HL Deb 01 July 1974 vol 353 cc24-32

3.37 p.m.


My Lords, with permission, I will repeat the Statement made in another place by my right honourable friend the Secretary of State for Employment. The Statement is as follows:

"The Government have today laid before the House and published the Report of the Pay Board on London Weighting.

"The Report was commissioned by the previous Administration as an independent examination to advise what changes are required in the basis and operation of the London Weighting formula, which was generally adopted on the recommendation of the National Board for Prices and Incomes in 1967. On taking office, the Government decided that it was desirable for this review to be completed and have urged all those concerned to await its outcome.

"The Pay Board have taken evidence from many groups and have undertaken detailed surveys. They have concluded—as did the N.B.P.I.—that the proper purpose of London Weighting is to take account of the different costs of working in London from elsewhere in the country, and that it is applicable only to those in London who have national rates of pay and not to those who adjust their rates of pay to the London labour market. London Weighting is therefore a solution for a largely public sector problem and should not be paid to those in the private sector who are not in exactly the same position.

"With this in mind the Board recommend that London Weighting should be made as comprehensive as possible to deal with the measurable differences in the costs of working as between London and the rest of the country. It should take account of housing, travel to work and certain other quantifiable costs, for all of which the Board suggest what they regard as valid measures. They also set a value on certain intangibles, such as relative standards of housing. On this basis they suggest that the level of weighting should be raised to £400 for Inner London and to £200 for Outer London.

"By 'Inner London' the Board mean an area within four miles of Charing Cross and for the limit of 'Outer London' they take the G.L.C. boundary. It would, however, be left to negotiations to decide whether or not to alter these boundaries to suit their circumstances. If they do so, the Board envisage that they would distribute the same total sum of money which the Pay Board's boundaries would have produced for the employees concerned.

"The levels of weighting suggested by the Board are based on information relating to last April and the Board make no recommendation on the question of retrospection. Looking forward, the Board suggest that there should be a simple annual up-dating operative from July 1 each year and relating to costs in the preceding April as published by my Department. There would be a major review of the whole operation of the scheme after three or five years.

"The Board say that London Weighting cannot be designed to help the first-time house purchaser. They see this as a major but separate problem with which each employer must deal in whatever way the situation merits. Assistance for first-time house purchasers would raise issues for the public sector which the Government will have to consider in the light of the Report. There is little doubt, however, that housing is at least as important as pay in many of the labour supply problems of London.

"The Government appreciate the clarity and thoroughness of the Report's analysis. The Board's examination was set in train when statutory pay controls were in full operation, but the recommendations are entirely applicable to a voluntary situation. These recommendations provide a common set of principles by which substantial improvements can be negotiated in the existing rates of London Weighting and by which negotiators can arrange for their objective adjustment in the future. The Government regard the Report as a most useful contribution to the resolution of this particular problem and believe that the principles proposed should be applied in negotiations on London Weighting both in the public sector and by private sector negotiators who are in the same position.

"As I have earlier made clear, it is the Government's intention that employers and unions should be free to negotiate on this matter; and the Government are glad to endorse the Report as affording guidance by which negotiations on London Weighting can now sensibly proceed. If these negotiations lead to settlements before the statutory pay controls are ended, the Government consider that the Report provides the exceptional circumstances to enable me to enter into consultation with the Pay Board with a view to using my consent powers to enable implementation.

"Although action on London Weighting should help to ease labour shortages in the services affected as between London and the rest of the country, I recognise that it is not a complete answer to the special problem of London Transport, on which a strong case was put to me some time ago jointly by the employer and unions. Action on that special situation will need to be taken in the light of the outcome of the current arbitration on London Transport pay."

My Lords, that concludes the Statement.

3.40 p.m.


My Lords, I should like to thank the noble Lord for repeating that interesting Statement, and to welcome this Report on London Weighting which, as he said quite rightly, was commissioned by us when we were in Government. I am very glad that the present Government have welcomed it and I should like to join with the noble Lord in paying tribute to the Pay Board for having produced it. But it seems to me to be extraordinarily paradoxical that here the Government are coming forward with a Report from the Pay Board, which they thoroughly commend, on the very day when we are discussing the Prices Bill, which under Clause 6 contains powers to abolish the Pay Board. I should have thought that this Report was further evidence of the usefulness of the Pay Board in its approach to these problems, and in making sure that we deal with them in a fair way and in a way that all can see is fair.

I would ask the noble Lord only one question, which is stimulated by his repeating the phrase, "entirely applicable to a voluntary situation". As I read it, when statutory controls are ended unions will then be free to negotiate whatever London Weighting they wish, regardless of the guide lines in this Report. I wonder what is the intention with regard to an annual review every July 1, if there is no statutory policy and if the findings of that review have no weight and are simply open for negotiation between unions and management.


My Lords, may we also thank the Minister for repeating the Statement made in another place? May I ask him whether, in view of the fact that the Government have repeatedly urged those concerned to await the outcome of the Board's deliberations, they feel that there is a strong case for retrospection, at least to April 1, especially since the cost of living has continued to increase since then? Presumably, if this amount was paid, it would compensate workers only for the differential in the cost of living in London up to April 1, and not for the increased differences between the costs of living in London and elsewhere in the country which have occurred since April 1.

Bearing in mind the consideration of transport costs in these findings, does the noble Lord consider that there is a case for the Government's making a contribution towards the cost of subsidising fares on London Transport—a policy which has been followed by the Greater London Council? Also, can he say anything further on the assistance which might be offered by the Government to first-time house purchasers? Does he realise that this is a practice which is fairly widespread in private industry? I believe that banks, insurance companies and building societies all give assistance to some extent. This might be an additional means of ensuring that workers in essential occupations are available in Greater London.


My Lords, I should like to thank both noble Lords for the welcome which they have given to this Statement. I understand the difficulty mentioned by the noble Lord, Lord Aberdare, in accepting this Report within the context of a voluntary wage negotiation system. There is clearly a most important factor here and the noble Lord should try to understand what we are trying to do. We do not want the over-rigid compulsory system, but we do want certain guide lines to be accepted. The Trades Union Congress lays down certain guide lines. There is a guide line laid down here in respect of London Weighting, and we hope very much that that guide line will be respected. There is a difference from the rigid system of statutory control which, as the noble Lord knows, gave rise to so much trouble.

With regard to the questions asked me from the Liberal Front Bench, I am unable to say anything either about the first-time house purchaser or about London Transport. As I indicated in the Statement, there are certain special problems there in regard to under-manning. Negotiations are taking place between the employer and the London Transport unions concerned and this Statement. I have no doubt, will be taken into consideration. So far as retrospection is concerned the argument is a definite one, that the figure established here is one which has relation to this year. Therefore, one cannot say, retrospectively, that there was this difference between London and the Provinces last year. At the same time, some undertakings have been given in certain cases and I have no doubt that those will be borne in mind when negotiations are considered in the light of this Statement.


My Lords, may I ask the noble Lord whether the Statement is to be taken to imply that the Government will be prepared to provide the finance for the increases which arise under this formula, not only in respect of the central Government services within the ambience of Whitehall, but quasi-public services—such as demonstrators and assistants in scientific laboratories and so on—depending on Government grants for their continuation?


My Lords, it would be wrong of me to say—and I am sure that the noble Lord, Lord Robbins, does not expect me to do so—that whatever agreement is reached between employers, whether public or otherwise, and the unions will be financed from public funds. Clearly, if a settlement is reached within the guide lines laid down here the consequences will have to be faced when the financing of any public authority is considered.


My Lords, will the noble Lord forgive me if I say that he must not regard my question as unreasonable. Considerations of the kind I have ventilated must necessarily be in the minds of those who are negotiating on the employing side. I am talking about nonprofit making institutions where a very grave problem of this sort exists at the present time.


My Lords, I absolutely agree with what the noble Lord said. Of course, those considerations must be taken into account. I am saying that I am not here going to lay down a rigid blanket rule as to what will happen.


My Lords, is my noble friend aware—I am quite sure that he is—that this will give welcome increases of pay to teachers, firemen, local government clerical workers, local government manual workers and many others? Is he further aware that this will increase very considerably the expenditure of local authorities in and around London, and that this will necessitate increases in local rates? Therefore, do the Government intend to increase the rate support grant to these authorities, so that the ratepayers shall not have to bear an additional burden?


My Lords, I think the noble Lord is putting in more concrete terms some of the problems which the noble Lord, Lord Robbins, put to me earlier, and my answer to him must be the same. I am not going to say exactly what will happen in particular cases. It is interesting to realise that the full implementation of these recommendations will increase the cost. There is already a cost of London Weighting, and this will mean increasing the cost of London Weighting by £154.5 million a year, or 6½ per cent. of the London pay bill, and will add about 0.38 per cent. to the total national pay bill. There are problems arising from this, which I have no doubt we all accept, but we must also accept that from all sides of the House there have recently been complaints about inferior services on public transport, about the understaffing of the police force in the metropolitan area and about the difficulty of getting teachers in the London area. One has to recognise that some of these things have to be paid for.


My Lords, will my noble friend answer a further question? Does this mean an end to the chaos in the town halls? I am not quite sure whether there is a "go slow" or an industrial dispute. Does it also mean an end to the fact that we do not get any printed matter in this House?


My Lords, I would rather not say anything about the printed matter in this House. I should myself have thought—and I speak here without a note—that printers are already paid as London printers and do not qualify for the London Weighting Allowance. With regard to the chaos in the town halls, I hope it will now be possible to negotiate a settlement.


My Lords, when my noble friend said that the cost of this award will be £154.5 million, did that sum relate to the actual rises which will be paid to the actual people who are in employment today? Does it take account of the fact that this increase in pay will be an inducement to recruits to come forward so that in six months' time there may be an extra 20,000 or 30,000 teachers, local government clerks and so on in employment?


My Lords, as usual, my noble friend has put his question so simply that I find it impossible to answer! Obviously I ought to know the answer, but I should not like to give him a definite reply without making further inquiries. I will do that, and let him know.


My Lords, while welcoming the Statement made by the noble Lord and being in full agreement with the increases proposed, I wonder whether the noble Lord would feel that this differentiation between Inner and Outer London is rather unrealistic?—because according to the experience of several Members of this House, if you are a teacher it is just as expensive to live in Croydon or Bromley as it is in Southwark. Those who have to commute to Inner London have ever-increasing fares. Would not the noble Lord think that doubling the amount for four miles round the City centre and giving only half the recommended rate for round the perimeter of Greater London is a very wide and discriminatory differentiation indeed?


My Lords, I understand what the noble Baroness is saying and I am quite certain there will be arguments about these boundaries. All I can say is that an objective and most thorough inquiry has taken place and the figures recommended here are based on that inquiry and not on the "hunch" or personal experience of any one of us. In certain cases it will be possible for an employer who employs people both inside and outside the suggested boundary—perhaps with depots outside—to come to an arrangement with employees, based on sharing the total amount available but on a different basis. This will be open to negotiation and I have no doubt that in certain cases it will help to offset the difficulties to which the noble Baroness has referred.


My Lords, is my noble friend aware that the problems to which he has drawn our attention, in so far as this economic weighting is being taken into account, is a universal problem throughout the world in large cities? Metropolitan man is now living in such conditions that the old-fashioned idea of private enterprise completely falls down. Therefore, I suggest we should be trying to study universally this problem of the attracting of mankind into huge cities which are unhealthy, noisome and conducive to the destruction of the best characteristics of the human being.


My Lords, I am not sure that this is a question of private enterprise, but certainly I agree with the noble Lord that I myself am finding the idea of living outside the greater Metropolitan area increasingly attractive. However, unless something is done about pay scales the people living inside the Metropolis will find themselves without any public services.


My Lords, may I ask my noble friend who started this problem? Was it this Government or the previous Government?


My Lords, the tendency for human beings to congregate together I think pre-dates both this Government and the last Government.