§ 3.33 p.m.
§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)
My Lords, with the leave of the House, may I repeat a Statement on the Post Office which has been made in the other place by my right honourable friend the Secretary of State for Industry. I am aware that your Lordships were told from our Front Bench that the Statement on agriculture would come first. I understand that the order of the Statements has been changed in the other place, but I should just like to pause for a second and ask: have I the leave of the House to repeat the Statement on the Post Office now?
§ Viscount TRENCHARD
My Lords, the Statement runs:
"With permission, I will make a Statement about the future of the Post Office Board.
"It is the Government's policy to encourage increased involvement of employees in decisions affecting their interests. But it is not for the Government to lay down how this should be achieved. The precise arrangements are for discussion and agreement between employers and their employees 1159 in the light of the particular circumstances of each individual business. This applies equally to nationalised industries, subject to any necessary Government and parliamentary approval.
"In the case of the Post Office, the management and the Council of Post Office Unions agreed two years ago that there should be an experiment in industrial democracy at all levels in the business, including the main Board. My predecessor facilitated in January, 1978, the main Board experiment by appointing seven representatives of the Post Office trade unions to be part-time members of the Board. He also appointed two consumer representatives. These appointments are due to expire on 31st December, at the end of the agreed two-year period of the experiment.
"In accordance with our general policy, it is for the Post Office and the Post Office unions to decide together what form they wish employee participation to take after the end of this year. One thing is quite clear at the present time; they do not agree that this particular experiment at main Board level should continue. Broadly, the unions are in favour of a continuation, whilst management and a majority of the independent members of the Board are not.
"The Chairman of the Post Office is continuing consultations with the unions and is making new proposals for close employee involvement in top level Post Office decision-making. It is for the Post Office management and the unions to agree on the way forward. I shall, of course, be ready to take any action that might fall to me to facilitate whatever new arrangements might be agreed between the Post Office and the unions. If an agreement were to be reached within the next two months which required such action, this could include bringing before Parliament an order under the terms of the Post Office Act 1977 to make permanent the statutory powers to make additional appointments to the Board.
"However, in the absence of agreement that the two-year experiment 1160 should continue, the Board appointments made for the purpose of that experiment will lapse at the end of the year.
"I would like to express my appreciation for the contribution made by all those who have played a part in this experiment."
My Lords, that is the end of the Statement.
§ 3.37 p.m.
§ Lord PONSONBY of SHULBREDE
My Lords, may I first thank the noble Viscount for repeating the Statement on the industrial democracy experiment which is being made in another place at the present time. I can only regret the contents of this Statement. It is, as I see it, harmful to industrial relations as it puts the clock back, and it is certainly ironic, at a time when the country is seeking better worker participation, that this experiment should be curtailed. It is also ironic that only 18 months ago Sir William Barlow was writing in the annual report of the Post Office:The experiment is still in its early stages, but so far I have been impressed by the way in which the Board has dealt with matters of policy and has already contributed much to the major decisions that have to be taken about the future of this massive organisation and its rapidly expanding range of services. Although this is a radical departure, it is an extension of the Post Office's rich history of participation through extensive consultative arrangements at all levels, built up over many years".Indeed, we learned from yesterday's Financial Times that the view of the union representatives on the Post Office Board is that with such a conservative management the experiment has just not been running long enough for any real assessment to be made, not least because so many major policy items take at least two years to germinate. Therefore, it should continue. Indeed, I am sure it is true that things do take a long time to happen and that it takes a long time for the fruits to be plucked.
One has learned with interest of the report which has been prepared by the Industrial Relations Research Unit at Warwick University, under the chairmanship of Professor Dorothy Wedderburn, and one wonders—and indeed I should like to ask the Minister—whether it is the Government's intention that this report 1161 should be published. We understand that report is likely to be critical of management's attitude throughout the experiment. In the light of today's Statement, one would have thought that it would be particularly useful that the report should be published so that we could see what that assessment has been.
Another effect of this curtailment of the experiment is that the consumer representatives, of whom there are two, will also lose their places on the Post Office Board. These representatives were put on the hoard at the instigation of the Liberal Party. So I cannot hold out any affection for the Statement which the noble Viscount has given to us this afternoon. I regard it as a very retrograde step.
§ Viscount SIMON
My Lords, from these Benches I should also like to thank the noble Viscount for repeating the Statement. I was very glad to have it confirmed at the opening of the Statement that it is the Government's policy to encourage the increased involvement of employees in decisions affecting their interests. In those conditions, it seems to me to be a thousand pities to abolish this experiment before anything else has been put in its place. May I ask the noble Viscount whether or not it would be possible to continue the present arrangements and the nomination of the directors until such time as appropriate and adequate arrangements can be agreed between the board and the trade unions.
We on these Benches would prefer trade union representatives to be elected rather than nominated by the unions. All sorts of alternatives could be discussed, but surely we should keep the present arrangement going until something else is there to put in its place. If that is not done it will be, in my opinion, a very severe setback to the advancement of what is I always think unhappily called "industrial democracy"—of worker participation in this important industry. Indeed, it seems to me that it would throw some doubt on the validity of the Government's real commitment to the policy which they have expounded.
I think that the noble Lord, Lord Ponsonby of Shulbrede, has asked the other question which I was going to put to the noble Viscount. However. I have two small ones. I could not understand 1162 what was the relevance of the reference to the "next two months ". As I understand it, the intention of the Government is that the experiment should come to an end at the end of this year; so I am not sure what the two months have to do with the matter. But perhaps the noble Viscount can explain that point.
May I also ask him about the consumer representatives. We on these Benches very much favour consumer representatives. It is not quite clear from the Statement that the consumer representatives are also going to he swept away at the end of this year. Perhaps the noble Viscount can make that point clear in his reply.
§ Viscount TRENCHARD
My Lords, may I thank both noble Lords for the points which they have made. Perhaps I could start by saying that the Government are neither curtailing nor abolishing this experiment. The experiment stems from a joint agreement which was negotiated by the parties concerned. It was negotiated for a two year period as an experiment.
The Government do not feel any great affection for having to make the Statement at this time. Indeed, my right honourable friends, both the Secretary of State and the Minister of State, have spent a very large amount of time in consultation and in receiving the individual views of board members to try to facilitate any agreement to the continuation of this experiment. But there is no agreement—quite definitely not.
It is clear that a majority of the board feel that the purpose of the agreement; namely, to improve the efficiency of the Post Office and to make it more effective and able to perform a better service, is not being facilitated by this form of employee co-operation. In this situation, the Government are not in the position of deciding to curtail or to abolish; they are simply not in a position to tell the parties to the agreement to continue that agreement when they have not agreed to do so.
I am well supplied with many quotations, but I shall give only one to your Lordships. On 25th January 1977, at col. 1181, the right honourable gentleman the Prime Minister said: 1163I accept that the principle of industrial democracy, if it is to be permanently based, must arise from agreement between both sides ".Unfortunately, we are in a position where there is no agreement to continue the experiment in this form. The Warwick University report will be made available in the Library of both Houses in a few days. With the permission of the parties concerned, we hope to put with it a consolidation of the views of the Post Office Board on the same question. I do not think that at this stage I should add any comments to the reasons why it has been found not to be possible to achieve agreement.
So far as the period of two months is concerned, allowance was made in the 1977 Act for that Act to continue for a period, in case, at the end of the experiment, time was needed to make the minor alterations permitted under the Act. There therefore remain two months from now for the consultations which the Chairman of the Post Office is still having. As my right honourable friend mentioned in his Statement, if during those two months some of his powers under the Act are indeed needed in relation to any part-time members, they are there to be used.
So far as the consumer representatives are concerned, their positions lapse also, and the views of the board and of Warwick University will no doubt touch upon their positions as well.
§ Baroness PHILLIPS
My Lords, may I ask the Minister whether he would put to his right honourable friend the view—I do not think that it carries the force of law—that since it has been suggested to private industry that it is highly desirable to have both worker participation and indeed consumer participation at the highest board level, it would be extremely unfortunate at this time if the nationalised industries were to be seen not to be carrying out this very useful process of improving the quality of the service which they can give?
§ Viscount TRENCHARD
My Lords, I thank the noble Baroness for making that point. I am sure that in the future the House will have a number of opportunities to discuss the role of boards and the problems of the representation of different 1164 interests, either by means of direct representation from the interests concerned or by the choice of people of wide experience from more than one sector. These are areas in which individual enterprises will have to find out what is the most efficient way to combine the single-minded efficiency of the enterprise as a whole, upon which its future depends, with the necessary degree of taking account of the views of important sections of the workforce of that enterprise.
§ Lord BOYD-CARPENTER
My Lords, can my noble friend confirm that the unhappy (as I think we all feel it to be) outcome of this experiment has tended to confirm the anxieties which many of us in industry who are interested in forwarding employee participation have felt about this expedient of so-called worker-directors? Has it confirmed-which is our anxiety—the suggestion that the trade union-nominated or employee-nominated worker-director is exposed to a very difficult clash of loyalties in deciding whether his first loyalty is to the union, to the employees who nominated him or to the board of the company on which he is serving? Can the noble Viscount say whether this experiment has thrown any light on that, which many of us think is the basic difficulty?
§ Viscount TRENCHARD
My Lords, I thank my noble friend for that question. The first thing I should like to say is that the Government and the Post Office Board—this was in the Statement—are deeply indebted for the dedicated and unpaid efforts of the trade union members on the Post Office Board for the period of this experiment. I want to make it quite clear that this is our view and we are grateful for the efforts that they have put in.
I must ask my noble friend to await the consolidation of the Board's views, which we shall place in the Library, to take in the differing and complex views of this subject. However, it will indeed refer to the problem of combining the single-minded necessity for the board as a whole to go forward in pursuit of efficiency with a rather separate kind of necessity to consult deeply with employees or indeed to take account of consumer views. It is the reconcilitaion of these in a manageable way which seems to have beaten those engaged in this particular experiment.
§ Baroness FISHER of REDNAL
My Lords, may I ask the Minister, in view of the EEC's concern and the European Parliament's concern about worker participation in the European Community, especially as it seems to be successful in many of the countries of our partners in the EEC, why the Government find it so difficult to operate it in this country, hearing in mind that Germany and France and many of our European partners find it a suitable vehicle? Might it not be that because they find it a much more suitable vehicle they get greater worker participation and fewer strikes arising in those industries?
§ Viscount TRENCHARD
My Lords, I will first say to the noble Baroness that neither here, in this case, nor in my experience of Continental countries, which is considerable, do the Government operate this—or not in industrial areas. It is operated by the companies and industries concerned. With regard to why this experiment has not succeeded and why our pattern is very different from the Continent one has to look at the whole picture. They have a highly developed joint consultation system, often backed by law, but they also have a closely regulated trade union system within a very definite legal framework and, as in many areas, one country's experience based on its whole background history and way of dealing with things is not a blueprint copy for another country. I certainly know, however, that important industries in this country, both nationalised and private-sector, have experience and have studied in great detail the Continental practices and that that is part of their background for trying to improve the many areas that need improvement in this country.
§ Lord KALDOR
My Lords, the noble Viscount stated that the majority of directors of the Board were against the continuation of the experiment. Can he say whether this majority included any of the workers' representatives on the Board and will it be possible for Members of this House to get more information on the reasons of the directors who voted against the continuation of the experiment?
§ Viscount TRENCHARD
My Lords, as my right honourable friend's Statement made clear, in the main the worker- 1166 directors—the trade union-nominated directors—were in favour of continuation. The Post Office directors and the majority of the independent directors were against it. That hides a large number of very different individual views of which my right honourable friend has been taking note. So far as the reasons are concerned, I have already told the House that the Warwick University Report will be available and also that the consolidation document of the views of the Board will be available.