Local Authority Staff: Pay Dispute (Hansard, 10 June 1993)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)
My Lords, the pay of local authority administrative, professional, technical and clerical staff is entirely a matter for local government to resolve. The Government have no locus in these negotiations and no power to intervene.

§ Lord Molloy
My Lords, I thank the noble Lord for that reply. Is he aware that the organisations involved are the Confederation of Health Service Employees, the National Association of Local Government Officers and the National Union of Public Employees? Is he further aware that when they meet the local authorities, the local authorities always submit that they cannot move without some representation being made to the Government? I do not accept that and I hope the noble Lord will not do so. Will he accept that after 1st July there will be many more unions joining UNISON, and it will involve over 30 million of our fellow men and women in this country? If the problem has not been resolved by 1st July, will he be prepared to consider whether he might be able to receive representations from UNISON at that time?

§ Lord Strathclyde
My Lords, I understand that at the moment it is not a pay dispute but a negotiation. Clearly, negotiations should take place between the employers and the employees. In this case the employers are the local authorities. It is for them to decide how best to negotiate with either half a dozen unions or one single union.

§ Lord Bottomley
My Lords, is the Minister aware that when UNISON comes into being on 1st July it will be the most powerful public employee trade union in Europe? Does he agree that, because of that power and the cause for which they fight and in which they believe, it would be in the best interests of the country for the Government themselves to say to the local authorities, "Try to resolve this dispute speedily"?

§ Lord Strathclyde
My Lords, surely the history of the past 14 years indicates that it is the employers who must settle their pay decisions with their employees. Furthermore, if the new union UNISON is to be the most powerful union in the country, perhaps too it should also be the most responsible union.

§ Lord Stoddart of Swindon
My Lords, in his reply to my noble friend Lord Molloy, was the Minister saying that the 1.5 per cent. limit outlined by the Chancellor of the Exchequer in his last Budget has no force in law and that the Government do not themselves believe in it? Did he say that the discussions and the negotiations should take place between the trade unions and the employers, who may make what concessions they like?

§ Lord Strathclyde
My Lords, we take the 1½ per cent. target very seriously. Indeed, 25 per cent. of the 1044 public sector has already settled within the Government's zero to 1½ per cent. range. The point on this issue is that time and again noble Lords opposite tell us that we should not interfere in matters that are quite properly those of the local authority. That is the way that we prefer to keep the matter.

§ Lord Williams of Elvel
My Lords, the Minister said that the Government do not interfere. Does he recall that in the 1992 Autumn Statement a 1.5 per cent. limit was put on public sector wage increases and that the revenue support grant to local authorities was fixed to that target? Is not that government interference? Does he further recall that the 1992 autumn statement was produced by the Chancellor of the day, Mr. Norman Lamont, who I understand is not in total favour with the Government at the moment? Will the new Chancellor be prepared to revise what is obviously quite an unrealistic revenue support grant to local authorities?

§ Lord Strathclyde
My Lords, absolutely not. One-and-a-half per cent. is an important target. Indeed, inflation is now only 1.3 per cent. and a 1.5 per cent. pay increase is positively inflationary. It is an opportunity for employees throughout the country to show that they are serious about the economy, about being competitive and about being responsible. As I have already said, it is up to local authorities to come to an agreement with their unions.

§ Lord Ewing of Kirkford
My Lords, is the Minister aware that I agree that the Government should not intervene in the pay negotiations? Can the Minister, therefore, give the House an absolute assurance that, if local authorities settle beyond the 1.5 per cent. limit announced in the Budget and that takes them beyond their spending limits, the Government will not cap them as a result?

§ Lord Strathclyde
My Lords, I cannot give that assurance. Noble Lords opposite are continually talking about the Government cutting jobs and services in local authorities. If local authorities pay people too much then they will be responsible for the cuts in jobs and services.

§ Lord Molloy
My Lords, the point is this; and surely the Minister can understand it. What is infuriating the unions is that when they try to negotiate with local authorities, the local authorities say that some aspects of their case are a matter for government. All I am saying is that if by 1st July the matter is not resolved, UNISON does not want to start off its career with any form of strike. It believes that the problem can be resolved but wants the more sensible local authorities and the Government to listen to the case, weigh up the situation and make a decision from which they can embark upon further discussion.

§ Lord Strathclyde
My Lords, I certainly do not want to see a strike. I am sure that noble Lords opposite and local authorities do not want to see a strike. The best thing the unions can do is to accept a reasonable offer of 1.5 per cent.

§ Lord Williams of Elvel
My Lords, the Minister cannot have his cake and eat it.

A noble Lord
Why not?

§ Baroness Hollis of Heigham
My Lords, that sums up the Tory philosophy.

§ Lord Williams of Elvel
My Lords, I am sure that the Minister eats a great deal of cake and I am sure that it does him a great deal of good. Either the Government are saying that 1.5 per cent. is the limit and that is all that they will tolerate, or they are saying that local authority employers can negotiate to whatever limit they think is right. The two propositions are inconsistent one with the other. Where do the Government stand?

§ Lord Strathclyde
My Lords, 1.5 per cent. is a guideline limit. If the local authorities choose to break it. then that is up to them. However, it will mean cuts in jobs and services which noble Lords opposite have always pledged themselves against.

§ Lord Stoddart of Swindon
My Lords, that is not good enough. On the one hand the Minister is saying that the Government do not believe in a wages policy; they believe in free collective bargaining in which they must not interfere. Yet on the other hand they say that if local authorities do not keep within their guidelines, the Government will cap their expenditure to ensure that they cannot pay the 1.5 per cent. That is what the Minister is saying and that is why my noble friend says that the Government wish to have their cake and eat as well. It cannot be done.

§ Lord Strathclyde
My Lords, it can be done, and predict that it will be done. The point is that the Government have decided that there should be an overall limit of 1.5 per cent. Where the Government are not responsible for pay negotiations, such as on this issue, it is up to the employers—in this case the local authorities—to decide how much they should pay. We have given them a guideline of 1.5 per cent. If they break that guideline then there will be effects on jobs and services which, I repeat, noble Lords opposite have always set themselves against. The matter is really very simple.

§ Lord Williams of Elvel
My Lords, if they break the guideline, will the Government cap them?

§ Lord Strathclyde
My Lords, that entirely depends on what happens, when it happens and what the overall restrictions are on government spending.

§ Lord Mayhew
My Lords, does the Minister agree, if I can make a non-controversial point, that the vigorous defence of the unions by the Opposition would carry even more weight if its party was not financially dependent upon them?

§ Lord Strathclyde
My Lords, I am sure that that was a helpful non-controversial point that will have been taken on board by noble Lords opposite.

§ Lord Cledwyn of Penrhos
My Lords, can the Minister say whether the Government are recommending a similar guideline of 1.5 per cent. to the executive side of private industry as an example?

§ Lord Strathclyde
My Lords, for a long time we have been encouraging the private sector to reduce their pay settlements. I am delighted to say that there are many instances where pay settlements have been below 1.5 per cent., in some cases even zero. That helps us to be more competitive and to provide the long-term prosperity that we all want.