Dock Work Bill

HL Deb 24 April 1989 vol 506 cc1127-42

8.11 p.m.

Lord McCarthy rose to ask Her Majesty's Government whether, before proceeding further with the Dock Work Bill, they will refer to the Monopolies and Mergers Commission the allegedly restrictive labour practices in docks covered by the Dock Workers (Regulation of Employment) Act 1946.

The noble Lord said: My Lords, in asking the Question in my name on the Order Paper, I should like to begin by trying to make clear to the House what an unprecedented position we are in with regard to the Dock Work Bill. It was only 18 days ago—indeed, only 11 parliamentary working days ago—that the Secretary of State for Employment rose in another place and announced the abolition of the dock labour scheme. The Second Reading of the Bill took place seven days ago and the Bill goes into Committee tomorrow. We understand from the Government, through the usual channels, that they have every hope that the Bill will be enacted in late June or early July.

That degree of speed is without precedent. Not only has there been speed, but there has also been no preparation for the policy as a policy. On 10th March 1988, in reply to a debate on the subject, the Under-Secretary of State at the Department of Employment said that the Government had no plans to abolish the scheme. On 19th January this year, at Question Time, the Prime Minister said that she had to disappoint honourable Members in another place in their expectations and hopes that the dock labour scheme would be abolished. On 20th March, when the Government published their latest Green Paper on removing barriers to employment—which will subsequently find enactment in a further employment Bill next year—the Secretary of State said that he had nothing more to add to the statement of the Prime Minister on 19th January.

There has therefore been no previous announcement. Nothing was mentioned in the Conservative Party election manifesto or in the Queen's Speech; yet, two weeks after the statement, a White Paper is published, the First Reading is the following day and the Bill is to be steamrollered through both Houses.

Lord Graham of Edmonton

Disgraceful!

Lord McCarthy

My Lords, there was no consultation and no discussion. The Government will push the Bill through in that way. There has never been a precedent for such action, certainly not in the field of industrial relations. Employment Bills in 1980, 1982, 1984, 1986 and 1988 were all preceded by consultation documents, Green Papers or White Papers, as has been the present Employment Bill and next year's employment Bill. There has never been such a precedent in the field of industrial relations, nor has there been a precedent outside.

If we examine the Government's present policies, we see that there have been Green Papers or White Papers and consultation documents on their proposals for the National Health Service, water privatisation, the poll tax, football membership and reform of the legal profession. Indeed, because of the problems and difficulties that have arisen and the consultation and representation that has taken place during the passage of the football membership legislation and during discussions on the reform of the legal profession, those proposals are either being delayed or more time is being taken to bring them forward. No such precedent has been set by this Government or any previous peacetime government.

What can be the possible justification for that combination of secrecy and immediacy? We know what the Government will say, because we know what the Secretary of State has said so far. At Second Reading in another place on 17th April, the Secretary of State said at Column 44 that there had been "an evolving consensus" on the subject and that there was a strong and unanswerable case.

The fact is that one other argument was put forward at that time. He said that in 1986, when the two sides of the industry were discussing the problem of a replacement for the present provisions, the national officer of the Transport and General Workers Union at that time, Mr. Connolly, said that the union was opposed to the amendment and revision of the existing scheme. Mr. Connolly was reported to have said in the Lloyd's List publication: Our opposition will take the form of a national dock strike". That is the justification; namely, an emerging consensus, an unanswerable case and a statement by a national officer two or three years ago. That is the justification for the present policy.

I seek to suggest to the Minister and the Government that there is no such consensus. There may be unanimity in the Carlton Club and a two-thirds majority in the Athenaeum, but there is no emerging consensus. I do not seek to suggest that there is no answer; I seek to suggest that the Government have not listened to the answer. In any case, they have got the TGWU's position quite wrong, as they have been told on several occasions.

Something must therefore be done. My proposal is that the Government should refer the matter to the Monopolies and Mergers Commission, and I shall say why subsequently. In order to make the case, I must summarise the Government's case in the White Paper and the objections that have been raised to it. As I understand the case—if I am mistaken, I am sure that the Minister will tell me—the central argument of the Government is that it is the system of joint control, in which the T&G's nominees sit on the National Dock Labour Board, which results in a number of malpractices and restrictive arrangements and in the fact that there is a job for life for registered dockers; that there are so many restrictive practices, such as ghosting, welting and bobbing off; that we are told that employers are unable to discipline their labour forces; the high handling costs in the registered docks; the failure to encourage new investment in the hinterland of registered docks; and the continuing strike pattern in the registered docks.

I suggest that each of those assertions contains a paradoxical element and can be challenged. Perhaps I may take first the assertion that there is a job for life. It is a strange kind of job for life when, since 1951—the peak period of employment in the docks-88 per cent. of the labour force has been declared redundant or taken voluntary redundancy. However, it did not all happen back in the 1950s: the labour force has been reduced by 65 per cent. since 1979 and by 31 per cent. since 1985. In the last two years, 10 per cent. of the labour force has taken severance. It is a funny kind of job for life when, over five years or so, the chances are that at least half the present number of registered dockers will find themselves outside the industry.

There are three things to be said about the web of restrictive practices. One would have thought that, if the union were in a powerful position and the organisation had a stranglehold upon the industry, the average earnings of dockers would be more than £310 a week—22.5 per cent. over the average for male manual workers. It is not Fleet Street; it is not the Inns of Court. Earnings are roughly those of other workers of similar skill.

One would have thought that some of the arguments and examples of restrictive practices given by the Government in their White Paper would be rather more persuasive than they are. One would have thought that more than one of them at least would postdate 1983; in fact all but one of the examples in the White Paper predate 1983 and some go back to the 1940s and 1950s. One would not expect, it might be thought—if there were such restrictive practices—to see a higher output per man shift in the registered schemes than in the non-registered schemes. But it is some 20.7 per cent. higher. Is all that taking place in a web of restrictive practices?

Thirdly, the assertion is made that there is an inability to discipline in the docks. One would have thought that no one was ever dismissed. On the employers' own figures, it is true, the substantial majority of dismissals are followed by reinstatement. But 12 per cent. of dismissals are upheld by the Natonal Dock Labour Board. The only sense in which one can say that this is unusual is if one compares it to the level of dismissals and reinstatements in industry generally. It is true that there is no system of reinstatement in industry generally and no system of reinstatement operating under the Government's employment legislation. What the dockers have is a system of reinstatement. Whether it is fair or unfair, it does not prevent dismissal. Subsequent investigation would be required to see whether or not it is disproportionately in favour of the workers rather than the employers.

Fourthly, there is the assertion of very high handling costs. It is made much of in the White Paper. Where do those costs come from? The insinuation in the White Paper is that a substantial part comes from the very high level of severance pay which the dock employers are forced to give in order to run down the labour force as they have done. Yet the average severance pay since 1972 has been £13,974 per docker which is roughly average male earnings of 40 weeks pay for the dockers. There is little sign of the kind of power, and abuse of power, that, it is true, we saw in Fleet Street and certain other situations where there was a powerful union involvement. And, of course, in order to get the maximum redundancy pay it is necessary to have 15 or more years' service.

Moreover, still on the issue of the high cost of handling in the registered docks and looking carefully at the employers' own evidence, it appears that the employers do not blame labour costs for the major difference in handling costs between registered and unregistered docks and they do not blame labour costs for the uncompetitive nature of both registered and unregistered docks in comparison with international ports elsewhere in Europe. They blame the system of subsidies in Europe. They blame the fact that a whole range of dues—lighthouse dues, customs services, pilotage and so on—which are subsidised and paid for centrally in Europe are not paid for in this country.

So it is the employers and not the union who say that the real and dominant deterrent is the need for British dock workers and dock employers to bear an unsubsidised system. The union maintains that a part of the increase in labour costs arises from the fact that the employers will not train people, and because they will not undertake training the system of ghosting continues.

Fifthly, there is the argument about discouragement of investment of which much has been made in the White Paper and elsewhere. There are three things to be said on that score. First, there is still very considerable investment in many of the registered ports. Secondly, in general this is not an industry which is without profits or investment or an industry that is facing bankruptcy. Let us take for example the largest firm in the industry, Associated British Ports. It is responsible for some 25 per cent. of the total tonnage. It has been described by its chairman, Sir Keith Stewart, as having had last year a highly profitable year. There was a 46 per cent. increase in profits and a 21 per cent. increase in the chairman's fees, allowing him an annual salary of £97,000 plus a share of the profits. This is not an industry which is going bankrupt; it does not appear to be an industry without the money available internally to finance investment for itself.

On the question of investment in the industry, much false information about the disadvantages of entering the travel-to-work area around the docks has been advanced. Much false information has been advanced and is repeated verbatim in the White Paper about the consequences of abandoning the registered scheme in terms of improved employment opportunities. A forecast introduced by the Wharton Group which was commissioned in 1988 by the National Association of Port Employers and which is much in evidence in the White Paper suggests that if the dock labour board scheme were abolished another 50,000 jobs would be created between now and 1992.

That is based upon a very dubious sample of small ports. It is based upon assumptions that past job loss rates can be extrapolated. It is based upon unrealistic growth rates in the future and above all it is based upon a series of employers' subjective estimates of the consequences of getting rid of the dock labour board scheme.

Let us consider the assertion made about industrial relations in the docks. One of the most remarkable disingenuous pieces of information was advanced by the Secretary of State in his Second Reading speech when he said that there had been 3,569 disputes in the dock industry since 1967. If one divides that number by the number of years over which they occurred, it does not indicate a large number of strikes. But the fact is that the overwhelming preponderance of those strikes took place before 1975. The number of strikes in the docks industry is now so small that one does not know how many there are, because the Department of Employment does not consider it worthwhile to publish the figures separately. However, so far as we have figures it appears that last year on average the number of working days lost in the industry was something less than half a day per worker employed. From the point of view of industrial unrest, this is a long story of long ago and far away.

Finally I come to the misrepresentation of the union. The union says that in 1982 it sought to persuade the employers at the first conference ever held on the future of the industry to adopt a common approach tithe Government and a continental model for the British ports industry, concentrating on a few large integrated ports rather than a very large number of competing ports. It complains that the new policy was making some progress in the industry and among employers until 1983 and the coming of privatisation. However, with the privatisation of ABP, unification of the case against the dock scheme and the abolition of the present provisions became widespread in the industry. It is claimed that it was in that context, the context of a commitment in the industry to repeal the whole of the dock labour scheme, that Mr. Connolly made his statement in 1986.

I do not say that the union is right or that the case is overwhelming. The case of both sides can be contested. There is nothing in this extremely complicated and difficult industry to suggest that the Government can be so certain that they are justified in rushing forward in this way and breaking all precedents. Therefore, there should be a reference to the Monopolies and Mergers Commission under Section 79 of the Fair Trading Act. The commission should be asked to decide on the possible existence and effects of alleged restrictive labour practices. It would need to decide whether they exist, whether they are restrictive and whether they operate against the public interest.

The House will know that such a reference has been made. It will know that in the most recent case, when the Prime Minister said that the last bastion of trade union power and monopoly—perhaps she meant the penultimate—was the television and film industry, the television and film unions were referred to the Monopolies and Mergers Commission. The House will know that unfortunately for the Government, when the MMC reported it said that technological and market changes had made those practices a moving target at which essentially it was not worth shooting.

The Government should send this set of complaints of alleged restrictive labour practices to the Monopolies and Mergers Commission in the same way as they have done in the past to see whether this moving target is worth shooting at. They could refer the constitution, practices and policies of the NDLB for consideration to see whether such practices allow and encourage jobs for life, ghosting, welting, bobbing off, or the discouragement of investment. The T&G will say that they do not. If they do, it will say that they are an insignificant and moving target, disappearing into the far distance. The employers may say something different. We shall see. We can wait and have some facts.

The Government will no doubt say that their dogma tells them already. If so, in conclusion I ask them to remember the words of the noble and learned Lord, Lord Hailsham, in the debate in this House on 7th April on the Lord Chancellor's Green Paper. The noble and learned Lord said: My noble and learned friend says that he starts from first principles. My view, for what it is worth, is that that is about the worst point from which to start. When I hear a person say that he starts from first principles, I know in advance that he is going to rely either on uproven dogma or else on platitude. Both are bad sources of policy. The right place from which to start is a correct analysis of the relevant facts".—[Official Report, 7/4/89; col. 1333.] That is what I ask the Government to do tonight.

8.33 p.m.

Lord Rochester

My Lords, I congratulate the noble Lord, Lord McCarthy, on the presentation of his case. I do not think that it will altogether suprise him, in view of our differing reactions to the government Statement earlier this month about their intention to abolish the dock labour scheme, that I am unwilling to support his contention that before proceeding with the Dock Work Bill the Government should refer to the Monopolies and Mergers Commission the allegedly restrictive labour practices in docks covered by the scheme.

Speaking on behalf of my noble friends in response to the government Statement, I expressed surprise that the Dock Work Bill was to be introduced in another place so soon as the following day. I even went so far as to say that in my view an opportunity should have been given for the interested parties to express their views on the Government's proposals before final arrangements were made. That was because I felt that faced with the Government's firm intention to make radical alterations to working arrangements in ports covered by the scheme, the Transport and General Workers Union might itself have come up with suggestions that would have had the effect of making certain modifications in the Government's detailed plans, thus enabling the transition to take place on a more generally acceptable basis and without undue disruption.

However, the noble Lord, Lord McCarthy, has now raised a quite different issue. The Government earlier referred to the question of alleged restrictive practices in the film and television industry to the Monopolies and Mergers Commission, which concluded that the practices were not against the public interests. The noble Lord seized that referral as a precedent—perhaps as a reason—for doing the same in the case of the docks. I cannot agree. On these Benches we see no need for any third party to tell us whether or not current practices under the dock labour scheme are damaging to the national interest. We have reached the conclusion that they are.

Indeed, when the Government made their earlier Statement, I made it plain that in our view the present arrangements amount to a practice that is both monopolistic and restrictive; that the minority who enjoy these privileges in regard to discipline and employment protection do so at the expense of others and to the detriment of this country's trade; and that the chief beneficiaries of the present scheme are places such as Rotterdam, Antwerp and other major Continental ports.

This is not the occasion to rehearse in detail the nature of all the old Spanish customs that have been involved. Reference has been made by the noble Lord to bobbing and welting, under which numbers of those employed on a particular job have been paid to bob off, perhaps to their homes or the nearest pub. Ghosting is the system under which a registered docker has been paid to do nothing but shadow an unregistered man brought on to the docks to perform a specialist task beyond the capacity of the "ghost", and so on. Perhaps the most damaging of these practices is where an employer goes out of business and his employees are transferred automatically to another company although that firm will almost certainly lack any work for them to perform. We regard these as practices that have taken place. However, the time to debate them is surely when the docks Bill eventually comes to this House.

Meanwhile, events have moved on. There is to be a strike ballot. The Bill has had a Second Reading in another place, where my right honourable and honourable friends voted for it in principle. However, the noble Lord, Lord McCarthy, should not think that we on these Benches shall be altogether unsympathetic to the Bill being amended in Committee. Indeed, if necessary when the Bill comes here I may well put forward amendments myself; for example, to make statutory provision for the retraining of registered dockers who are made redundant. However, all that is for the future.

To be candid, the substance of the Question asked by the noble Lord, Lord McCarthy, seems in reality to be a pretext to postpone parliamentary discussion of arrangements that have long since outlived their usefulness and should now be brought to an end.

8.37 p.m.

Lord Hatch of Lusby

My Lords, as a socialist, I have always believed that the production process, especially in a mixed economy, needs the co-operation of government, unions and management, whether that management is in nationalised or private industries. I do not expect the noble Lord who will answer this debate to agree. However, I refer him to the much quoted Select Committee Report on Overseas Tade. That committee considered the contrasts between industrial activities in this country and in those of our major competitors. As the noble Lord knows, there was a majority of his supporters on that committee. We found that whether we considered Germany, France, Japan or many other countries, the essential difference is that in those countries industrial relations and industrial production are virtually out with the arena of party politics. They are accepted as a national asset because governments, unions and management work together whatever the colour of the government. It seems to me that, as has been so ably expounded by my noble friend Lord McCarthy, this action by the Government illustrates the way in which they are apparently incapable of recognising the importance of that kind of trilateral operation. As the noble Lord has pointed out, this is a very sudden decision. I hope that the noble Lord who is to wind up will tell the House why, as recently as 14th March, the Under-Secretary of State for Employment said that the Government had no plans to change or to abolish the dock labour scheme, whereas the announcement that it was to be abolished by legislation was made as soon after that as 6th April.

I do not think the noble Lord will expect the House to believe that if that decision had not been taken as early as March, when the Under-Secretary made that Statement, the Bill could have been prepared by 6th April. I am not suggesting that the Under-Secretary misled the House of Commons, but if he did not mislead it then he was not told himself. That is a peculiar way to govern the country and to conduct industrial relations. I hope the noble Lord will address himself directly to that issue.

This has been called by the Sunday Times, no friend of the Labour Party, the best kept secret for years. Was it a secret? There has been at least one report of a leaked document that suggested—indeed, asserted—that the preparations for this measure have been in progress for the past 18 months. Why have the Government taken this disruptive attitude in industrial relations at this time? Has it anything to do with the figures that we shall see this week of the latest trade deficit? Would it be convenient for the Government if there were a dock strike? Have the Government been trying to provoke a dock strike? Do the Government believe that that will reduce the deficit by reducing imports?

I am asking these questions, but it is a curious coincidence that, as my noble friend Lord McCarthy has pointed out, this intention has never appeared before in Conservative Party manifestoes, the Queen's Speech or, as I have pointed out, in Answers to Questions in the House of Commons. Will the noble Lord address himself to this issue and explain to us why the Government have taken this provocative action? Why do they not see that their most constructive role would have been to encourage the port employers and the unions to discuss together alterations to the dock labour board? None of us has ever considered that this is perfect, but alterations could have been made in an atmosphere of co-operation; instead of which the Government plunged in, produced a White Paper one day and a Bill the next day, against all that government spokesmen have said in the past.

I should like to address myself to just one of the arguments that have been put in support of the abolition of the dock labour scheme, one that is connected with my main theme tonight: the comparison with the ports of other European countries. Perhaps the noble Lord will consider the situation on the Continent. He will find that the rival ports to those in this country are heavily publicly subsidised. They have very similar job security arrangements to the dock labour board, but they do not have what we have in this country—a proliferation of small ports. They have concentrated, as it was suggested several years ago that we should concentrate, on the larger ports which are not competitive with each other but complement each other. In that way there has been a conscious policy of concentrating trade into well-equipped ports with the infrastructure provided there: ports such as Rotterdam, Antwerp, Hamburg and Le Havre, the competitive ports. That could have been done in this country. How is it that this country is one of the few countries in the Community which has not ratified the ILO convention—I believe it is Convention 137—which calls for registers of dock workers and opposes casual labour?

I suggest that the Government have a question to answer for this House and the country. As my noble friend has said, they could have referred what they claimed to be restrictive practices—they are very dubious when examined in detail—to the Monopolies and Mergers Commission. They could have brought together the employers, the unions and the Government to work out a co-operative scheme for the benefit of the docks, the dockers and our trade. They have done none of those things. They have jumped in suddenly, completely reversing the statements that their spokesmen made in the past. They have thrown industrial relations into turmoil, quite unnecessarily, and that can only be to the detriment of the economic prospects of this country and of social peace within it.

8.48 p.m.

Baroness Turner of Camden

My Lords, I should like to commence by expressing my thanks to my noble friend Lord McCarthy for putting down this extremely timely Question. The report of the Monopolies and Mergers Commission on labour practices in TV and film making has recently been published. This is a result of the first reference under Section 79 of the Fair Trading Act 1973. That reference was made jointly by the Secretaries of State for Employment and for Trade and Industry, and the Home Department. The commission was asked to report on whether certain practices said to exist in those industries were restrictive labour practices and, if they existed, whether they operated or might be expected to operate against the public interest.

The commission sought and obtained evidence from interested parties, including all the unions concerned and the employers. The similarities between the two sets of circumstances—government allegations or beliefs in the existence of restrictive labour practices in the TV and film making industries and also in the dock industry—are clearly very close, as my noble friend Lord McCarthy said. It is therefore quite legitimate to ask why the Government chose in one case to make a reference under Section 79 of the Fair Trading Act and in the other to produce a statement that they intended to introduce legislation to end the dock labour scheme on one day, a White Paper on the same day, and a Bill in another place on the day following that.

In one case there has been an investigation involving those with a direct interest and in the other a White Paper full of assertions, some of which are open to a great deal of questioning and indeed have been disputed by the union directly concerned. However, there has been no investigation and no consultation. Everyone agrees about that, including the noble Lord, Lord Rochester, who, I was glad to note, believes that there should be consultation although he does not agree with the main thrust of the Question.

Barristers may rightly feel aggrieved about the inadequate time provided for consultation about the so-called "legal reforms" but they are better off than the dockers who have had no consultation or time for that at all. As we all know, the dock labour scheme was first introduced in 1947. The intention was to bring to an end a particularly degrading and inhuman system of working in the docks. It was the system known as "casualisation". Before the scheme was introduced dock workers were treated like animals. They were hired and fired by the day. Men fought each other for work at the dock gates. As one of them once said, "We were ashamed but what could we do? I had children at home to feed". Yes, and at 6d. an hour and with little in the way of safety regulations. That was a life of no security or self-respect.

It is difficult for those of us who are used to salaried employment to realise what that must have been like. But I am the daughter of a manual worker who was brought up on a council housing estate during the years before the war. I know what it is like to be a child in a household where the breadwinner has no security of employment. Union organisation has ended that for many workers, including dock workers. Even so, as my noble friend has indicated, dockers are not all that well remunerated for the hours that they work. I understand that the average working week is 45 hours for which they receive approximately 13,000 a year. Nor is it true that the scheme itself provides jobs for life. Dockers can be sacked for justifiable reasons such as misconduct. Thousands of dockers have left the industry under voluntary severance terms. But registered dock workers have the right not to be dismissed without cause and not to be made redundant without severance payments. And dockers receive a minimum guaranteed daily pay as do many people in salaried occupations. They know that if they turn up for work on a day they will be paid for it.

The employers and the Government claim that there is no intention to return to casualisation. It is said that, anyway, that would be outdated because now the need is for a stable, highly-skilled workforce. That is partly true but the very nature of the industry makes it likely that, given the choice, employers will revert to a form of casualisation. A core workforce that is highly skilled is required, but there is also work for dockers who are less skilled. Sometimes only one ship will dock at a port while on other days there will be several ships. Therefore the demand for semi-skilled workers fluctuates. The union sincerely believes that, given the opportunity, casualisation with all its evils will come back again.

The Government claim that the scheme has driven port investment elsewhere. In fact, major investments have been announced for scheme ports such as Immingham, Southampton, Bristol and London. Much has been made of the growth of Felixstowe, a non-scheme port. But, as I said in this House on 6th April (at col. 1200 of the Official Report) its success may be more attributable to its geographical position than to the absence of the dock labour scheme. When I made that statement in your Lordships' House there was mocking laughter from the Government Benches. But it is true that east coast ports—including Ipswich which is a scheme port—have grown because of the shift of trade towards Europe.

Comparisons with European ports have been made, a matter dealt with by my noble friend Lord Hatch. But rival ports in Europe have public subsidies. All have similar job security arrangements for dock workers. Major ports in Europe have systems to avoid casualisation of dock work, including registers and structures which carry out similar functions to the dock labour board. Furthermore, the United Kingdom is one of the few EC countries not to have ratified the International Labour Office Convention 137 which calls for registration of dock workers and opposes casual dock labour. If the Government are opposed to casualisation, why do they not ratify the convention?

The Government White Paper contains five case studies said to show that the dock labour scheme is reponsible for the problems that have arisen. In each case any negative differences between scheme ports and non-scheme ports are blamed on the existence of the dock labour scheme irrespective of any other possible cause. Reference is made to threats of national strike action, whether or not such threats were made. The dock labour boards are joint bodies of equal employer and union representation but are represented as dock workers attempting to impose a monopoly. In fact, they have enabled a genuine system of worker participation to develop. In a recent press interview a docker said: What they [the Government] are after is to abolish the protection we have had … the say we have had in our industry is the say every working man should have in his industry. We have it and they are trying to take it away from us. Under the National Dock Labour Scheme we have an input into how our industry is run, something that is totally foreign to this Government's way of thinking. No working man should have a say in how his industry is run—that is the way they think—and that's what it's all about. It's got nothing to do with efficiency, it's all to do with dogma". I should like to look at the case studies in detail and I must say that in each case there is a different side to the story. I do not say that I necessarily agree with what the union is saying in each case but it indicates that there is something to be investigated and that the case put forward by the Government is open to challenge.

As regards Liverpool (Case No. 1 in the White Paper on page 17) I am advised that there had already been extensive redundancies in the docks. More than 6,500 dock workers, out of a total of 7,639 employed in 1975, had lost their jobs. The local dock labour board tried to save as many jobs as possible in an area of high unemployment. The National Dock Labour Board, as a joint forum, sought to resolve the problem and eventually it was found possible to relocate those who were threatened with job loss. The final sentence of this case study gives the impression that because of this firms went out of business. I am informed that that is grossly misleading because at the time massive changes were taking place which had nothing to do with that decision.

On page 21 of the White Paper we find Case No. 2; that of the Thames Barrier Gates. Here again, the union has a different case to make. It believes that the difficulties arose from the failure to train dock workers, despite union pressure to do so. For that reason dock workers were not available to do the work. The gates could not be moved for a much shorter period than the time given in the White Paper.

On page 23 is Case No. 3; that of Aberdeen, Fleetwood and Grimsby. Again, the union claims that this passage is a travesty of what has occurred. The main reason for the decline of fishing in those ports was the decision by Iceland to impose a 200-mile limit (thus resulting in the so-called "Cod War") and European Community access to traditional fishing grounds. In Aberdeen the union co-operated with a number of arrangements for the use of labour for unloading boats. The scheme was made more flexible to suit the needs of employers. Similarly at Grimsby there is a history of very flexible working arrangements. Nor is it true, says the union, that trade is shifting from Grimsby to Hull. The whole picture is of a backwards and forwards shift of business between the two ports. In any event, I am informed that trade in fishing ports is determined by a quota system and not by competition between ports.

Then we have Case No. 4. It is the only instance where a national stoppage was actually threatened. It was a case in which a company sought to break the existing law and the terms of the licence it had just received in order to employ fewer workers to do more work for less pay than other Clyde companies. Joint union and port authority action was used to prevent this exploitive activity by a cowboy employer. Currently the issue is before an industrial tribunal.

Finally, there is Case No. 5; that of Southampton. The union tell me that it is a non-case. An agreement for handling goods was reached acceptable to both sides. The union took a flexible attitude. Although it would have preferred all workers to have the protection of the scheme, it has agreed to the employment of equal numbers of registered and unregistered dockers at this free port. 1t asks: what is the problem? Whatever it is, they believe that it cannot be put down to the existence of the scheme.

I have referred in some detail to the bases set out in the White Paper because that represents part of the Government's case for doing away with the scheme. Whether or not what I say is accepted, it demonstrates that there is another side to the argument. There are different versions and different attitudes to be considered, particularly among those who work on the docks.

There is also disagreement about the Government's assertion that the creation of new jobs will be the result of the disappearance of the scheme. There will almost certainly be further redundancies. In fact it has been estimated that in the short term there could be 15 per cent. redundancies, and that is not just the union's view but was expressed in a Centre for Policy Studies booklet called Clear the Docks.

I believe that what is clear is that there is something here to be carefully and fully investigated. The machinery for such an investigation already exists. As we already know, the Monopolies and Mergers Commission is in place. Why will the Government not do here what they have already done in the TV and film-making industry? Can it be that the commission in that case did not come up with the answers which the Government would have preferred? Are they disappointed that in that case the commission found in most instances that restrictive practices operating against the public interest either did not exist at all or were on the point of being already negotiated out of existence? Are the Government so unsure of their case against the national dock labour scheme that they prefer not to risk an independent investigation since that might result in a report which did not confirm their prejudices?

We are entitled to ask those questions otherwise we shall be justified in coming to the conclusion that the Government's action in regard to the national dock labour scheme is motivated by dogma and that they are out to provoke another confrontation with the trade union movement. Again, I wish to record my thanks to my noble friend Lord McCarthy for introducing the debate this evening.

9.2 p.m.

Lord Brabazon of Tara

My Lords, the noble Lord, Lord McCarthy, has raised an important topic for debate tonight, but I am bound to ask why he should have felt it necessary to do so. The Government have decided that the dock labour scheme should be abolished and have accordingly introduced the Dock Work Bill. The reasons for that were made quite clear in the Statement, in the White Paper and in my right honourable friend's Second Reading speech in another place.

The scheme was introduced by Parliament, and only Parliament can remove it. Only Parliament can debate that, the Monopolies and Mergers Commission cannot. This House will shortly have an opportunity to debate the Bill and the important issues that flow from it; that debate will provide the appropriate opportunity to discuss these issues.

Unlike other noble Lords, I do not propose to make a Second Reading speech but to answer the Question on the Order Paper about a reference to the MMC, and I have to say that the reference to the MMC advocated by the noble Lord would be of little or no practical value.

The power to refer restrictive labour practices to the MMC is contained in Section 79 of the Fair Trading Act 1973. Under this section, the Secretary of State may refer to the MMC the question whether a restrictive labour practice exists, and, if it does, whether it acts against the public interest. However, Section 79(5)(a) provides that the MMC can only examine restrictions or practices which could be discontinued without contravening existing law. In considering, therefore, whether the restrictive labour practices of the dock labour scheme could be referred to the MMC, we need to establish whether those restrictions are in fact established by statute. That is the difference between broadcasting and this issue.

The fact is that the dock labour scheme imposes rigid statutory controls and restrictions. Fundamental to the scheme is its statutory definition of dock work and its statutory monopoly on who can carry it out. Only employers who are on a register maintained by the dock labour boards may undertake dock work. Only workers who are on a similar register of dock workers may carry out such work. The employment of any other worker without the agreement of the local board is a criminal offence. The scheme also sets out what work is reserved for registered dock workers.

There is also a statutory control on the number of dock workers that can be employed in scheme ports. The national dock labour board's 20 local boards are alone responsible for deciding how many, and which, people are to be included on the board's registers and therefore employed as registered dock workers. Thus, the joint boards control recruitment and severance. Any employer wishing to recruit a dock worker or reduce the number he employs can legally only do so through the local boards.

The noble Lord, Lord McCarthy, and the noble Baroness, Lady Turner, referred to jobs for life. However, severances of surplus RDW's from the industry can only be achieved with their voluntary agreement, induced by large cash payments of up to £25,000.

There is also a statutory control of discipline by the local boards. The only disciplinary sanctions open to employers are suspension of an employee for five days or dismissal. However, anybody dismissed will have their case reviewed by the local board, and anybody suspended may appeal to the board. The board may oblige the employer to withdraw a suspension or reinstate an employee, and they have frequently done so. Indeed, in eight major ports between 1980 and 1986 100 out of 122 registered dock workers whose dismissal was sought by employers for disciplinary reasons were reinstated by dock labour boards.

These controls on what constitutes dock work and who may do it, on numbers employed, on recruitment, severance and discipline represent the fundamental restrictive labour practices in the scheme ports. They are all enshrined in statute and are an essential element of the scheme itself. They cannot therefore be referred to the MMC, and such a reference would serve no purpose. They can only be removed by statute, and that is why the Government have acted decisively in introducing the Dock Work Bill.

Baroness Turner of Camden

My Lords, would it not have been possible for the Government to refer the issue to the Monopolies and Mergers Commission before coming out with their White Paper? They could have proceeded with their White Paper if the MMC had recommended that they should so proceed.

Lord Brabazon of Tara

My Lords, no. That is exactly the point which I am trying to make at the moment. These are statutory provisions and therefore the MMC cannot make recommendations on them. I shall not give way to the noble Lord, Lord McCarthy. He spoke for 20 minutes, which is quite enough on an Unstarred Question. I did not interrupt the noble Lord and I should be grateful if he will give me the opportunity of giving the Government's response.

I should also like to refer briefly to the restrictive labour practices of "ghosting" and "bobbing", which have been referred to so often in previous debates. Indeed, they were referred to by the noble Lords, Lord McCarthy and Lord Rochester. The development of "ghosting"—whereby RDWs are paid to "ghost" work done by non-RDWs whether or not they do any work—is a direct consequence of the dock labour scheme. In many ports the allocation of a registered dock worker to ghost has become a tacit condition of the employees' acceptance of the employment of non-RDWs. Equally, the practice of "bobbing" or "welting"—where more RDWs than required are allocated to a job and the surplus then "bob off" home—is a direct consequence of the requirement of the scheme that the local dock labour board determines the number of men allocated to each employer.

But what would a referral of these restrictive labour practices achieve? As the noble Lord, Lord Rochester, said, we all know that these practices exist; they are well documented. Nobody has suggested that they do not. So we do not need the MMC to tell us whether or not such practices exist in the scheme ports. In any event Section 79 of the Fair Trading Act does not provide any order-making power to remedy or prevent any adverse effects specified by the MMC. In fact, the MMC can only make suggestions to replace any restrictive practices that are found to exist, and the Government could not enforce those suggestions on the industry.

The fact is that these restrictive practices have evolved as a direct consequence of the fundamental restrictions of the scheme itself. It is because the local boards have a direct and statutory control on the number of dockers employed in scheme ports, and it is because of the power of the unions on those boards, that "ghosting" and "bobbing-off" have developed. It is because the boards have failed to agree to a reduction in the number of RDWs to meet employers' requirements that men are allowed home if there is nothing for them to do. The practice of ghosting is a direct consequence of the scheme's requirement that dock work can only be done by RDWs; so the local boards have insisted that non-RDWs can only do specialist work if ghosted by an RDW.

Noble Lords asked why there were no negotiations or consultations. This point was fairly well covered when the Statement was made. Nobody can negotiate on the scheme itself. That is a matter for Parliament. The scheme was set up by statute and can only be repealed by statute. In any event the TGWU has consistently refused to negotiate on the scheme; not just on the central issue of whether the scheme should be abolished, but even on its amendment or revision. In February 1987 Mr. Connolly, who has been referred to, said: The policy of the Docks and Waterways Group has not changed. There will be opposition to the amendment or the revision of the scheme, and the opposition will take the form of a national dock strike. Again, on 1st April of this year, with regard to the dispute in Aberdeen, Mr. Connolly was quoted in The Times as saying: Any move to abolish the scheme which effectively prevents the dismissal of registered dock workers would be met with a national strike". The National Association of Port Employers invited unions to negotiate changes to the scheme on no fewer than five occasions. On each occasion the union refused. Whatever noble Lords opposite may say, the union's position could hardly be clearer.

I return to the Question before us this evening. We will be unable to deal with these restrictions unless we address the basic problem. A reference to the MMC will merely waste public money, to no good effect. It could not address the key issues. It could only examine a consequential aspect of the problem. We must address the fundamental statutory restrictions of the scheme itself which are at the very heart of the problem and the root cause of the other restrictive practices that have evolved. The Government cannot allow the scheme to continue to hinder the future prospects of our ports. They must act decisively to bring the scheme to an end.

House adjourned at thirteen minutes past nine o'clock.