PAY COMPARABILITY (Hansard, 7 March 1979)

§ The LORD PRIVY SEAL (Lord Peart)
My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Prime Minister about the establishment of a Standing Commission on Pay Comparability. The Statement is as follows:
"In my speech to the House on 16th January I commented on the present methods of fixing pay and conditions in some areas of the public services, and expressed the Government's readiness to see a greater role for measuring their pay and conditions by making comparisons with pay for comparable work and effort in other occupations where both sides so requested.
"This suggestion was carried further in the recent joint Government/TUC statement as a means of averting strike action in areas which affect public health and safety, and we undertook to identify groups which might be covered by such agreements.
"The Government have a responsibility both to be fair to public service employees and to avoid arrangements which could in themselves prove inflationary. Comparability studies must, therefore, be made in a systematic and thorough manner, taking all relevant factors into account.
"A Standing Commission on Pay Comparability is accordingly being set up by the Government to examine the terms and conditions of employment of particular groups of workers, referred to it by the Government in agreement with the employers and unions concerned, and to report in each case on the possibility of establishing acceptable bases of comparison, including comparisons with terms and conditions for other comparable work and of maintaining appropriate internal relativities. Any further role for the Commission in each case will be a matter for agreement between the Government and the parties. 207 "The Chairman of the Commission will be Professor Hugh Clegg and members will include Sir Leslie Williams, Sir William Ryland, Mr. Peter Gibson, Mr. Harry Urwin and Dr. Joan Mitchell. Other members will be announced in due course.
"During the recent negotiations on the pay of local authority manual workers, National Health Service ancillary workers, ambulancemen and university manual workers, it was agreed as part of the proposed settlements that a study should be made of acceptable bases of comparisons for these groups. It has also been agreed that these groups should be investigated by this new Standing Commission.
"In the case of these groups it has been agreed that the Commission will make recommendations which the Government and the trade unions concerned have undertaken to accept. The Commission is being asked to report on these groups by 1st August, 1979.
"The staging of implementation of these recommendations was also agreed as part of the pay negotiations. The Commission will start work on these assignments as soon as each settlement is reached. Other groups will be referred to the Commission from time to time by agreement.
"The TUC inform me that they fully associate themselves eith the establishment of the Commission. My right honourable friend the Secretary of state for employment will be responsible for these new arrangements, which should help us in future years to avoid the dislocation and hardship that the public has suffered in recent weeks.
"This is a difficult area in which to determine proper rates of pay, but I believe that these new arrangments will commend themselves to the public as a sensible way forward".
My Lords, that concludes the Statement.

§ Lord STRATHCONA and MOUNT ROYAL
My Lords, the House will be grateful to the noble Lord the Leader of the House for repeating the Prime Minister's Statement, which I must say 208 right away appears rather difficult to reconcile with his remarks on 1st November 1978, when he rather dismissively referred to the appealing argument that fair comparisons with similar work demand the same reward.
I think we on this side must have reservations about this Statement, if it is intended to be a response to the urgent and pressing problems of strikes which we have experienced in recent weeks. Setting up a Standing Commission may, indeed, by a sensible long-term concept, but it would surely be a fairly major institutional innovation, and it seems to me that it would be rather dangerous to ask it to do too much too quickly for fear that it got off to a bad start. Surely in this case it would have been right for Parliament to have had a chance to examine and debate the terms of reference that this Commission was to be given. Indeed, this was mentioned in the TUC statement to which the noble Lord referred.
There are various questions which arise out of that. For example, would it be possible for settlements to go down as well as up as a result of the recommendations of this body? It appears that the body is to be asked to recommend. It is more than merely a fact-finding organisation. In that case, does the reference to the fear of inflationary pressure mean that the Commission will be making recommendations within cash limits, for example? Presumably the Commission is not itself going to enter into negotiations, but what about the market forces for labour, what about the supply and demand for labour, what about local variations and regional variations, what about job security? Are all these going to be considerations which the Commission will have to bear in mind.
It looks as if it is going to be a massive new QUANGO. There are six distinguished names in the Statement, and it says, Other members will be announced in due course". Can the noble Lord tell us how many other members they envisage having in due course? What will be the relationship of this Commission with the Office of Manpower Economics; will it complement the work of that body?
Reference to producing a report by 1st August 1979 takes me back to this 209 question of whether we are not trying to ask a long-term organisation to produce an immediate panacea for the four particular groups referred to. Finally, would the noble Lord please tell us what the perfectly astonishing sentence towards the end of the Statement means: The Commission will start work on these assignments as soon as each settlement is reached". I simply do not understand what that is intended to mean, if it means anything at all.

§ Lord BYERS
My Lords, while I thank the noble Lord the Leader of the House for repeating the Statement, I should like to ask him three questions. First, can he indicate how this new Board will differ from the Prices and Incomes Board, which was abolished by the Conservatives in 1970, and the Relativities Board, which was abolished by the Labour Government in 1974? What is the difference? Secondly, is the work of the new Board to be confined to the public sector, or will it have some relationship with the private sector and, if so, what? Thirdly, in view of the need for continuity and permanence, have the Government tried to get all-party agreement on this new Board so that it has some chance of becoming a long-term part of the incomes policy and not something which will be abolished as soon as a new Government comes to office?

§ Lord PEART
My Lords, I have been asked a series of questions which I shall try to answer. I did not think that the noble Lord, Lord Strathcona and Mount Royal, made a very helpful speech; if he will forgive me for saying so, I thought that he was nit-picking. He said that this is no response to an urgent and pressing problem. For the very reasons contained in the questions put to me by the noble Lord, Lord Byers, on behalf of the Liberal Party, I believe that it is a major response. His approach was much more positive. I am glad that he asked questions in which, basically, he praised the creation of this body and thought that this would be the sort of body which could be set up irrespective of party.
In this particular area, noble Lords opposite have always been pressing us to have all-party agreement. I detected no 210 constructive approach from them today. I would ask questions about the difficulties which this body would have. May I remind noble Lords that there is in existence a Pay Research Unit which has been very successful. About two or three years ago noble Lords questioned me about its effectiveness. I wish that some of my noble friends, who I know are particularly interested in this, would appreciate that the Pay Research Unit has really inspired the sort of comparability studies which we require in a body of this kind.
Therefore, without responding to the smaller areas of the questioning of the noble Lord, Lord Strathcona, I believe that this body should be given a fair trial. There is no reason why we should not examine the pay situations of those in the public sector. I believe that it has been good for the Civil Service unions, despite the difficulties which we are now experiencing as a result of their strike action. However, I believe that it is a positive contribution. I hope that before noble Lords criticise this, they will study carefully what I have said.

§ Lord ROBERTHALL
My Lords, as a long-standing advocate of incomes policies, I should like to welcome the Statement just made on behalf of the Government because I strongly believe that some mechanism of this sort has a necessary part to play in the formation of an incomes policy. I particularly welcome the Statement because we are now drifting into a position of competition between muscle power; that is to say, the miners and the lorry drivers have shown that they can hold the community to ransom and now we are getting all sorts of people, who never dreamt that they could hold the community to ransom, trying to do the same thing. That is the anarchic state towards which we are moving. From its terms of reference I do not think that this Board will interpret comparability to mean comparability in the chaos that can be inflicted upon the country. I think that it is comparability almost in the market sense to which the noble Lord, Lord Strathcona, referred.

§ Lord PEART
My Lords, I am grateful to the noble Lord for what he has said. It enables me to mention a point raised by the noble Lord, Lord Strathcona, 211 which I missed. He asked whether the Board will deal with matters like local variations and job security. That is precisely what the Pay Research Unit does; it will cover these points. I am glad that it has been welcomed.

§ Lord BYERS
My Lords, can the noble Lord answer one question which I asked him—namely, what relationship, if any, will this have to the private sector?

§ Lord PEART
My Lords, this covers only the non-trading public sector.

§ Lord SHINWELL
My Lords, is my noble friend aware that some of us—and we may be in a minority—have for a long time rejected collective bargaining as a solution of our wages problems although we have experienced collective bargaining since the beginning of the century? We have had the results quite recently: chaos, discontent and, to a large extent, muddle. Therefore we welcome even a minor, modest contribution which might lead to a better understanding of what is required when wages have to be determined. Comparability must be regarded as only a part of the general policy which sooner or later must be adumbrated if we are to avoid anything like what happened recently.

§ Lord PEART
My Lords, I am grateful to my noble friend, Lord Shinwell, for his remarks; he has had long experience of industrial negotiations over many years. I agree with him that this should be part of a general policy. Obviously, as I have mentioned, a body of this kind, created because of the experience of a body such as the Pay Research Unit—for which I have a responsibility—will enable us to sift the information far better. It is extremely important to obtain the right information before negotiations and before staff sides and the bodies concerned reach conclusions. I very much welcome this.
May I say to noble Lords that I am not running away from questions, but I have another Statement to make on another subject, and I should hate to hinder the fuel debate, which I believe has gone on so well. I hope noble Lords will understand that I am not trying to dodge questions, but I do not want to spoil 212 what I believe will be a very fine debate. Perhaps I may proceed to the next Statement, which should be easier.