether or not you need a Bill drafted in the succinct but not very easily understood phraseology of the draftsman, in addition you need a document which every Tom, Dick and Harry can understand. That is an essential thing if you are going to have an improvement in human relations among all workers, all employees. Therefore, the fact that we have a document which is written in such plain, clear English is, I think, a great boon; we are very grateful for that, and I welcome it on that account.
Then, again, I welcome this document because I see it as a guide to assisting voluntary co-operation rather than compulsion. Without trenching too heavily on the dispute we have had and are still having on the Bill itself, it is clear to your Lordships that we on this side regret
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very much indeed that the Bill is framed on compulsion, even though it is compulsion at a late stage. We think it should be free of compulsion. We think that human relations are best encouraged free from compulsion, and that the way to assist is by encouraging voluntary cooperation. This code sets out to do that, and I welcome it, therefore, on those grounds, also.
Particularly I welcome it because it avoids the distinction between registered and unregistered unions. I am bound to invite your Lordships to consider this point most carefully. Of course, that statement is not made in the document itself, it is made in a footnote; and we all know that footnotes and the small print very often contain nuggets of wisdom. A footnote on page 8 reads:
" For the sake of simplicity "—
that is a wonderful term—
" the term 'trade unions' is used in this code to describe both registered and unregistered workers' organisations ".
My Lords, I am not commenting on this because it is a footnote or because of the English. I am commenting on it because the draftsman, and the Government responsible for this code, saw immediately that if you are trying to provide a simple document to help in industrial relations then you no longer attempt any legalistic and unhelpful distinction between registered and unregistered unions. You want to deal with people irrespective of whether the union of which they are a member happens to be registered under a particular Act or under a later Act, or not registered at all. They are human beings at work; and you want to encourage relations among them and other workers and their employers, and the way to do this is to have regard to all of them and not to some of them.
As the noble Lord, Lord Drumalbyn, himself made absolutely clear, this document is intended to speak to all. In that sense it suffers to a certain degree from the usual lowest common denominator difficulty, but I do not for one second attack it on those grounds. I share the view that we want to speak to all who are engaged in work of every kind, and the way to do so is to avoid this artificial, legalistic, damaging distinction between registered and unregistered unions. I rejoice, therefore, that the document does so almost immediately—on the

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second page of the notes—and that it recognises that if you are to have overall appeal, this is how you must proceed.
While I am on that issue, may I ask a question of the Government (this is slightly off at a tangent but only slightly) about their own position as employer, or perhaps I should say as customer? Your Lordships are familiar with the Fair Wages Resolution under which the Government contract only with contractors who undertake to respect the freedom of workpeople to be members of trade unions. I think it is Clause 4 of the Resolution that applies. That document, I believe, was prepared in the time of the Attlee Government—in the late 1940s, I should assume—and therefore it clearly had reference to trade unions as defined before the present Bill was thought of. So I am asking the noble Lord, when he replies, to say how the Government regard their responsibilities in relation to trade unions and how they define trade unions in Clause 4 of the Fair Wages Resolution.
In view of what I have said, I think it follows that the code should have a separate existence from the Bill. I say that because I know that at one time we on this side of the House put forward for consideration, and only for consideration, the view that the code might be incorporated in the Bill as a Schedule, which would provide your Lordships with the opportunity to debate each word and to make amendments, word by word or paragraph by paragraph, as your Lordships might desire. So far as I am aware, there is no other method. The method at present before your Lordships is the usual one of the Affirmative Resolution, under which a Government proposal is accepted or rejected in total, and is not susceptible of amendment. To make it susceptible of amendment, the code would have to be in a Schedule to the Industrial Relations Bill. If that method had been adopted it would have had certain advantages, but I think the disadvantages would outweigh the advantages. The disadvantages are first—I must be quite frank about it—that the code, by being part of the Bill, would in the view of those on the employees' side whose co-operation is sought under the code, be contaminated by the Bill. As I am going to suggest later, I think we can make progress on the code; I do not think that in practice we can make progress on the Bill.
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It is therefore, in my view, wise that the Government have decided that the code should be a separate document. I know it was so decided because it lent to ease of adjustment and alteration. But I think, for the reason I have given, it is also wise that it should stay as a separate document and be recognised as such, and so avoid being blighted by the same hostility to the Bill as will be shown by so many of those whose co-operation is needed to put the provisions of the Bill into practice. So I give that fairly full welcome to the code. But I assume that we are in the process of consultation; that the Government really have an open mind on this subject and will listen (I am sure they will, because the words in the introduction give a complete guarantee that they will) to people from both sides of industry who wish to make constructive contributions designed to improve the code for the purposes set out in the foreword.
I wish now to deal, as I warned your Lordships I should, with certain attitudes displayed by the code, and my comments will take the form of criticisms. I underline what everyone I have spoken to has said about this code: that it is "paternalistic". Every discussion I have had and every opinion I have heard pitches on the same word. The noble Lord, Lord Drumalbyn, does not like the word "paternalistic"; but the only alternative course I can suggest to him—having regard to the fact that many of the practices promoted in the code were popular and much discussed at least fifty years, two generations, ago—is that we should change "paternalistic" to "grand-paternalistic". But I would not be so stupid as to call this paternalistic without giving examples to show why I quickly reached that conclusion.
That is one main criticism, and my other main criticism—I shall give details of it about the approach of the code relates to the still ambivalent attitude of the Government with regard to trade union interests. The introduction, the foreword, speaks of "strong representative trade unions". We all know by now that the Donovan Commission suggested that the way to improve industrial relations was through increasing the strength of trade unions. We want trade unions to be strong and representative, as the document states. We know also that

27
the Government have said that they adopt that part of the Donovan Report; and their view, as stated by the Secretary of State, is that trade unions should be strong. My Lords, we also know, because we heard the speeches on Second Reading and speeches made in another place, that many of those who support the Government would prefer to see a weakening rather than a strengthening of trade unions; and that the Government are in the difficult and ticklish position of having to express their views in a way which will give minimum offence. This is unsatisfactory, and the code suffers as a result.
We have to recommend very strongly indeed to the Government that they should cease their ambivalent attitude and recognise that if they want to improve industrial relations, the method is by encouraging the growth of trade unionism. The Government must say so; and the code must say clearly, without any possible doubt, that one of the responsibilities of management is to encourage trade unionism. That is to be found nowhere. There is one reference in the code, on page 19, paragraph 14C, which goes a little way; but that refers only to the responsibility of management, after trade unions have been recognised. It does not refer to the responsibility of management to encourage trade unionism before, during and after recognition. That is nowhere mentioned. There is also a reference, a most unhappy reference, very early in the document, on the first page—which everyone reads even if they go no further—where it states
" Where trade unions are recognised, management should…".
My Lords, that is the most unhappy form of words, whatever the view of the Government. The Government could have expressed the same thought, even if they did not want to encourage unions, without trailing their coat in this way. So I suggest to the Government that, whatever happens, they alter those words in their own interest. What I am asking for, in particular, is that it should be made absolutely clear that the responsibility of management is to encourage the growth of trade unionism. The reference which I have mentioned does not help at all.
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I said I would refer to the reasons why I conclude that the document is paternalistic in its approach. I distinguish between paternalism and cooperation: "co-operation" means working together, "paternalism" means telling you the way in which you should work. On that basis I want to refer to various paragraphs in the document which I think establish what I am saying. In section A, paragraph 8, there is an introductory sub-paragraph under the general heading of "Trade unions." I think the shortest way would be for me to read the paragraph, which is only six lines long:
" The principal aim of trade unions is to promote their members' interests. They can do this effectively only if they accept that, in common with management, they have an interest in and a responsibility for the success of the undertaking. This involves co-operation in promoting efficiency and good industrial relations."
There is the statement that this involves co-operation in promoting efficiency. My Lords, I do not dispute that. I am suggesting to the Government and to your Lordships that the well-known way of securing co-operation is by offering it first. If you want to secure friendship, you offer it. If you want to secure cooperation, you offer it and get the response. If you do not, you must not be surprised if you do not get a response.
Therefore I am saying to the Government that they must offer co-operation in a number of important respects. I am animated by the thought that what is good for the "boss" is good for the "gander". But this does not seem to have emerged very clearly if one compares the attitude inherent in sections F and G with the attitude disclosed in paragraph 3. If I may now make clear those hieroglyphics, section F relates to individual grievance procedures—most important for the employee—where it says that management should ensure that an effective procedure exists for employees to seek redress for their grievances. It does not say anything about discussing, in advance of the decision being made as to the form of the grievance procedure, with the men themselves, who are concerned, what form that procedure should take.
Section G deals with disciplinary procedures and says:
" Management should define and make known to each employee the rules of work

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and the disciplinary action which may follow if they are broken."
Certainly management should make these known to each employee, but before making them known and defining them management should work out with employees what the disciplinary procedures should be. That is the normal way to secure co-operation. These two fundamentally important matters to the individual have only a partial, I would almost say a minimal, effect on the essential problem of management in relation to making, producing and selling goods, or whatever the function of the business may be, but even in these areas, which are of such little importance to management and of such crucial importance to employees, the document does not say one word about real co-operation in terms of decision-making before the decision is arrived at. Of course these matters should be agreed upon so far as possible. If they cannot be agreed upon, then I recognise that, as the noble Lord, Lord Drumalbyn, said, management has to take the final decision. But how much better to try to agree upon them first! And in the majority of cases agreement will be reached.
If agreement is reached, the employees are involved. They have participated they find themselves involved, and will honour the arrangements. They will understand them and accept them, and the arrangements are less likely to give rise to difficulties, contentions and controversy. We all know this in every walk of life and in the running of a democratic system. I must say that under Sections F and G the Government are to be severely criticised for not suggesting that in areas where management is only slightly affected and the workers are critically affected there should be an attempt in the first place at real cooperation. But when we come to G and E (and I am comparing F and G with E, which deals with shop stewards)—will the noble Lord forgive me? I will complete my argument, and I shall be very brief about it, and then I will give way. Section E.3 says that
" It is desirable that trade unions and management should agree on the total number of shop stewards—"
and on other things. So here, where we need co-operation of the unions in relation to the employment qualification of shop stewards—in fact, it is impossible to
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function without them—it is said not that the trade unions have the right to make their own decisions, as happens under the other headings I have referred to, but that,
" It is desirable that trade unions and management should agree…".
It is desirable that trade unions and management should agree both with regard to shop stewards and with regard to individual grievance procedures and disciplinary procedures. I think that the noble Lord, Lord Drumalbyn, wished to intervene.
LORD DRUMALBYN: My Lords, I take the noble Lord's point on discipline but I only wonder whether in talking about grievances, he has taken into account the provision of D.20.e, which says:
" the procedures for settling collective disputes and individual grievances"
are among the things which the procedure provisions should set out. These, of course, will be agreed upon.
LORD DIAMOND: My Lords, if there is another part of the Document which I have not read and which fills in the gap, I am delighted that it is so. I am not criticising the Document on small points, but making clear what I think should be the guidance given to the employer. If the Government are saying that the guidance given to employers with regard to the grievance procedures is of the kind I am suggesting, then I am delighted. I go on to say immediately that I hope that the Government will extend their wise thinking to sections F and G and do the same with regard to disciplinary procedures, which the unions have been seeking for years now to be a joint concern in their establishments. It is for those reasons, among others, that I regard the Document as paternalistic in its approach, because it has inadequate reference to joint participation in decision-making processes.
Incidentally, on this one point may I say that though it appears that there are elements in each part of the document which are repeated in other parts, this is not only essential but, indeed, advisable. I hope that the Government will not hesitate to include under each heading what is relevant to that heading, even though it has already been said somewhere else in the Document: because the tendency for people interested in, for

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example, grievance procedures is to look them up in the index to see what is there and to say to themselves that that is the Government's view or the view of the code of practice, whereas the noble Lord has just now said that it is not the view of the code of practice—the view is that before the situation gets to that stage, there will be joint consultation and cooperation and if possible agreement with the people concerned. So I hope that the noble Lord will not hesitate, if necessary, to make the Document slightly longer so that every part will speak for itself.
Still on the argument that the document is paternalistic to a degree because it fails to allow for joint participation in decision-making, I would refer to five headings, every one of which is damned by the same argument: manpower planning, a most important area affecting the livelihood of employers and the prospective livelihood of employees; redundancy, training, payment systems and safety arrangements. All these, I suggest, are vital to the livelihood and security and, indeed, prosperity of the employees. In not one of these cases can I find any reference to real co-operation, in the sense of working out between employers and employees how the matters should be arranged, but only reference to telling the employees afterwards what has been decided. That is not the best industrial practice. That is all I want to say on those headings, although with time available I could make speeches on every one of these topics, they are of such importance.
I turn now to a number of individual points of less importance than the two major criticisms that I have made but I should like to refer to them, because this is our opportunity for doing so. I am sure that other noble Lords will have similar and other points to make. Section A,7,d is a reference to supervisors explaining to work groups innovations and changes before they happen. I hope that this paragraph can be clarified to make it clear that there should be no such changes of practice without prior consultation. I repeat that I recognise management's responsibility at the end of the day to make the decision, but I do not recognise management's right to make a decision without prior consultation. That is unwise. It is against the
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interests of management and good organisation and it is damaging to industrial relations. I hope, therefore, that that can be made clear.
I hope at the same time that the Government will give thought to a point on which the T.U.C. have been keen for a long time now and which seems to me to be common sense—that is, to provide that where a dispute has arisen out of a change the status quo should be restored wherever possible while negotiations arising out of that change are taking place. It helps enormously if one can return to the status quo ante, the situation existing before the change, while negotiations are taking place, without prejudice to the negotiations. That would be a wise guideline to introduce. Then, on page 11, section B,8, I hope that the Government will consider expanding the heading of "Training" and calling it "Training and Education." There is no reference to education and I think it is necessary that there should be.
Again, on the same page, at section B,10,a, there is reference to "a general introduction to working life." That is good. I hope that it will include a general introduction to the functions of trade unions and I hope that such an introduction could be given by representatives of the trade unions. I think that this part on working life ought to be explained in a wholesome way to beginners. Then section B.13 talks about payment systems being introduced, but does not include a reference to the need to encourage productivity and to remunerate it. I think that ought to be included.
Under section B,19,b, there is reference to redundancy. It says:
" If redundancy becomes necessary management [should]…establish which employees are to be made redundant and the order of discharge."
That must be done in advance, because it is impossible to do it at the time. It is almost hoping for the impossible to believe that one could reach such an agreement after the redundancies have become necessary. It is much easier to reach agreements before they become necessary and I should have thought that that ought to have been included as a guide to industrial relations.
On page 15, section C.5, sub-paragraph a, refers to management explaining to

33
employees or providing them with information on
" the performance or prospects of the undertaking."
I entirely agree, but I hope that the word "whole" will be added, so that it will read, "of the whole undertaking". It is very difficult for an employee in an individual section to understand what is going on in other parts of the works or factory or shop, and it is a great aid to understanding if the management take the trouble to explain things in relation to the whole undertaking.
These are small points in relation to the two that I have mentioned but they are not unimportant. I have no doubt that there are many more, and indeed the noble Lord must not assume that, if I refer only to five or six, there are not others to which I could happily refer, if the time were available, but there are many other noble Lords who wish to speak. Therefore, I come now to the most contentious part of my speech; namely, what do we do now? What course do we suggest that the Government should favourably consider? What I suggest is that the Government should rely on the code rather than on the Bill. I believe it is possible and indeed likely that the code will, after consultation and consideration, be implemented and it will receive co-operation, where co-operation is needed and required, if—and only if—the atmosphere is not polluted by having the Bill implemented and working. If we have the Bill we have neither the co-operation required to make the Bill work, so the Bill itself must be ineffective, nor the co-operation to make the code work, and so the code will not produce the good results which it could produce.
The Government should recognise that the way to make progress in improving industrial relations is to rely on the code and not on the Bill. The Bill is still regarded as grossly unfair, irrelevant and impractical by all those whose cooperation at employee level is needed to make it work. Association of the Bill with the code could be only prejudicial to the code.
But I do not think it would be too difficult to devise a way forward. I recognise the position of the Government. I recognise in particular that the Prime Minister has taken the view that he
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needs to demonstrate his political strength by putting on the Statute Book a Bill of this kind. But I doubt whether he can any longer take the view that such a Bill will help in dealing either with industrial relations or with the current major problem of inflation. There was a time when undoubtedly the Government thought that it would be helpful in dealing with inflation so to regulate and affect the powers of unions that the unions' ability to negotiate high wages for their members would he much reduced. Neither of those ends—that is to say, helping industrial relations or helping with inflation—is possible as a result of bringing in this Bill. On the contrary, it is now clear that steps are needed to deal with inflationary pressures which can be implemented only with the co-operation of the trade unions and employees generally. That is the major problem, as we all recognise. We cannot therefore carry on with the implementation of a Bill which is going further to exacerbate feelings and at the same time to require co-operation in order to serve the needs of another quite major policy.
Honour could be satisfied if the Bill went as far as the Statute Book. What I am talking about is the damage which would come from implementing it, or at all events those parts of it which are highly controversial. The Government have said that they intend to have different dates for the implementation of various parts of the Bill once it becomes an Act. There is therefore no reason that I can see why those parts which are broadly acceptable should not be implemented when the Bill reaches the Statute Book at whatever date the Government decide and then is kept in reserve so that if the code—having had a good chance of working and benefiting industrial relations—is seen not to be sufficient thoughts could be turned to something else, which might even be the Bill.
But that is not what I am suggesting. I am not suggesting that we should ever have regard to the Bill. I am merely saying that from the Government's own point of view there seems no advantage at all in insisting on implementing the Bill. Such insistence would at the best produce a tremendous conflict and at most a Pyrrhic victory. My recollection of a Pyrrhic victory is that it was one

35
which left a mound of corpses and a blasted heath. I am sure that that is not what the Government desire. If the Government want to keep the Bill up their sleeve—I refer now to those unacceptable and controversial parts of it—as a long-stop, they could do so without bringing in and implementing the controversial parts. I am saying to the Government—I know that they will find this unacceptable but I believe it to be the truth—that they no longer have the moral authority necessary to implement such a controversial Bill. That moral authority stems from continuing electoral sympathy and support which have gone. All Governments know that the time to deal with controversial measures of this kind is at the start of their period of office because controversial measures lose votes and they must be brought in while the going is favourable.
My Lords, the Government's honeymoon period has gone more quickly than any other honeymoon period one can recollect. The conclusion to be drawn is very clear indeed. It does not matter whether or not your Lordships agree with what I am saying; what matters is what the people themselves think and feel. They will not observe the law if it is passed by a Government in which they have at that time no confidence and have demonstrated that they have no confidence, and if they believe that the Government are not acting in the interests of good industrial relations but out of preconceived partisan notions.
Therefore, I am saying to the Government that the way forward is of the kind I have indicated, and I hope that they will consider it seriously because I can see no other way forward. I can, of course, see confusion; I can, of course, see conflict; I can, of course, see battles royal, but I cannot see any other way forward if what we are all after in all parts of the House is an improvement in our industrial relations. So I finish by repeating my suggestion that the way forward is to lean on the code and to leave the contentious parts of the Bill in abeyance. In that way industrial relations will be improved instead of damaged; in that way I believe that the nation will be united instead of divided.

THE STEEL INDUSTRY: FUTURE PLANS
4.8 p.m.
LORD DRUMALBYN: My Lords, it may be for the convenience of the House if I now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
" With permission, Mr. Speaker, I will make a Statement on steel. I must apologise for the length of the Statement.
" A further important stage has been reached in the consideration being given by the Government to the future of the industry in consultation with the British Steel Corporation and other interested parties. Having on April 27 announced our conclusions about the maintenance as an integral part of the B.S.C. of the bulk iron and steel making activities, I am to-day able to deal with the short-term financial and investment prospects and the objectives for re-structuring the industry upon a more logical and efficient basis. In due course I look forward to completing this series of announcements when the longer-term plans for the industry have been appraised and agreed.
" Secondly, after nearly breaking even last year, the prospects of the industry for the current financial year involve a loss after depreciation of some £100 million. However, I have decided that, nevertheless, the investment needs of the industry make it necessary for me to authorise the B.S.C. to proceed with capital expenditure this year at a level of £225 million at 1970/71 prices—that is some £40 million more than the total authorised last autmun. This level of investment allows the B.S.C. to proceed with all the various projects it had decided upon, including expansion at Ravenscraig and Llanwern, but does not prejudge the results of the long-term review now in progress.
" The combination of the loss and the higher level of capital expenditure has implications of a major kind to financing needs. I have accordingly agreed that the B.S.C. may increase their net borrowings to a level of £300

37
million this year, and a draft Order has been laid before the House to increase the Corporation's borrowing limits from the present £500 million to the full £650 million provided in Section 3 of the Iron and Steel Act 1969.
" The anticipated loss makes the setting of a statutory financial target difficult, but the Corporation have agreed with me that, subject to major and unpredictable eventualities, they will work within the loss levels and borrowing limits agreed. Arrangements are being made for quarterly reports.
" The need to move into profitability is recognised by both Government and B.S.C. As regards prices for the B.S.C.'s products, the Corporation wish, in future, to be more selective in their price changes, dealing with their products individually rather than upon an across-the-board basis. I am in favour of such a change in practice, which will still be subject to the normal procedures involving the I.S.C.C. and informal consultation with the Government.
" My honourable friend the Minister for Industry has been engaged with the B.S.C. and other interested parties in extensive discussions concerning the future structure of the industry. A broad measure of agreement has been reached between all concerned in four fields of restructuring.
" First, in the boundary area between B.S.C. and private industry agreement in principle has been reached between the Corporation and Firth Brown, Ltd., as to the initial steps necessary to rationalise their overlapping interests. Further steps are currently in negotiation to strengthen the Sheffield steel industry.
" Secondly, the Corporation fully recognise the need to find a solution to the problems of private sector re-rollers and others who are substantially dependent upon the Corporation for supplies of billets while at the same time competing with them in finished products. B.S.C. are prepared to open discussion with interested parties with a view to the creation of one or two new jointly-owned steel and billet-making companies. In addition, the B.S.C. have told G.K.N. of their preparedness to discuss the future ownership of the Brymbo Steel Works, which makes high
38
quality billets. Moreover, the Corporation have agreed to discuss with private interests whether further action may still be required to ensure adequate independent supplies and fair competition, particularly for higher grade billets.
" Thirdly, major parts of the B.S.C.'s constructional engineering and chemicals divisions are to be established by the Corporation as Companies Acts Companies with a view to the introduction of private capital by direct subscription or as a result of mergers. Action upon broadly similar lines will be taken in the field of wire making, to create a really strong ' wire' group capable of holding its own in foreign competition. Similarly, the B.S.C. have agreed to establish a company with Companies Acts status, to hold its B.S.C. stake in all the various joint public/private steel companies, into which it is intended that private capital will be introduced.
" Fourthly, the B.S.C. see industrial advantage in disposing of a certain number of peripheral interests at a fair price: these include their bright-bar, stamping, tool and tool-steel making, a small engineering works, some industrialised housing and certain of their brick-making operations.
" Finally, I have appointed two new part-time members to the Board of the Corporation with effect from July: Sir Matthew Stevenson and Mr. R. Bateman. In addition, Sir David Barran has accepted an invitation to serve with effect from the beginning of next year. I am discussing with the Chairman what additional Board members would be appropriate.
" These measures, together with the long-term study of the B.S.C.'s future development, represent important progress towards establishing the foundations for a much strengthened and profitable British steel industry. There are great opportunities ahead for the Corporation and for the industry as a whole and I am confident that, among both men and management, there is every determination to make the most of them."
4.13 p.m.
LORD DELACOURT-SMITH: My Lords, your Lordships' House will be

39
grateful to the noble Lord for having repeated this long-awaited Statement. It is one which we shall need to study and to digest, but perhaps I might ask the noble Lord one or two questions arising from it. In the reference to the selectivity in price changes there was also a reference to these price changes continuing to be subject to the normal procedures involving I.S.C.C. and informal consultation with the Government. I hope that the noble Lord can assure us that this precludes some of the somewhat arbitrary decisions in this field which have been taken by the Government in recent months.
In respect of the restructuring, with the various aspects of which the Statement dealt, there is a reference to "a broad measure of agreement having been reached". I hope again that the noble Lord can assure us that the restructuring proposals are fully acceptable to the British Steel Corporation, and are accepted by them as in the long-term interests of the Corporation and the industry.
Lastly, my Lords, in so far as in the fields of constructional engineering and chemicals there is to be a measure of partnership between the British Steel Corporation and private interests, is it intended that, as a general principle, the Corporation should maintain a majority interest in these joint ventures, or is the public interest to be safeguarded in some other way? I should be grateful if the noble Lord could touch on these points.
LORD BYERS: My Lords, in thanking the noble Lord for repeating this Statement, may I ask him whether he can tell the House what is likely to be the outcome financially when the appropriate steps have been implemented? When, for instance, is the profit position expected to arise; and when can we anticipate a reduction in the high level of indebtedness which has now been achieved?
LORD DOUGLASS OF CLEVELAND: My Lords, the noble Lord mentioned more selective pricing systems. The pricing system, as I understood it, was selective as regards different materials—plates, rails, sheet, flat rolled product—that could move in accordance with the requirements of those products. If there is to be a more selective pricing system,
40
is it to be between individual works, or what does it mean?
LORD DRUMALBYN: My Lords, I am obliged to noble Lords for accepting this Statement and I quite agree that it will take some digesting. The noble Lord, Lord Delacourt-Smith, asked whether consultation on price in the future would preclude what he called the "somewhat arbitrary decisions" that have been reached in the past. So far as responsibility for price is concerned, this will, of course, remain the same as in the past. It always has been recognised that the Government have a special position in regard to pricing in nationalised industries; but I should perhaps make plain that one of the effects of setting up the joint companies will be to withdraw those sectors from this kind of consultation with the Secretary of State, or of the same kind of consultation in future. This represents a real measure of Government disengagement.
So far as the broad measure of agreement is concerned, I can only say that the British Steel Corporation were fully associated with the review in all its stages and were parties to the conclusions of the Steering Group on which the Government's decision was based. As to chemicals and constructional engineering, the extent to which private investment will be forthcoming in these enterprises is of course rather for the future, and I think it would be premature at the moment to go further than I have done in what I have said to-day.
The noble Lord, Lord Byers, asked when the profit position would be improved. I have indicated what are the limits of loss—perhaps an unusual concept—in the coming year; but I have also made it clear, I think, that both the Government and the B.S.C. fully recognise the need to restore profitability at the earliest possible moment, and certainly it is intended that a substantial step towards that end will be made in the following year. On the subject of pricing I speak with some reservation, but my understanding is that pricing is as between products rather than as between different establishments of the B.S.C.
4.20 p.m.
THE EARL OF LAUDERDALE: My Lords, may I ask the noble Lord three questions? First, whether the approval

41
for the Ravenscraig development includes, or carries with it, approval for the new bulk ore terminal at Hunterston on the Clyde? Second, whether we can expect no later than the end of the year the final decisions on the allocation of resources to bulk steel production on maritime sites and their selection? Third, whether we are to deduce from what the noble Lord has said about the various sides of the industry now in the new arrangement that the Government are beginning to think in the direction of a kind of B.P.-type solution for the future structure, financial and constitutional, of the B.S.C.?
LORD DRUMALBYN: My Lords, on the first point, the further Ravenscraig development is the final stage of the provision of hot rolled coil, and has no particular connotations. It does not indicate anything further than what I have said. It stands on its own. I was not quite clear what my noble friend meant by his second question. I do not think he should read into what has been said more than what in fact has been said. The same applies to the B.P.-type solution. My right honourable friend made it clear at the time when the last Statement was made (I think on April 27) that the bulk steel production provision would remain with the B.S.C., at any rate for the time being.
THE EARL OF LAUDERDALE: My Lords, to clear up one point, may we assume that the decision on the long-term investment programme of B.S.C. will not be delayed longer than the end of the current year?
LORD DRUMALBYN: My Lords, this phase is at present being examined, and it is hoped that this autumn it will be possible to make an announcement.
LORD POPPLEWELL: My Lords, can the noble Lord indicate how the disposal value will be arrived at? Will it be by value of plant, by free play in the open market for bidders? What is the basis in mind for arriving at the disposal value of these units?
LORD DRUMALBYN: My Lords, that is entirely a matter for the British Steel Corporation. The Statement I have repeated makes clear that B.S.C. will not dispose of these assets except on a basis that they consider to be satisfactory.
LORD PARGITER: My Lords, may I ask whether or not the trade unions have been consulted in regard to these altered arrangements?
LORD DRUMALBYN: My Lords, my honourable friend the Minister for Industry saw the trade unions this morning, and I believe he is going to see them again in the very near future.
LORD PARGITER: My Lords, I take it that does not mean consultation; it means that they were told.
LORD DRUMALBYN: My Lords, the consultation on this matter has been between the British Steel Corporation and the Government.
LORD SHINWELL: My Lords, I understood the noble Lord, Lord Drumalbyn, to say (and he will correct me if I am wrong) that the B.S.C. sustained a loss last year of £100 million. That is a substantial loss. Can he explain the cause of this huge loss? Was it due in any part to disposing of any of the products at uneconomic prices—in other words, subsidising other industries at the expense of the B.S.C.? Is that one of the causes, or is it attributable to excessive rates of pay to those employed? Was it caused by inefficient management? What was the cause of such a substantial loss?
LORD DRUMALBYN: My Lords, the answer to the noble Lord would be long and complex, but perhaps he misunderstood what I said. I said that in the past year the B.S.C. just failed to break even. There was an anticipated loss of some £10 million. It is for the current year that a loss of £100 million is expected. The reasons are many and complex, not least the state of the market at the present time and the need for investment, for which the Statement I have made makes a start.
LORD BLYTON: My Lords, can the noble Lord say how much of this anticipated loss was due to the refusal of the Government to allow the increase in steel prices when the Corporation asked for it?
LORD DRUMALBYN: My Lords, naturally this plays a part quite a big part—though perhaps not quite so large a part as was estimated at some time because of the state of the market. Noble Lords will appreciate that at a time when the Government are trying to keep prices

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down it is not altogether illogical to seek to maintain prices, to restrict the increase in prices in steel, a material that goes into so much of our production and, therefore, affects our prices to such a large extent.
LORD BLYTON: My Lords, if the noble Lord is correct when he says that the ambition of the Government is to keep prices down, with the exception of steel, could he tell me in what field they are trying to do this?
LORD DRUMALBYN: My Lords, it is the constant endeavour of the Government, in those fields in which they have influence, to try to make certain that prices do not increase more than is necessary.
LORD DAVIES OF LEEK: My Lords, it is very difficult to take in such a vast Statement, and consequently it is difficult to put cogent supplementary questions. May we have the opportunity, if it is only for an hour or two, of a short discussion on this Statement? Will the usual channels be used to see if time can be devoted to it? Whatever politics we may have on each side of the House, it is now getting antiquated for each political Party at every General Election to scream at each other and say, "When we get into power next we are going to denationalise that", or, "We are going to nationalise that". Are there not some industries that are so vast that they are too big altogether for private enterprise and for liquidity? At difficult transitional periods do they not have to come to the State; and, because of that, should not the people own them?
LORD DRUMALBYN: My Lords, the noble Lord's last question raises a very wide issue indeed. It would not be proper to debate that, or even go very far into it, at this stage. I recognise that this is a complicated Statement and there would have to be discussion through the usual channels as to whether there could be time for discussion on the matter in your Lordships' House. Your Lordships will bear in mind, however, that at this time of the year there is strong pressure on the time of the House.
LORD DELACOURT-SMITH: My Lords, I wonder whether the noble Lord would be good enough to clarify an
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answer which he gave to an earlier question of mine. Did I understand him to say that in the case of the companies in the field of constructional engineering and chemicals which would be established under the Companies Act by the British Steel Corporation, with the prospect of private participation, there would be complete freedom of pricing by those companies? Am I right in saying that there would be no control and no consultation?
LORD DRUMALBYN: My Lords, that is my understanding of the position.
THE EARL OF LAUDERDALE: My Lords, may I come back to my Ravenscraig point? Are we to understand that the projected Hunterston ore terminal to supply Ravenscraig either was not included in the programme now approved or has been excluded from it?
LORD DRUMALBYN: My Lords, I think the answer is "both".
LORD ALPORT: My Lords, may I ask my noble friend how the very considerable investment which B.S.C. are going to take on during this forthcoming year is going to be financed?
LORD DRUMALBYN: My Lords, by borrowing. I referred in my Statement to the fact that the borrowing limit for this year is fixed at £300 million.
LORD POPPLEWELL: My Lords, in view of the fact that the Government kept its funds down, will the Government assist the Steel Corporation to meet its obligations at the end of the year?
LORD DRUMALBYN: My Lords, I apologise; I did not catch that question.
LORD POPPLEWELL: My Lords, in view of the fact that the Government have kept the price of steel down, which will be a large contributory factor in the Corporation's being unable to pay its way—I refer to the forecast of £100 million loss—and that the Corporation was acting under Government instructions, will the Government reimburse the Corporation by the amount it would otherwise have received?
LORD DRUMALBYN: My Lords, I do not quite know what the noble Lord is suggesting here. The money has to come from somewhere, and of course it is borrowed from the Government.
LORD POPPLEWELL: My Lords, may I put the question in another way? In view of the fact that the Government have deliberately refused to allow the Steel Corporation to put up its prices in order to meet current expenses, and it is now visualised, by virtue of that action, that the Steel Corporation will have a loss of something like £100 million, is it the Government's intention to reimburse the Steel Corporation by the amount the Corporation should have received if it had been allowed to charge the price it wanted to charge?
LORD DRUMALBYN: My Lords, the noble Lord must be aware that Governments, both past and present, have restricted the Steel Corporation in the amount by which it could increase its prices. This has an effect all along the line. The noble Lord knows as well as I do how these matters are dealt with.
LORD ALPORT: My Lords, may I follow the previous supplementary question I asked by asking this question? Would my noble friend say whether it is intended that the borrowing should take place on the London Market, or will it be from Government sources?
LORD DRUMALBYN: My Lords, the Steel Corporation can borrow only from Government sources.
LORD DOUGLASS OF CLEVELAND: My Lords, reverting to the question of prices, can the noble Lord tell us whether the prices which the Iron and Steel Corporation desired to apply were higher or lower than those generally applying in Europe?
LORD DRUMALBYN: My Lords, the Steel Corporation put forward its suggestions as to prices—the prices which it thought it could obtain—but the Government felt obliged to restrict that increase in prices for wider economic and national uses.
LORD DOUGLASS OF CLEVELAND: My Lords, if I may be allowed to say so, that does not answer the question. I wanted to know whether the British Steel Corporation wanted to charge higher prices than the normal prices current at the time in Europe.
LORD DRUMALBYN: My Lords, if I remember rightly, some of the prices were higher and some were lower. But what I
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have said I think is right: the Corporation suggested prices it thought it could get.
LORD DOUGLASS OF CLEVELAND: My Lords, may I ask the noble Lord to refresh his memory and let me have some more information when he has done so, because I am convinced that his memory is at fault on this occasion.
LORD DIAMOND: My Lords, may I ask the noble Lord to give us the information which so many of your Lordships are seeking and which he has not yet given? If it is available it may be easier for it to be given now than for it to be obtained by one of us putting down a Question to the Government. What we are all seeking to find out is, quite simply, how much has been transferred by Government action from the consumer to the taxpayer, and what is the justification for it.
LORD DRUMALBYN: My Lords, the amount by which the Steel Corporation asked to increase its prices was about 14 per cent. all round. It was allowed to increase them by 7 per cent. all round. I think I am right in saying that the difference represented at the time about £60 million, but at the present time, because of market factors, it is probably a good deal less.

INDUSTRIAL RELATIONS: CODE OF PRACTICE
4.35 p.m.
Debate resumed.
LORD BYERS: My Lords, in resuming the debate on the Code of Industrial Practice, I can assure the House that it is not my intention to take 48 minutes, as was taken by the noble Lord, Lord Diamond. I do not want your Lordships to feel that we have not a great deal which we would want to say on this particular code, but in deference to the many speakers who are to follow I will try to confine my remarks to a short time.
We on these Benches, as the Industrial Relations Bill has progressed through this House, have been impressed with it as a potential base upon which we can build an industrial relations system in this country; it is not the sterile measure

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which I expected, if I may say so, when it was first trailed by the Conservative Party before and during the last Election. There is a great deal wrong with it, but I believe it is a potential base, and we have always set great store by having a code of practice. We believe it to be a very important part of industrial relations. Therefore, we cannot conceal our disappointment at the flatulent and wishy-washy nature of the document that has been put before us. I can promise the Government that we will do all we can to strengthen it, because we feel a great opportunity has been missed to give some backbone to the Industrial Relations Bill by asserting in forthright terms what employers, trade unions and employees must do if good industrial relations are to be achieved.
Instead of this, we have been treated to a filleting operation. Rather than strengthening the Bill, this code weakens it in a number of respects. The best one can say at this stage—and I emphasise at this stage—is that I do not think it will do any harm, but it is difficult to see how this spineless language can do much good. As the noble Lord, Lord Diamond, said, it is a very old-fashioned document. One authority on this subject said to me: "It might well have been written by Whitley." That is no disparagement of Whitley, but it ignores all the work which has been done in the sociological field over the last ten, twenty or thirty years; and I think the phrase which the noble Lord, Lord Diamond, used, "grand paternalistic", has a lot to commend it. However, the code abounds with do gooding "phrases and weak phrases. The phrase," should take all reasonable steps ", et cetera, occurs a dozen times in the document. The terms "as appropriate" and "when possible" stamp the document with the hallmark of compromise and cowardice.
Much has been said of the analogy of the Highway Code. Just imagine if the Highway Code had been written in the same sort of language. Take section 42, a very important one, in the Highway Code. It says:
" When coming to a zebra crossing be ready to slow down or stop to let people cross. You must give way once they have stepped on to a crossing."
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No doubt about that. In the language of this code of practice, this provision would read:
" When coming to a zebra crossing you should take reasonable steps to try to slow down or where possible to stop to let people cross, and if possible you should give way once they have stepped on to the crossing."
Your Lordships can imagine the sort of chaos which would result if that were the language in which the Highway Code were to be written. Again, we have many statements of the obvious. It says in the code:
" Soundly based payment systems are essential to good relations between management and employees."
But of course they are. What we want to know is what are the rules for getting soundly based payment systems.
However, it is in the part dealing with works councils that we particularly feel that there is the worst sort of feebleness. I One has only to read this section. It starts off by saying that institutions or organisations of more than 250 employees should have works councils. We feel that this is the area in which the real development of industrial relations over this next decade should and could take place—in strong, representative works councils. This is certainly the Continental experience and particularly the German experience. The works council system, in our view, is at the heart of the matter, and this was recognised by Donovan when he wanted to get as close to the plant as he could. If it is to work and succeed it must become the forum where the inevitable conflicts are ironed out between management and employees, and where realistic procedures are established. In Germany this system is a success because the rights and obligations of workers are established and guaranteed by law. There is no question of "should have" or "where appropriate" or "if possible". The provision is there and it is mandatory.
Above all, works councils should in our view be entitled to basic information as of right, and not in the weak and circumscribed way envisaged in this code. Unless you can lay the information on the table of a works council you will never get the communication and intercommunication which is so vital if human relations are to be improved in industry. I am told that even the Weimar Republic

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gave legal rights to works councils; even the United States goes further than this code. I believe it is not enough to say that employees are entitled td the same information as shareholders: they can get that, anyway. There are many other things which they should know and are entitled to know if we are to get the industrial relations we want. Probably one of the tests is that all information, short of information the disclosure of which might affect share prices and lead to speculation, should be given and made available to works councils.
I believe one can get over the problem of giving information which is of a highly confidential nature by doing what they have found to be successful in some parts of Germany, where the works council elects three or four of its members to act as a confidential panel to whom the information can be disclosed, and one is never let down because they appreciate the confidentiality of it. They are given that information, they are consulted, and they can advise on the way in which mergers and takeover bids go forward. I believe that is the way we must develop. I can see the objection to giving highly confidential information to 25 to 40 people, but we ought to be in a position to-day where we can trust representatives of the workers and ask for their advice before major decisions are reached.
As I understand the position, the Commission on Industrial Relations will have a lot more to say about the disclosure of information. I believe this matter is something which the Commission should take into consideration and see whether it cannot go a great deal further than anything that is contained in the Bill at the moment. Having said all this, I want to make it clear that we prefer the code to no code at all, and in particular we welcome the provision which recommends the setting up of works councils on the basis contained in the code. But we want to make it clear that we shall press for much more strength in the code. We want to get rid of a lot of the feebleness in it, because we believe that, based on the works councils and really good industrial practice, it could have quite an effect on British industrial relations.
4.42 p.m.
LORD DAVIES OF LEEK: My Lords, I am grateful to the noble Lord, Lord
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Byers, for speaking briefly. I will take my cue from him and try not to speak for more than about five minutes so that other noble Lords may have the opportunity of making their points. Consequently, I will eliminate from my speech things which have already been said.
First, let me reiterate that I endorse entirely what the noble Lord, Lord Byers, said about works councils. There are other points that I would endorse about which my noble friend Lord Diamond spoke in depth. I hope that people throughout the country will obtain copies of this Document and will do exactly what they are asked to do on page 27: I will not read it as that would waste time, but I hope that national organisations and others will send in their proposals to the Industrial Relations Division or to the local representatives so that some improvements can be made and such improvements may then come from the grass roots.
On page 3 of the Document, in the Foreword, it says:
" Collective bargaining requires a reasonable and constructive approach by both sides "—
That is axiomatic. It then says:
" Both must be prepared to co-operate in working out solutions to their problems to make a real effort to understand each other's point of view and to abide by agreements which have been made."
It then says that the code must apply to establishments of all sizes. I should like to see, in connection with the modernisation of agriculture, and especially if we are going to rush into the Common Market, a realisation that modern agriculture is as mechanised—indeed in some cases more so—as small factories. Codes of practice are essential on farms today, with the massive, complicated machinery that is used in farming. A farmer is no longer just a milkman: he also has to be a mechanic, and as well as knowing the whole gamut of ancient crafts he has to keep abreast with modern industrialisation. Therefore, when this code is being written I hope that one or two countrymen with understanding of agriculture will be able to put forward their points of view.
It is a terrific strain on me not to say a great deal, but I am trying to discipline myself, so I hope noble Lords will bear with me. I will not say what I had in

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mind to say in criticism, but I think it is worth taking note of the Trades Union Congress. My source, as with most people, is this document on the facilities available for shop stewards. I will drop it now, to stop myself for the sin of expansive quotation, but I sincerely hope that note will be taken of that booklet, particularly when the Government are looking to the section on stewards. The facilities for training a modern shop steward form one of the key points. I am going to give the history of this, right back to the 1914–18 war, and here, sitting near me, is the noble Lord, Lord Shinwell, who knew all about the efforts of the Clyde engineers in that First World War when prices in one year jumped 25 per cent. while wages in that area rose by only about 5 per cent. The shop stewards movement grew, but the modern shop steward must he a scientific individual, and I hope that the Government will see their way to help the trade union movement. Many members of the public do not know of the marvellous weekend colleges and schools that have been established by the trade union movement, out of the trade union members' money, to train their shop stewards. I hope that more attention will be given to the training of shop stewards.
Finally, while praising the Foreword to this Document at least I will give some credit to the Government that they are willing to accept constructive criticism from various parts of the country, and I hope that the words of my noble friend Lord Diamond will be listened to when the day is done and we come to the end of this so-called tunnel through which we are working our way. When the Bill becomes an Act the code will be much more important than the Act. Now, my Lords, I will resist temptation and sit down.
4.48 p.m.
THE LORD BISHOP OF BLACKBURN: My Lords, I shall try to emulate the example of the noble Lord, Lord Byers, and the noble Lord, Lord Davies of Leek, in limiting my remarks. But first may I say how greatly I wish to welcome in general terms this Code of Industrial Relations Practice. I must admit that I have not yet had the time to study it in depth, but what I have read encourages me to believe that the Secretary of State
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is to be congratulated upon the production of a broadly based and comprehensive document for consultation. From it will emerge, we hope, an agreed statement from the Government, management and trade unions which will promote what we all look for, namely, better industrial relations, which are so essential to the solution of our current problems.
While I wish to refer to one or two points of detail, I should like first to make some general observations. Like the noble Lord, Lord Diamond, I particularly welcome the Foreword and I think we shall all wish to congratulate the Secretary of State on that admirable Foreword, with its clear definition of aim and the Government's policy to set standards, to give practical guidance on the conduct of industrial relations and to improve human relations. To set standards: I am sure that it is these which most need definition. One of the biggest questions with which we are confronted is that of authority and where power ultimately resides. I have just come across some words of a certain Mr. Clarke Kerr:
" The old struggle was seen by Marx as being over the ownership of property, since property determines power. The new struggle is directly over power almost regardless of the ownership of property: power to set the rules, to fix the rewards, influence the style of life. There are thousands of battles, not one; but they are over authority, not over ownership."
I think this is one of the great questions that has got to be faced in this whole question of the code.
Secondly, the aim to improve human relations. We should all be grateful, and I am sure your Lordships are grateful, that in the very first paragraph this is clearly enunciated and spelled out. It is human relations that matter. The boss is more than an executive; the men on the shop floor are more than hands: they are human beings who are brought into contact with one another—no, more than that, they are brought into partnership to produce goods and to serve the community. And it is here that we have to build up trust, even though there are points where we may disagree. I agree that, in the end, no law can produce trust. But what will produce trust is the desire to serve the community, and it is this thought of the community which I believe should be uppermost in our minds. It is very much in our minds

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at the moment as we think upon the European Community and the European Common Market. There is the community spirit to be built up in the life of industry and commerce, and this is precisely what this code is designed to do. There is the general community which industry exists to serve, but it is this community which pays the wages of those who are engaged in industry.
I am not at all sure that we have given sufficient thought to this whole idea of community. Perhaps I might remind your Lordships that if you break down the word to its two Latin constituents—"cum" and "munis"—a rough translation is. "ready to work together". It is that spirit which we need to secure in any code of practice, a readiness to work together. I grant that there are the inevitable two sides in industry, but they must learn to work together in community for the sake of the community. I believe that this is what this code sets out and, if I read it aright, this is the aim and motive that lies behind it. It is in this spirit that we in your Lordships' House should receive, comment upon, and where necessary improve, this Document.
I shall welcome, as the Secretary of State says, the fullest possible discussion and consultation. I hope that this is going to be very widespread. My only fear is that we shall not complete our consultations by the date in October that he has named. I confess that I am surprised by the attitude of some trade unionists who have adopted an almost indifferent and sometimes cynical attitude to this Document, although I should like to say how much we welcome the praise it has received from Members of your Lordships' House who speak on behalf of the trade unions. Surely they will indeed agree that we must have a code of practice. But the Document has been accused of paternalism. "Paternalism" has become a sort of dirty word. I wonder whether it is as bad as it is made out to be. I can understand its being used as regards university life, but surely here it is unfair to label almost the whole of this code as suffering from paternalism, because there is the attitude, which is right, that the boss, if you like, should take a fuller measure and a personal concern for those he employs. I am
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sorry the noble Lord, Lord Diamond, is not in his place, because in several instances, in one instance particularly, which he quoted on redundancy he missed the earlier sentence which says that there should be the fullest cooperation between management and employees. Do not let us toss this word "paternalism" about too much: because there is still something good in a paternalistic attitude.
The Document states an all-inclusive purpose that must commend itself surely to all parties; namely,
"…industrial relations—are best conducted by collective bargaining "—
the whole of the Industrial Relations Act rests upon this factor, and indeed this code of conduct—
" between employers and strong representative trade unions supported by orderly procedures—"
What more could we want than that! I tire sometimes of people who say that the concern of the Government is to weaken the trade unions. I personally believe that their intention is to strengthen the trade unions—representative trade unions—and that they shall follow orderly procedures. The references throughout this Document—I will not go through them—again and again come back to orderly agreed procedures. These references are almost too many to be counted.
Another matter emphasised throughout the document is training. All from management down to shop stewards must engage in training. This has been sadly neglected in many of our industries; there has not been enough training. The Document makes collective bargaining, as one understands it, the keystone on which sound industrial relations can be built. It states that collective bargaining requires a reasonable and constructive (not destructive) approach by both sides. There is still discernible in some quarters a failure to be constructive, the threat of a refusal to co-operate. I was very grieved to hear some of the things the noble Lord, Lord Diamond, said about a threat that there will he no co-operation. I have stated before and I venture to state again, that this failure to co-operate is destructive of progress. I believe it is utter foolishness to fail to make representations which it is the bounden duty of those concerned to make on behalf of

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their members, many of whom have elected them.
Perhaps I may be allowed to quote this sentence from the foreword:
"—both must be prepared to co-operate in working out solutions to their problems to make a real effort to understand each other's point of view…"—
Oh, that we could do this on either side!…
" and to abide by, agreements which have been made."
There is great wisdom in those words which I solemnly applaud. My reading of the Document convinces me that what is proposed is an expression of these aims.
There are points that need to be adjusted, maybe amended and expressed more adequately, and they will be as we have full consultation. I will deal with only one, in paragraph 16 on page 12, relating to the status of white collar workers in relation to other employees. As I understand it and see the situation in my own diocese, the difference in attitude shown by management to the white collar workers and other employees is a burning issue. But all this code of industrial practice can do is to make some rather vague reference to facilities being related to responsibilities. That is far from adequate, and I hope that this particular problem arising from the code will have fuller treatment.
I would plead with the utmost vigour that this code of practice should be taken with the greatest seriousness and should be fully and widely debated up and down the land. I believe that it has within it the germ, as it were, the consensus, of a most valuable and practical document, which obviously can be further improved. It is encouraging to know that, while the Government have sometimes taken up a very stubborn attitude about certain Amendments that were placed before them because this is a matter of law, we can look for a great deal more flexibility from the Secretary of State and his Department in relation to this code of conduct. It can produce a charter—in fact, I can say a Magna Charta—for those engaged in industry and commerce which, if it be accepted and implemented, can do much to establish industrial relations on a sound and secure basis such as can
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bring satisfaction, security and success, to employers and workers, and produce that profit for all that we seek.
I believe that primarily there are two things that matter, and of which we should never lose sight: first, people and human relations; secondly, that people must live at a decent standard of living. In order to live at that standard, productivity in goods must increase. That will only happen through co-operation between union and employer, and that is what the code of conduct aims to achieve.
5.2 p.m.
BARONESS GAITSKELL: My Lords, I wish I could go all the way with the optimism of the right reverend Prelate on this code, although I agree with him on one or two points that he made. To go from the tight legal maze of the Industrial Relations Bill to the industrial relations code is quite an experience. There is a dramatic drop in temperature both in drafting and in the psychological approach from the Bill to the code. In fact, after our experience of the Bill, the conciliatory tone of the code is really unexpected. Unlike the Bill, the code is written in such simple English that any child could understand it—and here and there it reads as if any child might have written it. But no matter: it has some very good things in it; and seeing that the Bill is about to become law one should, through the code, clutch at any straw which might improve the working of the Bill. I believe that the code will prove something of a lawyers' dilemma. I am not a lawyer, but I can see places where the code will trip up the Bill, and vice versa.
I can understand Mr. Vic Feather's impatience with the Consultative Document, but personally I should like to see diplomatic relations between the T.U.C. and the Government resumed, however much the T.U.C. looks back in anger at the Bill. How will Mr. Feather make his voice heard without consultation? I can also understand Mr. Feather's impatience with the beautiful sentiments in the code, and its ambitious claim to set standards and give practical guidance for good industrial relations. The sentiments are so far removed from the tough and intricate day-to-day practice of industrial relations at plant level. However, there are some proposals in the code

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which are good, some obvious and unexceptionable; but the code cannot claim to be practical, because the way of achieving improvement remains suspended.
From the trade union point of view, there are some glaring omissions of principle, which stem from the paternalistic attitude of the management. Here I take issue with the right reverend Prelate. I do not think, if I may say this—and I say it very humbly—that the Church can really pronounce on paternalism, because I think the Church believes in it. Therefore, if we are to pronounce on paternalism we must go to the trade unions and get their point of view. The Government, however, cannot get away from this paternalistic attitude. The code makes amends to Donovan by again placing on management the primary responsibility for good industrial relations. Some critics of the code have objected to the abstract word "management" throughout the code. It has a caste aura about it: management—the "untouchables". Surely it would be more correct to speak of "managers", particularly as they are often employees as well. There is also a welcome come-back of the shop steward, the prodigal son. The proposals for full recognition and status of his services are very welcome, although the facilities outlined for him are not so good as those set out in the T.U.C. document.
The code is full of good intentions, but I can see that there will be stormy weather between the Bill and the code when dealing with unfair industrial practices. Somehow, the code, with its emphasis on common sense, and the Bill, with its emphasis on the law, do not match up. I myself am very sceptical about common sense as an instrument to deal with complex human behaviour. It is a very superficial instrument. Among the recent recommendations are a few new good ideas, such as the one recommending the abolition of the class distinction between white collar and manual workers. This is a real advance, and I think that the right reverend Prelate underestimated it.
Overall, I agree with my noble friend Lord Diamond, that the Document still has an out-of-date flavour about it. Nowhere are the rights of trade unions spelled out or stressed. The code shrinks ultimately from the idea of a real partnership between employers and trade
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union employees. It urges involvement, it is true, for the workers; but it simply by-passes participation. The Government do not seem to realise that mutual responsibility is the key to good industrial relations and that this can never be achieved without workers' participation. Collective bargaining must be based on this, and this means collective bargaining between employers and strong trade union representatives on all aspects of employment, as well as on earnings. I agree with Mr. Feather that this is a glaring omission.
The trade unions still feel aggrieved, and are still smarting, about the Industrial Relations Bill, but it would have been more productive if Mr. Feather had collected a few smart lawyers, put the code side by side with the Bill, and shown which proposals cancel out, which can be improved, and which should be scrubbed out. This would lead not only to a compendium of common sense, but perhaps to a compendium of the snags. It is really not enough to say that the trade unions are not going to play. The Government have said that they welcome consultation and criticism. Why not take them up on that? Why not take them at their word? The industrial relations code has often been compared to the Highway Code. I myself think this is a pretty silly comparison, but because the code is full of good intentions—even if it is not a practical document—it is up to the T.U.C. to show the way ahead.
5.10 p.m.
THE EARL OF BALFOUR: My Lords, the Secretary of State for Employment, the right honourable Robert Carr, my noble friend Lord Drumalbyn and their assistants should be congratulated on the care and thought that has gone into preparing the code of industrial relations practice. The foreword, to which many of your Lordships have referred, indicates immediately that the Government realise the importance of good unions and good management and shows that they are "with it", to use the modern expression. The code begins by describing responsibilities, and in the first section naturally places the main responsibility on management. It next describes the unions' responsibility—and I refer in particular to paragraphs 9,c and 11,c—to encourage officials and members to take all reasonable steps to observe agreements, and to

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encourage their members to take an interest in activities not only at union meetings but also at the firms in which they work. There is no future in enforcing wage claims which result in a firm's going out of business. The code then goes on, in paragraph 15, to describe the responsibility of the individual employee. Although paragraph 17 does not strictly refer to ordinary employees, I feel it will be encouraging if all employees who belong to a profession with a code of conduct have an obligation to comply with that code. They all have a duty and I hope that they will all take an interest. In other words, it should be the object of all concerned to see that when a product is marketed it is never found faulty. This will get Britain a good name in any market in the world and people will invest their money in the pound sterling.
I come next to Section B, dealing with employment policies. Management and, I believe, Government are responsible for developing soundly based payment systems, which are essential to good industrial relations. That is the principle, but care should be taken by all concerned not to commit the mathematical crime of comparing percentages. I shall give your Lordships one example. Let us suppose that a fitter earns £10, and an engineer on the same enterprise earns £20. The trade unions negotiate a 10 per cent. rise in wages, which means that the fitter will be getting £11 and the engineer will be getting £22. Here is the danger. The pay differential, which so often breeds discontent, has widened, and instead of there being £10 difference in that case there is now £11. Planning and use of manpower is dealt with in paragraph 2 of Section B. Unions, as well as employers, must be aware that the sound planning and efficient use of manpower are important for the success of an undertaking. In this highly industrialised country, managements and unions often forget the importance of maintaining a system by which workers are transferred from one job to another within an undertaking—and I feel that the word "undertaking" should be looked upon from a pretty broadminded point of view. If an industry is not developing, then time is leaving it behind. Here, again, the code has laid down the principles and I shall
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illustrate their importance in three examples.
First, let me take the trade of stonemasonry which existed in every city in Britain a hundred years ago. To-day, I know of only one lodge of stonemasons in Scotland, and that is in Aberdeen, where a man still serves a five-year apprenticeship. The stonemason has disappeared from most building and his place has been taken by three new trades—the bricklayer, the plumber and the electrician. Secondly, to follow what the noble Lord, Lord Davies of Leek, said, there is the case of agriculture. On a 500-acre farm in 1930, four men and four to five women would have been employed. To-day, there may be only two men, but connected with agriculture there are the agricultural engineer, the tractor maker, the shed maker, the combine harvester maker, the fertiliser firms, et cetera; and there are more people connected with agriculture to-day than there were in 1930.
Thirdly, there is the case of shipbuilding. Before the war there were five men in a gang of riveters—two hammering, one holding the rivet, one tending the fire and one thrower; and to be a skilled riveter took five years or more. During the war, girls were brought into the industry, but although a girl can weld she cannot rivet. To-day, there is only one welder doing the job of the gang of riveters. To-day, ships are larger and the plates are larger. There is the firm making the welding rods and the welding machinery, and the ships' plates have to be cut more skilfully. Therefore, just as many men are employed. But the son of the riveter may now be a welder, the son of the carpenter may be a shipwright, the son of the fitter may be an engineer and the son of the rigger may be a pipe-welder. This is progress—progress which leads to greater efficiency.
This illustrates the importance of training. Training is dealt with on page 11 of the code, and status and security of employees is dealt with on page 12. As I have tried to illustrate, trades and skills can become redundant. The Department of Employment has a wonderful system, through the Labour Exchanges, of training disabled people to find new jobs in new fields. If only management and unions would recognise the importance of providing new jobs in completely new

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fields for men of 45 who have become redundant, a great step forward could be achieved. I fully realise that this cannot be done immediately, but it can be done. Rather than receive redundancy pay and have no prospects, a redundant shipyard worker could with training become a pylon erector, a redundant coal miner could become a bricklayer and a naval draughtsman could become an architect. Union leaders should never be disheartened if men leave their union, provided that they go to another union. Every industry in this competitive world must constantly develop and improve. This will often mean creating redundancies in one field, although there may be a shortage of manpower in another.
Certainly, industry needs money to develop, and that is the main reason why corporation tax was reduced. Money is needed to recruit, train and retrain staff in new and improved methods of production. It is here, if the code is observed and co-operation exists, that much can be done. As the code states under "Collective Bargaining" in Section D on page 17, paragraph 5, the need is "to safeguard the interests of minorities". My Lords, this is important, because the minority of to-day may become the majority of to-morrow. It is to be hoped that in future this code, as in paragraph 14b, on page 19, will be noted by officials with company time (to use the expression) in which to hold their most important meetings, and will encourage employees to join and play an active part in the work of their union. Your Lordships should feel confident that if the Government, management and unions follow the principles laid down in this code, the depression of the 1930s will never happen again and the ordinary member of a trade union will cease to be so apathetic towards his employer and his union. This code states a principle by which men and women should be proud of their work, proud of their union and proud to work with their employer.
5.22 p.m.
LORD POPPLEWELL: My Lords, all those noble Lords who have spoken so far have paid tribute to the essential characteristics of this code, and in my opinion those tributes have been well justified, because they express the desire of noble Lords to get on to some kind of plane on which both sides of industry may join together to make industry
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more efficient and to increase productivity. I think these are very interesting observations. It is a very interesting foreword that has been written by the Secretary of State. Most noble Lords who have spoken have subscribed to that, as I do myself; and I am sure industry subscribes to it, too. The difficulty that I find in connection with this code is the strong tone of paternalism which flows through it. The right reverend Prelate the Bishop of Blackburn welcomed this type of thing. Theoretically, I can understand a welcome being given to paternalism, but in practice I think it destroys much of what is in the code itself. Trade union leaders, workers and such like do not seek paternalism from anyone. They are seeking collective bargaining arrangements, and they are prepared to stand equal and discuss all matters affecting the industry in which most of them are proud to be employed.
This, in effect, means that trade unions and collective organisations of workers must be brought more into decision-making. Various schemes are outlined in the code to meet this requirement, which is necessary in order to make effective the decisions that are being taken. To-day, with the higher standard of education of our people, more and more requests are being made that as they are very influential partners in any job that they are undertaking they should be informed and allowed to take part in decision-making. Many enlightened managements are doing this now, and are proving the usefulness of it. But there are some managements who stick firm to their idea that they are the executive, that they are the managers and that the workers must obey the law that they have laid down. To-day, manpower cannot be dealt with like that. That type of attitude quickly arouses anger or suspicion. Enlightened management, particularly of our nationalised industries as a whole, have realised this and are working on it. Manpower is something that has been negelected through the ages. That is why the trade union movement has come into existence and is now occupying a powerful position in our way of life.
With that background, I would say that much of this code could have been improved. Seeing that it is a consultative document, I sincerely hope that the Government will now discuss it with those

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who are prepared to discuss it with them, and, arising from that discussion, I am sure it will be brought home that more facilities ought to be provided in industry for the shop steward and for the union official. Manpower must be considered from this point of view. If we take the evidence that was given to the Donovan Commission we find it was stated that a shop steward is normally responsible for about 60 workers or so. On the basis of a 40-hour week for each of the 60 employees for which the shop steward is responsible, the evidence given before the Commission was that the time of that shop steward would occupy only one-sixth of 1 per cent. of the man-hours of those for whom he was responsible. That is something of which more note should be taken.
It is interesting that all through this document the Government seem to speak about collective bargaining, but nowhere in the document, so far as I can see, is encouragement given for trade unions effectively to organise a particular shop, factory or whatever it may be. It seems to presuppose that the trade unions must get organised themselves first and the workers within the factory, before any of this code can become operative. Here is a genuine weakness, and I sincerely hope that during the discussions which will take place this may be pinpointed and highlighted, and that something will be written into the code that may bring it about.
The code as it is could be made very welcome: what makes it not acceptable are the suspicions about the awful Bill with which it is connected. If the Bill could be quietly burnt and we could hear nothing more about it, and if we could work on the lines of this code, it would be all right. We should then have free trade unions at work, as distinct from there being, when the Bill becomes operative, only licensed trade unions. That indeed is a blow to our freedom. Instead of workers organising themselves into a trade union, they are not acknowledged as trade unionists unless they apply for a State licence. I think this deplorable and I sincerely hope that it will be changed.
The noble Lord, Lord Drumalbyn, said that the best results were achieved
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by strong collective bargaining. I would ask the noble Lord to discuss with his colleagues in the Government the need to improve the code in order to encourage workers in industry to join a trade union and so secure collective arrangements. Only by the provision of responsible trade union arrangements shall we manage to avoid the kind of unofficial disputes which have troubled us in the past. The noble Lord, Lord Drumalbyn, said that the code contained revolutionary proposals, and so it does. We should not destroy those proposals by the introduction of the provisions in the Bill; let us scrap the Bill and have the code.
I was very proud when at one period in my Parliamentary career I was known by workers in Newcastle as their "shop steward in Parliament." I considered that a tribute. The work of shop stewards is not being done in a constructive fashion; there are no provisions for shop stewards to do their work efficiently. They should be provided by management with accommodation, a telephone and other facilities; but no management provides these things. If such facilities were provided an atmosphere would be created in which a shop steward would be on top of his job and able to resolve difficulties. Therefore any expense involved would be worth while. If such conditions were created for shop stewards it might influence their conduct; they might not take the law into their own hands, as many do from time to time, with consequent difficult circumstances resulting.
In giving a general welcome to the code I would say that it contains many good features which ought to be expanded. I hope that it may prove possible for the trade union movement to co-operate with the Government. But the trade union movement so detests the Industrial Relations Bill, and the difficulties which its implementation would impose on trade unions, that trade unionists are not on speaking terms with the Government. The T.U.C. has decreed that no trade unionist should take part in discussions on the Bill. I wish that the Government had accepted the offer made originally by the T.U.C. to enter into discussions to see whether some tripartite agreement between employer, employee and the Government might be made to ease the difficulties resulting from unofficial strikes. Such discussions

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must be initiated, and I hope the Government will make endeavours in that direction rather than seek dates for the application of various provisions in the Bill.
5.35 p.m.
LORD BROWN: My Lords, I support the idea of having a code; indeed, its introduction has enormous potentialities for good. I thought that the noble Lord, Lord Byers, treated the code pretty roughly, but in general he was fair. I can say in different words what he said. The Bill is sociologically imprecise; it deals with a series of institutions but does not define them accurately, and so I do not think it brings the pressure to bear on management or trade unions that it would were it more precise. I do not propose to comment on the good parts of the code—and there are good parts—but rather shall confine my remarks to criticisms, which I hope will be accepted as constructive, about the parts which I think need alteration.
Section A,4,a emphasises the importance of the responsibility for each group of workers being clearly defined. At A,7 it says that the supervisor is a key member of management. At A,15 it states:
"The basic relationship between employer and employee is defined in the individual contract of employment."
My Lords, I submit with respect that, so long as the employee does not move into another role, either as a trade union member or a shop steward, the basic relationship between employer and employee is that of manager to subordinate. There is no hope of this being defined in the contract of employment as is called for in A,15, unless the code sets out a definition of the term "manager".
My Lords, this has been lacking from industry for years. In a company employing 1,000 people there are 999 managerial-subordinate relationships and this, surely, is the key relationship in employment. But the code shrinks from a definition. Nowhere is a definition more necessary than on the shop floor. I once calculated that there should be more than half a million foremen managers in British industry. But what do we find? We find a nightmare confusion: charge hands, leading hands, supervisors, assistant foremen, foremen and the rest;
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shadow managers, half-managers and so on. In the majority of companies their degree of authority is unformulated. The policies which they are supposed to implement are unwritten, and inconsistent from one section to another. The result is a lack of authority, confusion, indiscipline, unfairness and inconsistency, and bitterness on the part of the subordinates. There ought to be a clear right of access for every subordinate to his manager. The manager should be the man who allocates the work, and knows about the performance of his subordinates, and is responsible for assessing it.
This shop floor confusion of accountability usually means that the supervisor who knows about an individual employee has no authority to make vital decisions affecting the employee. Higher up the management hierarchy are managers to whom the employee does not have access, and it is these higher managers who make the vital decisions about individual employees, without personal knowledge of them, or knowledge of their past careers or current work performance. This is a recipe for real trouble. Your Lordships may think that I am exaggerating, but I have visited many hundreds of factories in my time, and I assure you that I am not exaggerating.
I would define a manager, briefly, as one who minimally has the following degrees of authority: first, a veto authority on appointments to roles immediately subordinate to him; secondly, authority to decide what work a subordinate shall perform and to assess the performance of that work; and, thirdly, authority to insist (subject to warning and to right of appeal to higher managers) that an immediate subordinate should be removed from that role if the management thinks that he cannot do the work allocated to him. This does not mean that the manager has the right to dismiss an employee from the firm, but that he has the right to dismiss him from a particular role. In Committee, I drew attention to the fact that the Government have failed to distinguish between dismissal from a specific role, with the possibility of transfer to another role, and dismissal from the company: dismissal may mean either of those two things. That is a grave defect which I still hope will receive attention. The definition I have given is strictly defensible on the grounds

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of logic. I shall not defend it now: I have done so often before, and I have done it in writing.
Using that definition, by asking three questions one can discover rapidly whether a person is or is not a manager. I doubt whether more than 20 per cent. of British supervisors and foremen are managers in that sense. If they are not, someone higher in the hierarchy carries managerial authority, but employees do not have the right of access to those higher in the hierarchy. The code should seek to put that matter right. I suggest that the code should set out a definition of "manager". It should give every employee the right of free access to his manager so defined and lay on management the duty of agreeing with representatives policies about conditions of work and pay. It should publish those agreed policies and teach new employees and all managers what their true meaning is. It should make clear the authority which managers derive from the fact that those policies are agreed by representatives. It should lay on management of companies accountability for ensuring that all managerial decisions about employees are kept within the confines of agreed policies. It should provide an agreed appeals mechanism, so that any employee who believes that a manager has breached those principles can argue his case before ever-ascending higher levels of management.
Finally, the code should make clear that any management which fails to move rapidly in this direction is failing to conform to the code. The code as it stands makes little contribution towards clearing up the disastrous shop floor management situation which prevails in most companies. A great opportunity will be missed if it is not drastically improved in that respect. Those who wrote the code have failed to realise that just as the source of authority of the executive arm of Government derives from Parliamentary law, so the only source of authority by managers vis-à-vis their subordinates derives from the policies agreed between management and representatives. We are in the presence of that situation, and the code should say so quite clearly. I know from long experience that if the ideas I have put forward are followed, not only will employees achieve a deeper sense of participation, which is the wish of many managements today, but management will
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achieve greater authority than they have had heretofor.
I now turn to Section C, dealing with communication and consultation, and Section D, which deals with collective bargaining. These words "communication and consultation" have been overplayed. They have dogged discussions about industrial relations for more than thirty years. They serve to take the emphasis off the crux of the problem, which is the setting up of institutions within which managerial/representative negotiations can take place concerning agreement about all matters of concern to employees. I prefer to call these quasi-legislative institutions, because that is what they are. This brings them within the ambit of language which is familiar to our citizens as citizens. Properly used, they set up the framework of internal company laws within which the company is managed. It is not good enough to have negotiating procedures brought into play only when trouble or pay claims arise or when redundancy has to be declared. There must be these quasi-institutions within industry which meet regularly and devote time to agreement on procedures and policies governing matters such as pay, promotion, redundancy, sick pay, pensions, holidays, night shifts, shift working, disciplinary measures, manning, work methods and so on.
Section C,7 of the code says:
" Any establishment with more than 250 employees should have a consultative committee "—
I emphasise the word "committee"—
"representing all sections of the establishment."
We all know what a committee is in this House. It is a body which carries corporate responsibility, and in the last analysis it makes decisions by majority vote. Is it seriously contended, as the code implies, that the consultative committee should decide matters by majority vote? If not, why is the word "committee" used? If this is to be the case, each such committee will perforce be composed of equal numbers of management and representatives of employees. That is a recipe for deadlock, creating two sides, one for and one against every proposal. There is ample history of committees set up in industry like that in the past. They have not succeeded in working out agreed policies. If in such

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a situation one representative voted with management to produce a majority for some proposal, is it seriously suggested that the others would accept a decision arrived at in that way? Of course not. This is a matter for negotiation, not for committee work.
I have explored the use of the term "consultative committee" at some length to illustrate the naïveté of the proposals not only about consultation but also about negotiation as outlined in Section D of the Document. Whenever representatives of different departments, different strata of employees or different trade unions negotiate with management, either agreement is unanimous or there is no agreement. If one trade union disagrees and management attempts to force the issue, the establishment will have a strike on its hands. Note that the settlement of that strike will have to be based on unanimous agreement. Why not come to it before the strike, instead of after?
I am not aiming this shaft particularly at the present Government. Why is it that Governments in general which are so familiar with the need for unanimous agreement when representatives of different nations meet at The Hague, for example, to discuss all the multifarious agreements which affect safety at sea, or the International Air Traffic Association, or the General Agreement on Tariffs and Trade at Geneva, or within the Common Market, continue to be blind to the operative basis of agreement arrived at between management and industry? We need explicit quasi-legislative institutions in industry based on the unanimous votting principle. In any case, they exist hidden in industry. To put it in another way, we need institutions which recognise that each representative of different associations and managers concerned, whether we like it or not, has the right of veto. We are not advocating something new. These things exist and should be explicitly recognised in the code.
Paragraphs 2 and 3 of Section D are concerned with bargaining units. Paragraph 3 implies that management will bargain separately with all sorts of different groups within the same establishment according to criteria set out in subparagraphs a to f of the code concerning training qualifications, location of work, hours of work, and the subject matter of the bargain and differing bargaining units
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should be dealt with according to which subject is under discussion. These paragraphs ignore the whole problem of differentials. Every experienced manager knows that if he has to argue separately with different groups in the same area he is in serious trouble. A bargain with one group disturbs the differential relationship of that group with another. Change in one group is likely to lead to an endless series of negotiations with each other group in turn until each group of representatives feels that the disturbed portion of differentials initiated by the first group has been re-established in accordance with the status quo. That is what happens in industry. This fractionation of bargaining units is stimulated directly by Clause 49, the renumbered clause of the Industrial Relations Bill on which the Government have proved so unyielding. I think the Government have failed to appreciate the necessity of having bargaining units embracing all employees' representatives who work on the same geographical site. Both the Bill and the code encourage fractionation of bargaining units, which will place the trade unions and employers, I think, in grave difficulties. If the Bill cannot be changed, then at least the code should be amended to show more realism in this respect.
Section F of the code sets out guide lines for the establishment of what are called "Individual grievance procedures". I am a little disgusted because the words "grievance procedures" still appear. They have a connotation of triviality. I think they should be called "appeal procedures." I made this point during the Committee stage of the Bill and I hope that the name will be changed.
Section F, paragraph 2, envisages appeals becoming transformed into the subject of negotiation apparently at any stage of the appeal procedure. This is sufficient to destroy the integrity of the appeal procedures themselves, if it is not changed. It is essential, in my view, that appeals should be heard by successively higher levels of management up to the chief executive of a factory or of a geographical area in which the appeal takes place. Then, and only then, should the issues become the subject of negotiation, if it is necessary, and if there is sufficient feeling of residual injustice among representatives to cause them to decide that

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further discussions with the management are required.
Section F, 3, b, would allow appeals to go to the chief executive but only "where practicable." But this is not good enough. Every chief executive in a factory should be prepared to hear appeals about felt injustice where they cannot be settled by his subordinate managers. In my view, it is essential that chief executives should personally explore an issue before it becomes the subject of negotiation with shop stewards or union officials. I am quite sure that well-constructed and well understood and explained appeal procedures could eliminate many of the unofficial strikes which have caused so much trouble in the past. Though I welcome the fact that the code lays a great deal of emphasis on appeal procedures, I think that in some respects it is still technically imprecise and needs amendment.
There are many other detailed points in this code which need amendment, but I have already taken up too much of your Lordships' time. I would end by saying that I am very much in favour of the code. Some of its aspects are excellent. But its real value will be to emphasise the need for the existence of a range of explicit institutions in industry, so that everybody knows where they stand. We can be polite and discuss controversial things in this House, because this is a great and time-honoured institution with rules and we know what our relationships are to each other. This is very far from being the case in industry. It is a primitive place. It is unsophisticated. It is using institutions whose shape it does not even know. There is a lack of definition. Institutions properly thought out and precisely formulated can have enormous effect on human behaviour. I hope that the code can be looked at in this way.
LORD HANKEY: My Lords, before the noble Lord sits down after his fascinating and most interesting and constructive speech, may I ask him to elaborate a little his thoughts about the institution which could be used for consultative purposes? He said that he favoured a process of continual contact, with which I could not agree more, but he said that he did not like the idea of
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the consultative committee. What institution does he feel could fill the role? He thought there could be one, and if he could explain what sort of institution he had in mind I believe that his speech would be even more interesting than it was.
LORD BROWN: My Lords, if the House will spare me another minute or two, I will describe something of which I have great personal experience. In the company I used to manage in 1941, we set up an institution which consisted of representatives of every sort of employee and a manager supported by others who could give him advice in the course of proceedings. That institution had the singular characteristic that it could not come to a conclusion without the agreement of the managerial representatives on the council and all and every representative of the workers. It required a unanimous vote.
That institution has existed now for 30 years. It has never failed to agree on important things. It is regarded by the shop stewards—and some of them are very militant—as being an enormously important institution, and throughout that period it has produced a wide range of agreed internal laws for the company, which are looked up to and valued and obeyed by managers, employees and shop stewards alike. I have written at great length on these matters and published books, which I am glad to say sell in large quantities. I am sorry that I have advertised myself in this way, but I have been trying to get the idea of this sort of institution into the minds of industrial people for 25 years and I seize this opportunity. I am very grateful to the noble Lord for putting that question to me.
LORD SHINWELL: My Lords, so much harmony has prevailed in your Lordships' House that only with extreme reluctance and diffidence do I venture to offer a few observations. The Government were responsible for an egregious blunder—am I out of order?
LORD DRUMALBYN: My Lords, we have a list, and the next speaker on the list is the noble Lord, Lord Platt.
LORD SHINWELL: My Lords, I apologise and do not propose to proceed. The Government Chief Whip said earlier on that it was possible for a Member

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who had not put his name down to intervene. I took no opportunity of intervening before now. Besides, I was not aware that on a debate on the code of practice it was essential to put one's name on the list.
LORD DRUMALBYN: My Lords, may I say to the noble Lord that there are another three speakers who are down and one who added his name to the list. The gap referred to by my noble friend is the gap before the winding-up speeches, and if the noble Lord wishes to come in there, I am sure that we shall all be delighted.
5.59 p.m.
LORD PLATT: My Lords, if the noble Lord, Lord Shinwell, can say something particularly relevant to what the noble Lord, Lord Brown, has just said, I would gladly give way, but unless that is the case, I think that I should take my place. The noble Lord, Lord Diamond, in his opening speech from the Opposition Front Bench, said that he could not speak too highly of the Foreword to the code, which of course was written by the Secretary of State and which states objectives with which we are all agreed, about improving "human relations in all types of employment." But I am bound to say that with the exception of two somewhat fragmentary and (I have some reason to believe) last-minute acknowledgements to the professional people in the community, not in industry, the Document is about as relevant to their professions as is the Bill itself. How you improve industrial relations "in all types of employment" when one important type of employment is almost completely ignored is beyond my comprehension. At best, it can hardly be considered a really good start.
Until now professional people have been held in some esteem. They have had a certain professional pride, and have been accorded certain privileges, not because of some arbitrary assessment of their value to the community—though I see no reason why that should not be taken into account—but because of the degree of learning and training which they require, the codes of ethics which govern their behaviour, because they make decisions, they are consulted, they carry a load of responsibility not usually required of workers in industry, and they owe that responsibility not solely to an employer, but to their clients and patients.
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In the Bill it is made clear that the few concessions now made to the professions are merely in respect of their being in a minority, and not because of their particular work or value. The code goes one minute step in the better direction, in that one of its two brief references to the professions is actually an acknowledgement of the code of practice of the professions. For this, we in the professions, hat (or should I say cap?) in hand, are duly grateful. Why do the Government choose to ignore the professions in this way? It is quite clear that they are terrified of incurring the wrath of the unions. Some words which have been used in discussions on the subject make this plain. I should like to quote from a document which says:
" Even if a concession were limited in its effect to professional workers, however these may be identified "—
and I admit the difficulties there—
" there would still be the danger of excessive fragmentation, and additionally this would of course tend to be regarded as a special privilege for a particular class of persons which would be sharply attacked and cause much resentment."
I do not believe it. I do not believe that my trade union friends—and I hope that I have many—want their doctors, lawyers, professors, professional engineers and the architects to be forced into a mould that was not made for them and into which they do not fit. I think this is the first Government who are afraid of making any distinction between doctors and dustmen. The fact that there are a few outstanding dustmen of great merit and a few doctors who are rogues is no answer to the general case.
That being said, I should like briefly to allude to the code itself, though I have little to say about it because it is almost entirely irrelevant. I have said something about the Foreword. The first part, about management, is wholly applied to industrial practice; and the next part, about the trade unions, is again wholly concerned with industrial practice. There is in fact a footnote which defines an "establishment" as
" an individual factory, plant, office, shop, et cetera in which employees work ".
This again is not very relevant, at any rate to my profession.
On page 9, paragraph 17 is the one to which I have alluded, and for which

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I am grateful. I should like to say, because of this paragraph, that I have absolutely no quarrel with what I know the noble Lord, Lord Drumalbyn, has tried to do to acknowledge that the professional people have a particular case to make, which is not very clearly provided for in the Bill. What I would say about paragraph 17 is that it ought to be in the Bill, and not in the code. It says:
" An employee who belongs to a profession with a recognised code of conduct has an obligation to comply with that code. He should not be called upon by his employer or by any trade union of which he is a member to take any action which would be contrary to it."
Pages 10 to 16 are irrelevant for my purpose. On page 17 we have the other mention of the professions as a minority group. Pages 18 to 19 are all about trade, industry, shop floors, shop stewards and so on. On page 20 there are some minor points which with difficulty might be applied to the professions, but I will not delay your Lordships by dealing with those. On page 21 there is Section 25d, about conciliation and arbitration. Paragraph 26 says:
" Arbitration can be used to settle all types of dispute if the parties concerned agree that it should."
I hope that the Government will not mind my reminding them—though it did not particularly apply to this Government—that in the medical profession there is a kind of permanent body, the Review Body, which arbitrates on earnings for doctors and dentists. However, its findings are not necessarily accepted by the Government if they are inconvenient to the Government's purpose. Paragraphs 22 to 27, which is the end of the Document, seem to me to be irrelevant to the professions.
In his opening address, the noble Lord, Lord Drumalbyn, said that the code of practice might be different had it been written by the T.U.C. or the C.B.I. It might also be different had it been written by the medical profession or by the Royal Society. The noble Lord, Lord Diamond, criticised the code for being paternalistic and for failing to emphasise the importance of participation. I think we cannot expect the professions to welcome a Document which has those two defects.
6.8 p.m.
LORD DOUGLASS OF CLEVELAND: My Lords, I wish I could share the respect that has been paid to the foreword by a number of my noble friends to-day. The foreword states, as has been said more than once, that the Government want strong and representative trade unions. What in the history of this Government would justify that particular statement? What in the history of most industrialists would justify that statement? In all my experience, I have had practically no help from employers, nor did I want it. If a trade union cannot organise itself without the help of the employers, it will not do much good for the workers. I do not want this help from the Government; I do not want help from the employers. This foreword looks to me very much like the boy who prayed to the good Lord: "Please make me good, but not to-day ". When one reads the whole of the Document following it, it is merely repetition, delving into the archives of the National Joint Advisory Council on Industry, on which I sat with so many noble Lords opposite for years. We churned out the shibboleths by the yard, and at the end of the day the Labour Government said: "This is not the machine which is going to be effective in industrial relations". I think there was some justification for that. It had been a machine for providing argument, debate and advice. But the Labour Government felt that we now ought to go further, and they supplanted that body by the National Economic Development Council.
The Document goes on to talk about consultations. Has this Document been before the National Economic Development Council? Has there been consultation with the employers and with the trade unions in the machine set up specifically for this purpose, right at the top representing all sections of industry? No, no consultation at all. Has there been consultation with the T.U.C. about it? No. The Government have the effrontery to go on in the Document to talk about consultation at all levels when they neglect consultation at the very level at which it should have started. The Government's intention is to emasculate the trade unions. Let us have no illusions about that. In my own industry, where we had strong trade unionism and

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good relations with the employers, I never knew the employers to want a strong trade union. The trade union was going to interfere with what they wanted to do. That is its purpose. There is no point in a trade union unless it interferes with what the employer wants to do. It cannot operate unless it interferes. It has a different opinion from the employers—a different opinion as to how money should be shared out, a different opinion as to how the industry should be run.
In one place the Document says quite pointedly that after the rather honeyed foreword, the ultimate size of the manpower shall be decided by the management. It is 40 years since, as a callow youth, I disabused a management of any opinion like that. Those are not the rights of man; those are the rights of property—that "because I own the property I should tell the men what to do". Is this how we are to get good relations in industry? These honeyed words get us no further with our industrial relations problem. Trade unions have to fight the same people as the management have to fight—those who would disrupt industry. The only way they can fight those who would disrupt industry is to know what the management is going to do and intend to do, and to criticise where it is necessary and to come to some agreement. If there is no agreement at the end of the day, there is no point in consultation. You may well say that you cannot get agreement. This is probably true. I, as a representative of the General Council, have many times met representatives of a Tory Government, Cabinet Ministers, the Minister of Labour, and we never got agreement, for at the end of the day the Minister said, "Certain things have to happen because we are the Government "—not "because we are the management" but "because we are the Government". Many were the fights we had with the late lamented fain Macleod when he was Minister of Labour; far into the night we argued. But he was a man who would see our point of view. He never said, "I want strong trade unions", but "When you have strong trade unions I want to talk to you". That we had differences of opinion made no difference to the fact that problems were discussed, and many of them settled. They were settled because we had a sincere man speaking to the trade unions.
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If the trade unions to-day have been difficult in any way it is because of insincerity which is creeping into negotiations. I am not by any means claiming that the trade unions are perfect. I have good reasons to know that they are not perfect—I have had to fight the imperfections for a long time. I remember the present Minister of Employment—I think my memory is right in saying this—coming back from a trip to Italy and eulogising their works councils: "Here you have a body at the top, elected by the workers, meeting the management, thrashing out agreements—not necessarily run by trade unionists but representative of the workers; and these works councils are a good thing".
In this month's Economist you find the result of that set-up; and I make bold to say that in this House I forecast it some time ago. Anarchists are now working with abandon in Italy, and the Economist is saying that the management are now looking for co-operation with the trade unions in order to defeat the anarchists because the trade unions are responsible. There are three sorts of trade unions in Italy: the democratic trade union similar to the unions we have in this country; the Christian trade union which is in the main Roman Catholic, and the Communist union, but the Communist union has become respectable in the light of the anarchy which is taking place in Italy at the present time. The Government are looking to the trade unions there to help them.
Just as it has happened in Italy, so it will happen here if the trade unions are emasculated and the power that they have at the present time is taken away. I said in this House when we were dealing with the closed shop question, that it was immaterial to me whether it was decided that we should have a closed shop because the trade unions would find a way of obtaining it, and that it would be the dirty way they would find. In this Bill the trade union is like a hare that is being coursed by the Government; when driven to the hedge it will go through the hole that is available to it. If you close up the holes which are honourable it will find dishonourable ones. That happened in Italy, and it will happen in this country if the Bill goes forward as it is at the present time and if the Government do not find a

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better way of dealing with industrial relations.
I have looked at some of the clauses. In Section A, paragraph 6,c, says that where trade unions are recognised—and this point has been made by previous speakers—the employer will encourage workers to join a trade union. I put this question to noble Lords opposite: how will you encourage them? In the past they have been encouraged in this way. Every national agreement we have made with the trade unions has been applied to the non-unionist. He has got holidays with pay and redundancy protection. Legislation was brought in to give him rights under redundancy. He has the advantage of all sorts of national agreements; locally in the branch, where piecework benefits have been negotiated, he has the benefit without contributing "a sausage" towards the agreement.
Is this the way it is intended to encourage men to join the unions? If it is not, you are bound in honour to tell us this afternoon what you are going to do to encourage trade unionism where there are weak trade unions. Indeed, if you are going to give encouragement where there is weak trade unionism, or where there is strong trade unionism, you are bound to give encouragement where there is no trade unionism at all. There is no sense, no morality in the argument. I want to know how the Government are going to help us to organise trade unionism; how the employers are going to do that which is in this Document. The Government are making the people sceptical—sceptical about strikes, sceptical about agreements, sceptical about trade union officials. Their lack of sincerity is permeating all sections in this country, and unless we get back to something more sincere the various ideas put forward today will come to nothing.
Why is there not a lead given in this Document? Why does not somebody put a heading about the sanctity of agreements? Go to the T.U.C. and ask, "Do you support broken agreements?" The Government have their ideas on supporting this Document by legal means. The unions will find a way round those legal means. Here the Government have to cater for the trade unions. In many cases—and too often it has been stated—the power of the unions now lies with
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the shop stewards. So it does, and so it ought to do. They are the people who are making agreements on the shop floor. The shop stewards have a responsibility to their executive councils, and the sooner the Government get working on that the better. No trade union will be able to deny its responsibility in that respect, and there will have to be consultation. It is a fit subject for the National Economic Development Council. Let us find out what is happening.
Another lesson we are learning from Italy at the present time is that the men are getting tired of going on strike at the behest of the anarchists. That is why the employers should work with the unions. In recent strikes 80 per cent. of the men walked past the picket lines because they were sick, sore and tired of those irresponsible anarchists who were running the industrial side of the country. The trade unions are right in considering this matter at the present time, because unless they do so the trade unions themselves are going to be weak. If your Lordships think that statement out, contradictory as it seems, you will find that there is something in it. Why did two big unions, one of which was the Transport and General Workers' Union, go down to Ford's and make an agreement above their shop stewards recently? Is there a trace of the Italian history catching up with us in this country? Those two representatives, important and militant as they are, went down to Ford's and told Ford's that they would make an agreement above the shop stewards. Do you not think that the trade unions want to get into line so that they can have a considered, correct approach to all the problems; so that they can talk to management in such a way that they can get high wages and provide managements with the opportunity of getting these wages? Are we afraid to talk of these things to-day? Must we constantly talk about the small things in life, like the professional workers whom the noble Lord, Lord Platt, mentioned?
When you tell me that professional workers are not to be compelled to take trade union activities, I want you to define "professional workers". I am on good ground, because I was on the Monopolies Commission when we were trying to define them, and we could not do so. They can be defined well enough, as the

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noble Lord, Lord Platt, said when they are doctors, lawyers, parsons and people who are recognised as professional people. But how many of these people are now forming associations to call themselves professional people for commercial purposes? If you go into the engineering industry, where do you stop with a profession? Is a fitter who has served five years not a professional? Must he have a degree to be a professional? If so, what degree must he have? How do you define "professional"? Who would put a stupid thing like that into a document and expect to gain the confidence of the trade unionists throughout the country? These are the foolish things that we are doing. Let us demonstrate what we want, give a strong lead on what we want. I have never known a strong lead that was a sensible strong lead that was not followed.
Section A 15 says that a contract of employment should be clear and definite in its terms. A legal contract of employment has existed for years. The Bill says it should be clear and definite in its terms. Come and sit with me on an arbitration court, where I frequently sit, and you will find a number of contracts of employment which are absolutely worthless, and are intended to be so. One can make nothing out of them at all. Noble Lords have been talking about doing something in the future which was a proved failure in the past. How do you expect to solve these problems by dealing with them in a way that has been a failure in the past? What are you going to do about contracts of employment? Give us some clear indication of what is going to be done. It looks as if this matter of contracts of employment has just been thrown in to make some extra meat in the pie—and even the meat is going bad.
The noble Lord, Lord Byers, talked about a soundly-based pay system; he talked good common sense. What is a soundly-based pay system? In the motor industry they tell you that it is not soundly based if it is piecework; it has to be measured day work. I am not criticising them; they are probably right from their experience. In the iron and steel industry we have piecework from top to bottom; we do not have measured day work at all. In the American steel industry it is all piecework. The car
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industry said that that was not a sound basis. The steel industry said that measured day work was not a sound basis. What do you mean by a "sound basis"? Do not be so ambiguous; do not be so coy (if I may put it that way); let us know what you are really talking about in this code. Up to now the code is more indefinite than the Bill, and, God knows!, the Bill is difficult enough.
Section B 16 says that we must give the manual worker the same advantages as the white collar worker. That is really the climax! At a time when white collar workers are joining trade unions by the thousands to get the same benefits as manual workers, you say you are going to give the manual workers the same benefits as the white collar workers have. This can lead to all sorts of trouble that cannot be foreseen. This is the system which in the past has led to a lot of leap frogging. Out of this, on the Government Statement, white collar workers will be leap frogging the manual workers, because you say that they ought to do so, and the manual worker is leap frogging the white collar worker because this is the order of the day. That is how leap frogging goes on. And you are asking for it in the code. I beg of you to give another thought to that section and at least make it sensible, if you do not make it workable.
I have told your Lordships about the ultimate responsibility for the size of the work force. Make no mistake about this. Trade unions are going to decide how many men go on each machine—I am sorry; I mean they are going to negotiate how many men shall go on each machine. I nearly made the same mistake as the employers make there, in saying that the trade unions "are going to decide". They are going to negotiate. But neither the employers nor the trade unions are going to say, of their own volition, what the manning of any particular plant shall be.
In one part of the code it is said that where short time working is temporary, work should be shared. I have been fighting employers all my life to get this established and I welcome the Government's putting it in. The excuse the employers had when I was insisting that work be shared (and we did this for five years, one week in three) was that the cost of the insurance stamps was so big

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that they could not afford it. I want workers to be allowed to share work. With the social benefits we have at the present time we should be on a very good thing in this country on many occasions. We should prevent men from moving from the area in which they were working. When we first went on to "Neddy" we said, "we have to train men to move from the obsolete plant in which they work to the new plant". The Government are asking us in the code to share work where workers are temporarily unemployed. I welcome this. But I wonder if we really know what it means. Can your Lordships tell me what a "temporary" shortage of work is? With me it meant a period of five years. Indeed, it went on longer afterwards—ten years. You may think that three months is "temporary". The Government drafted the code; let them explain to me what "temporary unemployment" is. It seems to me that this code is padded with detail that was culled by an office boy from some of the National Joint Advisory Council documents that I have spoken about. I wonder whether you are going to put any meat into it.
I have overlooked one point and I hope that somebody will tell the noble Lord about this because I want him to answer it. There can be problems in collecting trade union contributions when plants are a mile long and may be a quarter of a mile apart. Are the trade unions going to be helped by the operation of the check-off system? I want an answer to that point; I want something practical, not something which is ambiguous. I want to know where we are going. Section A,11,b says that the trade unions should have enough officials to maintain contact at all levels. Trade union officials cost money. I am not quite sure what is meant by "all levels" or by "trade union officials". Are the officials full-time or part-time? But how can you ask us to ensure that we have these communications at all levels at a time when you are going to emasculate the trade unions and deplete the funds? Is it deliberate chicanery, or is it simply being naïve? I do not know, but surely we want some answers to these questions.
It almost seems to me that what you are asking us to do is to act like a shopkeeper,
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and to provide the right goods at the right price and of the right quality, but if somebody wants them for nothing we must give them to him. If that is the intention of this code it is not going to gain much credence in the country, and if it does not gain credence it will not work. It does not matter what is done in Parliament; it must be operated down below. The last few by-elections have given a pretty clear indication of what people are thinking. If you have this code, and this Bill, I do not think you will be allowed to go the full course. It is time we had more thought on this. At the present time we have had nothing that has been constructive, nothing that has been co-operative. Everything has indicated that the employers and the Government have decided they can now put the trade unions in their place. Well, let me tell your Lordships this before I sit down: you have got to find where that place is. In Germany, where there is the best growth in Europe, there is co-determination and the workers really participate in what is happening in industry. They sit on the top board of directors and decide policy. There is no participation envisaged in this document, nor even co-operation. I say this to your Lordships now with regret.
When I left my industry it had the best record for being strike-free of any industry in this country, or any industry in Europe. It had that record only because we were firm in our contentions and fair in our argument. If we are going to have unfair argument, as we have under this Bill and this code, then this country is not going to be successful, and responsibility for the lack of growth that will follow will be firmly placed on the shoulders of those to whom it belongs—first, the employers (my noble friend Lord Brown mentioned a number of points, and your Lordships will need to think a lot about what he said) but principally the Government. My Lords, I end as I began. How can the Government introduce a Paper like this? As to co-operation and consultation, they have not even discussed with the National Economic Development Council any of the matters in either the Bill or the code. The position is impossible.
6.33 p.m.
THE EARL OF COURTOWN: My Lords, I do not intend to follow the

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noble Lord, Lord Douglass of Cleveland, in his arguments—no doubt others will answer them—except to point out that this document is labelled as a Consultative Document. That is presumably what it is for—for consulting with various institutions and bodies concerned with it. I, unlike Lord Douglass but like most speakers this afternoon, welcome this code. It is in effect a statement of many of the principles of good man-management. Possibly it sounds "old hat" to some of us. I think it was the noble Lord, Lord Byers, who said it sounded old-fashioned, and he also referred to the fact that it was not in line with—or did not show it was in line with—modern sociological thinking. I have been exposed to all the modern sociological thinking. I am one of those who have read the books of the noble Lord, Lord Brown (I see he is not in his place at the moment), and I would pay tribute to the work he did in the company he managed for so many years. Nevertheless, what most of this modern sociological thinking is directed towards is the improvement of management and improvement of industrial relations, and human relations generally. All this code can do, and actually does—and all it should do—is to set out, in fairly general terms, the factors which affect the situation, and which must be complied with and taken into account if we are to get good management and good industrial relations.
It is important to avoid being too dogmatic. The document is read to apply to the whole of industry and, beyond industry, agriculture and the like. Therefore, it must be couched in simple language, which it is, and must avoid dogmatism and jargon. It does this. I will not say that I agree with every word in it. There is a good deal to be altered after the consultation period and I have no doubt that that will be done. The objections of the noble Lord, Lord Diamond, seem to be, first, that the document is paternalistic. I have difficulty in knowing really what this word "paternalistic" means. If the unions think that it is paternalistic, equally management would think it paternalistic because it tells management, as it tells unions, many things which they know, or think they know. It is almost inevitable that such a document is going to do this. The noble Lord's other objection was the ambivalence
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of the document towards unions, in that there is in the document no encouragement to management to enable unions to secure recognition, and where it refers to relationships with unions it speaks about "after recognition". I would say in this respect that if the unions wish to absorb (I think "organise" is the expression) all the white collar workers, it is up to them to make themselves acceptable to the white collar workers. This point relates to the objection which the noble Lord, Lord Platt, had.
Fairly recently there have been cases where white collar workers in certain industries and certain large companies have voted against belonging to a union. I do not know whether noble Lords opposite expect the Government to say that management should instruct people to join a union when they do not want to do so. In due course maybe more and more white collar workers will become unionised. That may be inevitable; I do not know. But I do not think this document should put too much emphasis on the point that management should try to encourage their workers to join a union if they do not want to.
Apart from setting out the general principles of man-management, which is a useful exercise, the document certainly fills in various gaps in the Bill for me. In particular, I was interested in the part about bargaining units—Section D of this document. The Bill rather gave the impression that each location was going to have its own bargaining unit, whereas a large number of works in this country belong to an organisation which is bigger than just the one works. Section D of this Consultative Document clearly puts emphasis on that point, in that it expects the bargaining unit to be much larger than covering one works or one location where there are more than one works or one location in the company. Here again, I would query something which the noble Lord, Lord Brown, said when he implied, I believe to avoid multiplicity of unions, that everyone in a particular location or works should be encouraged to join the same union. That would cut across the idea in this Paper that specialist knowledge, qualifications and the like of various specific groups of people should be taken into account in the founding of a bargaining unit. Also it seemed to me

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that the noble Lord, Lord Brown, did not take into account the situation where there is more than one works in a company.
When this code of practice is revised and put into operation it is going to be used as evidence in cases coming before the Industrial Court, and I find it difficult, being a layman, to envisage how this will work and what effect it will have. I should have thought that it would be a stimulant to thinking out management systems and would develop a demand for mare management education. I regard this as desirable, and management education is not something that can be done entirely on the shop floor or in the office; nor can it be done entirely in the classroom. It is a matter of integrating training on the shop floor, in the office and in the classroom; and in this I believe there is a considerable use to be made of the training facilities that are available not only in the universities but in the technical colleges and other institutions concerned with management education. Recently, certain regional management education centres have been designated by the Government. In the past I have been connected with a number of management education institutions, and since I retired from full-time work in industry I have recently become more closely connected with one of these regional management education centres—the one in the Polytechnic at Portsmouth. I have been extremely impressed by the standard of the work that is being done in these centres, and by the skill, the knowledge and the devotion to the cause of management education that exists there.
It seems to me that when businesses get down to considering this document a great many companies will realise that there is a lot in this which they are not at present doing and which they ought to be doing, and if it is going to be cited as evidence against them in cases coming before the Industrial Court it will be greatly to their advantage to look well to their management systems and their management development generally. I believe that many of them could do much worse than get alongside one of these regional management education centres, which will provide, if necessary, not only in-house courses but also excellent advice as to the way they should be
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organised and how they should be integrated into the whole pattern of the business.
To sum up, I welcome this Code of Industrial Relations Practice. It certainly needs amendment, and I think that certain things have been left out. I will not go into detail now, but I believe that the Government could reduce some of the opposition to it which exists at present by bringing in more reference to participation. I do not think it has been intended that participation should be left out of this document—if indeed it has been left out—and in fact I think there is something in what the noble Lord, Lord Diamond, said, in regard to repeating some things, because people will look up sections of the Document and will go by what is in that particular section, whereas if something is mentioned in another section it may be ignored. I think it is quite possible that this code, when it is finally issued, will be a really significant feature for the improvement of the standard of management in this country as well as that of industrial relations.
6.45 p.m.
LORD STOW HILL: My Lords, I approach a debate on the code with considerable trepidation because so many of your Lordships are so much better qualified than I am to speak upon it, having extensive experience on both sides of industry which I personally lack. But there is one aspect of the code, in particular, to which perhaps I may usefully invite your Lordships' attention. I refer to the part of the code which deals with the imparting of information by managements to unions, which is necessary for the purpose of negotiations between them. I suppose that a very important feature of the Industrial Relations Bill, which we are discussing, is that which centres upon the provisions contained in Clauses 56, 57 and 155—laying on management an obligation to furnish such information. That obligation goes somewhat far back in the history of the thinking on this Bill. It originated in paragraph 184 of the Report of the Donovan Commission; it found its place in the Bill introduced by the last Government, and the clauses in the present Bill to which I have referred are closely based upon the last Government's Bill—indeed, the relevant wording

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in those clauses is identical with wording used by the last Government.
The submission I would make to your Lordships is that it is disappointing that the code does not deal with that aspect of the changes which are being brought into the field of industrial relations. If one looks back to the Bill (I am conscious that we are discussing the code, but I think this is relevant) one finds that it is expressly provided in Clause 2 that there are two major topics with which the code is to deal. The second of those two major topics is just that topic to which I have referred—namely, the disclosure of information by employers necessary for the efficient and effective conduct of negotiations between both sides of industry. The rationale of that is obvious. When the union side present a claim for an increase in wages they obviously do so in the firmly held belief that management can afford to pay it, or something like it. Management take the opposite view and say that they cannot afford it. The information which would enable that question to be resolved is, in the nature of things, as to nine-tenths of it, at least, in the possession of management and not accessible to unions. I think I shall not be exaggerating when I say that if it were well understood as an obligation on management to furnish all necessary information to the union side of the table, to enable them to arrive at a just and accurate evaluation of the capacity of management to afford the claim put forward against them, that would contribute substantially towards orderly and useful negotiations in the future.
I submit that that is an extremely important part of the Bill. It was obviously thought so to be by the last Government, and the present Government have followed in introducing into their version of the Industrial Relations Bill what the last Government proposed. That being the situation, one looks to see in the code what is to be found which could be regarded as a fulfilment of the obligation contained in Clause 2 of the Bill to lay down principles with regard to the imparting of such information. My noble friend Lord Diamond called attention to the fact that at page 15 an obligation is referred to to impart information about "the performance and prospects of the undertaking". That, of course, is very vague and does not give any practical guidance to those who want
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to know what information they should impart. But it is paragraphs 27 to 30 of the code that really deal with the actual problem itself.
I should like to go back to the speech of the noble Lord, Lord Byers, who particularly dwelt upon this question of imparting information. He informed your Lordships of the experience in Germany and told us about the system there of confidential panels; he said that they worked very well. Whether or not they would do so in this country, I do not know, and I do not express a view about it. But, basically, the problem with which the Legislature and the Government are faced is that posed by the wording in paragraph (e) of subsection (1) of Clause 155, which says what information the employers are not under an obligation to disclose. They are not under an obligation to disclose:
"any information the disclosure of which would be seriously prejudicial to the interests of the employer's undertaking for reasons other than its effect on collective bargaining."
The big question that emerges from that language is, if you have a situation in which the trade union side need, for the purpose of negotiation, information which competitors of the undertaking would be delighted to have, where are you to draw the line? In those circumstances, the object of my intervention in this debate is to ask the noble Lord who replies to indicate what is the Government thinking on the matter, because it is not set out in the code where one would expect to find it.
The reason why it is not set out in the code is perfectly clearly stated at page 21, paragraph 30, to which I have referred. Under the general heading "Disclosure of information" there are some very general precepts set out. One is that the trade union side should have the substance of information which is supplied to shareholders or published in annual reports. For the purposes of negotiation, that is nothing like enough. If you merely read the trading experience of a company contained in its trading and profit and loss account for the year, and look at the balance sheet position for that year, that will not in ordinary circumstances give anything like a reliable guide to what the company may be able to afford to pay in the way of increased remuneration to its employees. That must

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depend on a great amount of information which is privy to the board and which they will wish to withhold from the cognisance of their competitors, who would be delighted to receive it. But it ought to be at the disposition of the trade union side if it is to negotiate effectively and make claims which can reasonably be accommodated into the general framework of the economy, and particularly the capacity of the undertaking against which the claim is made.
The question is how do you reconcile those two. Where do you draw the line? the company's competitors want that information, and the trade union side need the same information. How, then, are you to say what the company is to disclose and what is to be withheld? The very general language used in Clause 155 of this Bill, and equally that in Clause 22 of the last Government's Bill, does not give an answer to that question. What Clause 155 says is that the line is to be drawn, in effect, in the light of the guidance given in the code; and that is equally clearly set out in Clauses 1 and 2 of the Bill. There one is told that management must disclose some information, need not disclose some other information, and that if you want to know where the line is to be drawn you must look at the code and that will probably tell you. But the code says simply that the trade union side must have the information available to shareholders and annual reports; and that is nothing like enough.
Then the reason is stated why the full guidance for which Clauses 1 and 2 and 155 provide is not set out in the code. The reason given is that
" This part of the code "—
namely, that dealing with imparting of information—
"will be amended to give fuller guidance about the information which should be made available for purposes of collective bargaining when the Commission on Industrial Relations has completed the inquiry on disclosure of information on which it is currently engaged and there has been opportunity to consider its report ".
Prima facie, if I may say so, that is perfectly reasonable. But the unfortunate thing is that this is the last opportunity we shall have of discussing the code before the Bill is enacted. I realise—and I rely upon the fact that, under the
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terms of the Bill, within one year after it becomes law a further draft code has to be framed by the Secretary of State and has to be submitted to the Commission for its advice, and it is only after the further draft code has been considered that a final code is enacted. As I say, we are now using our last opportunity of considering the terms of the code. By the time the next draft is published, the Bill will be law, and we shall then be under the disadvantage that we shall not be able to make any change in the Bill if it seems to us the code is unsatisfactory.
The Government surely must have thought about the dilemma posed by Clause 155 as to what must be disclosed and what need not be. I am quite certain that the Secretary of State has given a great deal of attention to it, and even though he has not got the Commission's report he must have formulated some general conclusions. I would submit to the noble Lord who is to reply that it would have been more satisfactory if at any rate those tentative conclusions had been included in the code. They could have been altered when the Commission's recommendations were to hand after this Bill becomes law, and in time for the draft code, which is to be published after the Bill becomes law, to be converted into its final form; they could have been taken into account at that stage. But here we are left completely in the dark, simply with the statement that there will be further amendments, as to the form of which we are told nothing, but simply that they will be made after the Commission's recommendations are available.
It is in those circumstances, this being one of the most important aspects of the legislation we are considering, that I would respectfully submit that the House is entitled to some fairly full answer from the noble Lord who will reply to this debate as to exactly what, up to this stage, the Government's thinking has been on the nature of the information which must be disclosed and that which may be withheld. It is quite impossible to suppose that the Government have not given a lot of thought to that, and have not been able to arrive at some conclusions. I would submit to the House that it is not really an adequate justification for leaving us completely in the dark at this stage that the Government are expecting advice.

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Of course they are expecting advice, and they must take into account that advice when available. There will be every opportunity to do so in time for the next draft after the Bill becomes law.
In those circumstances, I would press the noble Lord to give something in the way of a detailed account, or as detailed as is practicable in the circumstances for him to give, of what he would envisage as being the appropriate entry in that part of the code with regard to that information, subject always to such Amendments as may be necessary. I submit to the Government that it is not really fair to the House to expect us to form a conclusion on the code in the absence of such knowledge. That is the submission I would put. I do not wish to dilate on other aspects, but on that point I would press the Minister here and ask for a fairly full account of the Government's thinking on that aspect up to this stage.
7.0 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, may I follow up the last point the noble Lord, Lord Stow Hill, made and seek further elucidation, because I had been under the impression—it may be wrong—that the draft code as we have it now, after the consultation has been completed, will be subject to debate by both Houses of Parliament. I hope that the Minister may have an opportunity of confirming that.
LORD STOW HILL: My Lords, as I meant to make clear—and I thought I had—there are two stages; this draft is a kind of preliminary run before the Bill becomes law. Then, if one looks at Clause 3 of the Bill, one finds that after the Bill becomes law a further draft has to be prepared. That further draft is, of course, open to debate, and will be debated, but this is the last opportunity that we shall have of discussing the code before the Bill becomes law. That was the point I was trying to make.
LORD SINCLAIR OF CLEEVE: My Lords, I thank the noble Lord. I have listened to practically all the speeches this afternoon and I think, with one impressive exception, the majority of them have been, in greater or lesser degree, in favour of the code, and have recognised the purpose and the usefulness of it. I have had reason in the past to appreciate the very great service to industry
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which has been rendered by the noble Lord, Lord Douglass of Cleveland—to the steel industry in particular—and I have had good reason to respect and admire his sincerity. I think, if he will allow me to say so, he slightly tarnished that reputation in the doubts that he cast on the sincerity of what the Secretary of State said in the introduction to this document. I believe that this very carefully phrased introduction to this document—I would suspect written entirely by the Secretary of State himself—has shining through it complete sincerity, and a desire for the better understanding which all who look for improvement in industrial relations in this country want to see achieved.
As I tried to say once before in your Lordships' House, I think that the best way of achieving the result that we all want to see from this code is by having complete and free consultation between both sides of industry, and between them and the Government. The noble Lord, Lord Diamond, when he spoke earlier this afternoon, said that if you want cooperation you have to offer co-operation. I can assure your Lordships that the C.B.I. are anxious to have the fullest possible consultation both with the T.U.C. and the Government, and they have made that very clear. The offer is open, as far as they are concerned, and I very much hope that the T.U.C. will respond to that offer, because that is the best way in which the object we all desire can be achieved.
7.5 p.m.
LORD DELACOURT-SMITH: My Lords, the code of practice is a lengthy document, and many individual points have been touched upon by noble Lords in speeches during the debate. I believe that this has been an important debate. As my noble friend Lord Stow Hill pointed out, it is the last opportunity that we shall have to debate the code of practice before the Industrial Relations Bill receives the Royal Assent, and is presumably brought into operation. If I might go a little further, it is the last occasion when we shall have the opportunity of debating the subject matter of the code in an atmosphere where we can hope that our observations will lead to amendment, because, if I understand the situation aright—and the noble Lord will no doubt confirm or correct me in this respect—the next time

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a document of this character will be before us will be when the draft code is submitted to the two Houses, and on that occasion it will be a question of a vote for or against, with no opportunity for making amendments of any sort.
I think I would not be unfair in saying that, although many noble Lords who have spoken in this debate have welcomed the concept of the code and have praised particular aspects of it, there has run through the debate to some degree a sense that the code is, in major respects, inadequate and disappointing. It certainly contains some passages which, taken in isolation, are valuable and to be welcomed—certainly welcomed from these Benches, and I would think welcomed in all parts of the House. For example, in Section A it refers to management; and the reference to its responsibilities in industrial relations, and the necessity for those responsibilities to be matched by adequate training, are points which are valuable, and to which I think we should all assent. It is valuable, too, to see the emphasis given to communication and consultation in the early part of Section C of the code. It is, of course, useful to have the concept of the code. Many of the ideas in it are in advance of the practice in a good many of our industries, but I am afraid that is because in many firms the outlook of managements on industrial relations is exceedingly primitive. I think, on the whole, the code really must be put down as a disappointment for there are respects—and they become more prominent the more one actually looks at the detail of the code—in which it will impede progress rather than stimulate it.
My noble friend Lord Diamond, and I echo him entirely in this respect, praised the terms of the Foreword. It is in no way casting any doubts upon the intentions of the Secretary of State to say that the Foreword, to many of us, does not seem to be matched by the detailed provisions of the code when one comes to look at them. The Foreword talks, and talks rightly, of industrial relations as being best conducted by collective bargaining between employers and strong representative trade unions; but, like many other aspects of the Government's industrial relations policy, the admirable general principles announced are in a
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great measure contradicted by the actual provisions when one comes to examine them in detail. I do not intend to be as brutal as the noble Lord, Lord Byers, was in talking of the language of the code. I think he suggested it was generally flatulent and weak. I would agree that weakness and imprecision do characterise many of the clauses. I hope, in particular, that we are going to have a full reply to some of the detailed points which have been raised on this aspect. I have in mind some of the detailed points raised by my noble friend Lord Stow Hill.
But my own criticisms would not run along those lines for, of course, one could answer that to some degree by pointing to certain sections of the code which contain admirable sentiments, well expressed. We need a better wage structure, we need better procedures, we need to get rid of out-of-date distinctions between white collar workers and manual workers, and all sorts of admirable sentiments of that sort. But those sentiments, admirable though they may be, are by no means new. For years, courts of inquiry, academic commentators, Ministers, institutions such as the Institute of Personnel Management, the British Institute of Management and other organisations which do good work in this field, have been saying precisely that. Indeed, may I be so bold as to venture to point out that trade unions have been saying them in respect of many industries. For example, I recently saw a remark attributed to Mr. Hugh Scanlon. Somebody asked him, "What is wrong with the engineering industry?", and he replied, "A crazy wage structure and an inadequate procedure" That is what the trade unions have been saying for a pretty long time.
The question, really, is whether these splendid sentiments which are in the code are going to be brought any nearer practice. For example, I hope the noble Lord, Lord Drumalbyn, will tell us—and I am taking up a question asked by my noble friend Lord Diamond—what are the intentions of the Government in respect of observance of the code by those who perform Government work on contract; those whose industrial relations behaviour the Government have a means of influencing very directly? But of course the major way by which these improvements in industrial relations are going to be made, the major way by

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which these excellent sentiments will be brought nearer reality, will be, as the Secretary of State suggested in the foreword, by strong trade union organisation. It is here where the gap between the principle and the detail is so striking, because when one examines the code it is hard to find what it is that is going to strengthen trade union organisation and representation. The trouble with the edifice which the noble Lord has been defending and which the Secretary of State has put forward is that it is magnificent wallpaper, but it does not have very much in the way of walls.
When one looks at the code in detail one finds that it plays down the role of trade unions. To take one example in the section on training, I can see no reference to trade unions nor even a reference to the industrial training boards, in the organisation and running of which the trade unions play such a part. Similarly, the reference to consultative machinery in Section C,7 does not give the trade unions anything like the key role that it should do. That is why in this debate many people have used the term "paternalism", and almost always with understanding of its application in this context. Nobody will fail to welcome the emphasis on the responsibilities which management have towards the community and those whom they employ. Of course the underlining of those responsibilities is welcome. But when we say that this gives a paternalistic impression, what we mean is that an atmosphere of equality between the two sides in industry is lacking.
That equality can be achieved in one way, and in one way only; that is, by the economic power of the employer being balanced by the collective organised power of those whom he employs. The trade unions represent the workers' self-respect, and for that reason there is no substitute for trade unions. That is why, with all their failings—of which those of us who have been in the movement are as conscious or more conscious than those outside—the trade unions command such great respect from millions of workers. They are institutions which, with all their imperfections, represent the workers' point of view and they are felt to be the possession of the workers in a way that no other institution is. The lack of a sense of equality between the two sides in industry is
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intensely bound up with this, and that causes the term "paternalism" to be used.
May I illustrate this point by looking in a little detail at the section dealing with trade union recognition? One sees the shortcomings of this code most clearly if one looks in detail at a certain part of it, rather than if one looks at it in general terms when one can be a little mesmerised by some of the excellent sentiments which stud its pages. There is no general statement anywhere in the section dealing with trade union recognition to indicate that it is important to encourage workers to join trade unions. It is hardly surprising that this should be lacking, because the Government have had to put a special clause into their Bill to make it clear that it is not actually an offence for an employer to encourage workers to join a trade union. That is a concept which might be embodied somewhere in the code or somewhere else, in a rather more positive way. It is patently clear that recognition of trade unions is in itself an important aid to recruitment of workers to them and to building up the strength of the trade union movement. But nothing is said about the facilities that should be made available when a union is seeking to recruit groups of non-unionists. No guidance is provided to deal with the situation where existing unions have recognition and a third union seeks to secure it.
VISCOUNT AMORY: My Lords, the noble Lord is making a quite interesting speech and is making a number of useful and proper points. But the code states on pages 18 and 19 under "After Recognition":
" Where a union or unions have secured recognition management should:
encourage employees to join a recognised union and to play an active part in its work."
LORD DELACOURT-SMITH: I appreciate that, my Lords, but the noble Viscount will appreciate that that is after recognition has been secured. I am seeking to emphasise the lack of any encouragement to workers to form a trade union, and the lack of initiative by the employer to assist that process and bring a union to the point at which it is a recognised organisation. The list of matters to be

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taken into account when one is discussing the granting of recognition also fails to provide any guidance to a minimal standard of industrial relations practice. It is the gaining of recognition which I particularly want to elaborate as my theme. It is said, for example, that management is entitled to know what number of its employees are members of the union or unions making the application. This is in paragraph 9 on page 18. But I do not see anything said about management having a responsibility to encourage unionism, or, at the very least, to respond to tentative attempts to bring a recognised trade union into being.
Here, I think, it useful to look at the experience of the Commission on Industrial Relations. I am bound to say that paragraph 9 seems to me to represent a major step backwards in the formulation of this problem compared with the approach which has been established by the Commission on Industrial Relations. The Commision on Industrial Relations is not an old or long-established body, but it has in its relatively brief history already accumulated a considerable amount of valuable experience, and it has done so particularly in the field of recognition. For in the early programme of references to the Commission it was very clearly demonstrated that intransigent employer resistance to trade union recognition was by no means exceptional. Of the first 8 references to the Commission on Industrial Relations, no less than 7 were references on recognition issues; and it is interesting to note that, of those 7 references, 3 were references which applied to manual workers in manufacturing industry—an important point, because there is a tendency to think that union recognition problems arise predominantly, and indeed sometimes it is suggested almost exclusively, in the "white collar" field.
A study of these references does not support that view, and shows how difficult it has proved in many cases to get employers to accord recognition to trade unions. In one firm, 50 per cent. of the employees concerned were actually on strike for 10 weeks to secure union recognition. In another firm, with 400 workers, 20 to 25 per cent. were paid-up members of the union although the firm refused to grant recognition, and the
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Commission on Industrial Relations made a survey which showed that if trade union recognition were accorded the membership would at once rise to 70 per cent. In other words, something like one-half the workers concerned for one reason or another took a rather negative attitude, but were quite prepared to say, "If the firm is prepared to recognise the union, we will join straightaway". A further one-quarter of the workers were determined to be trade unionists and, if necessary, to struggle for recognition. I believe that this firm actually found itself in some difficulty in believing that the C.I.R. Report was correct, and finally they had a ballot which indicated that 70 to 75 per cent. of the workers concerned were prepared to join a trade union and desired union recognition, and would join the union if recognition by the employers were to be forthcoming.
We can take a third example from this group of C.I.R. references, concerning a case where the General and Municipal Workers had built up 50 per cent. membership at one plant despite the fact that the management would not recognise the union. I ask the noble Lord who is going to reply: does the code make clear to management that they should not resist recognition until the last worker has joined; that they should not resist recognition in cases of that sort, where 50 per cent. of the workers have in fact joined the union? It is rather interesting that in their Report on this third case to which I have been referring the Commission on Industrial Relations describe the management view as follows:
"The management's view was that labour relations should be based solely on direct contact between individual employees and factory managers."
I think that, in fact, if somebody who had that attitude of mind read this code and was in the position of not having accorded recognition to workers in his firm, he could find a certain amount of support in the code even for that extreme viewpoint, although most of us would now think it a rather out of date viewpoint.
I therefore want to put to the noble Lord who is to reply: what really is there in the code or the Bill, if he likes to widen it—and the two stand very much together—that is going in practice to make it easier for unions to obtain recognition from employers than it is

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at the present time? At the moment, there are various sorts of pressures which trade unions employ—sometimes directly, sometimes to assist each other—which will become unfair industrial practices under the Bill. Will the Bill or the code make it, on balance, easier for unions to get recognition than it is at the present time? I believe that it would be valuable if the noble Lord could reply to that question in a perfectly emphatic way and could demonstrate (and I am bound to say that I have not been able to find the justification for this point of view) that it will be easier, appreciably easier, for unions to get recognition from a somewhat recalcitrant employer; and, better still, if he would say, if it is not sufficiently clearly in the code or the Bill, "We fully accept that one of our purposes, as the Government, is to see that it should be easier, appreciably easier, for unions to get recognition than it is at the present time, and we will try to find ways and means in the code and in the Bill to bring that about".
Now I want to turn, as my second and last example of where I think many of us find this code sadly inadequate, to what is one of the most vital and crucial aspects of industrial relations at the present time—the necessity for prior consultation about changes in organisation of work and in working methods. I am not thinking now of cases where the changes lead to redundancy; I am thinking of cases where changes, of one kind or another, in the way that work is organised have an effect upon the working life of the individual because he has to work in a different way or more rapidly, or has to accept some substantial measure of redeployment. One of the most contentious features in industrial relations to-day is that management, in general, claim the right to make changes first and to consult, if at all, after the event, when the change is in operation. I am not suggesting that this is the practice of all managements, but, as I sought to point out to your Lordships in the course of our debates on the Bill, the doctrine of managerial prerogative is much treasured by many managements and is often the cause of very bitter disputes.
Where do the Government stand, and where does the code stand, upon these related questions of prior consultation
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on changes in work organisation and of managerial prerogative? I agree at once that they are not precisely the same thing, but in practice they are closely related. If there is to be any real improvement in industrial relations—not only a raising of standards in those areas where at the moment the standard of industrial relations is very low, which is of course desirable, but also where there is already a great deal of industrial relations activity, where trade unions are recognised, and so forth, but where relations are not good—then the practice of prior consultation is one of the most vital things of all.
A series of consultations over a wide range, on the basis that consultatior precedes change, is, in my view, the beginning of workers' participation in the control of industry—and let there be no mistake about it, in the 1970s the great issue in industrial relations and the one on which everybody concerned with industrial relations has to take his stand is whether we are going to accept a measure of erosion of the managerial prerogative to give to the ordinary man at the bench or on the building site, in the pit or on the docks a greater measure, a general sense, of a degree of control over the job he does and over the industry in which he works than he has at the present time. I ask the noble Lord to answer this point also. What is the position of the Government about prior consultation, not only in redundancy situations but in changes of work arrangements; and where do the Government stand on this contentious issue of the status quo, whether arrangements should remain unchanged until the consultation about their changing has taken place or whether, in general, the employer should have the right to make all the changes first and then to meet the criticisms, then to have the consultation and in many cases then to have the unofficial strike? This is the second major point to which I should like the noble Lord to address himself. There are many other questions which other noble Lords have raised and to which he will no doubt wish to reply. I do not wish to trespass on the time of the House for more than a moment or two.
VISCOUNT CALDECOTE: My Lords, before the noble Lord sits down, may I say that he has made a very important point about workers' participation? I

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agree with him about prior consultation; but I think he is confusing us a little about workers' participation. Does he mean workers' involvement in the sense that they should be consulted before changes are made, and attempts made to get agreement as far as is humanly possible? With that I agree. If he means participation in management, then the employees become a part of management and must be concerned with and take on not only the authority of management but also the responsibilities of management, in the sense that if decisions are wrong they take the responsibility. Does he mean involvement or participation in that latter sense? I believe that this is a very important point.
LORD DELACOURT-SMITH: My Lords, may I say first that the worker, whether he wishes it or not, already takes on the responsibilities or shares the responsibilities of management, in the sense that if management makes a series of bad mistakes the worker is out of a job. But I think, with respect, that the noble Viscount poses this issue more sharply than I see it. It would take a long time to answer his question fully. Let me try to do so briefly by saying that I believe that basically we ought not to draw sharp distinction, either in our minds or in our machinery, between consultation and negotiation. It is desirable that they should be conducted through the same machinery by the same people. I believe, further, that if management approaches the problems in the belief that these are basically common problems it will be possible, in the vast majority of cases to reach agreement. There will be a residue of cases where agreement cannot be reached, but I believe that if the discussions have been genuine and if agreement is the order of the day, the workers will be prepared to accept the limited number of cases in which they find agreement cannot be reached, because they will be completely convinced of the bona fides of management and of the approach which management has brought to the negotiating table.
I genuinely believe that a great deal of the difficulty arises, not from the problem of finding a very substantial measure of agreement but from the fact that there is in the minds of too many managers,
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and certainly not always those at the top (and I believe the noble Viscount will confirm that this is so) a feeling that they must always insist on their rights, always insist on their prerogative. I believe that it is this concept—and its roots are very deep in our society—much more than any real difficulty in reaching a much larger measure of agreement than is normally reached in industry, that is a major cause of our difficulties.
VISCOUNT CALDECOTE: My Lords, I am grateful to the noble Lord. I do not think there is much between us. Perhaps we could discuss the point about participation and involvement outside the Chamber.
LORD DELACOURT-SMITH: My Lords, I should be delighted to do so. I think that these words "involvement", "participation" and "workers' control" often confuse and divide people beyond the necessities arising from the realities of the situation.
I was coming to my concluding remarks, which arise really from the fact that the noble Lord, Lord Drumalbyn, said that he found the attitude of the Trades Union Congress hard to understand. I have no right and I am in no position to speak for the T.U.C., but I do not find the attitude which has been expressed upon this code of practice difficult to understand. I think that a very sad situation has arisen. If the noble Lord finds the attitude of the T.U.C. on the code of practice hard to understand, I can only conclude that he has not realised the degree to which the code, with its virtues and weaknesses (whatever those virtues or weaknesses will be) is hopelessly prejudiced in the eyes of the vast majority of active trade unionists by its association with the Bill.
The Government—and there is no use trying to hide the fact from ourselves—have created an atmosphere of antagonism between themselves and the trade union movement. They must not therefore be surprised at the lack of cooperation which they are receiving and which they will receive from the operation of the Industrial Relations Bill. This is not the habit or custom or normal frame of mind of the trade union movement. The trade union movement has always, within very broad limits, co-operated with

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the Government of the day, the Government which the people have elected, whatever may be the feelings of individual trade unionists or whatever may be the general character of the Government. But, as has been said by spokesmen of the trade union movement, if the trade union movement feels—and it does so feel, rightly or wrongly—that it is under attack in the Bill, then it is hardly likely to offer co-operation in operating the Bill or in considering and improving a code which is so inextricably bound up with the Bill.
Frankly, my Lords, I am surprised at the apparent complacency with which the Government have received the announcement of the very comprehensive programme of non-co-operation by the trade union movement following the Special Congress at Croydon. I think I am right in saying that this is a situation without parallel in this country, certainly in recent times. As I have said, it is quite out of character and outside the normal frame of mind of the trade union movement. I really wish that noble Lords opposite would grasp the depth of feeling which exists throughout the trade union movement about this Bill. I am bound to say that, to the trade union movement, the tendency of the Government appears to be towards making the division deeper and deeper. I wish that they could find a way to escape from the weary sterility, as I see it, of their policy towards the trade unions. I most earnestly hope that they have considered what effects the development of non-co-operation will have, and how in due course they are to get back to an atmosphere more consistent with that which existed over the last quarter of a century, irrespective of what Government were in power.
My Lords, nobody, least of all the trade unions, seeks to challenge the right of a Government to pursue policies which they think proper. But there are measures of consultation which could take place; there are points about which the trade union movement feels strongly and which have not been appreciated by the Government. I get more and more concerned at the number of people who feel that, with the Industrial Relations Bill reaching its final stages, there are still a large number of points of considerable importance which are unresolved, which are unclear, about which one can obtain completely conflicting
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views from lawyers of equal eminence—and almost identical political and social viewpoints. There is, I think, a responsibility on the Government to listen to the criticisms being made, and to try to find a way to restore a more normal attitude of dialogue between themselves and the British trade union movement.
7.42 p.m.
LORD DRUMALBYN: My Lords, may I say at the outset that I think the Government should be well satisfied with the debate which has taken place to-day. I think I ought straightaway to make clear my own position. I have been invited to explain certain things and to state what is the Government's position. I do not want to evade any of the issues which have been raised, but I am sure noble Lords will recognise that the purpose of this debate is to hear the views of the views of the House. If, in answer to the various suggestions made, I were to come down flat-footed on this, that and the next subject, no doubt I should have to eat my words later and take back many of the things that I said.
LORD DOUGLASS OF CLEVELAND: My Lords, could the noble Lord attempt it on tiptoe?
LORD DRUMALBYN: My Lords, I can tiptoe with the best of them, but I think I can best serve the House simply by trying to sum up in general terms, and not dealing with particular points actually in the code.
First, may I say one general thing about a code? Inevitably, a code is something which imposes moral obligations, and in that respect it is, of course, distinct from a statute. This code is intended, and is designed, to help to make things go right in industrial relations. This will involve all those concerned adhering to the spirit of the code. As we live in an imperfect world, from time to time this group or that will not do so, and things will go wrong. What I do not think has yet been put over sufficiently, even to noble Lords in this House, let alone to the public, is that the Bill is concerned primarily to deal with the situation when things go wrong. The code is here to encourage things to go right. The Bill to deal with them when they go wrong, though this is, of course, a very general statement—
LORD DIAMOND: Very general.
LORD DRUMALBYN: —and I would not fill it out in every detail. But I suggest that that is the way noble Lords should look at I his. To take an example, the noble Lord, Lord Byers, in a fairly forceful speech (the noble Lord is always forceful, and perhaps on this occasion he was even a little brusque) condemned the code because of its weakness. He pointed to tile fact that the word "should" was used. But "should" is the appropriate word to use when dealing with moral obligations.
LORD BYERS: My Lords, may we get this right? A code is not necessarily a collection of moral obligations. The Highway Code uses the word "must" in a number of cases. This code uses the word "should". This is feebleness, and there are many cases where we could substitute "must" for "should" and make it a much better document.
LORD DRUMALBYN: My Lords, the reason why the word "must" is used in the Highway Code is because there is reproduced in the Code what is already in the statute.
LORD BYERS: Not always.
LORD DRUMALBYN: That, my Lords, is the case when the word "must" is used. The noble Lord, Lord Byers, referred to zebra crossings and I think that he will find zebra crossings are referred to in the statute. The point still stands. What I have said is right: we seek to lay down in the code ways in which people may be expected to behave, and ways in which we hope they will behave. It is not saying that they must behave in that way in every case. As the noble Lord, Lord Platt, pointed out, so far as his profession is concerned, not everything in the code—perhaps I could go so far as to say not a great deal—is directly applicable. But the fact remains that there are doctors who take appointments, in a research establishment, or a place of that sort, where they enter into an atmosphere of industrial relations.
That is the first thing I wish to say generally about the code. I hope that to some extent it will make people realise that what is in the code is precisely that which it is not desirable to back by
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statutory requirements. For one thing, they will not always be applicable. In a statute you have to lay down what people will have to obey in all circumstances, and if they do not do so, it may be that there are mitigating circumstances or something of that kind. The noble Lord referred to "works councils" which he had attempted to put into the statute and which we resisted. That is something which might not be applicable in all circumstances; but it could still be inserted in the code, and it has been.
The second major point that I should like to pick up is the very general reference which was made to paternalism. I think this was used as a term of abuse.
LORD DIAMOND: No.
LORD DRUMALBYN: But it was used in the reference to the statement on the code by the Trades Union Congress. Even if it was not a term of abuse, it was at least a criticism.
LORD DIAMOND: A very valid one.
LORD DRUMALBYN: I do not believe this is a valid criticism. It depends, I think, on the point of view from which one looks at the code and what point of view one has in mind. I think that as noble Lords become more familiar with the code and its different sections, and the way they join together (the noble Lord, Lord Diamond, may be right in suggesting that we should cross-reference it a little more and, where relevant, repeat what is said in one part in another; but we have tried to be precise, and if we had been more detailed we should have been criticised for that), they will see that it is not written in any sense of paternalism.
One can, of course, get into difficulties straight away when we come to the question of decision-making. The noble Lord, Lord Delacourt-Smith, has referred to participation, but here I think the real basis is the recognition of function. One cannot have any kind of organisation without allocating functions, and no organisation will be successful unless people do their jobs within those functions. Undoubtedly there is a function of management, and management must be allowed to fulfil that function, if only because it holds a direct responsibility to the board to do so. I agree that from time to time management may become

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over-anxious about fulfilment of its responsibility and about the obstacles which it feels are being put in its way.
I think I should refer to what is said in the Foreword, to which the right reverend Prelate the Bishop of Blackburn also referred—the sentence which says:
" Collective bargaining requires a reasonable and constructive approach by both sides; both must be prepared to co-operate in working out solutions to their problems to make a real effort to understand each other's point of view and to abide by agreements which have been made."
The basic element in any successful enterprise involving a number of people is trust and confidence. I have some sympathy with the noble Lord, Lord Diamond, when he says that it is up to management to make the first move in co-operation. I dare say that the very opening sentence is some indication that this is what the code expects.
I listened with great interest to the noble Lord, Lord Brown, and the success story he has had to tell in his writings, which I have read—some of them, at any rate. I could not help reflecting that the basis here must have been that the management have succeeded in getting the confidence of the workers. If that is done, then of course things will run relatively smoothly.
LORD BROWN: My Lords, the basis is that you construct your institution in a quite clear form, so that everyone understands what the institution is. I do not want to interrupt the noble Lord for too long, but there is a great failing in British society, in spite of our long history and our wonderful institutions, to build new ones and to make them explicit. These are the things which give trust and confidence. It is no good saying that we must have trust and confidence unless we get them through institutions.
LORD DRUMALBYN: I would put it another way: that one would not get there without precision as to the institutions and the way in which they work. I do not want in any way to underestimate what the noble Lord has done in institution building, but there is something behind that which is of far more importance—the personality of the people concerned and their will to make the thing work. This is absolutely basic. This is what the Foreword says, and this
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is what the code requires. I say "requires" deliberately, because it is all in the form of recommendations. It is basic in the code that only if one gets confidence on both sides will this thing work. Before leaving that point I should say that I do not regard this as paternalism. The mere fact that the first approach has to come from management is not an aspect of paternalism. There are occasions, and we can all think of cases we have come across, where it is difficult because of past history for management to take that first step and a catalyst is needed. We have in the Bill the conciliators and the Commission on Industrial Relations, all of whom can help.
Then there is the question of recognition. The noble Lord, Lord Delacourt-Smith challenged me and asked, where do we in any way show that management is required to recognise? Of course he was quite right in saying that in the code itself there is no requirement to recognise, but the indications are that where there are a considerable number of employees who are already members of a trade union it would be reasonable to hold a ballot. Under the Bill the union itself can apply for recognition through the Industrial Relations Court, under Clause 45. That is one answer to the noble Lord. If the management act unreasonably in not according recognition where there is already a trade union in being, application can be made under Clause 45.
LORD DELACOURT-SMITH: I am grateful to the noble Lord, Lord Drumalbyn, for giving way. Is he prepared to say that, taking everything into account, he believes that it will be easier for trade unions to secure recognition from employers generally under the operations of the Bill than it is at the present time? If it can be demonstrated to him that it will not be easier, is he prepared to say that it is so much the Government's intention that it should be easier that the necessary amendments to the Bill or to the code, or to both, will he presented?
LORD DRUMALBYN: I would be extremely surprised if the noble Lord could demonstrate that the Bill will not make it easier. This part of the Bill dealing with bargaining is specifically designed to make it easier for trade unions to be recognised and to compel employers to

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recognise them. Once the employer has been compelled to do so the implication is, of course, that the employer will accept the fait accompli and do his best in the circumstances to develop industrial relations in the way in which the code provides. I would be very surprised indeed if in his own interests and in the interests of his undertaking he would not be prepared to do so. I think it very unlikely that the noble Lord would be able to demonstrate to me that the Bill will not improve matters from the point of recognition in that respect.
LORD DELACOURT-SMITH: With the greatest respect, this noble Lord is under no obligation to do that. I put the question to the noble Lord, asking if he could give an assurance that it was his view that it would be easier, and I asked whether if it were demonstrated that it would not be easier the noble Lord would be prepared to say that the Government attach so much importance to is being made easier that any necessary amendments to the Bill or the code would be presented.
LORD DRUMALBYN: I can only express my personal belief that it certainly will be easier, and add the assurrance that it is certainly the intention of the Government that it should be easier.
The noble Lord, Lord Diamond, asked a question about the fair wages resolution. As he said, that resolution applies to trade unions as at present understood, and the Bill restricts the definition of a trade union to registered organisations of workers. I understood the noble Lord to ask how the Government would view their responsibilities under Clause 4 of the resolution, in the light of the change of definition. I should like to make clear that the Government intend that the resolution will continue to be applied in accordance with the spirit in which it was passed. Contracts will therefore not be awarded to employers who interfere with the employees' right of association. If the changed definition of trade union is thought to be likely to create any difficulties in this respect, then the Government will make a statement during the Report stage of the Bill.
The noble Lord said something about the status quo. Let me say frankly that this position is of such difficulty, as the noble Lord well knows, that it is not possible
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at this stage to put anything into the code. But let me say that the Secretary of State will be glad to receive suggestions and consider whether the code in its final form should contain some reference that will be helpful on this matter.
LORD DELACOURT-SMITH: My Lords, while I appreciate the difficulty that is inherent in the presentation of such a code as this, once it is presented then it becomes accepted not only as a spur to those falling behind but also by many as perfection, containing all that is necessary for their salvation. Will the noble Lord at least consider putting in words which will ensure that people recognise that what they are required to do under the code in respect of consultation is the minimum and should not be regarded as a limit to which they should be prepared to go, if urged by the trade union representatives and the workers to go further.
LORD DRUMALBYN: My Lords, I take note of what the noble Lord has said but, of course, the main point here is simply a question of managerial responsibilities. I think that it is in this context that we shall have to consider what, if anything, has to be put into the code.
May I turn to what the noble Lord, Lord Stow Hill, said on the question of information? What is said in the code about the inquiry that the C.I.R. is at present conducting is what the Government mean to do. It would be irrational to hold up the code because the C.I.R. has not yet reported. The noble Lord knows from the Bill that it is the intention to introduce a revision of the code whenever it is required, and the code makes it clear that what appears in the information section at the present time is only provisional and temporary and obviously a matter which will be put right after consideration of the C.I.R. report. I do not think I can say more at the present moment, but if we were to put tentative things into the code and then change them a short time afterwards we should be much more likely to confuse people than to give any improvement. I think that this is something on which we have to wait. I listened with great interest to the speech of the noble Baroness, Lady Gaitskell, and I should like to thank her for the attitude she took.

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I found a great deal in common with her. I do not believe that the conflict between the code and the Bill, which she fears, exists, but it is certainly something which will have to be looked at in the course of the preparation of the final code. At any rate, I am glad that she recognises that it has good intentions.
I should like to refer to one other point of the noble Lord, Lord Delacourt-Smith. Talking about trade union recognition, he deplored the apparent encouragement in the code to employees to join trade unions before they were recognised. I wonder whether he could look at it from this point of view. The code says that the employer should encourage employees to join recognised trade unions. If we were to say that the employer was to encourage employees to join a trade union and to form trade unions, though in certain cases there would be no particular difficulty because there would be only one union, presumably it would mean that the employer would have to decide the trade union to which he should encourage employees to belong. There is a real danger here. I think we have to be careful not to put anything in the code that would suggest to people who are not looking at it from exactly the same point of view as the noble Lord that employers should in any way encourage the formation of a particular union under, so to speak, the ægis of the employer. I think that we should run into considerable criticism if we had ourselves made the suggestion. Surely it is a matter for the individual employee to decide whether or not to join a union and what association to form along with those he is working with, and it would be wrong at this stage for the employer to encourage the formation of a particular union. These are circumstances quite different from those which exist in Germany, where there are big industrial unions and one suitable union for a factory. May I also say that encouragement to join a recognised union is a very considerable safeguard for the recognised union itself. It is not encouragement to join a splinter or breakaway union. So I think that the noble Lord can take some consolation from that.
LORD DELACOURT-SMITH: My Lords, if that is the only difficulty it can be easily overcome. There is no difficulty about anyone ascertaining what is the
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appropriate union to join. A letter to the T.U.C. will always remove from anybody's mind the possibility of doubt on what is the appropriate union or what is the range of appropriate unions in any case. My particular concern is the situation in a factory where there is already a handful of trade unionists, who in nine cases out of ten are no doubt members of the union appropriate to their work. It is at that point that we need the goodwill of the employer towards unionisation of the workpeople by giving a clear indication that he is ready to accord recognition. This is the attitude of mind we are anxious to secure, and it is one which with the best will in the world, I cannot find embodied in the code.
LORD DRUMALBYN: My Lords, I really dealt with that point earlier on. I hope that the noble Lord will accept that it is intentioned that in order to secure orderly collective bargaining, recognition will be accorded by the employer on a voluntary basis in all reasonable circumstances, and the criteria are there in the code. Where that is not so, then under the Bill an application can be made for compulsion to be brought to hear on the employer. I think that that is a great improvement on the present situation.
My Lords, I could deal with a number of other separate points, but in view of the hour I think it would be desirable for me to write to those noble Lords who have raised them. I would just end by—
LORD DIAMOND: My Lords, before the noble Lord ends (he has been extraordinarily good about giving way, and I am sorry to interrupt), may I put two questions, to have the point on the Record. The questions both arise out of his speech. The first is about giving information. The noble Lord will recollect that the whole purpose of asking (the Government have conceded this, and we are grateful) for the code to be published before the Report stage was so that we should know, before parting company with the Bill, where we stood. On one issue, as my noble friend Lord Stow Hill has made absolutely clear, the Bill depends entirely on the code; namely, information. We shall be reaching that on the Report stage shortly. May I therefore ask the noble Lord whether he cannot do as he was asked; namely, give us

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an indication of what the Government's thinking is at present? If not, will he be good enough to endeavour to give us that information when we reach the relevant clauses in the Bill, so that we may know what we are talking about before we are asked to approve those two clauses?
The second question is this. As the noble Lord said in his opening that he did not want to answer questions on which he might have to eat his own words (I think that is what he said), do I take it that he is telling us that the Government do not want to take a fixed, inflexible stance at this point on a number of issues, and that they are prepared to listen to representations from all sides? If so, that would be a most acceptable situation.
LORD DRUMALBYN: My Lords, that is precisely what I meant to convey. This is the first public discussion on the code, so far as I know—no doubt the first of many—and the Secretary of State will be ready to listen to all the recommendations that may be made, including representations from noble Lords who choose to make them. On the matter of information, here again I think the appropriate time to amplify what needs to be amplified would be when we come to the clauses in the Bill.
LORD BYERS: My Lords, may I suggest to the noble Lord that even that may be a little early, because many of us will want to make representations right throughout the piece on the whole question of disclosure of information. We should not want to find that the Government have made up their mind too soon.
LORD DRUMALBYN: My Lords, I am sure that is right. I qualified the observation by speaking of "anything that needs to be said on this subject". That would be the appropriate time to discuss it rather than now.
I think that inherent in this code is a striving towards a complete change of attitude in industrial relations. The fact remains that one cannot for ever conduct industrial relations on a basis of confrontation. On the one hand, one has the desire of the employees to get better conditions of work and to improve their standard of living. On the other hand, there is the need to maintain the efficiency
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and prosperity of the enterprise, which, after all, is the basis of secure employment. Somehow or other, these two elements have to be reconciled. In the reconciliation of these elements lies the future of that undertaking, and indeed the future of the country. I close by quoting the well-known words:
" And if a kingdom be divided against itself that kingdom cannot stand.
" And if a house be divided against itself, that house cannot stand."
It is in order to ensure that a system of working together in mutual trust is developed by the two sides of industry that this code, which, as I say, involves moral obligations, is put forward.
On Question, Motion agreed to.

PENSIONS (INCREASE) BILL
POOL COMPETITIONS BILL
Brought from the Commons; read 1a, and to be printed.

RURAL WATER SUPPLIES AND SEWERAGE BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1a, and to be printed.
WILD CREATURES AND FOREST LAWS BILL [H.L.]
Returned from the Commons agreed to.

NATIONAL INSURANCE BILL
8.17 p.m.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I beg to move that this Bill be read a second time. The Bill does two things. First, it provides for a general increase of benefits (and of contributions to pay for them) on lines similar to the usual pattern of periodic upratings. Second, it continues the policy initiated by the 1970 Act of identifying groups in special need and providing selective improvements for them.
To take the main uprating first, Clause 2(1), with Schedule 2, provides for the

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increases in National Insurance benefits. The standard single rate of benefit goes up from £5 to £6, and the married rate from £8·10 to £9·70. The attendance allowance, provided for in the 1970 Act at the rate of £4, will be payable at £4·80 when it starts in December. The old person's pension goes up from £3 to £3·60 single and from £4·85 to £5·80 married. Increases for children, inclusive of family allowances, go up from £2·45 to £2·95 for widows, and from £1·55 to £2·95 for invalidity and retirement pensioners. Increases for children of other beneficiaries go up from £1·55 to £1·85. In the remainder of Clause 2 we provide for the implementation of two of our Election pledges. The amount of earnings free of any adjustment of retirement pension is increased from £7·50 to £9·50, and increments for deferred retirement are increased from 5p to 6p for 9 contributions paid.
Clause 6 makes changes in the earnings-related supplement payable for the first six months of unemployment, sickness and widowhood, and imposes the 85 per cent. earnings ceiling on the supplement when it is payable with injury benefit, in line with sickness benefit. The changes in earnings-related supplement are linked with the changes in the contribution structure, where the upper limit is to be raised from earnings of £30 to £42 per week. The rate of earnings-related supplement is related to the earnings in the previous tax year. It is at present 33⅓ per cent. on earnings from £9 to £30. It is to be changed to 331 per cent. on earnings from £10 to £30, and to 15 per cent. on earnings from £30 to £42, this to take effect from the beginning of the benefit year, which is related to the 1972–73 tax year, the first full year in which the new contributions will be paid. We are increasing the lower level from earnings of £9, set at that level in 1966 when it was about half average earnings, to £10, to pay some, though not full, regard to subsequent increases in earnings.
Clause 8(1) with Schedule 4 provides for increases in Industrial Injury benefit. Injury benefit goes up from £7·75 to £8·75, disablement benefit for 100 per cent. assessment from £8·40 to £10·00 and widow's pension from £5·55 to £6·55. Increases for wives and children go up in line with National Insurance benefits. Clauses 8(3) and 9 provide that those who
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qualify for Industrial Injuries unemployability supplement will be eligible for the improved dependency benefits available to invalidity pensioners and for an increase corresponding to the new invalidity allowance. Clause 10 gives power to make regulations to adjust Industrial Injuries benefit payable to hospital inpatients, in line with National Insurance practice. Clause 11 provides similar changes, including increases in the rates of the allowances payable from the Industrial Injuries Fund to those suffering from industrial injury or disease due to employment before the Industrial Injuries Scheme came into effect on July 5, 1948.
Changes in National Insurance and Industrial Injuries contributions are provided for in Clause 1 with Schedule 1 and Clause 7 with Schedule 3 respectively. The contribution structure is noteworthy, in that it makes no increase in the flat-rate National Insurance contribution payable by employed persons, and no increase in graduated contributions payable on earnings of between £9 and £18. This standstill is designed to avoid increasing the burden on low earners. On earnings between £18 and £30 contributions will be increased from 3·25 to 4·35 per cent., and contributions of 4·35 per cent. will be levied on a new band of earnings from £30 to £42, thus bringing the contribution ceiling up to about one and a half times average earnings.
Self-employed and non-employed persons pay flat-rate contributions and these are to be increased to ensure that they pay their fair share of the cost of improved benefits. Flat-rate contributions automatically attract a Treasury supplement, but graduated contributions do not. To match the projected increase in graduated contributions provision is made in Clause 1(6) for additional supplements so that the total supplement will be about 18 per cent. of contribution income.
We are making two easments in contribution liability. For employed persons contributions will not be payable where weekly earnings are £5 or less, instead of £4 or less. For self-employed and non-employed persons the limit of income for exception to pay contributions on grounds of small income is being raised from £312 to £468 a year.
Now I come to the selective improvements that are embodied in the Bill.

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First, for the chronic sick, Clause 3 introduces a new benefit, invalidity benefit. This provides that after six months of sickness benefit a beneficiary shall become entitled to an invalidity pension. The pension itself will be at the same rate as sickness benefit, £6, but it brings with it an invalidity allowance for people whose incapacity began more than five years before minimum pension age (65 for men, 60 for women). The allowance will be payable at three rates, depending on the age of the pensioner at the onset of his incapacity. If incapacity began before the age of 35 the allowance will be £1; if between 35 and 45, 60p; if between 45 and 60 for men or 45 and 55 for women, 30p. The allowance continues at the same rate so long as incapacity continues, and if incapacity runs on to pension age an equivalent addition to retirement pension will be made. All those who qualify for invalidity pension and who are under minimum pension age when the uprating takes place will automatically get any invalidity allowance to which they are entitled, based on the age when their current incapacity began. Where incapacity has been continuous since July 5, 1948, the £1 allowance will be payable. The invalidity allowance is arranged in this way because in our view the man who falls chronically sick young will have had less chance to accumulate resources (such as an occupational pension) and is more likely to have heavy family commitments.
We propose two valuable improvements for the families of invalidity and retirement pensioners. Firstly, Clause 4 provides that the working wife of an invalidity or retirement pensioner will be subject to the tapered retirement pensions earnings rule starting at £9·50 (already mentioned), instead of the present all or nothing rule whereby the increase of benefit is wholly withdrawn if her earnings exceed the amount of the increase. Then we propose to pay these pensioners the higher rates of increases for children, at present payable only for the children of widows; they will get £1·10 more per child than they would under the present rules—that is £1·40 more in all, including the 30p increase which the rest of beneficiaries will be getting.
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For the very elderly, Clause 5(1) provides for the extension of retirement pensions to non-pensioners or pensioners with low rate pensions at the age of 80, now and in the future. The rates will be the same as the pensions provided under the 1970 Act, as increased; that is, £2·20 for a married woman and £3·60 for other people. The pensions will be subject to a residence test. Clause 5(2) provides an age addition to retirement pension of 25p a week for all retirement pensioners over 80, including beneficiaries under Clause 5(1) and the 1970 Act.
Of the remaining clauses and schedules, I need only comment on Clause 12, as the remainder are concerned with the "nuts and bolts" of the uprating. Clause 12 is designed to allow the Secretary of State to take a rather more generous line over polygamous marriages by making regulations.
LORD DAVIES OF LEEK: Hear, hear!
LORD ABERDARE: I am grateful to the noble Lord. The intention is to regulate in "those classes of cases which we want to cover, rather than give blanket cover and" regulate out those whom we do not want to cover for benefit. This is a complex matter, on which we do not propose to move without due consultation, but broadly we mean to confine eligibility for benefit to cases where there is only one lawful wife or widow at the time of claim. This is a lengthy Bill in comparison with most uprating Bills, because it makes a number of selective improvements in addition to providing for the general uprating of National Insurance and Industrial Injuries benefits. These selective improvements are the natural sequel to the 1970 Act, which was entirely devoted to providing for three special groups: the very elderly who had been left out of insurance, women widowed between the ages of 40 and 50, and the very seriously disabled in need of attendance. This Bill extends selective aid to further groups, by improved benefits for the chronic sick, by providing pensions for all non-pensioners over 80, and by giving everyone over 80 an addition to his pension. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Aberdare.)
8.30 p.m.
BARONESS PHILLIPS: My Lords, I should like to thank the Minister for explaining the Bill to us. As he will know, I could not imagine what he would be saying, but I remembered that the Minister here has to make a slightly different statement from the Minister in the Commons; I had therefore to work on the Bill as presented by the noble Lord's right honourable friend in the other place. He said that the Bill breaks new ground in several directions. Here the noble Lord, Lord Aberdare said this in a slightly different way. He mentioned that it was the longest National Insurance Bill since the original measure was piloted through the House in 1948, and then he claimed that it disposes of the largest aggregate sum of money of any National Insurance Bill since then. Then the noble Lord claimed that it introduced a most varied package of improvements. I think we can say at once that there is no particular virtue in introducing a long Bill. It is the quality of the clauses and the advantages that the Bill brings to the average citizen that we are more concerned with.
Looking at the package of improvements, the noble Lord outlined those improvements which we would certainly applaud—increase in retirement pensions, unemployment and sickness benefit, maternity and widowed mothers' allowances, invalidity benefits and so on, But as the Minister himself said in another place, we are enduring a very high rate of price inflation, and those who collect these benefits and pensions have to shop in the same markets as the rest of the community, so that they always suffer much more acutely from the ill-effects of any situation.
I wonder whether I may repeat the appeal which I made during a recent debate on retirement pensions, that these pensions be subject to an annual review. I applaud the extra increase to the over-80s. This is akin to what we did on a previous occasion. Here we must emphasise the need for speedy payment. The Divine Reaper does not wait on the pleasure of the officials of the Department of Health and Social Security. The invalidity allowances for the chronic sick are something we discussed before and which again I applaud, although I noted that the Minister in another place said
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that some people who are chronically sick will get no benefit at all. The Government regard this as a worthy start to bringing help to these households, and I hope that we shall so regard it—as a worthy start. I applaud the modification of the earnings rule, as applied to wives, where the husband is receiving benefit; but I will return to this point when I discuss the philosophy of the earnings rule, and, of course, the addition to the industrial injuries benefit.
My Lords, may we look a little beyond the uprating and at the fact that this Bill disposes of the largest sum of money since the last Bill. This fact we can see in the Explanatory and Financial Memorandum. I am not quite sure what is the virtue of the boast that it disposes of the largest sum of money, because if costs rise and the value of money changes one has to distribute more money in order to provide the same purchasing power; but if we are going to examine the disposal of these monies in full we should look at paragraph 3 of the Explanatory Memorandum, which says—and this I think is appallingly mean:
" There will be a small saving to the National Insurance Fund resulting from the restriction on unemployment benefit in occupational pensions. This is about £2 million ".
This, of course, links with Clause 7; and this is where we see how these people are dealt with.
I believe there has been quite a lot of criticism of the fact that some people receiving occupational pensions after pensionable age were able to go to employment exchanges and register. Surely nobody should receive unemployment benefit if the test of further work cannot apply. I see now, following a recommendation from the National Insurance Advisory Committee, that pensions over £18 a week are to be reduced and that this will save about £2 million. I do not think this can affect a large number of people.
LORD ABERDARE: My Lords, I am not quite sure where the noble Baroness is quoting this from. I think she is quoting something that was altered in the House of Commons. This was amended.
BARONESS PHILLIPS: You have the clause relating to occupational pensions.
BARONESS WHITE: It is dropped.
BARONESS PHILLIPS: It is dropped. That is splendid. I am sorry I did not follow that matter right through. Perhaps I shall find some other points which have been dealt with. That will be even better.
Clause 4, which I do not think has been changed, relates to the earnings rule in connection with retirement pensions. When I was a spokesman for the Department—and, unlike the present Minister, I did not enjoy the responsibility of being part of the Department—this was one point on which I constantly appealed to the Minister for consideration, so I would like to reiterate my plea. I am aware that there has been an upgrading, and that it is now possible for the wife to earn more before this is taken into account; but when we look at the effect of it we see in Clause 4,
"…where the beneficiary is residing with his wife, and the earnings of his wife for the calendar week ending last before any week for which he is entitled to benefit under this section exceed £9·50, the weekly rate of benefit under this section shall for the last-mentioned week be reduced—

(a) where the excess is less than £2·00, by 5 new pence for each complete 10 new pence of the excess, and

(b) where the excess is not less than £2·00, by 5 new pence for each complete 10 new pence of the excess up to £2·00 and by 5 new pence for each complete 5 new pence of any further excess."

That last paragraph, where you actually extinguish every 5p you receive, surely is something which is not embodied in any other part of our legislation. Even our taxes do not extinguish completely a man's earnings. Even if a man pays the highest rate of tax he is entitled to something; but here we have a principle which is almost exclusive to insurance.
My Lords, what is the real virtue of this? Looking at the administrative costs of running the scheme, if one is going to need 225 new workers, and the cost of the scheme is going to be £650,000, it seems to me that this is rather like Parkinson's law: you are going to spend far more to collect back these five new pence. It is a complicated way of doing it, and it seems to tie up with the advice allegedly given to a reporter on a particular paper who worked as a clerk in the Department. Evidently they said, "The more forms you send somebody, the better it looks. If you are going to do anything, make it a rigmarole; go the long way round. This is how Government
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works". I do make a plea to the noble Lord that, before the next piece of legislation, we should look again at this earnings rule, and I would ask that we consider the abolition of this altogether. It cannot affect a large number of workers; it can create a great deal of hardship, and it is a definite disincentive. Noble Lords may say that perhaps we do not need to feel that retirement workers are employed—or, indeed, their wives—but these are people who so often work at what may be termed the lower end of the scale, in the catering industries—the kind of work which other people do not want to do, so there are several reasons why this should be looked at.
The noble Lord explained how the fiat-rate contribution is to be changed, and we see from the Memorandum to the Bill how the money is to be raised. On a small point. I notice from the explanation of the flat-rate increases, at the end, that they are expressed in a way which is new to me, bearing in mind that we discussed decimal currency in this House. I am looking at Schedule 1 where the amount of the weekly contribution is expressed as £0·672. I believe we agreed that we should refer to so many new pence. Perhaps the noble Lord could give us an explanation as to why these are expressed in three places of decimals. It seems to me that somebody is going to have an extremely difficult calculation to work out. I should like the assurance that every worker who can contribute to a graduated pension receives some part of this.
My Lords, I believe that the time is overdue when the whole principle of National Insurance has to be looked at and some kind of simplification introduced. I carried out a spot check with my own employees and I found that, while most people know what the reduction in tax is, they are very vague about the other deductions. They feel extraordinarily bitter because they do not understand the difference between the graduated deduction and the State insurance deduction and its connection with the National Health contribution. I believe that we could evolve a much simpler system of insurance, one which we could explain. It never seems capable of explanation; it is not actuarial; it does not follow that if you pay in you will draw out, because other reasons are

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introduced. It is not a scheme in which you pay in in order necessarily to benefit other people less fortunate than yourself. I am making a strong appeal to the Minister, in the position which he occupies in his Department, to let us have, quite soon, a discussion on how we can simplify our system of National Insurance. With those few words, I should like to wish the Bill a speedy passage through this House.
8.42 p.m.
BARONESS WHITE: My Lords, this Bill is one of considerable importance to millions of people in this country. I know that we have been discussing something else of great importance, but I wish we had more participants in this debate because we are not only affecting the basic rates of retirement pension, and the contributions required to finance them, but we are also embarking upon some interesting and important measures for the benefit of the long-term sick and the very elderly people who are over 80 years of age. There are a number of considerations in both these fields.
As my noble friend Lady Phillips and the noble Lord, Lord Aberdare, have remarked, so far as the volume of money is concerned it is the improvements in the retirement pension, and other benefits, which loom largest. More than £500 million, even in our inflated days, is a very considerable amount. It would be entirely wrong if we allowed ourselves to be mesmerised by this figure. One speaker in another place, an extremely experienced former Minister, Mr. John Boyd-Carpenter, referred to this increase as being a massive transfer of purchasing power from those now working to those in retirement. But one must bear in mind that in an inflationary situation it is those who are currently in work, whose earnings are going up so rapidly, who are getting more and are improving their standard of living. What we are doing by this Bill—which we naturally welcome, so far as it goes—is probably rather less than keeping relatively in place those who have reached retirement age. Therefore we should not talk as though we are doing them a vast favour. When we look at the massive increases in earnings rates which have been going on (and it would be quite improper on this occasion to go into the reasons for it, for we
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had a debate as recently as last Wednesday on this) then, relatively speaking, I do not think it is true to suggest, as Mr. Boyd-Carpenter did, that there is this "massive transfer". From various calculations that have been made—and inflation is now going on at such a pace that we can hardly keep up with the calculations—while it is still perfectly correct to say that when the increases come into effect in September they will rather more than make up the value of pensions which were settled last in November, 1969, nevertheless one is entitled to ask how long this marginal advantage is going to remain effective.
I was interested to see that when asked about this in another place the Minister responsible made no reply. It was suggested, when this Bill went first before another place, that at the present rate of inflation the additional benefits will be wiped out in March or April of next year. With the increases in the price of food, in particular, which affect elderly people considerably, that calculation should be January or February, instead of March or April. It would be helpful if the Minister to-day could give us the Government's current calculations as to the enduring value of these proposed increases. We are perfectly willing to accept that when they come into effect they will enable retirement and other pensioners to do slightly more than keep pace with the increase in the cost of living. But when we are faced with a situation that, in the couple of months for which we have had the most recent figures, the cost of food has gone up, 1 think I am right in saying, by nearly 3 per cent., and the cost of other necessities has also increased (and I know that my rates have certainly gone up) then we should not be unduly complacent.
What I am trying to put before your Lordships is that we shall hardly be maintaining the existing relative position of pensioners. We are certainly not embarking on something which is going to make this massive transference in favour of the retired as compared with those still at work. That is something on which we should be perfectly clear. This, if we wanted to pursue it (and tonight I suppose we do not) leads to the very much bigger question of how far we as a society with an increasing proportion of older people, are prepared

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genuinely to transfer a larger proportion of the current earnings of our society to those who no longer directly add to our economic increases. It is still true, in spite of the improvements which have been made by the present Government and the last Government, that one can fairly say that to be old is to be poorer. For many people it is still to be poor. We should not delude ourselves about that.
There have been considerable discussions, upon which the Minister hardly touched, as to the proposed changes on the other side. We have been speaking of the increases in benefits, but there are also the increases in contributions. It is the manner in which these increases have been decided upon that has caused a good deal of controversy. I would have supposed that in introducing the Bill the Minister might have said a little more about that. As I understand it, what the Government are really doing is to say that those below a certain level (I think the figure is £18 a week; there has been some slight increase in the exemption limit) will not be paying the extra. A group earning above £30 a week will be brought in where they were not contributing before—at least, that extra income was not calculated in the determination of the contributions.
The main burden is going to fall on those earning between £18 and £30 a week. I think I am right in saying that the average earnings now in this country, for men at any rate, are in the neighbourhood of £28 a week. Perhaps the Minister will correct me on this point if I am not accurate in that, but I think I am right. If this is so, it means that a considerable extra burden will be placed on those who are going to be affected by the various other measures which the Government have taken in relation to charges for school meals, milk, medical provision and so on, which have been discussed at other times. This particular band of wage earners who are likely in any case to feel particularly hard done by in other respects, will now also have to face these increases in contribution. That is what I might call the social effects of these proposals.
Then, however, there is a matter of principle which I know has caused considerable discussion and anxieties on the part of a number of Conservatives in
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another place. That is the relationship between the flat rate and the graduated contributions, on the one hand, and benefits on the other. This Bill seems to be in breach of the normal insurance principles in the relation between the flat-rate contributions and graduated benefits. I know there have been various breaches in the pure milk of the gospel of insurance. Nevertheless, the basic principle one has tried to preserve is that, by and large, one does not use this sort of National Insurance scheme for considerable redistribution within it itself, but uses the Exchequer contribution to make up the difference. It would be helpful to us in our later discussions on this Bill if at this stage the Minister could make a little clearer the Government's attitude to this change in principle. This time I am rather with Mr. Boyd-Carpenter—and I repeat he is a most experienced person in this field. He was one of those most agitated by what he felt was a change of principle on the part of the Government. So I do not think we should just let this pass as though it did not matter. I think it does, and that we should have further enlightenment on this.
So far as the earnings rule is concerned, I have considerable sympathy with what my noble friend Lady Phillips said about this. I have always felt that the earnings rule introduces a certain unnecessary rigidity into arrangements which people of retirement age and beyond can make for themselves. I am well aware, of course, that there have been very strong expressions of opinion in the past, by the Trades Union Congress, for instance, among others, in favour of an earnings condition for retirement. Their attitude was brought about in the days when there was considerable unemployment and it was felt that jobs should be kept, broadly speaking, for younger people who had family responsibilities, and that older people therefore should not compete in the labour market; nor should employers be encouraged to employ at low wages older people supplementing a pension to the detriment of younger people who were dependent entirely on their earnings to support their families. So one can well understand the insistence upon an earnings provision in retirement.
However, as against that, one should look perhaps with closer attention at the limitations which this earnings rule places

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upon people who are trying to adjust themselves gradually from a very full, sometimes an over-full, working life to the time when ultimately they may not wish to take regular employment or regular occupation at all. People age at extraordinarily different rates, and their chronological age may have very little to do with their capacity and activities. Therefore, we should look again more carefully in present-day conditions at how far we ought to maintain an earnings rule. My one caveat here, though—one says it with regret, tinged with apprehension—is that if we should be moving once more into a position of excessive unemployment—we have already reached that, but of really frightening unemployment—then one can perfectly understand that the psychology which was the basis of the original insistence upon the earnings rule will return, and one will have once again, very understandably, insistence by people of working age that they really cannot face the possibility of competition or, maybe, undercutting by older people when they themselves desperately need work to support their families.
Nevertheless, what is being done to increase the level up to £9·50 seems to us to be sensible, if only because, as in most of the provisions of this Bill, what we are really doing is running to keep in the same place in other words, we are adjusting the monetary amounts in our legislation simply in order to keep pace with the change in the value of money; we are not making any absolute change but are making a purely relative one, in order to keep pace with inflation. There was, however, one change in the earnings rule which went well beyond the amount that was necessary just to keep pace with the change in the value of money. That is the provision enabling the wife of a man who is chronically ill now, as I understand it, to be governed by the same condition as other people where the earnings rule is concerned, whereas previously she was at a very much lower level. This change, I must say, I welcome very much, as I am sure we all do, because, after all, if anyone is placed in a situation where she was under tremendous strain (many of us have felt the conflict of loyalties between looking after one's husband or family and earning one's living) it is surely the wife of a man who is chronically sick. Therefore, it seems to
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me that this provision, which as I say goes much beyond what is needed for purely monetary reasons, is a step in the right direction and one which I personally, at least, very much welcome.
I should like to leave the clauses of the Bill which concern the general run of retirement and other benefits and contributions and turn now to some of the categories which cost less, and perhaps do not look quite so important in the Financial Memorandum, but which, for those concerned, are of very great importance indeed. Before I deal with the details of the provision for the over-80s, perhaps I should say that we recognise that the provisions for the over-80s, and those for the long-term sick and for their families, are selective benefits. We have made a good deal of play about our dislike of selective benefits, but I should make it clear that when we speak in those terms we are of course referring to those which are selective on a means test or incomes basis, and we should certainly have no complaint at all to make about the type of selective benefit which is dealt with in this particular legislation, because here selection is by categories either of need in the physical sense (not in the financial sense) or of age. So we make no complaint at all about this particular type of selectivity.
Where the over-80s. are concerned, again provision is being made for some increase in the weekly allowances for those for whom provision was made in the legislation last year. This, welcome as it is, again is just keeping pace with the change in money values, but in addition there is a first step, I think, by the Government towards recognising that when you are over 80 your needs increase in the sense that you are able to do far less for yourself: you have to ask or employ other people to do things for you to a much greater degree, and your physical needs for warmth, for example, may rapidly increase. Therefore we welcome the age addition which is proposed in the Bill for everyone over 80, as I understand it. I think this applies to everyone, whether they were entitled to pensions under the old scheme or under the new one. I think the 25p per week age addition is universal. This is justified in principle, for the reasons I have given. I only wish, quite frankly, that

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it were a little more. Let us think how much 25p is in your purse or pocket; how long does it last? Not long; and I think one might at least have gone as far as 50p. Twenty-five pence is really a little miserly, and if we were going to do it at all—and it is justified on social grounds—I think it should have been a little more generous. After all, there are not so many people over 80, and many of them do not live very long; therefore in those circumstances I think we could have stretched it to 50p. Just think how long 25p lasts any of your Lordships, and I am sure you will agree that it is not very long.
There are other provisions which we should certainly welcome. The extra money for the children in the family of a long-term invalid is something which I was very glad indeed to see in the Bill. This is new. There are many provisions in the Bill which I am sure the noble Lord will agree were either contained in the draft National Insurance Bill which Richard Crossman had prepared when he was a Minister, or were originally in the Bill on the chronically sick and disabled brought in by Mr. Alfred Morris and passed in the last Parliament. These provisions were originally in that Bill but were taken out in the belief that they would be included in the legislation of the last Government, but because of the Election that legislation never came about. We should certainly give credit where it is due, because the provision to which I have just referred, the money for children in the family where the head of the household is a chronic invalid, was not, as I understand it, in the proposed earlier legislation. So this is something which I am sure we all very much welcome.
I am rather more doubtful about the differentiation between different groups of chronic sick according to age. It is perhaps desirable that we should have a little more discussion about this, possibly at some later stage. It really smells to me a little of Treasury midnight oil, this idea that the younger chronic sick should have a pound invalidity allowance, then in the next age group it drops to 60p per week, and then in the older group, up to the age of 60 for men and 55 for women, I believe, it drops again to 30p per week.
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None of these sums is very large. It is welcome, of course, so far as it goes, but I am not personally entirely satisfied that one should drop from 100p to 60p to 30p in that way. The reason given by the noble Lord is that if one's complete incapacity for work arises at a later age one should presumably have been able to accumulate savings, on which one could rely, and one should have done this by the age of 45; and he suggested that those under 35 had greater family responsibilities. With great respect, I am not at all convinced that this is so. I should have thought that the age band between 35 and 45 was where the greater family responsibilities lay, and one might have found it difficult to accumulate very much before becoming a permanent invalid at the age of 45. Also the older one gets, the less able is one's wife to earn.
Although I am certainly strongly disposed to help the really young chronic sick, because they have a much more daunting prospect in life, I am still not convinced that these particular age groups are justified. It may be that at a later stage we could discuss the position a little more thoroughly. I know that those of my friends who are concerned with the problems of the disabled do, of course, welcome very much the extra provisions that are made in this Bill. As one of them said, they are a tentative step towards the provision of a disablement income. But it is also true that those who are concerned are still very anxious for certain further improvements. I know it was said in another place that further measures would be brought in, but I think we should perhaps indicate at least two directions in which we hope that further improvements could be made.
I was rather sorry that we could not have included in the legislation which has recently gone through the House, or covered by Amendment to this Bill, the question of the attendance allowance for those who need constant attendance. It seems to me that the criteria for this allowance are very hard indeed when all the circumstances are considered, because one has to be able to prove that constant attendance is required not only by day but also by night. Those of us who have had some nursing experience know that it can be a very great strain on the family if there is someone who needs constant attendance by day; and

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this is a situation, particularly when there are other members of the family, young children and so on, which places an almost intolerable strain on the mother (it is generally the mother, but it can sometimes be the father) unless the family can afford to have some help, some relief in waking hours and not just at night. I do not pretend for a minute that it is not worse if it is necessary to have constant attendance at night—of course it is. But I am told that the calculation is that if it is restricted to those who will qualify under the present legislation it will mean that only about 25,000 persons will be covered, whereas if it were extended to allow for day-time care as well as day-and-night care—and obviously there will be some care at night for anyone as sick as that—this would extend the total qualifying to around 150,000. This is a point that many people feel should be looked at again.
Another category which is not covered—because normally she does not have her own insurance and therefore does not qualify—is the disabled housewife. Here again, although with the aid of modern inventions it is quite astonishing what a disabled housewife can accomplish in the home, it is inevitably more expensive to housekeep if a woman is in that condition, and again she may well need some extra assistance one way or another. Neither of these categories is dealt with in this Bill. I am just putting it to your Lordships that these are two categories of persons to whom I think, if we are in earnest about helping the disabled, we should turn our attention in the fairly near future.
I should like also to ask the noble Lord, because he and I share an interest in South Wales, whether he could tell us when we are likely to have the report of the Industrial Injuries Advisory Council which is engaged on a major review of pneumoconiosis. This point was raised in another place, and I am not expecting that the Government are prepared at the moment to make any changes in the legislation affecting these particular people. But those of us who have had long experience in the mining areas, more particularly in South Wales, know the deep distress which can be caused when someone is believed to have pneumoconiosis and then at the post-mortem it is discovered he had emphysema and his
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widow loses entitlement to various benefits to which she was expecting to be entitled. This is a very longstanding difficulty. There are other parts of the world where emphysema is an industrial disease for the purpose of benefit under the legislation, and I hope that we can have some indication at least as to when we are likely to have the results of this particular review.
There are a number of other interesting points in this Bill.
LORD FRASER OF LONSDALE: My Lords, will the noble Baroness allow me perhaps to give her some little comfort about constant attendance allowance? The matter has been familiar to me for 40 years. The officials in the Ministries of all Parties are quite extraordinarily kind about this, and they do not insist that a separate person, say a servant, must be in the house; they recognise that a member of the family can do it, and they do do it, and no very real difficulty has arisen.
BARONESS WHITE: My Lords, I am sure we are most grateful to the noble Lord for that intervention. The point I was making was not quite the one to which he was referring. It is not so much whether it is somebody in the house, or a member of the family, but, as I understand the criterion as to whether any benefit should be payable at all, it is that the sick person requires constant attendance by night as well as by day, and if this is strictly applied it can diminish the number of those who are entitled to that particular benefit. I do not speak with any wide knowledge of this myself, but I know that this is something which very much concerns the organisations which are particularly dealing with the problems of the long-term disabled.
I was about to say that there are many other interesting points in the Bill before us which I hope we shall have an opportunity of discussing at greater length at the later stages. It is a Bill which does many things that we are happy to welcome. On the other hand it has, as I have endeavoured to indicate, certain deficiencies, and it also raises certain matters of principle on which I think we should have, perhaps to-night, a slightly fuller explanation from the noble Lord who presented the Bill to us.
9.16 p.m.
LORD DAVIES OF LEEK: My Lords, I would not have intervened but for having served as a junior Minister in this Ministry. First of all, may I say how lucky the noble Lord is to introduce at this juncture a Bill against which none of us wants to vote, and which is giving some increases. Nevertheless, I hope he will take some of the criticisms that I make as criticisms that can be levelled at any Administration because of certain functional difficulties that have always existed in the Ministry of Social Insurance and Pensions, as it now is. In view of what was said by the noble Lord who spoke about constant attendance allowance, and as one who spent a long time dealing with the British Legion and all their problems regarding pensions, I should like to say that we are delighted to see in this explanatory memorandum that, relative to all the other social insurance schemes, the war pensions have been kept as was promised. The principal benefits under the war pensions scheme will be increased by broadly the same percentage as Nationl Insurance benefits; and, in addition, there will be substantial improvements in most of the preferential allowances which are peculiar to the war pensions scheme. I am delighted to see that a new provision is to be introduced to enable a war widows' pension and allowances to be paid to a widow whose war disabled husband was receiving constant attendance allowance at the normal maximum or higher rate, irrespective of the cause of death. Some of us, as well as the British Legion and other organisations, have been struggling to get something like that for years. In addition, war widows over 80 will receive the age addition.
May I now come to the Bill and the points that are relevant to its introduction in this House. One of the difficulties that all Governments find in the period after the promise, or whatever they said on the election platform—and we will disregard that so far as Party politics are concerned—is the large number of people, the millions, who have to be dealt with. As was said by the French—and there was a "Beveridge" in France before the Beveridge here, and the French were trying to introduce a social insurance scheme way back in the 1900s—no new
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social insurance scheme can be introduced unless you have the machinery to do the arithmetic and the difficult calculations. I want to know how far we have got with the introduction of the computer systems in Reading, which were to help the Newcastle area. I need not have these answers this evening. If the noble Lord thinks it worth while, I should be glad to receive the information later by letter rather than delay the House now. Are we in the position now that these promises of increases in insurance can be implemented much more quickly than hitherto, whatever Government may be in power?
I was glad that my noble friend Lady White referred to the old cases. I had the privilege in the other place of discussing and introducing some benefits for the old cases. They were old colliers and old quarry men who were injured in industry before 1948 and received no benefits whatsoever. I am glad to see that some improvement has now been made for this category, whose number is dwindling, and the expenses of which will taper off. I am worried about the constant attendance allowance in so far as industrial injuries are concerned. Will that allowance be lost when a person goes into hospital? That seems to be implied in the Bill. But I may be completely wrong in thinking that, and I am not being dogmatic about it.
I should like to press one other point. For years I and others have tried to improve the law in regard to insurance benefits for pneumoconiosis. This disease attacks men who work in the pits, especially in the anthracite areas. I have seen magnificent Rugby players who, after five years, were unable to walk along the touchline because their lungs had been affected by working among the anthracite. Their Rugby was finished because of that. This disease also attacks others, such as men who work in the quarries. I gather that we shall be getting another report. I have had the privilege of visiting the pneumoconiosis centre at Cardiff; and by Euston station we also have some dedicated civil servants and medical men who have made a great contribution to the study of this disease.
I sincerely hope that we shall try to get rid of the plethora of tribunals. I have had a lot of experience over the

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years of men and women who have been timid, worried and afraid about having to go before tribunals. It is time that both Houses looked into the number of tribunals. Furthermore, the layman appearing before a lawyer and a doctor is often unable to put a coherent case in regard to his illness—and he feels that justice has not been done. I am not saying that justice has not really been done, but that is what the layman feels because of the environment of the tribunal. Cannot the system of free legal aid be made available to these people who have to go before a tribunal?
There is to be an increase in the gratuity of £110, or 20 per cent., and I wonder whether the lump sum of £660 will be the finish. I should like to know what will be the position after next September in regard to this £660. I gather that the entire cost of what is proposed will be about £650 million. That may look a great sum, but it is nothing, really and truly, if you look at the mass of industrial know-how and the increase in productivity that we could get if, together with our social insurance and other schemes, we increased the opportunities for safety in factories and increased the opportunities for the maximum of prevention of industrial disease that is possible.
Before I sit down I will mention that tragic industrial disease which is one of the most difficult and which will grow in its incidence because of the increased use of asbestos in modern society. In building, asbestos is now becoming a common thing. People are building their greenhouses and their huts in their gardens with asbestos, sawing it up, little knowing that asbestos dust is one of the most deadly dusts that can get into a man's lungs. During my period as a Minister in this Ministry we had the case of a docker's wife who died of asbestosis although all she was doing was cleaning her husband's clothes after he had been unloading ships carrying asbestos. She had been doing this for eighteen months, and the result was that she caught this disease. The point I want to make is that there is still need for vigilance and a thorough-going observance of the provisions of the Factory Acts, and also a need for whatever Government is in power to carry out a courageous exploration of all the possibilities
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concerning industrial disease. The greatest treasure that a nation can have is its investment in men—and skilled manpower is precious for a nation's economic, social and other health.
9.27 p.m.
BARONESS SEEAR: My Lords, the Liberal Party has for years pressed for the total abolition of the earnings rule, and this is the policy which we would advocate. If, however, as I expect to be the case, the Government are not prepared to abolish the earnings rule, I wonder whether they would consider a variation in the way in which it is interpreted. It is quite clear that among many of the early retired the great desire is to keep a limited contact with employment, and that gradual retirement is what most of us would choose if we had our way. It is also clear that the recently retired can fulfil an extremely useful position in industry if they can be regarded as a pool of people on whom employers could call in times of emergency or when there is need for additional employees. For example, during the holiday period, when a good many of the regular staff are away, it would be very desirable to be able to bring back into employment, let us say for a period of ten weeks, during the height of the holiday period, people who have recently retired.
If people recently retired returned and worked for 20 weeks for, shall we say (to make the sum easy), £20 a week, their aggregate earnings for the year would be £400. This would average only about £8 a week, and therefore, on average, would be below the figure they are now allowed to earn under the earnings rule. But, of course, if they were earning £20 a week this would be above the total they are allowed to earn, and would eliminate their pension for the weeks in which they were employed. If such a variation in interpretation were possible, it would be a valuable addition to the pensioner's earnings; it would provide an extremely useful source of labour for dealing with emergency situations; and it would make it unnecessary to carry so much regular labour because it would be apparent that there would be a source of supply to meet these emergency situations. In this way it would also help the old-age pensioners to keep that continuing contact with their place of work which it is quite clear many of them wish

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to do when they have passed the stage at which they wish to continue in full-time employment. I very much hope that the Government will consider this. I am sure that there will be administrative difficulties, but I think it is an aim well worth pursuing.
9.30 p.m.
LORD ABERDARE: My Lords, I am grateful to all who have taken part in this debate even though some of the speakers were rather a surprise to me. I had seen the names of Baroness Summerskill and Baroness Wootton of Abinger on the list and I found speaking instead the noble Baroness, Lady Seen, the noble Baroness, Lady Bacon, and the noble Lord, Lord Davies of Leek.
BARONESS WHITE: My Lords, I am not Lady Bacon.
LORD ABERDARE: My Lords, I know perfectly well that it was the noble Baroness, Lady White, who spoke; it was a slip of the tongue. It has been very valuable and interesting to hear your Lordships' remarks about this Bill. At the risk of parting company with my honourable friend in another place I would rather agree with the noble Baroness, Lady Phillips, that the Bill has no merit in being simply long. But I think the fact that it does add a large aggregate sum of money to the pensions and other benefits paid is significant. Taking the rate of pension which was introduced by the Government of noble Lords opposite in March, 1965 as a base—because at the time this was, as they rightly claim, a high peak in the level of pensions—the £6 pension to be introduced in September will set a new high peak. It is a real improvement over all previous upratings since the scheme began in 1948. Of course, how much higher it will be will depend on the movement of prices between now and September. We cannot forecast that. How long the new pension will thereafter hold its value will also depend on the rate of inflation. I would suggest that the true comparisons can only be made with the value of pensions at the same point in the previous upratings. There are some interesting graphs which can be studied showing that these reach peaks when pension rates increase and how they gradually fall away as the price index rises. But
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what I would say to the noble Baroness is that while we are, as her Government were, committed to reviewing these rates every two years, we do and will keep the matter constantly under review. I think that all Governments would do the same.
BARONESS PHILLIPS: My Lords, I am sorry to interrupt, but I am not quite clear about what the noble Lord means by "committed". Is it written in legislation that there must be a review every two years?
LORD ABERDARE: My Lords, I am not sure whether it is in legislation, but we are committed to review every two years. A Bill of the previous Government which fell at the Election laid down that the matter would be legislatively reviewed every two years. What I am saying is that we are committed to reviewing every two years, but that we shall keep it under constant review in the meantime.
I take the noble Baroness's point about the over-80 payment being urgent. It will be put into payment immediately in September, and I know that local offices will do their best to get it paid swiftly. The noble Baronesses, Lady White and Lady Phillips, and later Lady Seear, mentioned the earnings rule. The earnings rule has existed for a very long time. All that we can boast of doing is to have made a very large jump in it by adding £2 to the point at which there is exemption from losing any benefit. After that it tapers away, until I think I am right in saying that at £11·50 all benefit is lost. We all of us have great sympathy with the idea of abolishing the earnings rule altogether. Perhaps one day we may get that far; but for the moment this is as far as we can move. I should like to thank the noble Baroness, Lady Seear, for her suggestion which I will see is carefully considered.
The noble Baroness, Lady White, asked me about the different contributions set up. What we have tried to achieve in the Bill is to leave those earning less—£18 a week and under—without any increase in contribution and to lay on the extra for the graduated contributions of those earning more than that. I must confirm what she said, that the average earnings in October, 1970, were about £28 a week; and I take the point that

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some of this extra burden will fall on those earning less than that. May I suggest that we do not have a particularly long discussion on that now, as we shall have an opportunity to debate it on Wednesday week when there is to be a debate on these matters.
The noble Baroness raised the question of invalidity allowances and the reasons why we were giving more to the younger, those under 35, and graduating less thereafter. As I tried to indicate in my opening speech, this was done because we genuinely believe that the younger a person is the less chance he has to build up any resources of his own. The point we had in mind about his family was that a younger person would have a younger family, and probably the mother would not be able to go out to work; therefore, again there would be a heavier burden. This was the only point about trying to build up his resources by giving more to the younger chronically sick person.
The noble Baroness also mentioned the question of constant attendance allowances and the need here to widen the scope, and the problem of the disabled housewife. We are very conscious of those problems. I do not know whether the noble Baroness read my right honourable friend's speech to the Disablement Income Group on June 23, when he tried to cover those points. Not that we have been able to do very much more at present than we are doing with the attendance allowance and other benefits for invalidity, but we are conscious of the need to do so as and when money becomes possible.
BARONESS WHITE: My Lords, if we might pursue this a little further (I must confess that I have not read the speech to which the noble Lord referred, but I will make it my duty immediately to do so), does he hold out no possibility at all that we may include, not perhaps both, but one or other of those in the current Bill? Would that not be possible? Here we do not have control over the Money Resolution, but presumably we might suggest to another place that they might amend the Money Resolution.
LORD ABERDARE: My Lords, I do not think that we could go any further
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with the attendance allowance than we have done. That was introduced in another Act already on the Statute Book, the 1970 Act. I was trying to say that whereas, as the noble Baroness said, the present attendance allowance is confined to those who need attendance by day and by night, one would hope that if, at a later date, money became available, it could be extended to those requiring a lesser degree of attendance. But there are difficulties of definition, and major difficulties about finding the money at the moment. I am only trying to say that we have every sympathy with the direction in which the noble Baroness wishes to move. If I may I will write to the noble Baroness about the Industrial Injuries Advisory Panel on pneumoconiosis, but I am afraid that I have not the answer immediately available.
I was very grateful to the noble Lord, Lord Davies of Leek, for mentioning the position of war pensioners. I can confirm that the benefits are correspondingly raised, and also that there are increases in preferential allowances. I should like to write to the noble Lord further about computer development. My impression is that we are ironing out the creases and that in future it will be easier to make upratings rather more quickly. As to the special attendance allowance for those in hospital, there is a special problem. At present, under the proviso to Section 16(2) of the Industrial Injuries Act, these cannot be paid for any period while the person concerned is in hospital. It is proposed to remove this proviso and to rely on regulations made under Clause 10(1). The intention is to bring provisions for payment of attendance allowance for people in hospital into line with the new attendance allowance in respect of other persons for the first four weeks in hospital.
I have already said to the noble Baroness, Lady Seear, that I will look at the point which she raised, and if there are any other points which I have not answered I hope to write to noble Lords about them.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

INDUSTRIAL RELATIONS BILL
9.43 p.m.
EARL ST. ALDWYN: My Lords, I had hoped that we might have been able to make progress with the Report stage of the Industrial Relations Bill this evening, but your Lordships have shown a rather exceptional interest in the National Insurance Bill, and I think it might perhaps be beter if we postponed the start of the Report stage on the Industrial Relations Bill until to-morrow. I hope, however, that Io-morrow we can make really good progress on the start of this stage.
LORD SHACKLETON: My Lords, I think the noble Earl has taken a wise decision. I think it is too late in the evening to start a Report stage. I rather regret the noble Earl's suggestion that an exceptional interest has been taken in what I thought the Government regarded as a major Bill and which, owing to the hour at which it came on, has not had the attention which it might have had. None the less, we have taken note of what he said. I gather that there was earlier a lengthy but extremely good debate, of a kind which, if I had taken part in it, I should probably have kept the House going for several hours if the House was willing to listen to me. However, in these circumstances, I think it is wise for us to adjourn now.