§ 3.6 p.m.
§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, I beg to move that the Bill be now read a 421 second time. Since 1979 a great change has occurred in the industrial relations climate in this country. That is due in no small measure to the legislative reforms that this Government have put in place over the years. This Bill continues our successful reform of industrial relations and trade union law.
Instead of an economy typified—in the eyes of both domestic and overseas investors—by strikes and union obstruction of efficient working practices, we have just seen the lowest number of working days lost through industrial disputes since records began over. 100 years ago. In 1991, barely half a million working days were lost as a result of strikes. That represents a dramatic and welcome improvement on the 1970s, when on average no fewer than 13 million days were lost each year.
We have a record of attracting overseas investment that is second to none among our competitor nations. Overseas investors have made it clear that the transformation of Britain's industrial relations practices have played a vital part in their decisions to invest here. Instead of employers, and would-be employers, being burdened by red-tape and restrictions, we now have a more balanced framework of employment protection law. That has enabled employers to get on with their main task of managing their businesses.
We have extended employment protection where necessary; for example, so as to ensure that the closed shop cannot deprive people of jobs simply because they do not wish to belong to a union. Thanks to our legislation, union members can now take it for granted that they have a right directly to elect their union leaders, and to do so at regular intervals. Union members also have a right to a ballot before their union calls them to take strike action, and there is protection against being disciplined by their union because they choose, of their own free will, not to take part in a strike. This Bill builds on the progress we have made in all these areas.
Its introduction is timely and appropriate. Good industrial relations, proper protection for individual rights, and the right balance and framework of law are critical to this country's future prosperity. The Bill fulfils the Government's continuing commitment to ensure that we have an effective and up-to-date framework of law covering industrial relations and employment matters—and one which meets the needs of a modern economy.
Provisions in the current Bill will continue the process of step-by-step reform which has been so successful over the past 13 years. They will increase the rights of individual employees, of individual trade union members, and of the community at large; and improve the operation of the labour market and break down barriers to the creation of jobs. The Bill forms a major element in the Government's legislative programme for this first Session of the new Parliament. The main proposals have been the subject of extensive consultation. A number of the clauses fulfil specific manifesto commitments. In addition, several of the measures in Part II of the Bill—which deals with individual employment rights—implement 422 requirements arising from European directives. In terms of its length alone, this Bill is the most substantial that the Employment Department has handled since 1979. I hope it will be helpful if I say a few words about some of its provisions but that noble Lords will excuse me from not attempting to cover them all.
The provisions in Part I of the Bill will give important new rights to trade union members, guaranteeing them enhanced, and new, protection and rights. They follow from proposals put forward for public consultation in the 1991 Green Paper Industrial Relations in the 1990s.
Clauses 1 to 7 improve the present requirements for the conduct and scrutiny of union election, political fund and merger ballots, giving union members much greater assurance about the proper conduct of such ballots. In future, individual trade union members will have the additional assurance that the storage and distribution of voting papers, and the counting of votes, will be carried out by people who are demonstrably independent of the union itself.
Clauses 8 to 12 give members a guarantee of receiving a regular report about the conduct of their union's financial affairs, and the assurance that they need no longer depend on their union leadership's willingness to investigate allegations of impropriety in the conduct of those affairs. This responds to evident concerns about the conduct of the financial affairs of unions such as the NUM and UCATT. In future, the independent certification officer will have powers to set up investigations, and can bring to account anyone who is revealed as having committed a relevant offence.
Clause 13 will give individuals greater freedom to belong to the union of their choice. This provision fulfils a clear manifesto commitment. It will mean that it is no longer possible for union membership to be determined by TUC diktat, against the wishes of the individual. Employers will, of course, remain free to decide for themselves whether to recognise a union.
But, to take two recent examples of how this clause would strengthen freedom of choice: USDAW members will no longer be prevented from transferring to a TUC union which does not oppose Sunday trading; and the GMB will no longer be prevented from establishing a construction section to accept UCATT members wishing to transfer. The Government believe that there can be no justification, in this day and age, for denying individuals the basic freedom to decide for themselves which trade union they wish to join.
Clause 14 protects union members against possible abuses of the check-off system for deduction of union subscriptions directly from pay—but without seeking to outlaw such arrangements where employers freely choose to operate them. It corrects a profoundly unsatisfactory legal position, and the provisions are firmly founded on the principle that individual union members should have the right to decide for themselves—and have the opportunity to reconsider, at regular intervals, whether they want to have their union subscriptions deducted in this way. Once again, this clause fulfils a clear manifesto commitment.
423 Clauses 16 and 19 update the law on strike ballots, so that voting must be conducted by fully-postal balloting, and be subject to independent scrutiny. This will help to ensure the proper conduct of such ballots, by allowing votes to be cast away from the kinds of pressures to which voters may be exposed in workplace ballots. These measures fulfil another of our manifesto commitments, and represent a further step in our successful introduction of balloting requirements for all important union decisions.
Other provisions in this part of the Bill recognise the interest which employers—whose workers may be called on to take industrial action against them—have in the conduct of strike ballots and any ensuing calls for action. The new notice requirements in Clauses 17 and 20, for example, will give employers the chance to respond to the prospect of a strike ballot, or strike call, as they deem best in the interests of their business. As foreshadowed in our manifesto, unions will have to give all employers directly affected at least seven days' notice of a call for industrial action after a ballot has been conducted.
Clause 21 will give ordinary customers deprived of goods or services because of unlawful organisation of industrial action an entirely new statutory citizen's right to bring proceedings to stop that happening. This provision derives from, and is entirely in keeping with the spirit of, the Government's Citizen's Charter. There will be a commissioner (the commissioner for protection against unlawful industrial action) who will be able to offer assistance to those contemplating or bringing proceedings under the new right.
Part II of the Bill provides important new rights for people at work. Clauses 22 to 24 will give every woman in employment a right to 14 weeks' maternity leave, regardless of the number of hours she works or the length of her service. She will also have the right not to be dismissed because she is pregnant or because she exercises her statutory right to take maternity leave. These new rights, which fulfil one of our manifesto commitments to improve opportunities for women, will benefit large numbers of working mothers who make up a vital and integral part of the working population.
Clause 25 gives every employee who works more than eight hours a week the right to receive a written statement explaining his or her basic terms and conditions of employment. Clause 26 provides protection against dismissal (or other victimisation) for safety representatives carrying out their duties, and employees who have to leave their work because of imminent risks to their health and safety. The clause will, I am quite sure, be of particular interest to this House as it extends and enhances protections which were enacted last year following the introduction of a Bill by the noble Baroness, Lady Turner. I pay tribute to the noble Baroness for her highly commendable initiative, which ensured protection for offshore safety representatives in line with the recommendations of the Cullen Report following the tragic Piper Alpha disaster. Since the passing into law of the Offshore Safety (Protection Against Victimisation) Act 1992, such representatives have had the right to complain to an industrial tribunal, regardless of length of service 424 or hours of work, if dismissed or otherwise victimised for carrying out any of their functions. That is a most valuable protection, and I am sure that the extended and enhanced provisions contained in Clause 26 will enjoy the same all-party support as did the Bill introduced by the noble Baroness. These are only some of the new, additional employment protections which the Bill proposes, which make this Bill one of the most important for the enhancement of the employment rights of individuals.
The Bill also proposes reforms to the judicial machinery by which those and other rights can be exercised where necessary. Clauses 32 to 34 amend the constitution of industrial tribunals and of the employment appeal tribunal, and provide power to extend the jurisdiction of tribunals to complaints about breach of contract of employment.
We have also taken the opportunity presented by the Bill to update the statutory provisions governing ACAS (the independent Advisory, Conciliation and Arbitration Service). Clauses 35 and 36 amend ACAS's statutory terms of reference to remove outdated and unnecessary references to the promotion of collective bargaining; place greater emphasis on the service's core business of dispute resolution; and end the anachronistic prohibition on the ACAS chairman from being a part-time post.
To ensure the taxpayer receives proper value for money, those clauses also provide ACAS with the power to charge for specified services where it thinks fit. The Secretary of State will also have a reserve power to direct ACAS to charge for a service, after first consulting the ACAS council.
Careers services provide essential and valuable advice and guidance which we wish to enhance and develop. The measures in Clause 37 remove the duty currently on local education authorities and place it on the Secretary of State. That is evidence of our commitment to quality careers guidance, and will enable arrangements to be made for careers services that best reflect local needs and conditions.
The key principles of good guidance—impartiality, comprehensive coverage of all career options, and equality of opportunity—remain unchanged. We shall continue to offer a free service, delivered by professionals to core client groups of young people in education and the jobs market.
In Clause 38 we make provision to allow careers service providers access to local education authority goods and services for a period of two years. That will enable those careers services, and private providers of such goods and services, to become established.
There is no doubt in our minds that the careers service can raise its overall quality. The high standards achieved by the best should be available everywhere. Organisations aspiring to provide services will have to demonstrate that they can meet demanding quality standards and sustain them.
Clause 31 abolishes the wages council system. The councils have been in decline for many years. From a peak of 66 councils in 1953, their numbers have been reduced so that today there are only 24 councils which continue to meet and set minimum rates of pay. The last Labour Government abolished 11 wages councils, 425 and the Wages Act 1986 further reduced their scope taking young people aged under 21 out of council regulation altogether.
Predictably, some pressure groups have campaigned vigorously against abolition. They have depicted a sound and sensible reform as a deliberate attack on the poor. Such emotive reactions fly in the face of reality. The Labour Party took some 600,000 workers out of wages council control with no detectable reduction in wages as a result. Young people's average earnings continued to increase when they were taken out of the wages council system.
§ Lord Eatwell
My Lords, the Minister has just claimed that the average earnings of young people increased after they were removed from wages council protection. Of course they did. Other wages also increased. Is the Minister not aware that an Employment Gazette article which studied those matters indicated that in over half of the trades in which young people were removed from wages council protection, their wages fell relative to those of adults still in employment?
§ Viscount Ullswater
My Lords, there have been one or two studies of the effect of the 1986 regulations. They are inconclusive in many areas. However, as I have already said, average earnings continued to increase after they were removed from the wages council system. Nor are minimum wage laws an efficient or effective way to tackle poverty. Some two-thirds of wages council workers are paid significantly above minimum rates. Even the overwhelming majority of those wages council workers who are paid at or near minimum rates are not poor. Many work part time.
§ Lord Dean of Beswick
My Lords, I thank the noble Viscount for giving way. For a number of years as the honorary secretary of a club I employed staff under a wages council system. I do not believe that the Minister is aware of the relative position. Historically, in the case of wages paid under the aegis of the councils to which the Minister referred, the minimum always applied, much to my regret. I do not know where the Minister gets the idea that the minimum was never paid. The minimum was always the order of the day; and they were very poor wages in comparison with what could be earned in other industries.
§ Viscount Ullswater
My Lords, research demonstrates that among the main wages council trades, all bar one of the groups examined experienced significant growth in real pay between 1986 and 1992. That is the latest information concerning young people in the light of the latest law.
As I was saying, many wages council workers work part time and most contribute a second or third income to their households. The plain fact is that wages council workers are spread right across income distribution. The Institute of Fiscal Studies has calculated that imposing statutory minimum rates gives more money to middle income groups than to those at the bottom.
426 The main effect of the wages councils is to force annual percentage increases in pay on individual employers regardless of their profitability, prospects, investment requirements or the local labour market. Where minimum rates have little net effect on the level of earnings, they are simply a bureaucratic burden. Where they artificially increase earnings they can only damage competitiveness and destroy jobs. We have made it clear for a long time that the councils have no permanent place in the labour market. They have outlived their usefulness. This Bill will bring their activities to an end.
The Bill before your Lordships' House is the product of careful consideration by the Government of responses to public consultation exercises. It includes what the Government see as necessary responses to events which call for further reform of employment law. It also incorporates a number of significant modifications and additions arising from the scrutiny given to the measures originally brought forward in another place.
However, during our consideration of other major pieces of employment legislation over the past decade, this House has invariably made useful amendments to Bills such as this. I have no doubt that the Trade Union Reform and Employment Rights Bill will prove no exception.
I believe that there will be a general welcome for many parts of this Bill—not least the new rights for individual employees contained in Part II. Some of the proposals will no doubt give rise to vigorous debate, and my noble friend Lady Denton and I look forward to entering those debates during our detailed consideration of the provisions in Committee.
The Government are fully committed to the rights of individuals—whether as individual employees, individual trade union members or individual citizens. This Bill will extend individual rights in all those areas. In doing so, it will help to ensure that employees enjoy the protection to which they are entitled at work; that trade union members continue to have a proper and effective voice in the affairs of their unions; and that citizens, as customers, are no longer without the protection of the law when they are the victims of unlawful industrial action.
The Government are also firmly committed to the creation of a framework of law which encourages rather than hinders business growth and economic competitiveness. That is the only lasting way to stimulate the growth in jobs which we all want to see. That is why the Bill continues the successful reform of law governing industrial action. That is why we have drawn a proper balance between the rights of employees and the cost burdens which employers are asked to bear. That is why we are abolishing outdated and inflexible statutory wage fixing which serves only to put obstacles in the way of creating jobs.
Moved, That the Bill be now read a second time.—(Viscount Ullswater.)
§ 3.30 p.m.
§ Baroness Turner of Camden
My Lords, I do not expect that the Minister anticipates a welcome to the Bill from our side of the House. It is true that there are 427 aspects that offer some improvements, in particular in health and safety and maternity rights. However, those could have been part of a different and separate Bill. In any event, they have largely been imposed upon the Government by EC directives. At Committee stage we shall be seeking some further improvements even so, in particular with regard to maternity provision.
For the remainder, the Bill is at best irrelevant at a time of high unemployment and at worst positively sinister. The Government really do have a nerve to come to the House with the words "employment rights" in the Title of the Bill when there are over 3 million unemployed—the figure is probably nearer 4 million—and when as recently as last Thursday, Black Thursday, further massive jobs losses were forecast at ICI and British Gas. The very term "employment rights" must occasion a few hollow laughs among those who have neither employment nor the prospect of obtaining it. Instead of addressing those problems, the Government have produced a Bill which seeks to put further curbs on the trade unions—in other words on the ability of workers collectively to protect themselves.
It should not be necessary 158 years after Tolpuddle to have to make a case for trade unionism. But this Government's philosophy is so anti-collective that I believe we have to do just that. There is still apparently some life in the old myth that unions are run by all-powerful barons and that individuals have to be protected against them rather than against exploitation by employers anxious to run their operations as cheaply as possible.
Much of the legislation since 1979 to which the Minister referred runs counter to International Labour Office conventions which the Government have themselves ratified. In other EC countries, including those with Conservative governments, unions are referred to as social partners. But, of course, the social partnership and the social chapter are both anathema to the Government.
It is also a myth that individuals do better on their own. Most people instinctively realise that if they wish to accomplish anything they must join up with people with similar interests and of like mind. That is how unions began in the first place and over the years much has been accomplished for employees by trade union organisation and agitation. I was a trade union official for some 30 years, as your Lordships know, and I know what I am talking about.
I deal with some of the main points of the Bill. First, on the matter of union membership, the Trades Union Congress has for many years operated its own internal mechanism aimed at dealing with membership disputes between unions. It has a separate tribunal chaired by a member of the TUC General Council, assisted by two sidespersons drawn from a panel of senior trade union officials. I am a member of that panel and have adjudicated in many disputes. We cannot, of course, sit on an issue involving our own union. There have sometimes been difficulties and problems but over the years the system has worked 428 well and, although once or twice there have been attempts to challenge in the courts the decisions that we have made, none to my knowledge has succeeded.
It has always been our aim to strengthen collective bargaining and thus the rights of individual members, since the reason why most people join unions is to be represented in negotiations with their employer. The question that we on the panel always ask is, "Which union actually negotiates terms and conditions of employment for those workers, or which has the best chance of doing so?". It is a system of self-regulation which many members support. There has been no call for it to be dismantled and yet that will be the result if the Bill, which prevents a union excluding a member except on certain narrow grounds and also prevents a union from declining to accept a member, takes effect.
I was under the impression that the Government were in favour of single union agreements. But clearly those would be fragmented by such a provision. It is argued that individuals must be free to join whichever union they believe can represent their interests most effectively. However, the Bill confers no right of representation or recognition. Indeed, the provisions which once existed which enabled unions to seek and obtain recognition by an employer following a test of employee opinion was dispensed with years ago by Conservative administrations. Self-regulation is apparently all right for financial institutions but not for trade unions, which must be encased within a tight legal framework.
Then there is the provision about the collection of union subscriptions by the system known as check-off, under which, by agreement with a union, union subscriptions are deducted by the employer from pay. To my certain knowledge, such deductions do not take place in my union without individual written consent of each member. I believe that to be true of others. The Bill will now impose the additional administrative burden of what amounts to an individual three-yearly check. Clearly employers do not want that additional burden, with the result that there are likely to be fewer check-off agreements. Employers' organisations have described it as an unnecessary administrative nightmare without commensurate benefit. Clearly the intention is to make it more difficult for unions to collect their subscriptions. In other words, it is an attempt to undermine the capacity for unions to operate their cash flow in the way that they have hitherto done.
I refer to the new provisions about industrial disputes. As the Minister has explained, it is already necessary to ballot members in advance of strike action. In the main the trade union movement does not quarrel with that; and neither do I. However, under the Bill it will no longer be possible to have ballots at the workplace, as allowed under existing legislation. The workplace system allows for maximum membership participation. All is now to be conducted by postal voting except, I believe, in the case of some very small companies. As a result of a government amendment introduced at a late stage in the Commons, from 1996 unions will no longer be able to apply for and obtain public money towards the cost of such ballots. The Government therefore say that it 429 is in the public interests that unions should ballot everyone by postal voting in advance of a strike, but there is no public money available to meet the cost of such an endeavour.
Taken with previous legislation, the provisions of the Bill represent a set of formidable hurdles for a union to surmount before a dispute can be regarded as lawful. Independent scrutineers have to be appointed and of course paid for, and must have access to and inspect membership registers. Copies of the notice of the ballot must be given to the employer seven days in advance, and a copy of the ballot form three days in advance. Information must be supplied indicating which members of the workforce are to be balloted and whether the dispute is to be continuous or non-continuous. Ballot papers must be issued by post. They must indicate to members that if they strike they will be breaking their contracts of employment. Why we should have to do that in this country in the case of a lawful dispute, I do not know. In many countries in the EC, employment contracts are simply regarded as suspended in such a situation.
At the end of the ballot the scrutineers will have up to four weeks to turn in the result. As if that were not enough, individual members of the public are to be given a new right to sue unions if they feel disadvantaged as a result of an unlawful dispute, whether or not they are party to a contract disrupted by the dispute or have actually suffered any damage. A new commissioner is to be appointed to give material assistance to such people, at a time when legal aid is being cut back in other areas. Clearly, Mr. Disgusted of Tonbridge will have a high old time of it. He or she is not likely to know whether or not a dispute is lawful, and probably will not care. However, each complaint will have to be investigated, with all the expense and administrative time involved. Again, no reputable body of opinion has campaigned for that.
The Government still seem to consider that unions exist only to organise strikes. I can tell the Minister that that is not so. Strike action is normally agreed by union executives only as a last resort. I have organised a number of disputes in my time and I know what I am talking about. Disputes are extraordinarily worrying affairs, if, as most union officials do, you care about your members. There is the worry that they and their families will have to exist on strike pay, which is substantial only in a few unions. There is the stress involved in coping with the intimidation which often takes place and the worry about how to bring the dispute to an end in a way that will be beneficial to the members. Altogether, we would sooner have conciliation or arbitration, if either were available. But of course the Government do not believe in arbitration either. They have virtually written the Central Arbitration Committee—of which I was at one time a member—out of existing legislation and it has little role left.
The Government clearly believe that employees with a grievance should either put up or shut up. In 430 times of high unemployment, they are scarcely in a position to leave, so the market philosophy does not work terribly well for them.
An even stranger provision crept into the Bill at Report stage in the other place. When I first read it, I wondered whether the Government had really at last gone a little dotty—and one has to ask oneself that. I am talking about the new provisions in relation to merger ballots, ballots on trade union mergers and amalgamations. I am sure your Lordships will appreciate that it takes a long time to bring about mergers between unions. But most people, including governments in the past, have felt that mergers between unions were a good idea. At one time, we had far too many small unions. Over the years, there have been a number of mergers. Of course, individual members have to be balloted before a merger is effected, but the ballot normally takes place only after much discussion at branch and regional level and also at annual conferences. However, not everyone goes to meetings; there are many loyal union members who do not do so. They are surely entitled, when the ballot occurs, to know what their elected leadership thinks about it and is recommending.
However, under the provisions of the Bill, they will not know unless the union goes to the considerable additional expense of circulating them by post separately. That, I understand, is what is meant by the clause which says that no recommendation or opinion is to be included with the ballot paper. To my mind, that is a removal of an individual right rather than the reverse and it strikes me as being quite ludicrous.
As I said earlier, there are provisions about health and safety which appear to offer improvements, and they are welcome. It will mean, of course, as the Minister said, that the Bill which we piloted through the House last year to protect safety representatives against victimisation while working offshore will be expunged. But I understand that the full compensation terms included in the Act have been carried over into the present Bill. If they will in future apply to everyone in similar circumstances, we shall, of course, be pleased. We shall be able to go further into that in Committee.
The case is similar with maternity rights. I understand that those also arise from the EC directive on the protection of pregnant women at work. However, there are some problems, I understand, about premature babies, the length of leave envisaged in the Bill and about women who are sick and off work due to a pregnancy-related illness. Again those are matters which we shall seek to explore further in Committee.
In regard to the transfer of undertakings regulations, again, those are to be amended, as I understand it, in accordance with EC directives. However, the present regulations exclude pension rights of employees in transfer and merger situations. We shall seek to deal with that in Committee. While on the subject of EC directives, I regret that there is no provision in the Bill which would give pro rata protection to part-time workers, many of whom are women. I am flagging that to the Minister as an issue which will be raised during the passage of the Bill.
431 I now come to a very controversial aspect of the Bill—perhaps the most controversial of all: the proposal to abolish wages councils. Of course, the Government have been hinting about it for some time. We have occasionally in the past been told by the Minister that wages councils have outlived their usefulness. If that were so, there would be no low paid workers in the UK. Sadly, that is not the case. Wages councils currently provide protection for 2½ million people, mostly women, and many from ethnic minorities. They are among the most vulnerable in the workforce. The Equal Opportunities Commission and the Fawcett Society have been campaigning on that, since they believe—I am sure correctly—that abolition will have a disproportionate effect on women's wages relative to those of men, and they see it as a gender issue.
Measures which weakened wages councils that were taken by the Government in 1986 have not created jobs. The consultation paper produced in 1988 by the Government now reads rather oddly. It is claimed, for example, that since wages councils ceased to cover young people in 1986, their earnings have not plummeted but have continued to rise. But —and this is the main point—the rate of youth employment has declined dramatically. I think that not even the Government would now make such a claim. Employment has not been created as a result of young people no longer being covered by wages councils.
Of course, there is no reason why the system should not be reviewed; indeed Labour governments did that in the past and, as the Minister said, a number of wages councils were discontinued. But one has to remember that in those circumstances there was a great deal more collective bargaining than there is now and the unions were quite happy for wages councils to disappear if collective bargaining would be available to take its place for the individuals concerned. But there is far less opportunity for that nowadays, largely due to the type of legislation that we are discussing this afternoon.
So there is no reason why we should not review the system and perhaps there is now no need for a council covering the ostrich and fancy feather and artificial flower industry, although there are still artificial flowers. Of course, there needs to be better enforcement. But to abolish wages councils altogether is bound to lead to further exploitation of vulnerable people. It simply means that the taxpayer is having to subsidise low-paying employers.
It is significant that the consultation paper of 1988 quite specifically refers to benefits such as family credit as a reason why it would not matter if the councils were abolished. But why should the rest of us subsidise employers who will not pay a living wage? Why should the Minister again this afternoon trot out the old argument about part-time employees—that being women, of course—not being the main wage earners and therefore it does not matter because they are secondary wage earners? They should still be paid a reasonable rate for the job and, if they are not paid it, the rest of us have to subsidise the failure of employers to provide a living wage.
432 Then there is, in this rag-bag of a Bill, the proposition that in future it should be possible to hear certain cases before industrial tribunals with chairmen sitting alone. I am not surprised that this suggestion should emanate from a Government so against tripartitism, but last week representatives of an employers' organisation came to see me. They were very upset about this proposition, which they felt would import more legalism into a system which is supposed to be not too legalistic. Surely we should make use of the industrial and practical experience of the sidespersons who now sit with legally qualified chairmen.
The representatives of the employers' organisation who saw me said that small firms were worried because they felt that they would have to be legally represented if there were only a chairman sitting alone. They felt that that would add to their costs and they could not afford it. That is an employers' angle, but from the employees' angle, as one who in the past has represented trade union members before a tribunal, I feel quite certain that I should have felt much happier to have a representative there who knew something about the industrial relations scene. I should not feel happy about simply having to present a case to a chairman sitting alone.
Then it is proposed to remove from the functions of ACAS the obligation to promote the development of collective bargaining. Of course, the Government do not believe in collective bargaining. However, they have ratified the ILO Convention 98 on the right to organise and bargain collectively. That may be another instance of the Government flouting an ILO convention of which they themselves are a signatory.
Finally, I wish to say a word about provisions relating to the careers service. As has been explained, the provision of this service will no longer be a statutory duty for local education authorities. It looks to me as though the Government wish to privatise the service. One can only remind the Minister that the Government's previous activities in this type of area have not been markedly successful. The Professional and Executive Register was sold off some time ago to none other than Robert Maxwell and the company ceased trading last December. There is no reason why the service should not remain with LEAs. It is quite possible that a number of my colleagues will address this subject during the debate. Furthermore, I believe that there is doubt that the needs of the disabled will be properly looked after. That is an aspect that we must explore further in Committee.
I return to my original theme. There is no pressing need for most of the Bill. No one wants it. Trade unions are not the all-purpose ogres that they once were. Indeed, according to the latest opinion polls their standing is rising while that of the Government is falling.
So why do we have the Bill? Is it because the Prime Minister wants to tell foreign investors: "Look, we have over 3 million unemployed. We have tied the unions in knots. There is precious little employment regulation and no protection at all for low paid workers. So welcome to bargain basement, sweatshop Britain". Is that what it is all about? This is a truly awful Bill.
§ 3.50 p.m.
§ Lord Rochester
My Lords, from these Benches I should like to thank the noble Viscount, Lord Ullswater, for having explained so clearly the main provisions of the Bill. In the past we have supported much of the Government's legislation that affected trades unions. Indeed, in a few cases we advocated reforms in advance of the Government: for example, in regard to the need for unions to use secret postal ballots under independent supervision in electing members of their principal executive committees. But on this occasion I have to say that in their so-called step-by-step approach to trade union reform the Government, in our view, have gone several steps too far.
On that point we are in accord with the widely respected organisation, the Institute of Personnel Management, whose members have to negotiate with trade unions in the front line. The IPM sees no compelling reason to introduce the changes which, for example, concern check-off arrangements and wages councils. The institute further considers—I agree—that those and other changes will do little to contribute positively to productivity, quality and competitiveness.
A case can certainly be made out for some of the individual proposals in Part I of the Bill. But I suggest that even they are largely irrelevant to this country's economic and social needs. Politically, in our view, they have more to do with persisting in a policy which, though appropriate for the early 1980s, today savours too much of continuing to knock trade unions when unions no longer offer any serious threat to the well-being of society.
I turn now to the Bill's main provisions. At this stage I shall pass quickly over the relatively uncontentious clauses, Clauses 1 to 12, concerning ballots and the financial affairs of trade unions.
An exception to that is Clause 7, which has the effect of withdrawing the Government's power to fund trade union ballots after 31st March 1996. It must be acknowledged that when such funding was introduced some unions were unwilling to accept it. Having said that, the situation today is very different from what it was then. At the same time that unions are now being told that funding is to be withdrawn they are being obliged under the Bill to spend more money on ballots. To me that smacks of a certain meanness. Indeed, I recall at Third Reading in this House of the 1988 Employment Bill saying even then that, because independently supervised postal ballots would prove to be very costly for trade unions, my noble friends and I considered that the Government were being parsimonious and short-sighted in refusing to allow public funds to be used to help finance the cost of employing independent scrutineers. Now financial assistance is to be withdrawn altogether and we deplore it. We also greatly deplore the fact that this clause was introduced at Report stage in another place out of the blue and without any prior consultation. We shall certainly oppose it in Committee.
Clause 13 is the clause which the Government say will give union members the right to decide for themselves which union they will join. That sounds 434 fine, though in practice it will undermine the role of the TUC in operating the so-called "Bridlington principles" which were designed to regulate competition for membership between unions. The question is whether the individual freedom that the clause is intended to provide may be outweighed by the conflict between unions which may result, to the possible detriment of orderly relationships in the workplace. In Committee we shall examine the clause with those considerations in mind.
Clause 14 is concerned with the deduction by the employer of union subscriptions from an employee's wages under the so-called check-off system. That is the general practice in the chemical industry, in which I used to work. It has benefited employers as well as trade unions in replacing earlier arrangements under which shop stewards were obliged to collect union dues from each individual in working time and thus inevitably interrupt production. In my experience, employees have had no difficulty in exercising control over the payment of their union's subscriptions. While the initial authorisation of check-off should certainly continue to be required on an individual basis, insistence on reauthorisation periodically and whenever the amount changes might well cause an undue increase in the administrative burden not only on trade unions but also on employers who nevertheless would not wish to withdraw from check-off arrangements. After all, banks operate direct debit arrangements for subscriptions to clubs, charities and other kinds of organisations in a similar way to check-off without requiring reauthorisation either periodically or whenever the amount involved changes.
I turn to Clauses 16 to 21 which deal with the organisation of industrial action, ballots for that action and the rights of individuals to bring proceedings to restrain unlawful action. We have a number of concerns about those clauses. We are troubled lest the requirements in both Clauses 17 and 20—namely, that a trade union should so describe employees to an employer that their identities can readily be ascertained—amount to an unreasonable breach of confidentiality. By no means all union members pay their subscriptions by check-off and thus disclose their identity to their employer. Some individuals may well not wish their employer to know that they are union members. I understand from the exchanges at Report stage of the Bill in another place that the Government may be willing to initiate or accept an amendment to meet that point. I shall be grateful, when the noble Viscount, Lord Ullswater, replies to the debate, if he will confirm that that is so.
Clause 21 empowers individuals to take proceedings to stop unlawfully organised action if it results in their being deprived of goods or services. The number of cases of unlawful action is now very small. Accordingly we shall need to be satisfied that the proposed new right will not give rise to vexatious litigation and, in the highly charged atmosphere of major disputes, lead to an extension of the dispute rather than to its speedy resolution.
We welcome the fact that in Part II of the Bill the Government are giving statutory effect to European 435 Community directives designed to improve the protection available to employees in terms of such matters as maternity leave and rights relating to pregnancy, written statements to employees of their employment conditions and protection against dismissal for employees and their representatives where health and safety are at stake. However, we shall wish to examine closely in Committee the Government's proposals to establish whether they fully meet EC directives and see if they could reasonably be taken further.
In that connection I give notice to the Minister that in the case of both Clauses 29 and 30, which deal respectively with the transfer of undertakings and collective redundancy, I am unhappy that, in confining the right to prior consultation and information to recognise trade unions rather than to employee representatives generally, the Government have apparently refused to respond to the European Commission's concerns on that point. I therefore propose to move amendments in Committee to remedy that deficiency.
That brings me to Part III of the Bill and particularly to the Government's proposal to abolish the remaining wages councils. My noble friends and I do not accept that the Government have produced satisfactory evidence that wages councils are damaging the economy. Indeed, many employers and academic bodies have argued against the claim that the wages councils have been instrumental in increasing unemployment. On the contrary, they consider that without such councils as remain unscrupulous employers will compete to drive down the wages of the lowest paid and, so far from resulting in any increase in employment, it could well exacerbate recruitment problems which already exist. As the noble Baroness Lady Turner, said, it will result also in an increase in the amount of family credit that will have to be paid to those low-income households that are adversely affected.
From these Benches on a number of occasions I have said that, unlike the Labour Party, we are opposed to the concept of a national minimum wage. In case that position is thought to be inconsistent with what I have said, I should explain that in our view there are significant differences between the current wages council system and a national minimum wage system. First, the minimum wages set by wages councils are negotiated between employers, employees and independent people in the relevant industries, whereas the national minimum wage would be determined by statute. We consider that it is much better to involve management and employee representatives in open discussion rather than that Ministers and civil servants should impose on the whole country a specific minimum wage level.
Secondly, the wages council system allows for a targeted industry-by-industry approach rather than the inflexible across-the-board approach that a national minimum wage would involve. It thus takes account of the economic and employment conditions within each industry, whereas the national minimum wage would preclude such flexibility. It may be said that it would be better still for wages councils to allow 436 for regional as well as sectoral flexibility. However, that is an argument not for abolition but for reform of the system, which could include an increase in the resources and powers of the wages inspectorate. Best of all, in our view, would be an integration of the tax and benefit systems, which Liberal Democrats have long advocated and under which benefits could be directed not to those on low pay but to ensure that people, especially those with families, enjoy a decent minimum income.
There are a number of other matters on which we shall wish to question the Government closely. For example, I am thinking of the change proposed in Clause 32 in the constitution of industrial tribunals under which a chairman is to be permitted to sit alone to hear appeals. That change is no doubt intended to speed up the hearing of cases. Our first reaction is that it may be at an unacceptable cost in terms of the loss of industrial experience resulting from the absence of lay members. Then there is the proposal in Clause 37 to transfer responsibility for career services from local education authorities to the Department of Employment. In that case we shall need to be assured that the proposal is not just another step on the way to concentrating powers in the hands of central government and continuing gradually to emasculate the functions of the local authority.
In conclusion, I feel obliged to reiterate that many of the measures proposed in the Bill savour to us of mean-mindedness and will do nothing positively to encourage co-operation between management and employees, which is so badly needed if economic recovery is to be achieved and sustained. I believe that the Bill is based largely on a philosophy which is now outdated and, what is more, that its enaction will be seen as such by the great majority of fair-minded British people.
§ 4.5 p.m.
§ Baroness Young
My Lords, I begin by thanking my noble friend Lord Ullswater for introducing the Bill this afternoon and explaining its provisions so clearly. Like other speakers, I too have a number of points I shall wish to raise at Committee stage, particularly in relation to Part II.
I welcome this legislation. I believe that it builds on success. It follows on five Acts of Parliament covering trade union reform since 1979 which have transformed Britain's previous record of bad industrial relations. I believe that when future historians look back on this period, those Acts will be singled out as one of the success stories of the time. In fact, they have redressed the balance of power between employers and employees and they have encouraged inward investment.
If I may say so to the noble Baroness, Lady Turner—a most skilful advocate of her particular position— I was extremely surprised by what she had to say in regard to inward investment. It has brought much new employment to this country. As far as I am aware, there is no evidence whatever that those employed in industry are anything remotely resembling sweated labourers. Inward investment has brought increased employment and prosperity both to a number of 437 people and areas. Indeed, an independent survey of foreign firms in the late 1980s showed that 96 per cent. believed that British industrial relations had improved significantly and 70 per cent. planned to increase their investment in this country. An OECD economic report on the United Kingdom in 1991 described our structural reforms as impressive, including the reform of trade union law.
My home is Oxford, usually referred to in your Lordships' House as one of the seats of an ancient university. However, it is also a centre of the motorcar industry. When I served, as I did for 15 years, in local government in Oxford during the 1960s and 1970s, one tragic fact emerged. That was the continual series of strikes in the motorcar industry which almost brought it to its knees. In contrast, it is extremely heartening in these difficult economic times to read in our local newspaper only last week that the Rover plant is taking on 350 extra employees and starting a night shift. That company too is building on success and is to be congratulated. I believe that much of that improvement can be laid on the reforms of the trade union law. Indeed, it is unlikely that Hoover would wish to relocate to Scotland and so increase employment there but for those reforms.
Those are the reasons I welcome the Bill. In its details, on which I understand there will be much discussion, it protects the rights of trade union members and gives individuals greater freedom to belong to a union of their choice. There are a number of technical proposals such as the abuse of check-off arrangements, which I believe will be helpful. A new proposal in Clause 21 gives a new citizen's right which will enable anyone deprived of goods or services to bring proceedings against the organisation involved.
Clauses 37 and 38 covering the careers services will prove to be helpful. As I understand it, they will open up the management of the careers service. I know from my own local government experience that the careers service has done much good work, but in the changed society in which we live, with the levels of unemployment and the increasing flexibility demanded in the workplace, there is advantage in opening that up to the best practice where it has been achieved in any area. That measure would be valuable for young people and others who are seeking employment.
I realise that the most contentious part of the legislation is that which concerns wages councils. Wages councils legislation was introduced in 1909, but the world today is a very different place. Wages councils distort the operation of the labour market, and national statutory wage rates are inconsistent with the need for more flexible pay arrangements. There is research that shows a link between wages councils and job losses. The IOD and the CBI have spoken against them and point to their effects, particularly on small firms that employ fewer than 50 people. Experience has shown, as with the proposals for a national minimum wage, that they can produce more unemployment.
I should like to add a further point in relation to the interlocking between wages councils and family credit. The purpose of family credit is to help families on low 438 wages. In 98 per cent. of cases family credit is paid to women but it is based on the income of the whole family. There are now approximately 450,000 people who receive family credit, and the average payment is £42 per week. It would be helpful if my noble friend the Minister could tell us how many families who are now covered by wages councils would continue to be helped, even after their abolition, by family credit. That kind of payment would help those in low paid employment and would accurately target a great many people who are in need.
There is much that is welcome in relation to maternity provisions. The Bill recognises the immense contribution that women make to the economy—and I include those who work part-time. Women workers offer flexibility, and, in the case of many married women returners, the benefit of their experience of bringing up families and other employment.
The current maternity rights provisions are strengthened by the implementation of the EC directive on pregnant workers which sets new standards on health and safety. It gives greater protection against dismissal on grounds of pregnancy and childbirth. In that connection I congratulate my honourable friend in another place, Mrs. Shephard, on insisting successfully that the directive could not be interpreted as linking sick pay with maternity leave.
I welcome Clause 25 which implements the Government's commitment to give those who are working eight hours or more a week the right to a written statement of their main terms and conditions of employment.
However, I do have some concerns. The Equal Opportunities Commission and some other organisations are concerned as to whether a period of 14 weeks for maternity leave is long enough. In the interests of both the mother and the employers, that is a situation that should be looked at carefully. The EOC have suggested a period of 18 weeks. Most women take 11 weeks' leave before the birth of their child, leaving them three weeks afterwards under the 14-week rule. It is a matter for individuals and how they feel, but I understand that the median time is 20 weeks before the birth of the first child and 18 weeks for subsequent births, which suggests that there is a problem for many women on returning to work. A longer period of maternity leave would benefit the mother, but I suggest that an employer wants the woman to return to work and will have spent much money on training her for the job which she has held, which would be wasted if she did not return to employment. Therefore, the issue of costs needs to be looked at very carefully.
The proposal for 14 weeks' maternity leave will add another tier to the already very complicated two-tier system of different lengths of service qualifications for leave and pay. The directive also requires provision for maternity pay, but that situation is not covered by the Bill and is to be dealt with at a later date. I shall not attempt to explain the complexities of maternity pay and leave provisions, but that is a matter which, in the interests of the women involved and the employers, could be improved and clarified. I hope that my noble friend, in the course of the passage of 439 the Bill, will be able to say something positive on that, which would be very helpful to a great many people. I hope that he will look very seriously at the 14-week period of maternity leave.
We shall no doubt cover an enormous number of very detailed and important points in the remaining stages of the Bill, but I hope that I have said enough to indicate that the Bill is on the right lines. It builds on the success which the Government have achieved in trade union legislation over the past 14 years, and I wish it a speedy passage through the House.
§ 4.15 p.m.
§ Lord Murray of Epping Forest
My Lords, one might almost get the impression from the Minister's enthusiastic introduction that the Bill is like the return of an ageing prima donna to the stage, the response to an overwhelming popular demand. In July 1991 the National Opinion Polls organisation asked a sample of voters the following question:Do you feel that there is a need for any more such legislation?One-fifth of those asked said that there was; two-thirds said no. That was the response of the Conservative voters who were asked. My Lords, popular demand? Not from decent employers and not from trade unionists.
There may be a few trade unionists who would welcome certain parts of the Bill. There are a few who regard wages councils as an impediment to recruiting and the development of militancy, who would prefer employees to join their union and take the employer on. There will be a few trade unionists who never liked the check-off and who are nostalgic for the days when the steward went round with his box on a Friday, collecting the subscriptions and the grievances, and doing a bit of stirring.
The Bill may well sharpen demands for the disclosure of financial information about companies and their managers and perhaps even about the sources of income of the Conservative Party.
There may be a few trade unionists who have been outvoted in a ballot on a wage settlement and who think that to join another union and get it involved in negotiations, thus breaking down a single union agreement, would get them a better deal. I would not encourage action along those lines; I am stating that the Bill will give the green light to those kinds of trade union activists.
I am not particularly bothered if the Government make a rod for their own backs or for the backs of their supporters. But if they make rods for employers' hacks, then we can reasonably expect employers to sit up and take notice—and of course they are doing so. The CBI, BIM, IPM, the Industrial Society and the Engineering Employers' Federation have put their criticisms on record, as have individual employers—for example, Sainsbury, Tesco, Asda, etc. Those employers do not share the belief of the Government that the way for Britain to compete is by way of low wages; that the way to improve Britain's industrial performance is by further tilting the balance of power in favour of the worst kind of employer—the Brick Lane brigade.
440 The noble Baroness, Lady Young, has questioned whether there is exploitation and sweated labour. I invite her to accompany me to the Whitechapel area. I should be delighted to take her, if they would let us in, to some of the sweat shops that are still characteristic of the East End of London.
The theme of the legislation is that the employers' ability to rule by fear will be further increased by the Government. To that end, the ability of employees to combine in trade unions for their collective protection must be further undermined. Those attitudes have shaped the legislation which has been put on the statute book since 1980.
I have lost track of the number of Acts which relate to trade unions. No doubt my noble friend Lord Wedderburn will remind us. However, I am not alone in my ignorance because most trade unionists have lost count. Few employers can describe with accuracy their legal rights and duties. The fact is that most employers and trade unionists have continued to sort out the problems of change without much reference to the small print of all the legislation.
The Minister told us that since 1980 fewer days have been lost in industrial disputes. That is a classic example of post hoc ergo propter hoc. It is not difficult to bottle up grievances when 1 billion working days are being lost each year as a result of unemployment and when every television news programme reports new sackings. The Minister spoke of 13 million days lost in strikes. Let him compare that with 1 billion and evaluate the relative impact on Britain's economy and well-being.
Furthermore, it is not surprising that trade union membership has fallen during the past 10 years. I find more surprising the fact that 10 million people have stuck to their unions and that two-thirds of establishments still have trade union members. Only a small number of people have walked away from their unions as distinct from those who have lost their jobs and subsequently their membership. The reason is not far to seek. The union card is the best insurance policy which the individual worker can carry.
All that must be most disappointing for the Government and therefore we are seeing yet another attack on trade union membership and finances. The Bill will create extra bureaucracy and will impose increased expenditure on unions in relation to ballots. In addition, state funding for ballots is to be withdrawn. That will not improve the ballots or increase their effectiveness. Furthermore, it is nonsense to insist on postal ballots in the face of evidence from employers that work-place ballots operate fairly and produce a much higher level of participation than postal ballots.
Much more important are the changes in the arrangements for the check-off, which were effectively criticised by the noble Lord, Lord Rochester, and others. The arrangements are invariably the result of agreements between employers and unions. They are designed to simplify procedures and to save the employers' time. This change is designed to encourage employers to abandon those agreements and thus weaken trade unions financially. That is the only purpose so we return to Friday afternoon collections.
441 No wonder the EEF talks of an administrative nightmare. I hope that good employers who operate the check-off will remember that they benefit by unions protecting them against their unscrupulous competitors.
The most obvious case is that of the wages councils. It is notable that the Government have changed their mind since 1988. Perhaps they are tired of defending themselves against charges of malign neglect and of flouting their own laws by ignoring the deliberate evasion of wages council orders. The wages councils do not help trade unions to organise. The situation is quite the reverse; they help decent employers to survive. If the Government wish to weaken trade unions, I shall give them some advice. They should be extending statutory provision and not reducing it. I welcome Part II of the Bill, although time does not permit me to comment on the improvements which need to be made. I express the hope that the Government will take the opportunity of extending the Health and Safety at Work etc. Act 1974 to the staff who serve us here and in another place.
The paradox is that employers have not asked for the legislation. On the contrary, they have criticised it. Two areas in particular have been singled out and have been referred to already. The first is Clause 21. That gives individuals without any contractual relationship the right to bring proceedings and to have them paid for by the taxpayer. I hold no brief for unlawful action; but I am impressed by the comment of the Institute of Personnel Management. It stated:The proposal is wrong in principle and likely to do great harm to industrial and corporate relations".The Association of British Chambers of Commerce, the BIM and CBI also cautioned against the proposal.
The second area of criticism is Clause 13, which the Minister claimed will extend the freedom of the individual worker. He said that that is curtailed by the TUC's procedures for regulating relations between unions. Those procedures do indeed set limits on the rights of the unions and their members as do the procedures which properly and by agreement regulate activities here in your Lordships' House. The Government have not, or cannot, grasp that unions protect individual workers. The files of the citizens advice bureaux are full of cases of non-unionists—of individual workers—who have been robbed by employers even of the statutory rights enacted by this Parliament.
The most effective way in which an individual can secure his natural rights, his contractual rights or his statutory rights is by combining with his fellows. In doing that, he acquires duties as well as rights. The same applies to unions which affiliate to the TUC. The Bridlington rules are accepted and valued by unions as the basis of good order and of stable industrial relations. They are valued by employers for the same reasons.
The Government paint a picture of the little man oppressed by the powerful union and prevented by the Bridlington rules from escaping to a more sympathetic union. However, the reality is that in practice unions acquiesce in a great deal of movement by thousands of 442 individual members between unions. They object when that takes the form of organised groups seceding and seeking to destabilise existing collective bargaining procedures.
There are two typical situations in which the disputes procedures are invoked in order to prevent the movement of members. The first is that in which a group of workers with a grievance against the union decides to secede to another union, are wrongfully accepted, and the second union demands recognition. Grievances can arise from the settlement of a wage claim, the termination of a dispute or an agreement to change working practices. What is a union supposed to do when after a majority decision to accept a settlement, possibly as a result of a ballot, a disaffected minority decide to reject that? They may walk away to another union, possibly one which does not want to accept them at national level but finds that they have been recruited locally?
The second case is that in which another union wants to muscle in on a company. Often a big union is involved at the expense of a small union, as in the case of the Fox and Goose public house. In that case, Congress had to expel for a short time the Transport and General Workers Union in order to concentrate the mind of its biggest affiliate on the need to accept a disputes committee ruling in favour of the small Licensed House Managers Association.
Incidentally, it has been claimed that the TGWU wants a relaxation of the Bridlington rules. I understand that Mr. Morris has called for a review of the principles. That is nothing new because during my time in office the rules were brought up to date in 1969, 1973, 1976 and 1979. They may well have been revised since then.
Therefore, the second case is deliberate poaching. Some people take a romantic view of poachers. I suspect that this is not shared by landlords on the Benches opposite, and certainly not by employers. In both of these cases, it is the employer who would suffer if the Bridlington procedures were outlawed, which is what this Bill would do. These rules protect employers by laying down that no union may authorise a stoppage of work arising from a dispute with another union until the dispute has been notified to, and been dealt with by, the TUC. Enact Clause 23 and it will be the employer who will have to deal with the dispute, the employer who would have to face a possible strike for recognition—all quite lawful—and, if it is successful, will have another union raising the ante at the negotiating table. So as well as increasing the probability of industrial action, this Bill—as has been said—must, by definition, multiply the number of unions that a company has to deal with.
Nor does the problem stop at the first action. The time will come when another minority develops a grievance, and yet another union will offer its consolation and its services. So the numbers—and the employer's problems—will escalate. It has been claimed that the dispute about the Ford plant at Dundee provides a case for this clause. It is quite the reverse. It is clear in this situation that the union's national officers were pressed—pushed—by their local members at Ford, quite democratically, and that those 443 members were reluctant to see the emergence of a single-union agreement, AEU agreement, at the Dundee plant at a time when the general secretaries were obviously under pressure from the TUC to accept it. Secondly, there has been no similar case since 1987. Trade unions learn from experience, and the TUC builds up its authority as much from its failures as from its successes. The third important thing that sticks out a mile is that if this proposal had been law, we would never have heard of Dundee, because the AEU would never have been able to offer a single union agreement at Dundee and Ford would never have considered establishing a plant there.
From whatever angle one examines the proposal, it is clear that it will lead to grievances becoming claims for representation by another union or unions, from there to disputes, and quite possibly to strikes for recognition. If a handful of people were to take up membership of another union, they could force that union to seek recognition by strike action, if necessary. If this proposal means anything, it means that the new union must claim to represent the members. If the Government do not intend that the new union should get representation and recognition at the bargaining table, then let them tell us now. I shall happily sit down if they tell us that that is not their intention. If it is their intention that the membership should be able to claim representation and recognition and become involved in bargaining, and thus multiply the number of unions, then what I have said is certainly the case.
No wonder the employers' organisations—the CBI, the ABCC, the IPM and so on—have criticised this proposal. Perhaps the IPM, to which the noble Lord, Lord Rochester, referred, should have the last word on this subject.
There has been no pressure from our members for any proposal to support the disbanding of the Bridlington rules. Whilst fully supportive of individual rights the removal of these procedures could be a destabilising factor…'single union' sites or recognition and brown field 'single table' bargaining should not be placed in jeopardy by this proposal.
§ 4.34 p.m.
§ Lord Boyd-Carpenter
My Lords, this is an extremely important Bill which it is right that your Lordships' House should be considering, having a full discussion and giving reign to its wide experience of these matters. It is of course the sixth Bill in a series of measures dealing with this subject which have been passed during the term of office of the present Conservative Government. It is the combined effect of these measures that your Lordships will wish to have in mind in considering the details of this Bill.
It is the fact that there is little industrial trouble at the moment. The era of continual strikes and pay disputes that we endured in the 1970s seems to have come to an end. I was interested to hear the noble Baroness, Lady Turner of Camden, criticising the introduction of this Bill "at a time of high unemployment". It seems to me that the argument is all the other way. A measure that is plainly going to help employment becomes even more urgent against the background of the unemployment levels of today. 444 The industrial peace that we are enjoying at the moment should be a considerable contributory factor to restoring the levels of employment that we would like to see. Therefore, it seems to me that the noble Baroness's argument should be the other way round: that a measure that might have been thought less necessary at a time of full employment acquires additional considerable importance when it is introduced at a time when unemployment is, sadly enough, high. It is in that spirit that I suggest that your Lordships' House would wish to consider this matter.
§ Lord McCarthy
My Lords, does the noble Lord recall that it is not six, it is eight? There have been eight Bills. I seem to remember that with every single one of those Bills in 1980, 1982, 1984, 1986, 1988, 1989, 1990 and 1992 on that side of the House noble Lords claimed exactly the same, that that Bill would reduce unemployment—except it was always going up.
§ Lord Boyd-Carpenter
My Lords, it was not expressed like that. It was expressed at the time that the Bills would help the problem of unemployment. It would have been foolish to claim—and it was not claimed—that each Bill of itself would substantially reduce unemployment. The fact is that they create better conditions in British industry and therefore help to deal, perhaps in a modest degree to begin with, with the problems of unemployment. That was what was said. If the noble Lord cares to consult the voluminous reports in Hansard of your Lordships' House on the five debates on the previous five Bills he will find that that was the argument.
The other point I would beg him to consider is this: what is clearly the case is that this country appears to foreign investors to be the best European country in which to invest. Take the Japanese: they could invest anywhere in Europe but overwhelmingly they have decided to invest in this country. Why? They have done so because they realised that we were introducing stable, peaceful industrial relations and that this made this country a sensible place in which to invest.
Lord Bruce of Donington
My Lords, would the noble Lord say the same thing about British investors, who appear to be more attracted to investing their capital in the United States of America?
§ Lord Boyd-Carpenter
My Lords, I do not think that the noble Lord can deduce very much evidence in support of that easily enunciated proposition. In any event, I am dealing with the point that he entirely avoided, that people such as the Japanese, who have the free choice of the whole world in which to invest and who can invest anywhere in Europe, have in fact decided that this is a sensible country in which to invest.
§ Lord Boyd-Carpenter
My Lords, perhaps I may finish my sentence. Because of our good industrial relations, our industrial calm and our freedom from strikes and disturbances, they can profitably and suitably invest here. I give way to the noble Baroness.
§ Baroness Turner of Camden
My Lords, does the noble Lord not accept that one of the reasons why the Japanese want to invest here is that we still have a fairly highly skilled workforce, although a lot of it is unemployed? Does he not appreciate that a little while ago, when I had the opportunity to talk to some Japanese who were coming to invest here, industrial relations played no role in that decision at all? They wanted to talk to the unions about coming here (I was one of the union representatives), and they were concerned with the skill of the workforce they were about to employ.
§ Lord Boyd-Carpenter
My Lords, with great respect, there might be several reasons why they did not wish to discuss industrial relations with the noble Baroness, some of which it might be discourteous of me to suggest. In fact, it is the good industrial relations in this country which have caused the Japanese overwhelmingly to place their investment here. It really is no good the noble Baroness trying to avoid that and to avoid the conclusion, which is absolutely and abundantly plain, that the main reason for that is the effect of the five successive measures to which I have referred on the working of our system. That is what the noble Baroness—
§ Lord Boyd-Carpenter
My Lords, I am trying to deal with the noble Baroness. I am sure that the noble Lord will accept the principle of "Ladies first".
That is the reason why the Japanese are investing —and that is the answer to the point which the noble Baroness sought to make, which was that it is a bad thing to introduce this Bill at a time when we are all grievously facing unemployment. I give way now to the noble Lord.
§ Lord Stoddart of Swindon
My Lords, I am most interested in what the noble Lord is saying. He is saying that foreign investors are coming here because of the five, six, seven or eight industrial relations measures which have been introduced and because industrial relations here are so good. But industrial relations are good in Germany, Denmark, Holland, Belgium and France, so why do foreign investors want to come here in particular when they could go to other countries where industrial relations are at least as good and perhaps in some cases better? Surely there must be some other reason. Is not the noble Lord really saying that wages are much lower in this country and that that is why foreign investors want to come here?
§ Lord Prior
My Lords, before my noble friend answers that point, would he like to deal with another one since he is being stirred up all round the place? Is not one of the factors behind Japanese investment in this country that they have been able to conclude single-membership agreements? Is not that the nub of the problem with this Bill?
§ Lord Boyd-Carpenter
My Lords, I am much obliged to my noble friend. That is a most helpful point.
446 Perhaps I may return to the noble Lord, Lord Stoddart, who asked why foreign investors should bother to come here when industrial relations are so good in various other European countries. I am not certain that he is right in saying that they are so good. As he will know, there is considerable trouble in France. If he had ever tried to export livestock, fish or anything else to France, he would know that riot and general confusion in respect of a great many trade activities take place there. I am surprised that he should take a poor view of the relative strength of his own country. He should be proud of the fact that our good situation, which results from those various measures (of which this is the sixth in line), has contributed to this extremely valuable development. We welcome Japanese investment. We hope that they will not be discouraged by interventions of that kind which I am sure the noble Lord himself would regret if they had an adverse effect on employment here.
§ Lord Stoddart of Swindon
My Lords, I hope that the noble Lord will give way. He has criticised me—
§ Lord Stoddart of Swindon
My Lords, the noble Lord has criticised me and I feel that he has a duty to allow me to come back.
§ Lord Boyd-Carpenter
My Lords, the noble Lord knows that he was out of order—deliberately out of order—and that a vote would have had to be carried against him if he had persisted. I have given the noble Lord a full reply to his very lengthy earlier intervention. He must possess his soul in patience.
With due respect to the other noble Lords who want to speak in this debate, I must move on to the most important matter of all in this Bill which is that provided in Clause 31. It is a very short clause but it is extremely important. It ends the existence of the wages councils. It is no use noble Lords opposite getting excited about the termination of the existence of the wages councils. As has already been pointed out by my noble friend the Minister, the Labour Government apparently abolished 11 of them—I had thought that the figure was 10. Therefore, in the eyes of noble Lords opposite there is apparently nothing sacrosanct about them.
One must consider how the wages councils work. One of their effects must be to create additional unemployment, which is extremely relevant at the moment. As noble Lords will know —I know this from my own experience—quite a number of people in this country want to work but have some disability of one sort or another which inhibits them from giving a full week's work for a full week's wage. Medically, they are not quite up to it. There are a great many such people. If there is a wages council laying down a minimum wage—still more, if there is a national minimum wage, with which idea noble Lords opposite 447 seem to be flirting—the position is even worse and one would be depriving such people of a chance of employment. That seems a thoroughly bad thing to do. And not only that—I believe that in two-thirds of cases the wages paid today in wages council industries are above the wages council figure. However, if one were to try to impose the wages council figure on all the people in that sector, one would either produce quite a measure of unemployment (as I fear that one must) or one would cause the greatest difficulty for those industries, with again the ultimate development of unemployment.
Therefore, it seems absolutely right that we should finish the wages councils now. Some noble Lords may recall that I advocated that during our discussions on at least two of the previous employment Bills, so perhaps I may inform my noble friend the Minister of how delighted I am to see that (perhaps a little belatedly) the Government are getting on with that job. I wish them the greatest luck and success.
I have only some small additional points to make, having expended a certain amount of time in agreeable discussions with noble Lords opposite. Perhaps I may suggest that there are matters in the Bill that are perhaps suitable for amendment. I refer, for example, to the check-off cases. It seems to me that where trade union contributions are increased, or where there is any other reason for increasing the deduction which is required to be made from the pay of the people in such schemes, it should not be the employer but the union which is responsible for notifying those people. Where a union increases its dues and under a check-off agreement it is decided to make those deductions, I think that it is quite wrong that it should be the employer who has to face the ill will which anyone who reduces somebody's pay by such a deduction will obviously have to face. It should be the union which notifies that matter. Otherwise, the check-off proposals seem thoroughly sensible.
They will secure that the deductions are not made unless written agreement by the employee concerned has been submitted. That again will help to secure that those check-off arrangements, highly convenient for the unions as they sometimes are—they are sometimes also convenient for the employers—will not be made unless the individual concerned has made a free decision, has been notified in writing and has notified in writing his willingness to pay them. That is a sensible, fair and just adjustment which we might make when the Bill comes into Committee.
The Bill is obviously controversial. I am sure that my noble friend the Minister began with no illusions about it. It is a Bill which I believe noble Lords will find is in accordance with the general wishes of a large number of people, including a large number of trade union members. I hope that we shall proceed to discuss it fully and carefully with such a consideration in mind. Meanwhile, as I said at the beginning, I welcome the Bill. It is a good step, and I hope that in due course it will become law.
§ 4.52 p.m.
§ Lord Wedderburn of Charlton
My Lords, the Minister kindly took us through the Bill which his right honourable and honourable friends introduced on Guy Fawkes Day last year. As he set it out, the response, not merely of this side but of the whole House, was that this is something that hardly matches current needs. About training there is nothing at all. Is there anything about a social consensus which I shall suggest later is important? Is there anything about the unemployed?—that reserve army which appears to be needed in all industrialised societies again, but especially in Britain. There is nothing at all.
Parts I and III have the distinction of continuing the old policies of the 1980s. As my noble friends have said, they remove the protection in the market for the weakest workers and extend still further state regulation over the affairs of trade unions in a manner which would offend the constitutional provisions of the majority of democracies in Western Europe. They withdraw government funds for ballots, in breach of the Government's own assurances; they ban sensible voluntary arrangements between unions on competition for members. After hearing the debate, I now understand why many personnel managers are worried and why the CBI is terrified. It is because the Minister and his colleagues believe that they are abolishing what he called things done by the diktat of the TUC. My noble friend Lord Murray is someone of enormous experience in that area. I invite the Minister to look at the work of the TUC committees and to see what their awards are about so as to revise at least his description of any diktat by the TUC.
Parts I and III of course continue the policies of the 1980s which have become known in some quarters as, "Thatcherism grey in tooth and claw". The Bill is very important in the development of labour law. Part II parts company with Parts I and III. It has to do so, because of the pre-eminence of Community norms.
I shall say a word first about Part III, then Part II and then about what I feel is the most important area upon which I wish to address also my noble friends. The most immediately offensive part of the Bill, as has been said, is of course the abolition of the legal protection of the bare minimum rates for nearly 3 million workers—80 per cent. of them part-time women workers, especially in retailing, catering and textiles, where bargaining machinery is poor. It scarcely benefits the records of the House to hear people describe the abolition of a wages council in the past—the Labour government abolished a number —in the same breath as the abolition of wages councils. Of course we abolished wages councils: we did so step by step where collective bargaining machinery grew strong; where workers were able to bargain on the table instead of being exploited. I think the Minister feels that the use of the word "exploited" is rather strong. Let me refer him to the history of the matter, because I have been looking at it during the Government's term in office. For 10 years now they have been considering the matter. The words usually are, "We have it under review", as they were in the 1992 White Paper. They have the wages councils under review.
449 In a debate in 1982, at the beginning of the process, the Minister of State, as he was then, the noble Earl, Lord Ferrers, to whom I have given notice that I shall refer to this matter, said in a remarkable debate about the abolition of wages councils that the abolition of wages councils altogether,would result in a free-for-all".A little later he said:This could undoubtedly lead to exploitation by some employers … no one wishes to see others who are in work being summarily displaced by those would be paid less or being themselves paid less".—[Official Report, 22/3/82; col. 891.]At that point the Government were placing a margin on the operation of the market. What has happened is that common sense of that type has had to give way to the ideology of the Government which has nothing whatever to do with the evidence.
Secondly, most of Part II of the Bill purports to implement Community legal requirements, either in directives or in Court of Justice judgments. On maternity and the equality of men and women, we shall of course debate the details in Committee. On health and safety at work and the protection of workers who leave work or stop work in the face of imminent danger or in their belief of imminent danger, there is a change in the Government's drafting in the other place which I commend, and it is something which I am pleased to see. But I remind the Government that there are a number of workers who have been injured, possibly in the circumstances of that schedule, since 1989. In 1989 the Government took up a position of complete rejection of any such law. They said that the common law was enough to stop employers keeping workers at the workplace. They are now having to implement Community directives, and they have of course found out that that is not so. So I commend them because they were wrong and now they have done better.
What is much more important is that the Bill does not implement adequately a number of the directives, including the directive on consultation where an employer contemplates redundancies, as amended in 1992, and the directive of 1977 which requires consultation if an undertaking is being transferred. The central point is that the directives oblige the employer to consult representatives. However, the Government have constantly raised the argument, which they are reported to have advanced to the Court of Justice, that in Britain an employer is not obliged to consult workers' representatives if he chooses not to recognise a union, and that that is enough. I see the Minister nods.
It is an argument which is highly likely to be shot out of the water when it goes before the court in Luxembourg, because it makes compliance with the directive optional. The Minister now nods his head a different way. With great respect, he cannot escape. However, that is something we shall debate in Committee, and we shall hear why. If the Minister does no better than his friends in the other place on this, I fear that there is no doubt what the result will be.
450 I wish to ask after the philosophy of this measure and the six or eight measures that have gone before since 1982. It depends upon which one includes. I would say eight. I say, "since 1982" deliberately because scholars of the subject are now finding—no one was clear about anything at the time—that, whereas 1980 made a platform, it is in 1982 that the philosophy really begins to build the construction. Therefore, the employment rights provisions in Part II of the Bill push employment rights modestly forward because of the Community—modestly, let us note, because even the social protocol and chapter is a very modest programme, though some of us may find it difficult to support the Maastricht Bill if it is not amended in such a way that social standards apply equally to our workers as they do elsewhere in the Community.
But in Part I of the Bill we have trade union reforms —not trade union rights—stripping unions of liberties of action. It depends on how one does it but at my last count there were more than a dozen major items—far more than in most other member states. These are not only associations which have been regulated compared with the deregulation of the rest of employment law. They have been regulated, harried, battered, fined and sequestrated, step by step by step, in Act after Act in pursuit of the aim of decollectivising the workplace.
In passing I say—I am sure that my noble friends will comment on this further—that the Minister's notion that he can lay a claim for this series of Acts as increasing the number of jobs seems very strange when Act after Act after Act leads to higher and higher and higher unemployment. But no one can accuse the Government of deception on this matter. If I may speak frankly to my noble friends—
§ Viscount Ullswater
My Lords, we have been through a pattern of increasing employment and decreasing employment. Would the noble Lord give no notice to that?
§ Lord Wedderburn of Charlton
My Lords, the Minister asks me a difficult question, and I shall tell him why. Since the experience in other sufficiently similar countries in Western Europe shows different kinds of patterns in the relationship between law changes, often of a completely different kind from those which the Government have introduced here, it is not easy—the literature suggests this—to match up legal change with increased employment. Indeed the thesis now is that probably the legal change in the whole of Western Europe—whether the 1982 French reforms which were very progressive or the Government's reforms here—is not something that one can match up. I would have expected the noble Viscount to do what I believe accountants do. Look at the market—the Stock Market or the jobs market draw a line through and say "Here are more and more Acts. Although it goes up and down it gets better in the end". But that is what he cannot do.
I want to turn to the lack of deception by the Government on this matter. In some of the past legislation the philosophy of decollectivisation has been implied. But in February 1992 the Government published their White Paper People, Jobs and 451 Opportunity, which was very explicit and very frank. It advocated an end to collective bargaining and a spread of "individualised" employment relations. I am happy to read the whole of chapters 1 and 4 but I shall take from chapter 1 the following statement:There is a new recognition of the role and importance of the individual employee. Traditional patterns of industrial relations, based on collective bargaining and collective agreements, seen increasingly inappropriate and are in decline".That is taken up in chapter 4, which states that this marked decline in collective bargaining and the increasing trend to move away from collective bargaining altogether are valuable and healthy developments. That is a clear and honest statement. They want to move away from collective bargaining altogether. With that ideology, the Government would not be true to their beliefs if they did not wish to weaken the role of trade unions at least in terms of their place in wage and conditions bargaining. Of course they may agree, as they usually do, with Professor Hayek that unions should be put back to their, as he put it, "most beneficial activity" as "friendly societies". That is not far from the White Paper. No wonder the Government have closed down tripartite bodies where employers, unions and government might actually talk to one another. If the decline of collective bargaining is healthy, small wonder that they legislate to reduce the efficacy of unions as agents for collective bargaining through obstructions to the check-off and the variety of other ways in Part I of the Bill.
By the same logic—this makes sense of the Bill—they must change the functions of ACAS and delete, as they are doing, the function which it has had since 1975 to develop and reform collective bargaining machinery. That must go out. That is the core difference between British developments and those in most other member states of the Community. In Italy, France and Germany—indeed in all the major countries of Western Europe, inside the Community and outside, and whether led by so-called socialist governments or so called conservative governments —the consensus of, if one likes, the social partners is that tripartite machinery is the way forward. The Government wish to abolish it. It is not a matter of this or that policy. It is a whole difference of philosophy. One Italian authority describes it as,a policy linking social objectives with objectives of greater efficiency".It does not exclude efficiency. As a matter of fact, recent law reform in Ireland shows a very good example of the same philosophy at work on a legal system which is of course much closer to ours.
Our friends are astonished at the absence of proven misfeasance or convictions in the trade union area and world on which the Government can rely. There have been one or two cases of what should not have been done. But if this Government had used the same rule of legislating in cases of impropriety in the world of companies and the City—Blue Arrow, Maxwell and so on—we would have been drowned in Bills every week. They know it as well as we do.
The Bill naturally shares the ambitions of the White Paper to deprive combinations of work-people of 452 having a capacity for strategy. It seeks to do so by a mixture of creeping illegality and suffocating procedural demands, by the expense of compulsory postal ballots and by a rejection of what the noble Earl, Lord Gowrie, in a debate in this House on 20th May 1980 when he spoke about ballots, called the,overall aim of encouraging greater participation by rank-and-file members".—[Official Report, 20/5/80; col. 740.]It was such Ministers who rejected for some time the pressure to have postal ballots for everything. Now Ministers have given in.
The most important step is the further violation of the rights of association in this country. The United Kingdom was one of the first countries to ratify the International Labour Organisation Convention—No. 87—in 1948 on freedom of association. I happen to think that this area is just as important, even though it is rather unfashionable, as the area of economic argument. It is a set of statements from the ILO, to which this country is still bound by its ratification, of human liberties on the basis of collective organisation and rights. Freedom of association, by every decision and every convention, has implied within it a right to strike. I know that when some noble Lords hear this human right and civil liberty mentioned aloud they run for cover or for the gun room. I mention it in the spirit of the American trade union leader, Samuel Gompers, who said in 1908:It is our aim to avoid strikes; but I trust that the day will never come when the workers of our country will have so far lost their … independence as to surrender their right to strike".All governments participating in the ILO have accepted this. In ILO documents the right to strike is always called:one of the essential means available to workers and their organisations for the promotion and protection of their economic and social interests".The ILO committee of independent experts, which comprises (since this is often misunderstood) 20 of the world's most eminent legal scholars and constitutional judges, takes the same view. However, every year since 1988 those experts have pronounced that, as regards the right to strike and freedom of the association, British law falls well below the standards of the convention.
The main areas are the right of an employer to dismiss workers for taking industrial action, the breach of workers' contracts, which is invariably inherent in strikes in Britain, and "the excessive limitations" introduced by the 1980s legislation, which the committee looked at in great detail. Those standards of civil liberties are of great importance. In the face of those criticisms and now in the face of the criticism accepted by the governing body on 27th February 1991, the Government go to the ILO and repeat the state of existing British law.
The 1992 report of the committee refers to and sets out seven pleas of descending persuasiveness from the British Government, starting from zero. Many of my noble friends will know well of the work of the ILO and its importance to ordinary working people all over the world. Each time that we say nothing when collective rights are attacked, because of a fear of the media or some misrepresentation, workers' rights and individuals' interests are damaged.
453 We saw illustrations of that a few years ago when we perhaps did not deal very well with the debate on the Community's social charter. Worse still, if the desired increase of individual rights, which are most important, is allowed to push collective rights to the periphery of our thinking, a generation will grow up which knows little or nothing about such freedoms. If we do not candidly explain the issues and fight those invasions, the rights will disappear step by step, in part because of our silence.
Where does the Bill harm those rights? It takes a most extraordinary step. Not only does it say that the union must have a postal ballot, but if the employer is the plaintiff, the union must take four extra steps. It must send the employer a sample ballot paper; seven days before the ballot it must describe to him the members entitled to vote; it must send him the ballot result; and then it must give to him seven days before the strike a notice describing to him the members who are taking part:so that he can readily ascertain them".What is that about? Any shop steward will tell you that it makes it easier for the employer to victimise people in the strike group. No labour legislation that I know of has seen such a shameless attempt to permit, indeed enforce, victimisation and enforce upon the union the job of fingering its members.
After all, that is what individualising industrial relations is all about. However, it goes further. As we have heard, any individual in that type of situation, on the basis of those requirements not being met, can bring a wholly novel and totally new form of action to the court if goods or services are delayed or their quality is reduced, even though that individual has no legal interest in the goods or services, even though the union's inducement to strike was not the effective cause—and I hope that my noble friends will look at that in Committee—and even though the individual involved has suffered no quantifiable damage at all. That is the labour law of the Mad Hatter.
In discussions we have asked who those plaintiffs will be. Disgusted of Tunbridge Wells—DoT, as he has now become—seems to fit the bill. To accommodate DoT, there is a new engine of law enforcement. To finance his actions, a new commissioner has been put in place. At a time when poor people are being deprived of their right to legal aid and at a time when their rights are being invaded, hundreds of thousands of pounds are being spent on a commissioner who is to support DoT in an action in which he has no legal interest and no rights whatever, except the right to go to the court to stop a trade union doing what he does not like if that union has not followed the five necessary steps.
That is quite absurd. I realise that noble Lords on other Benches may not share my analysis; I doubt whether they will do so. However, the provisions of this Bill are so unfair that I ask noble Lords on other Benches not to support it without major amendment.
§ 5.15 p.m.
§ Lord Skidelsky
My Lords, I am happy to agree with the central point made by the noble Lord, Lord Wedderburn, that the Bill represents the working out of a consistent purpose pursued by the Government since 1979. It is philosophically consistent with all that they have been doing, and the noble Lord described that accurately as the decollectivisation of industrial relations. However, I attach much greater value to that than does the noble Lord.
In my view, for much of the 1970s and 1980s the danger of employers victimising workers was much less than the danger of unions victimising their members and the industry of this country. The Government acted to bring that to an end. I applaud that pursuit of consistent purpose.
No doubt it is foolhardy of me to venture my opinions on these matters in the presence of such great experts on trade union law and practice; namely, the noble Lords, Lord Murray, Lord Wedderburn and Lord McCarthy. However, I am emboldened by the thought that even the greatest experts can get things spectacularly wrong. The noble Lords were not only determined opponents of the trade union legislation brought forward in the 1980s but they were strong upholders of the doctrine that the law had no part to play in what is popularly called industrial relations. Indeed, they said that the attempt to bring industrial disputes and other matters within the ambit of the law would be unenforceable. I believe that they were wrong.
The laws of 1980, 1982, 1984, 1988, 1990 and others to restrict picketing, to outlaw secondary action, to expose trade union funds to seizure for unlawful action, to weaken the closed shop, to provide for secret ballots and so on were not only reasonable but they fulfilled an essential purpose: to weaken the coercive power of trade unions in the labour market, whether exercised against their own members, against other groups, against the general public or against employers. The measures proposed in the Bill carry that purpose further. Again, I agree with the noble Lord, Lord Wedderburn, that they do that. Clauses 1 to 15 strengthen the rights of individual trade unionists. Clauses 16 to 21 carry further the protection against coercive action against the general public and against firms.
I believe that there is a strong connection between enhancing the individual rights of trade unionists and securing more co-operative industrial relations. The best way to prevent small minorities from exploiting the undoubted feelings of loyalty and solidarity which exist for ends which are contrary to the wishes and against the interests of the majority is to give back trade unions to their own members. I believe that the Government have been doing that. We have already seen the benefits of that and will do so to an even greater extent in the future.
One of the main points of the Bill does not directly involve trade unions at all; namely, the abolition of wages councils. The noble Lord, Lord Rochester, saw a danger that the abolition of wages councils would enable employers to compete to drive down the wages of the lowest paid. However, he did not mention the 455 employment prospects created by the abolition of the wages councils, particularly at the small business end of retailing and catering. I should have thought that in the present conditions anything which helped young people into jobs is to be welcomed. It cannot be repeated often enough that low wages are the result of low skills. Of course one's aim is to raise wages by raising the skills of people looking for jobs, but that is quite different from setting a minimum wage which fails to clear the market at the bottom end of the skills range. That can only lead to more unemployment.
The noble Lord, Lord Eatwell, has alluded to the fact that the pay of young people, while rising in real terms, has fallen relative to that of adults in hotels, catering and retail distribution since under-21s were removed from the protection of the wages councils in 1986. But can this be bad if that measure improves the employment prospects for that age group?
§ Lord Eatwell
My Lords, I hope the noble Lord will allow me to enlighten him on this matter. A study has been conducted by University College London and the London School of Economics into the employment effects of the abolition of wages council protection for young people. They have found no increase in employment whatsoever.
§ Lord Skidelsky
My Lords, the noble Lord must recognise that one cannot abstract the state of employment from the fluctuations in the business cycle. This measure was passed in 1986 and we are now in the middle of a big recession. This measure is designed to increase employment prospects in the long run. On balance, if one makes it easier for employers to employ people they will employ more people. If one makes it more difficult for them to employ people by putting restrictions in the way and by raising artificially the wages they have to pay, fewer people will be employed. That is straightforward economic theory. One cannot buck the laws of the market by simply talking about securing a wage one thinks is desirable when it is not profitable for employers to pay workers that wage.
§ Lord Dean of Beswick
My Lords, I am grateful to the noble Lord for giving way. Before he finishes on that point, is he not aware that any job that is advertised for young people now—this applies even to the poorest paid and most sedentary jobs—attracts a multiplicity of highly trained and highly skilled youngsters who cannot obtain a job for which they have been trained? How does the noble Lord relate that to his comments on expansion? Surely that is standing the economics and the well-being of the country on their heads.
§ Lord Skidelsky
My Lords, I was referring to those industries chiefly covered by the wages councils, which are the lower end of the catering and retailing sectors. We are in the middle of a severe recession. I am talking about the effects of this measure as regards improving the long-term prospects for employment at that end of the market. I should have thought all evidence and all theory suggest that there will be a positive 456 employment effect from abolishing minimum wages in those sectors. I wish to develop my argument further, but I shall give way once more.
§ Lord McCarthy
My Lords, will the noble Lord take it from me that in 1979 there were three studies carried out into the abolition of wages councils at a time when there was not the current high level of unemployment? Exactly the same results were achieved. Keynes would have understood that, even if the noble Lord does not.
§ Lord Skidelsky
My Lords, I do not think Keynes would have understood that. Keynes was talking about the business cycle and not about the supply side of the economy. As the noble Lord mentioned Keynes, I shall refer to a comment Keynes made on the trade unions and their effect in reducing employment. He referred to them as, once the exploited, now the exploiters.
I shall try to open up the debate a little to the question of the role of the trade unions in a contemporary industrial society. What are the trade unions for? Do they do any good? How far do they need to change to serve the interests of their members? It is popularly believed that trade unions make the wages of workers as a whole higher than they would otherwise be, but that is one thing that collective bargaining cannot do. The level of the real wages of the community as a whole depends on the productivity of labour and capital and that cannot be directly increased by trade union action. What collective bargaining can do is to increase the rate of inflation or increase the rate of unemployment depending on the monetary policy the Government are pursuing.
As Professor Layard of the LSE has often put it:the trade unions largely determine the unemployment cost of maintaining a given rate of inflation".There is now much evidence from the work of Professor Metcalf and others that unions keep unemployment higher than it would otherwise be. An important study published by Blanchflower, Millward and Oswald in 1988 stated quite baldly:The results of this paper suggest that trade unions depress the rate of employment growth and increase the extent of employment decline".Collective bargaining for wages can achieve higher real wages for those in employment, but at the expense of the unemployed. According to Professor Metcalf, union presence in a workplace is associated with higher relative pay and lower profits than in non-unionised firms. This matters because lower profits reduce investment and research and development. Further, trade unions have been shown to have a negative effect on labour productivity, especially in larger firms. Professor Metcalf states that in the firms he has studied—these are larger plants:the net association between unions and productivity is clearly negative".Conversely Professor Crafts has shown that the legislative weakening of the unions in the 1980s was associated with widespread elimination of restrictive practices and employers' ability to insist on productivity clauses in wage agreements—both of which contributed to the productivity miracle in 457 manufacturing of the 1980s. I am sorry to quote so many academics and academic studies but some have been quoted at me.
A trade union movement which aims to do well by its members has to come to terms with another fact of life beyond the scope of legislative action and that is the growing competitiveness of contemporary industrial life. There are two important indications of this from Britain's own experience in the 1980s. Between 1980 and 1990 the degree of concentration in British industry—roughly the number of firms in a given sector—has fallen or remained the same in all but one of 22 sectors. That suggests that British industry is subject to much stronger competition than it was in the 1950s and 1960s in the heyday of the Bridlington Agreement.
The second indication is the burgeoning of small firms in the 1980s. The United Nations survey on flexible manufacturing systems in 1986 reported that:Mass production as a concept is becoming more and more a thing of the past … Computer controlled machines will make it possible to add flexibility to the production system … [opening up] important potentials for dividing large scale production into many small batches".Flexible specialisation is the new name of the game.
These developments offer a fundamental challenge to the traditional view of our industrial system which has moulded so many of the arguments coming from the Opposition Benches. That view is of a world in which there are stable big businesses faced by big unions bargaining for national pay rates for employees with non-transferable skills, irrespective of local conditions of productivity or profits and local costs of living. That was the world in which Bridlington agreements made sense. It was a world which had embraced monopoly as a way of life and which hated competition except of one kind—that between employers and unions of which the sacrificial victim was British industry. That was the world from which this Government tried to draw away in the 1980s.
In our situation the need is for more flexibility, not less flexibility. If industry is becoming more fragmented and the demand is for transferable skills, job rotation, plant bargaining and flexible pay deals, is not the world of tripartism—for which the noble Baroness, Lady Turner of Camden, still hankers—completely out of date?
The noble Lord, Lord Wedderburn, spoke with indignation of decollectivising the workforce. What is so wrong with that? Are we not moving increasingly to a decollectivised industrial system and is not that a sign of progress? Why is there a constant hankering for the big battalions, oblivious of individual rights and completely out of date in the industrial world which is emerging?
Lord Bruce of Donington
My Lords, I am most grateful to the noble Lord for allowing me to interrupt. Does he not think that de-industrialisation of the United Kingdom is what we are really talking about?
§ Lord Skidelsky
My Lords, decollectivisation is very different from de-industrialisation. It is decollectivism that I am talking about. I regard it as a sign of progress, not of decay. I regard many of the speeches that have been made from the other side of the House as retrograde rather than progressive.
I want to conclude by saying that the Bill seems to me to be in line with the facts and the possibilities of contemporary industrial life and for that reason I support it.
§ Lord Wedderburn of Charlton
My Lords, before the noble Lord sits down perhaps I may ask him to clarify one point. He spoke of decollectivisation. Does he consider that decollectivisation by legal obligation is consistent with liberty?
§ Lord Skidelsky
My Lords, I do not know whether or not my speech has finished. I thought it had. The only answer that I can give to that question is that the law had to do something to change the balance of power in industry in the 1970s and the 1980s because the unions were making it impossible for British industry to develop on the lines to which the future points.
§ 5.32 p.m.
§ Baroness Fisher of Rednal
My Lords, it saddens me to hear such controversial remarks when the dilemma of unemployment in this country is so serious. I come from the West Midlands, which is the biggest manufacturing area in the country. When I meet people there who are in business and commerce and the leaders of industry I do not find the same antagonism to the workers. More often than not I find a great pride in the people they employ. It is not long since the noble Lord, Lord Astor of Hever, and I visited the Rover works at Longbridge. We were both impressed not only by the standard of work and output but also by the management's excitement at how well the workers were operating the system. It saddens me to hear comments which suggest that there are gangs of trade union bullies fighting big battalions of industrialists. That is not the real world. It is quite wrong for us to be arguing on those lines. There is greater co-operation than ever. Obviously, because there is unemployment the workers are more concerned, but nor do industrialists want to see their enterprises fail.
I did not intend to speak on those issues, but it saddened me to hear some of the points of view that have been expressed this afternoon. They do not reflect the feelings of many manufacturers in the West Midlands. We should consider the position of Leyland Daf. The management and workers are getting together closely with the trade unions in order to preserve Leyland Daf in the West Midlands.
I want to speak about the careers services for young people which are presently the responsibility of the local education committees. I am worried by what we heard from the noble Viscount this afternoon—that we shall see privatisation in those areas. I fear that the whole of the service will be put out to compulsory tender, like everything else concerned with local authorities these days, and that in the long run we 459 shall see a fragmentation of the service and there will be a hotchpotch of different agencies offering different services to young people.
Why change a service at which the Government have levied no serious criticism and which they say is providing a good local service? The need for change is unproven. That is illustrated by the comments of the Minister in the other place, Mr. McLoughlin, during the Committee stage of the Bill. He said:The present system has been in place for nearly 20 years. It has done well in the circumstances in which it has been required to operate. We know of very good work being done by the service to help many young people, but the service is constrained by a bureaucracy that governs local authority structures and systems … We are not saying that the service as a whole had been under-performing or that the present framework is entirely wrong".Therefore there is no real criticism of the service.
The Minister referred to local authority structures, systems and bureaucracy. But we should be perfectly candid: if it becomes a national system the Government themselves will create more bureaucracy than is found at local level. There will have to be more bureaucracy because the system will spread beyond the local authorities. Therefore, why do we have to change something which the Government have admitted has been done very well?
Local authorities provide a much better and more accessible service for local people. They know the students because they visit the schools and therefore when students come to the careers service their background is known. It is a local service for local youngsters.
Only last Saturday the Prime Minister spoke to Conservative local authority councillors. I do not remember his exact words, but he said that he wanted to make peace with local authorities and that it was time to stop the battles. Those were his sentiments. Perhaps it might be suggested to the Prime Minister that he could begin the peacemaking by removing from the Bill the part relating to the careers service. That would be a small step forward and something in which he could take pride.
I should like to ask the Minister some questions. How will local accountability be ensured when the changes contained in the Bill take place? How will the current partnerships between the LEAs and TECs continue in the future? The TECs have worked very constructively with local authorities. I speak again from my knowledge of Birmingham, where the two organisations work in close harmony not only with one another but with workplaces and colleges. One would not wish such harmony to disappear. How will the quality and impartiality be maintained? I believe that there will be impartiality when we begin the privatisation.
The Government want the changes because they wish to save money. They are saying, "Local authorities do not need to spend so much money. We shall take the service over and make it much better. We shall give it to the private sector and we will enhance the service in that way". If that is done, do the Government envisage that job finding agencies will take the place of the careers service structure? We may have specialist agencies for job finding. They may be in offices or in specialised areas but they will develop 460 as special units. I cannot believe that such a scheme will provide a better service than the one which is provided for students at present.
The careers service is not mainly a job finding organisation. Its function is to give career advice. It does that by going into schools and colleges. It provides guidance to students leaving school on what one might call worthwhile jobs. Perhaps we do not consider the careers service in the correct way. But the guidance that it gives in schools before the students come onto the labour market is well received.
The noble Baroness, Lady Young, stated that we must have best practice in the service. In Birmingham the careers services operated by the local education authority have been asked by Manpower Services to go into the jobcentre clubs to ensure that those people are given career opportunities guidance. In the main the people in jobcentre clubs are older than the students whom the careers services assist. However, no doubt their services are extending to older people. But they must be giving good service when a government agency asks for advice from a local education authority on how it can give a comparable service to young people.
Not only are the schools and members of staff involved in the service, but the careers offices are known to the young people. They know the services available to them. It is easy for them to find out information about job and career opportunities. Those services are free and accessible to young people. That is a point that I wish to emphasise.
The noble Viscount referred to citizen's rights. It is important that under the citizen's rights a free and accessible service is available to young people. It is important that they are aware of it. I shall later refer to the reason that I believe the noble Viscount contradicted what was said in another place on charging.
I wish now to refer to young people with disabilities and learning difficulties. They must not lose out as a result of the proposals in the Bill which transfer responsibility for such matters to the Secretary of State. I do not see any safeguards in the Bill which guarantee the specialist help which at present is provided for those vulnerable young people. I therefore wish to make a special plea for that group of students.
I always cite examples that I know and have not simply read about. I know full well that in Birmingham the careers service works closely with St. Basil's centre, which deals with 120 homeless young people at any given time. It works in close contact with the Rayner Foundation, another organisation dealing with young people with many differing problems, and with the Elfrida Rathbone organisation. Those organisations assist young people with certain problems. At present the services are dealt with by the local education authority careers services. I should not like the services weakened.
People with disabilities or learning difficulties often seek more support from the careers services than other students. I am anxious that the changes do not jeopardise those services if they are put out to private contract or that charges may be levied on those 461 vulnerable people. When the issue was raised in Committee in another place the Minister stated that it may prove necessary to make charges. The noble Viscount shakes his head, which means that I am wrong. I wish that I had a copy of Hansard with me. That is what was stated. The statement specifically referred to those vulnerable young people.
Young people who cannot find jobs when they leave school and who wish to receive benefit from the Government first have to register with the careers service to show that they are seeking employment and careers advice. I hope that the Minister will not shake his head to say that I am wrong; I know that I am right. I am involved with St. Basil's and the young homeless. If one is in charge of those homeless young people one must first make sure that they go to the careers services so that they understand that they must look for work. One then takes them to the social security office. The social security officers will not consider them unless they have been to the careers services first. Will there be changes in regulations which the social security department will have to put into operation? Perhaps that issue has not been sufficiently thought through by the Government at this stage. I shall return to it at Committee stage.
I do not understand why the Government wish to change a service which has proved so satisfactory to schools, colleges, students and parents. What are the motives for change? Perhaps the Minister will reply on that point in two sentences.
§ 5.50 p.m.
§ Lord Stoddart of Swindon
My Lords, the Bill is entitled the Trade Union Reform and Employment Rights Bill, but that is a complete misnomer. A more apt title for it would be: the Trade Union Emasculation (No. 8) Bill, for that is its real purpose, especially in its trade union clauses.
It has long been the ambition of Tory governments—and we have had it confirmed today from several quarters—to reduce trade union membership to no more than 20 to 25 per cent. of the working population. The Bill takes a big step towards the achievement of that ambition. It is clearly the intention of the Government to undermine further the ability of trade unions to act to protect their members' interests and to improve their wages and conditions of service. Indeed, under the provisions of the Bill, unions are allowed to exist only in so far as they are an administrative convenience for employers, not as campaigning organisations for their members.
It is a nasty Bill, oozing with prejudice and spite; a Bill so riddled with partisanship and contradiction that even employers' organisations have condemned it as harsh, unnecessary and unhelpful to labour relations.
The noble Lord, Lord Skidelsky, who is no longer in his place, had one or two comments to make about the trade unions. I should like to take up one of them. He said that trade unions had had no effect on raising the real level of wages but only caused inflation and high unemployment. That was what he told your Lordships' House.
462 I cannot ask him anything, because he has left the Chamber, but I ask your Lordships to consider, without his presence, the 1950s and 1960s when unions were strong. Those were the decades of low inflation, low unemployment and high growth, as my noble friend Lord Bruce says, as well as increasing living standards. By contrast, in the 1980s when the trade unions were under attack and weakened, we had high inflation and high unemployment. Indeed, we had mass unemployment. So perhaps the noble Lord, Lord Skidelsky, had better reconsider his point of view.
I do not intend to refer to every clause in the Bill nor to every part of it, although virtually every clause has some defect which causes offence. One or two clauses are particularly vicious and need condemnation. First, under Clause 5 regarding trade union mergers, as my noble friend Lady Turner pointed out, trade union executives will be barred from making a recommendation or expressing an opinion about a proposed merger when ballot papers are sent out. That is a removal of freedom. I understand that that was a late addition, an act of spite over the merger of NALGO, NUPE and COHSE into a big new public service union called UNISON.
Perhaps I may tell the noble Viscount that trade union executives are acting only in response to members' wishes which have been expressed at branch meetings, regional meetings and national conferences. The membership's wishes, therefore, are already known and there is every reason why members should be reminded of them during a ballot. But, of course, the Government, the Tory Party, found it particularly galling that NALGO members should have voted so overwhelmingly in favour of a merger.
There was a time when it would have been unthinkable for NALGO—a union which I advise—even to have contemplated speaking to, let alone merging with, COHSE and NUPE. The members were certainly not Labour Party supporters as a union. Only a few years ago they voted nine to one against affiliation to the Labour Party.
I was a member of NALGO for 20 years, so I know something about the union. In the 1950s and 1960s one had to keep quiet about being a member of the Labour Party if one wanted to do a job for the union. However, all that has changed. NALGO used not to be associated with or affiliated to the TUC. I remember being involved in the balloting and the campaign to persuade NALGO to join the TUC. Some of my colleagues felt that it would be quite wrong for NALGO to join the TUC because of the damage it would do that organisation. That is the kind of union that NALGO used to be. However, it voted overwhelmingly for a merger with NUPE and COHSE. Why did the members do that? They did it because it was a vote against the Government's policy of centralisation of local government functions and the destruction of local government jobs through shortage of money and compulsory competitive tendering. It was against the wage restraint which has been imposed on public servants, including those in local government over a long time. So that is the real 463 story about NALGO and why it decided to merge, because it needed the strength to fight off the depredations of the Government.
What about Clause 7? It removes from trade unions the money which was promised to them to enable them to hold the ballots which are to be so much a part of the new union democracy. Now the Government will renege on the undertakings they gave. I can tell the noble Viscount that, had many trade unions not been promised that money and assured that it would continue, there would have been a hell of a lot more trouble over the imposition of postal ballots. But now the Government are reneging on it.
If an insurance company or any private organisation did that, it would be taken to court and the directors rightly gaoled for so misleading their members and policyholders. But the Government make promises one day to suit their own policies, only to withdraw them when it suits them, irrespective of the damage that may do to the organisation whose financial position will be greatly injured by that.
Then we come to Clauses 6 and 10, union finances. I have no objection at all to union members having the fullest information about the financial affairs and conduct of their union. But it is also important that they have information about the conduct of and financial position of their employers. It would have been useful to people in Leyland Daf to have had advance information on what was going on in their firm. The Maxwell pensioners would have been in a much better position now had they had information about the crooked manipulation by Maxwell of their funds through the businesses that he owned.
Then we come to Clause 14, the check-off arrangements. He is not here but I was interested in what my noble friend Lord Murray said about the opposition to the check-off system. I was one of those who objected to it on the grounds that I believed that it would remove contact between union collectors and union activists and the rank and file card-carrying members. Indeed, I believed that it would transfer power from the local branches to the union executives, and that is precisely what has happened.
However, the system is there, we have it and it works very well. There is no reason at all why employees should have to renew authorisation every three years. That is not done with any other form of deduction; it is not done with charitable contributions, for example. It assumes that employees are cretins who do not keep track of their deductions. I can assure the noble Viscount that most people are on such low wages that they have to check on every deduction and do so every week. Furthermore, the measure imposes further administrative burdens on employers just at a time when they are trying to reduce overhead costs and improve their competitive position. The Government rely on inertia on the part of trade union members who will not renew their authorisation, thereby reducing the membership of trade unions and further undermining their power.
Clause 15, dealing with the so-called extension of workers' rights, is simply a recipe for chaos and fragmentation of workers' organisations. It ends 464 self-regulation, which has been highly successful for decades, and further erodes the position of the TUC. Who mentioned a TUC diktat? I have been a trade unionist all my life, since the age of 16. I have yet to hear of a situation in which the TUC dictated to anyone about anything. This clause undermines the position of the TUC which has regulated—effectively, self-regulated—the trade union movement over a long period of time. It is odd that a government so enthusiastic about self-regulation of the City should be so opposed to self-regulation of the trade unions. There will be the introduction of competition for membership between trade unions and that will not be helpful to employees or to employers. In fact, paradoxically, it could lead to the formation of large unions through amalgamations which would reduce the choice for trade unionists which the Government say they want to introduce.
There is the matter of ballots to consider, but frankly time is running on and I shall not go into that issue. The abolition of wages councils has already been dealt with by my noble friends. It is contemptible for the Government to bring forward legislation at this time of mass unemployment when the lowest paid workers are at their most vulnerable. Claims that the abolition of wages councils will lead to an increased number of jobs are unprovable. In the interventions that have taken place nobody has been able to prove it. In any event such jobs, if created at all, would be paid at starvation wages, which would be a disgrace to any advanced industrial country. Good employers would be forced to cut wages to compete with bad employers. That cannot be good for industry, commerce and retailing in this country.
I turn to Clause 37 which deals with careers services and which was so ably dealt with by my noble friend Lady Fisher. It is astonishing that the Government should seek to change the statutory basis of the careers service just at a time when 900,000 young people are unemployed. It shows the complete insensitivity of the Government to the real needs of the unemployed, and particularly the young unemployed. The service has worked well for over 20 years. Considerable experience has been gained in dealing with youth employment and in responding to and assisting with the introduction of a wide range of training initiatives for the unemployed.
The service has also built up close working partnerships with employers and other training providers. It also has close liaison with the training and enterprise councils. Indeed, successive Secretaries of State have praised the work of the careers service. All that experience and good work are bound to be put in jeopardy. It can lead only to fragmentation in the delivery and operation of the careers service at local level. It is yet another instance of undemocratic centralism.
The morale and commitment of dedicated staff is being undermined just at a time when they need to be concentrating on helping young unemployed people. It is quite clear that Clause 37 will reduce the quality of the careers services. There is no guarantee that education authorities will be involved in future in providing in any meaningful way a service for which 465 they have been responsible for the past 20 years. Furthermore, new Section 10(5) provides for charges for services to be provided by the Secretary of State. That seems to be something completely new. Perhaps the noble Viscount will give details of those charges when he winds up the debate.
In my view this measure is ill conceived, unnecessary and can lead only to an inferior service just at a time when mass youth unemployment needs stability, cohesion and continuity. If young people are to be helped in a meaningful and sympathetic manner, I sincerely hope that the noble Viscount will reconsider the implications of Clause 37 and be receptive to amendments at Committee stage.
In conclusion, I repeat that this is a bad Bill. It is not designed to help labour relations but to destroy the trade unions as effective organs of the working class and ordinary people of this country. I sincerely hope that we shall be able to amend it considerably during its Committee stage.
§ 6.7 p.m.
Baroness Plant of Writtle
My Lords, as a former Chairman of the Equal Opportunities Commission, I welcome the Bill as an important step forward in the development of equal opportunities in our country. I shall therefore speak only to Part II of the Bill. When I chaired the commission in 1988, we submitted to the Home Secretary, as part of our duty under the Sex Discrimination Act, recommendations for change in the equal opportunity legislation. At that time, we said:One of the most crucial considerations is to enable women to carry on working if they want to or need to after having a baby. The excessively complicated laws on maternity rights and benefits need to be simplified … The most effective immediate step that needs to be taken is to abolish the two year qualifying period for pregnant women to qualify for protection against unfair dismissal under the Employment Protection Act of 1978".The Bill amends that Act and will introduce a universal statutory entitlement to maternity leave and maintenance of contractual rights during that leave, while maintaining existing rights for all qualifiers. Clause 22 and Schedule 2 provide for 14 weeks' maternity leave for all employees irrespective of length of service. That is a great improvement on the existing situation.
However, I ask my noble friend the Minister to give serious consideration to extending that period to 18 weeks. That seems to be the provision most wanted by responsible women's organisations and organisations supporting their interests nationwide. A substantial proportion of women for health reasons choose to start their maternity leave at the earliest opportunity; namely, 11 weeks before the expected confinement. That leaves a minimum of only three weeks' leave after confinement or less if the baby comes late. I speak from personal experience in that both my babies came a fortnight late. That would have left me with a week, which could hardly be said to be sufficient on health grounds alone.
It is of great importance to mother and child that the mother recovers and establishes a good routine of breast-feeding before returning to work. Our National 466 Health Service strongly recommends that as crucial to the future health of mother and child. Also, the statutory maternity pay is payable for 18 weeks so that from the employer's point of view those two periods would be coterminous, thus simplifying paperwork enormously.
I hope too that provision will be made for a delay in return to work for all women on maternity leave, as for qualifiers at present, if they have a medical certificate stating that they are not yet fit to return to work. That too is vital to the future health of our nation and has implications for future public expenditure on the health service. Prevention of ill health is always better than cure. I hope that my noble friend will be able to give me a firm assurance that he will reconsider those two matters.
In any survey of employers, problems preventing successful business expansion always refer to skill shortages, even in these days of high unemployment. As well as affecting the health of these women and their babies, if maternity leave is not long enough, they will not return to work at all and the expensively acquired skills and in-house expertise will be lost to both the employer and the employee. New recruitment and training of replacement workers is expensive to employers; it results in temporary inefficiency during recruitment and as the new workers gather the skills necessary for their jobs. Thus, enabling women to return to their well-known jobs contributes to employers' efficiency and prosperity.
I welcome the provisions in the Bill which make it illegal to dismiss a woman on grounds of pregnancy or any reason connected with it. I am glad also that the Bill spells out rights of employees working over eight hours to a written statement of terms and conditions and to itemised pay statements for those working over 16 hours a week. Again, those are welcome steps forward. But as they cannot claim unfair dismissal unless they have worked two years for an employer, that right is virtually unenforceable. In the experience of CABs, once that right is claimed, often the unwilling and unscrupulous employer dismisses the employee so that they have no rights. Indeed, if paid in cash, they have no proof that their tax and national insurance has been properly sent to the Inland Revenue. I understand that Ministers promised to consider government amendments in another place and have issued a consultation document on itemised pay. I hope that my noble friend the Minister will be able to give me an assurance on that point and say that he will introduce those necessary amendments in this House.
The Bill excludes the question of pay, which is required by the directive and will be introduced in subsequent social security legislation linking maternity pay with sick pay. I know that my right honourable friend Mrs. Shephard won her point in Europe that under no circumstances should the directive be interpreted as suggesting an analogy between pregnancy and illness. Most women remain fit and capable during pregnancy—a totally natural event. Nevertheless, I hope that my right honourable friend the Secretary of State will see that the 467 associated legislation on pay will be introduced quickly so as not to add complexity of claim to the problems of obtaining due rights by working mothers.
I welcome the added protection under the Health and Safety at Work Act that if an employee's original work was unsuitable because of her pregnancy or the breast feeding of her child, she should be offered suitable alternative work. I welcome also the new provision for the Equal Opportunities Commission to issue a code of practice in respect of equal pay as well as sex discrimination. The EOC code of practice on sex discrimination proved a best seller for Her Majesty's Stationery Office and must therefore have been of great assistance to many employers in the elucidation of the complexities of the subject.
Much discrimination occurs because of ignorance rather than prejudice. Therefore the issue of a code of practice on equal pay by the EOC will help to unravel and clarify a difficult subject for employers and employees alike. In that context, I draw to the attention of my noble friend the extreme complexity of the "equal pay for work of equal value" legislation. At the time the Bill passed through this House, I made a plea for plain English of the type of which Sir Ernest Gowers would have approved. That did not happen. As a result, as the EOC predicted, the passage of cases through the courts on equal pay for work of equal value has been extremely protracted, resulting in tremendous and unnecessary work being loaded on employers and applicants elucidating obtuse language, double negatives and other uncertainties.
When we made our representations to the Home Secretary in 1988 for amendments of the Acts, we asked for a new equal treatment Act, bringing together under one umbrella all the legislation under the Sex Discrimination Acts and the equal pay Acts, and at the same time putting a modern expert on to elucidating the whole language of the legislation. That would be entirely in line with the Prime Minister's Citizen's Charter. I am sure that, done properly, it would reduce the burden on employers and women employees (who form nearly half the workforce), it would increase their sense of justice and at the same time would reduce wastage in both public and private expenditure.
I hope that at the same time particular attention will be paid to the rights and problems of part-timers, most of whom are women. We have the largest proportion of part-timers in Europe and employers are increasingly valuing the flexibility that they offer in employment terms. The Bill does a number of things to help part-timers; but in many ways they are still disadvantaged in employment rights and benefits. Their pay differential per hour compared with male workers is much greater than if they worked full time. They often do not have rights to contribute to pension schemes; and therefore in old age, however unwillingly, they find themselves relying on supplementary pensions and being a charge on public expenditure and in other ways, especially training provision. The fact that most of them are women can amount to indirect discrimination, which is being tested in the courts. Those women are the salt of the earth, fitting in their working hours with responsible 468 family life; being at home to give their children tea or supper; seeing that the household is well run; exercising responsible citizenship both at home and at work.
I hope that in the near future the Government will give the rights of part-timers special attention in a new overall Equal Treatment Act. I hope that my noble friend will pursue that aim in high government circles. When the Prime Minister launched Opportunity 2000, he said,The problems of working women are emphatically not a minority issue. Every day millions and millions of women cope with combined job and family responsibilities. We increasingly need to come to terms with these facts".The Bill makes several valuable steps forward to further that aim. But I hope that the Prime Minister and the Government will put forward more legislative progress in the near future, in the way that I have outlined.
§ 6.18 p.m.
§ Baroness Nicol
My Lords, this afternoon I want primarily to concentrate on wages councils. Before I do I should like to pick up a couple of points already made in the debate. I address one specifically to the noble Viscount. Whatever else he fails to answer this afternoon—I am sure that there will be much with which he cannot deal—he must deal with the point raised by my noble friend Lord Murray and reiterated by the noble Lord, Lord Prior, in regard to what is to happen to would-be employers coming into this country if they cannot obtain a single union agreement. That is desperately important and the Government cannot rely on the trade union movement collapsing completely before they are required to make a decision on that point. As matters stand at the moment it would be impossible under the Bill.
My noble friend Lord Stoddart of Swindon asked, "Why Clause 5?" I am cynical enough to believe that it means that, when the Government have withdrawn financial support for postal ballots, they are going to insist that the postal ballot will require two mailings from every union, one to send the ballot paper and one to explain their views towards it. That is quite a useful way of further denting union finances. I am certain that that is the reason for Clause 5, unless the noble Viscount can offer a better one.
Wages councils set minimum wages for between 2.5 and 3 million of the lowest paid of our workers in the catering and hotel industries, hairdressing, etc. All those occupations are essential to our comfort as consumers. The wage levels that are currently set range between £2.57 per hour to £3.10 per hour. That is not extravagant pay by any standards. The main reason for the Government's action is that some employers are pressing for wages councils to be abolished, to set them free from minimum rates so that they can introduce "flexibility" into their pay arrangements. Since there is no barrier to paying employees more under the present arrangements, obviously that can only mean that they want to pay less. Some employers already pay less and get caught; 469 others pay less and get away with it. The number of offenders already identified is a fair indication of what would happen if the councils were abolished.
The Government are not interested in the effect of the abolition of the wages councils on the workers, and that view is made clear by their refusal to accept an amendment that was tabled in another place which would have required a report on those effects to be made annually to Parliament.
That lack of concern must surely invite compassionate opinion on the other side to look more closely at what is being proposed. If compassion and justice have no place in Conservatism nowadays (and it is beginning to look as though they have not) noble Lords may like to consider the point that was made by my noble friend Lady Turner: that, if wages fall below the official poverty line, some employees will be entitled to claim benefit, which means that we, the taxpayers, will be asked to subsidise bad and inefficient employers. We have heard in the last few years about the Government's wish to see inefficient employers go out of business, but it looks as though we will be subsidising them in the future. Too many employers already enjoy such a subsidy.
It is interesting to discover that there is only one wages inspector for every 40,950 workers, while there is a different approach to social security abuse: there is one fraud tracker for every 14,000 claimants. We can see where the Government's priority lies.
It appears, as my noble friend Lady Turner implied, that the Government are stuck in a time warp in relation to the identity of household providers. It is assumed that they are all male and that, since the majority of workers protected by wages councils are female, the wages earned can therefore be insultingly referred to as "pin money" and become less important. The concept is as out of date as the term that is used.
There is ample evidence to support the fact that those wages increasingly form the main support of one-parent families; and the parents in those families are male and female. Such wages are of growing importance against the background of present high male unemployment.
Wages councils, when setting rates, make no distinction between male and female employees and they therefore help to ensure that equal pay provisions are implemented at the lower earning levels. That is something that the noble Baroness, Lady Platt, is keen to see occur. It is inevitable that without them the inequalities will grow.
Many of the workers who receive the lowest pay are doing jobs that require a considerable degree of dedication and interest. The Low Pay Unit states that a nursing homecare assistant is currently being paid £1.25 per hour. How can an employee on that rate be expected to have respect for the job or for the employer? How can employers expect to attract workers who will take an interest in what they do if such an insulting rate is paid? Is that really the value that we set upon such a vital service?
Ministers have stated that any job is better than no job. I am sure that the long-term unemployed would 470 agree with that statement for a time; but would they go on agreeing as desperate week succeeds desperate week and, at the end of the day, they have to go cap in hand to claim supplementary benefit to give them a living wage? That is not an acceptable situation in a civilised society.
The Minister in another place stated:People should be free to choose for themselves their terms and conditions". [Official Report, Commons, Standing Committee F, 28/1/93; col. 605.]Do the Government seriously believe that people covered by the wages councils have any choice? They have no bargaining power. They are often desperate for work and unwilling to argue their case for fear of losing the pitiful wages that they earn. That ministerial comment shows how out of touch with reality the Government are with the world that has been created by our devastating rates of unemployment.
Until now there has been consensus on the need to protect low paid workers, a consensus that has lasted for 80 years. I ask again that the Government produce evidence rather than just the opinion of a few employers. Without any evidence to support their case the Government are to end that consensus and are to become the only member of the European Community without any form of minimum wage legislation. Is that what the people of this country want? We do not know because the proposal was not in the 1992 manifesto. Where is the mandate for what the Government propose?
Much has been made of the fact that a Labour government abolished some wages councils. My noble friend Lord Wedderburn dealt with that matter. I should like to remind noble Lords that the present legislation provides that the Secretary of State can lay an order to abolish a wages council where there is an alternative effective means of determining pay. I suggest that, at the time that those wages councils were abolished, effective alternative means were available to those workers; and, what is more, they were abolished against a background of a much better employment scene than exists today.
I hope that noble Lords will decide to give the other place an opportunity for further thought on the proposal and that even at this late stage the Government may have further thoughts and withdraw the clause.
§ 6.28 p.m.
Lord Bruce of Donington
My Lords, we are living in rather troubled and, some would say, perilous times, both economically and socially. We are living in a time when in our own country there are between 3 million and 4 million people unemployed; when we have an unparalleled and unprecedented deficit on our balance of payments and balance of trade overseas. The public sector borrowing requirement has reached such a height as to make the application that was made by my noble friend Lord Healey to the International Monetary Fund some years ago appear to be an application for petty cash.
In Europe we are seeing some disturbing times, due mainly to unemployment on a massive and unprecedented scale, particularly in the EC where fascism is beginning to rear its head in the same way 471 as it did before the war. The efforts of all our citizens, of whatever ethnic origin or function in society— whether they are employees, employers, self-employed, civil servants or whatever—and the united efforts of our people inspired by some positive purpose are now an imperative necessity.
It is against that background that this miserable little irrelevant Bill is presented to your Lordships' House for serious consideration. The Government confront possibly one of the most perilous times in the state of our nation with 40-odd pages of trivia. Really! If it were not so pathetic it would be funny. The most audacious arguments have been adduced in support. I wondered for a while whether I was hearing correctly.
It has been put forward today that the working people of our country are in need of protection. That is a good argument; all people should have legitimate protection. But the bulk of our people—except perhaps for the 250,000-odd who are in positions of power in the United Kingdom—are dependent day by day for their very existence, their futures, the education of their children, their surroundings and everything else upon those who employ them. Those are the people who have the power.
It is now suggested that the real protection of the employed sections of the population is required not against those who wield and have ruthlessly exercised their power—the conventional term is "shedding labour"—but against those who seek, through their collective action, to protect their own interests.
The noble Lord, Lord Skidelsky, whom I am glad to see has returned to his place, went so far as to suggest that every advance made in the fortunes of the working people of this country has been due more to the generosity and far-sightedness of employers than to the pressure of the trade unions. All, save those who, with respect, have parted company with logic, know perfectly well that, if it had not been for the efforts of the trade union movement progressively over the years, the standard of living of the ordinary working people of this country would be far lower.
§ Lord Skidelsky
My Lords, why does the noble Lord believe that employers shed labour in face of the protections offered by the trade union movement and pay such low wages, which are lower than in much of the rest of Europe?
Lord Bruce of Donington
My Lords, I shall be pleased to answer the noble Lord quite simply; it is because of the incompetence of their political representatives in Parliament and their own management deficiencies. That is the quick answer to that one!
What do we find within a democratic society? We find that, when it comes to dealing with what the party opposite conceives to be in its own interests, it does not hesitate to legislate in detail, as it has for the internal operation and organisation of trade unions. But what does that party do when it comes to its own people? Then we have codes of conduct! I invite noble Lords to remember the passing of the Financial Services Bill through this House. The noble Lord, Lord Williams, and I suggested that it might be good if the captains of industry and the financial interests in the City and their hangers-on were governed by law 472 rather than by codes of conduct. But, no. As regards the ordinary hoi polloi, who do not have the financial, social or spatial advantages of the party opposite, detailed legislation must be passed. But when it comes to its own kind we have codes of conduct. We all know the result of that. We all know too that City analysts have recently informed the general public that fraud in the City of London and in the financial institutions in the UK is probably running at more than £4 billion per annum.
Yet, what do we find? Such institutions are not interfered with in any way. Some members of them are socially entertained before they are found out. But when it comes to the ordinary people of our country—those masses who have not had the advantages of inherited wealth or education—we find that they are dealt with ruthlessly. And, indeed, it can be expected, can it not, because it is implicit in the utterances of that political party?
What does the ordinary person expect—in particular the 4 million unemployed—of a party which states, "If it isn't hurting it isn't working", and, "Unemployment is the price worth paying"? What do they expect? They no longer expect even the common humanities; they expect a ruthless exploitation whenever that can be done. It is done by the party opposite preferably under the guise of kindness but always with one central objective: to remove any challenge to its political power.
Let us make no mistake—and I invite the thoughts of my noble friends on the suggestion—one of the reasons why there is an attack upon the trade union movement is that the party opposite, which does not hesitate to accept as much as £2 million from overseas finances into its party funds, is anxious to attack the whole base of the funds, few as they are, available to the Labour movement. That is the real reason, and it is despicable and irrelevant to the needs of our times.
I do not intend to speak longer today. However, when in future the noble Lord, Lord Skidelsky, participates in the debate I shall bring with me my copy of Keynes' general theory so that I can correct him where necessary. There is the widespread feeling that at the moment we have industrial peace. That is so, but I wish to warn your Lordships that one can have industrial peace of an uneasy kind. The industrial peace that is attained under duress, in particular the duress of large-scale unemployment, can lead to social unrest, to the instability of society and to the kind of increase in crime that we have seen during the past few years. Therefore, it is to be deeply suspect.
It is not the custom in this House to deny a Bill a Second Reading, and so I do not suppose that one has any option but to let it go through once again on the nod, with the pious hope that some penetrative wisdom might emerge at the Committee stage. For my part, this Bill is a contemptible little Bill and is unworthy of any government which has so far dared to show its nose in the United Kingdom.
§ 6.40 p.m.
§ Lord Mottistone
My Lords, what a pleasure it is to succeed the noble Lord, Lord Bruce of Donington. It has been my happy privilege to do so on many 473 occasions in the past on this sort of subject, usually about two-thirds of the way through the debate. This time the Chamber is pretty full. Well done Lord Bruce. I expect they will all now go away. It was an extraordinarily irrelevant speech for the Second Reading of this Bill. The noble Lord says that he does not like the Bill. That is not surprising. I would not expect any noble Lord opposite to say anything else. But practically everything else that the noble Lord said was not really relevant.
The most important thing that the noble Lord could do would be to try to shed his prejudices and read carefully what my noble friend Lord Skidelsky said, which was the best common sense I have heard in this Chamber for many a long day. I leave your Lordships with that as a really good self-denying ordinance. If noble Lords opposite understood what my noble friend was saying, they might learn something for the first time in their lives. I can now get on with my speech. I have wasted only a minute.
I thank my noble friend the Minister for his, as usual, clear explanation of the Bill. I hope that it will have a successful passage through your Lordships' House. I have to declare an interest in that I am being advised by the CBI for most of my contributions to the debates on this Bill. I say that I support the main purposes of the Bill which have been so splendidly supported by many of my noble friends. Because time is going on and I rather suspect that many noble Lords have spoken for twice as long as they need have done to make their point, I propose to concentrate my remarks on the areas in which the detailed wording of the clauses could be unnecessarily difficult administratively for companies, and especially small companies.
The CBI spent much time when the Bill was going through another place in discussing with the Department of Employment how various clauses might be amended to make the intentions of the Bill more manageable in everyday practice for companies. These discussions achieved some success but not enough. Because the various proposals for change were not tried out in Parliament—
§ Lord Dean of Beswick
My Lords, did the CBI think it worth while to discuss any part of the Bill with the trade union movement, which is also involved in the process we are dealing with now?
§ Lord Mottistone
My Lords, I do not know the answer to that question because I did not ask the CBI that. I do not know whether it did, but on the whole its relationship with the trade union movement is pretty good and I should be surprised if it had not at least given some thought to that. However, perhaps I may get on with my speech.
Because these proposals for change were not tried out in Parliament, I may have rather more amendments at later stages than is normally the case. Your Lordships will be aware that much of the Bill is devoted to implementing various relevant European Community directives. I and my advisers believe that in many cases the Bill is framed to go further than the directives actually require. Since the Bill had its First Reading in another place, my right honourable friend 474 the Prime Minister has more than once emphasised that the practice of legislating beyond the precise needs of directives by methodical United Kingdom departments of state is to cease. I hope that my noble friend the Minister in winding up will be able to reassure the House that his department has carefully examined this Bill with those prime ministerial exhortations in mind. We can then be hopeful that relevant amendments will get favourable treatment in due course.
Examples of where the Bill is potentially harmful to business are in Clauses 22 and 23 regarding maternity rights, where there is no requirement for a woman on maternity leave to notify her planned date of return. I rather gathered from what my noble friend Lady Platt said in her most interesting speech that she probably would move an amendment in the terms she was proposing. It is difficult for companies if they do not know when people are coming back because they cannot make proper arrangements for the persons they have had to employ temporarily to replace them.
In paragraph 1 of Schedule 4 far too much information is required in the actual statement to be given individually to all employees. It should be possible to make references to documents—documents perhaps produced by the trade unions as well as documents produced by management—so that the statement that is given to individuals is something they can handle, without the difficulty and extra administrative problem that the company has in trying to put all this together for each and every one. Another point is that Clause 29 relating to transfers of undertakings could be unreasonably commercially crippling to companies unless we have some sort of amendment.
Finally, in Clause 14, in the new rules relating to the check-off—that is, the deductions of employees' union subscriptions—these can add to the administrative load on companies, especially smaller companies, in matters that have hitherto been shared with trade union officials. When we come to an amendment on those lines perhaps there might be a little support from the other side, though from what they said earlier I would never welcome it because it would be bound to mean that my amendment was faulty.
There are other subjects on which I shall be seeking amendment, but the ones that I have touched on will, I hope, give your Lordships, and more especially my noble friend the Minister, the flavour of where in the Bill I shall be hoping that he is going to be particularly understanding in accepting at least the sense of the proposed amendments.
§ 6.47 p.m.
§ Lord Underhill
My Lords, the noble Lord, Lord Mottistone, said that he is advised by the CBI. I hope that he also takes the advice of the CBI in criticising various aspects of this Bill. My noble friends have referred to a number of issues in the Bill on which the CBI is strongly critical and wishes that the Government would not proceed with them.
I wish to make a few remarks on Part II of the Bill. This deals with employment rights. It introduces some improvements, which are welcome, but a number of 475 these points are in connection with the EC directives. It would seem that in a number of cases the clause follows only the minimum requirements of the directive. The noble Baroness, Lady Platt, made some comments, which I welcomed, criticising certain aspects of the clauses in this part of the Bill. I hope that she will bring forward amendments on the lines she suggested to ensure that the clauses fully convey the requirements of the EC directives.
On Part I, I can only say that it is intended to undermine the trade union movement. I ask why the Government are acting as if the trade unions are the sole cause of Britain's problems. Who has asked for this further trade union legislation? What employers' organisations consider that the proposals in the Bill are of such urgency that they should occupy legislative time instead of Parliament taking action to deal with the economic situation?
I regret that I was not present to listen to the noble Viscount introduce the Bill, but I have read a number of the debates that took place in the other place, and especially the Third Reading debate on 17th February. I should like to deal with some of the statements made in that debate by the Secretary of State. The right honourable lady revealed nothing at all that would tackle the problem of unemployment, bearing in mind that on the following day we had the disgraceful announcement of 3 million unemployed. After 14 years of this Government, the cost to the Treasury of unemployment is no less than £27 billion per year—or some £9,000 per year for each person who is unemployed. The Secretary of State made no comment at all on how to rebuild manufacturing industry, which everybody now agrees is in an appalling state. Instead, she talked about the tired old face of the Opposition and jeered at "socialist dogma".
The noble Lord, Lord Skidelsky—we always seem to be referring to him—referred to the old world of tripartism. Surely what is required now is a tripartite operation between the Government, the trade unions and employers if we are to tackle the serious problem of unemployment and help our manufacturing industries. The Secretary of State said that the gap between the Opposition and the Government over industrial relations and trade union reform is as wide as ever. How true that is. It is pretty obvious—and the terms of the Bill make it clear—that the Government and the Opposition are poles apart on what is required in industrial relations.
With all due deference to the right honourable lady, she then made what I regard as a rubbish statement when she asked:Is it clinging to the belief that Labour could run businesses better than business men and women?—[Official Report, Commons, 17/2/93; col. 328.]I do not know what that means. Is Labour responsible for the dirty tricks about which there has been a lot of publicity recently? Is Labour responsible for the shameful currency speculation—and all of us are appalled at what has gone on? Is Labour responsible for the £5 billion loss on Black Wednesday? Is Labour responsible for the large-scale frauds that we have seen tried in the courts in the past two or three years? Is Labour responsible for the record number of 476 bankruptcies? I do not understand how the Secretary of State could make such a statement in open debate in the other place.
Again, with all due deference to the right honourable lady, she then came out with what I would term a classic piece of nonsense when she said:For the first time, the Bill gives employees the right to join the union of their choice—not the union chosen for them by a Trade Union Congress committee".—[Official Report, Commons, 17/2/93; col. 326.]I only wish that the Secretary of State would elaborate on what she was referring to. Obviously, it has some reference to the clause that seeks to abolish what we know as the Bridlington Agreement. That would undermine the orderly arrangements for regulating membership competition between unions which the TUC has exercised for many years. Moreover, many employers' organisations have soundly criticised that proposal. As I have already suggested, the CBI has drawn attention in particular to the effect that the abolition would have on single-union agreements. No doubt the noble Lord, Lord Rochester, will agree to any amendment that is tabled to deal with the question of the Bridlington Agreement. Its abolition would threaten industrial relations in a number of very large undertakings. I wonder whether when she made that speech the Secretary of State really understood that that would be the effect of the clause that she was advocating. Who actually asked for the proposal to abolish the Bridlington Agreement? After discussion with the unions, will the Government consider withdrawing that clause?
This part of the Bill seeks to undermine trade unions. The changes that are advocated are not needed. As I have said, employers' organisations have not sought them. It would be interesting to know who thought up the various clauses in Part I which will have such a terrific effect on the operation of trade unions.
In addition to the provisions affecting Bridlington, other proposals in the Bill will be damaging to trade union membership and finances. Perhaps I may list them briefly. The revised procedures for check-off arrangements for the payment of union subscriptions are obviously aimed at making it more difficult for those arrangements to continue. I refer also to the proposal to withdraw (from 1996) the provision for state funding to meet the costs of trade union postal ballots, for which a statutory duty is laid on the trade unions. There is also a provision to add to those statutory obligations the obligation that industrial action ballots must be conducted only by full postal balloting. However, there is evidence from many organisations, including from many employers, that in many cases workplace ballots, if properly conducted, are as efficient as postal ballots.
There is a further provision that the notice to be sent to members with their voting papers for a union merger ballot must not include a recommendation or opinion about the proposed merger. As my noble friend stressed, that will mean additional costs falling on the union which must undertake an additional circularisation of its members. The four points to which I have referred are aimed at making it more 477 difficult for unions to handle their membership and at impairing their finances. They are certainly not aimed at improving industrial relations.
Part III of the Bill, under the heading "Other Employment Matters", includes two completely unacceptable proposals. Clause 31, which has already been referred to, concerns the abolition of the wages councils. I do not want to go into that in too much detail, but it must be emphasised again that the wages councils cover 2.5 million of the lowest-paid workers in this country, the great majority of whom are women. Some 1 million of those workers are employed in the home industries—if one can call them "industries". Indeed, many of the employers who are covered by the wages councils are opposed to their abolition. They fear—and justifiably so—that their abolition could lead to exploitation by unscrupulous employers. I believe that the CBI has made that same observation.
The Secretary of State argued that fixing minimum wages, especially at a time of high unemployment, could lead to the destruction of many jobs. How often have we heard that sort of argument against trade union protection of workers' interests? Such arguments have bedevilled industrial relations through the years. Does the Minister agree with my noble friend Lady Nicol that the United Kingdom is the only EC country without some form of minimum wage protection? Is it also the case that the United Kingdom is the only one of the 94 signatories to criticise the relevant International Labour Organisation convention dealing with minimum wage provisions?
The question of a minimum wage opens again the argument about the social chapter of Maastricht. I take this opportunity to affirm once again—as I did in our recent debate—that the relevant article on social policy will not apply to pay. That is quite clear in the treaty.
However, Article 6 states:Each Member State shall ensure that the principle of equal pay for male and female workers for equal work is applied".The trade unions are convinced that the abolition of the wages councils will give the opportunity for more than 2 million women workers to be paid less than they are now. Trade unions have emphasised the fact that the gap between men's pay and women's pay is narrower in industries covered by wages councils than in other industries.
Noble Lords may have heard on the radio or seen on television the Prime Minister on Saturday when he said:They can have the social chapter, we will have the jobs".If he knows, will the Minister tell the House what the Prime Minister meant, because my interpretation of that statement is, "Let's go hell for leather, boys. Let there be complete competition in the Community as to who can pay the lowest wages and who can offer the worst conditions to try to get the most work?".
That can be the only explanation of the Prime Minister's statement.
The other matter that causes anxiety is one that has been stressed by some of my noble friends. It is Clause 478 37, which removes from local education authorities their statutory duty to make provision for careers services and to make them the responsibility of the Secretary of State who will determine how he will handle them. I thought we all welcomed the provision in the Maastricht Treaty under which subsidiarity is clarified as placing responsibility for deliberations at the lowest level—as near as possible to communities and citizens. The proposal for the careers services backtracks on that. It is a further example of the Government carrying out centralisation with the belief that Whitehall knows best. They are ignoring the desires and aims of local authorities, which, as my noble friends have said, have been carrying out the duty of providing careers services efficiently over the years.
I have mentioned only a few matters. Many of the issues will undoubtedly be dealt with in some detail in Committee. A great deal of the Bill needs to be changed. Clauses must be withdrawn. I hope that when he replies the Minister will not use the same language as that used by the Secretary of State in another place—he is too nice a chap for that—but will neveŕtheless deal with some of the criticism of the Bill, particularly of the contents of many of the clauses, made by employers' organisations.
§ 7.2 p.m.
§ Lord Dean of Beswick
My Lords, I shall not go into the Bill in detail because almost everything that needs to be said has already been said. We need to get clear what the Government's present policy is. One noble Lord said that through the Bill the Government will remove some existing powers of LEAs and take them over themselves. The Prime Minister was specific in what he said at the weekend. He said that he wanted there to be a better relationship between central and local government; the fighting had to stop; and we should all be friends with a common goal. But once again the first thing the Government want to do is to remove a major responsibility from local authorities. If anything needs to be left alone to settle down so that the people involved can do a worthwhile job, it is the local authority education system. It has been knocked from pillar to post by successive Secretaries of State. The poor performance in some areas lies at the Government's door because of what they have been doing. I am describing something which is rather like the mugger asking his victim to be friends after the event. The Government are standing the issue on its head.
I listened with horror to what the noble Lord, Lord Skidelsky, said. He is not in the Chamber. I make no comment about that, but I wish that he were. After listening to his speech and looking at his background, I say that he is light years away from having any knowledge of how industry in this country works. I have looked through Dod, and I would go so far as to say that he has lived his life between academic tramlines. There are academics and academics; and there are politicians and politicians. I am talking about the positions the noble Lord has held as set out in Dod. He did not talk about industry as we know it. I started in industry at the age of 14 and was in it until 479 I was 40. I do not remember the Engineering Employers' Federation offering a pay increase. We had to battle for one every time. We sometimes received what was then colloquially called "an Irishman's rise", where one received a rise but paid for it out of the productivity bonus.
It is nonsense to say that the trade union movement, in the widest sense, is responsible for what has taken place in this country. Powerful groups of workers may have over-used their muscle, but that has gone. The newspaper industry was disciplined by other means. The car industry nearly disappeared from sight. The noble Lord, Lord Skidelsky, complained about the present activities of trade unionists. But let us make it clear—the Minister rightly claimed some credit for it—that there is a resurgence in the motor car industry at present. Who played a part in that? It was the AEU, which is my union. It broke all the conventions of the past and accepted just one union in a factory so as to overcome the hamstringing caused in the past by different unions being at cross purposes in a single factory. The union has done away with that. Why, if the trade unions are bad, do the Government think that the Japanese want to invest money here? They are queuing up to come here. More of them will come. What is there that we need new laws to deal with?
If one takes the arguments of the noble Lord, Lord Skidelsky, to their ultimate conclusion, he is talking about returning to the philosophy of queuing at the factory gate. The workers have no protection. It is first come, first served. What a way to run a highly technical factory: "Let's see if there's someone at the door with the technical know-how. Let's not have a contract with someone who is highly skilled. Let's take a chance; there may be someone standing outside". That is utter nonsense.
As I said earlier, I spent 26 years in industry. I never came across anything where I worked which resembled what the noble Lord has described. He said that he was speaking wide of the Bill, so that is what I shall do. If he wants to discover what is wrong with industry and to put it right, I can throw something else into the ring. There was a press report over the weekend claiming that the Secretary of State, the right honourable Michael Heseltine, and another Minister had given conflicting views about industry and how it should be run. It appears that the Secretary of State for Trade and Industry had said that Britain had far too many accountants running industry and not enough managers or technical people who knew what managing a factory or an industry was all about.
About two years ago I went to an exhibition in the engineering department of London University. It was opened by the former chairman of ICI, Sir John Harvey-Jones. He said that the country closest to ours in terms of national production and so on was France and that France manages with a third of the number of accountants that we have. He wished there were more practical people in boardrooms who had come up from within industry rather than just people who understood figures on a balance sheet and thought that there lay all the answers.
480 One of the most offensive parts of the Bill—we have not had a proper explanation for it today—is the proposal to do away with the Bridlington agreements. Those were formulated years ago and have stood the test of time. I was associated in a rather detached way with the people who worked on the agreements. The agreements worked very well and I never found any case of people being overpaid under them.
Like my noble friend Lord Eatwell, I can see what the noble Lord, Lord Skidelsky, was trying to get at—that to do away with the wages councils would be beneficial in terms of increasing jobs. Every statistic demonstrates that that is absolute rubbish. How many replies will there be to an advertisement seeking a graduate with good qualifications and offering, say, £15,000, £16,000 or £17,000–300, 400 or 500? What happens to the disappointed ones who do not get the job? Is that all we can offer the young people whom we have trained to lead this country back into prosperity? Are we to say to them that they can get a job but that they have to negotiate their own salary because there are no wages councils?
I remember from my days in another place a member from another party saying during a debate that he could put all these educated young people back to work. He explained that he would have a massive road building programme and that all the work would be done by manual labour. I had the temerity to intervene and say, "Will your son be using a shovel or a pickaxe?" Oh no, his son was at Oxford. It was all right for my son to use a pickaxe or a shovel but not his son.
We have to get this philosophy correct. On the basis of assisting young people there were only a few years ago over 300,000 apprenticeships working in the engineering industry. The figure is now well under 100,000. What will this legislation do to encourage firms to take people on and train them as engineers?
The noble Lord, Lord Skidelsky, used one phrase which I objected to. He talked about people who were in non-transferable jobs demanding high wages. I can tell the noble Lord that people who have served as apprentices in engineering, the building trade and other trades are not one-job persons. I myself had to move three times in my adult life as redundancy caught up with me. I had to move to other factories and into a different type of engineering. I had to accommodate that. So the noble Lord is completely wrong when he says that everyone who loses a job needs retraining and that while they are in a job they are demanding too much money.
I think that the Bill was accurately summed up by the former Conservative Prime Minister, the right honourable Edward Heath, a few months ago. He said that the Government had to be careful that they were not going over the top in their attack on the trade union movement. I think that the clause which reneges on the Government's promise to fund enforced ballots is the dirtiest little piece of legislation I have seen since I first came to Parliament. I hope that enough Members on the other side of the House will stand by principle, turf that nasty little clause out of the Bill and throw it in the dustbin where it belongs. We on this side of the House will do our best to alter the parts of 481 the Bill that we think need altering. However, I think that this House and another place could have been better engaged on something more worth while than this Bill, which the Government want because they wish to divert attention away from the mess they have got the country into and once again blame someone else.
§ 7.15 p.m.
§ Lord Campbell of Alloway
My Lords, it is always a pleasure to follow the noble Lord, Lord Dean. It has been a lively, robust and on the whole good humoured debate in which the motives of the Government have been challenged by both the Labour and Liberal Parties as a trade union emasculation Bill, as a window dressing for overseas investors, as irrelevant, as unnecessary, as enabling employers to finger the striker and then to victimise him, as an attack upon the funds of the trade unions so as to weaken the finances of the Labour Party; and it was stigmatised by one noble Lord from the Cross-Benches as the labour law of a Mad Hatter. Well, that is all very fine. And, in my opinion, if any of those charges had a semblance of veracity I would decline to support the Government. I hope that noble Lords in this House will accept that as true.
It is not surprising that there should have been this attack on the motives of the Government as the essence of the Bill is to extend individual rights—to extend the individual rights of the members and so to hand the unions back to the individual members. So of course it is opposed by the Labour Party. For such is the wholly consistent stance of the Labour Party— certainly in your Lordships' House—since 1980 on each of the five industrial relations Bills which followed as part of the step-by-step approach, of which this is the last step.
In effect, nothing has been said by noble Lords on the other side of the House which has not been said in substance on each and every occasion that these Bills came before your Lordships' House. They complain that the Bill removes self-regulation by the unions and that the Bill is a calculated affront to the trade union movement. They say, as they have always said, "Hands off the unions. Leave it to them to put their own house in order and regulate their own affairs". But have the unions ever put their own house in order? Have they ever regulated their own affairs? Are they able or willing to do so? Are the affairs of which they speak as their own affairs of exclusive concern to the unions? Are they not also of concern to the membership, to the public, to the state and to the perceived status of the TUC General Council; and which noble Lord in this House today could say whether the militant dragon is slain or slumbers?
Noble Lords opposite oppose the three main principles of the Bill. I am concerned only with matters of principle, and in that I follow the noble Lord, Lord Dean of Beswick. First, Clause 13 provides for the freedom of members to belong to a union of their choice, a right which has not as yet been recognised by the trade union movement but which is a manifesto commitment. The second principle is the 482 check-off provisions in Clause 14, another manifesto commitment which substitutes contracting in for contracting out, which has been a political shuttlecock since 1913. Thirdly, there is what the noble Baroness, Lady Turner, described as the most controversial provision of the Bill—and I accept her estimate of that —the abolition of the wages councils, which for many years have failed to serve any worthwhile purpose.
The noble Lord, Lord Rochester, opposes the Bill as mean-minded and a step too far while welcoming the provisions of Part II and also taking what seems to me to be the wholly inconsistent position of supporting wages councils, which create minimum wages, while opposing a national minimum wage. I understand but do not agree with the reasoning of the Labour Party. As yet I cannot understand the reasoning of the Liberal Party but await clarification from the noble Baroness, Lady Seear, who I am sure will give that in due course.
The fundamentally important point is made that the Bill must be seen in the context of the needs of the 1990s, the decade ahead, so that it creates an environment for economic recovery. I take issue with noble Lords opposite. To say that because we are in deep depression today and because today there is massive unemployment, the matter is irrelevant and unnecessary is, with respect to the noble Lords, to emulate the antics of an ostrich. I say that with particular respect to what was said by the noble Lord, Lord Bruce of Donington.
There are fundamental questions which divide your Lordships' House. Why should we have a Bill at all? Why should we do away with contracting out? Why abolish the Bridlington system and create rights for members to belong to the union of their choice and so remove the right of the TUC General Council to decide the appropriate union to which a person should belong? Lastly, why should we abolish the wages councils?
That ground has already been covered by noble Lords who have spoken on this side of the House and I shall not say much of what I was going to say. However, at the outset I should like to deal with the freedom of choice to belong to a trade union. As to that, many trade unionists, including Mr. Frank Cousins, Lord Robens and Mr. Vic Feather, have expressed the view that a man should not be made to join or belong to a trade union. They have expressed that in the form—and I have the material but I shall not quote it—that one should be proud to be a member of a trade union. It should be a matter of persuasion and not of compulsion. Noble Lords opposite know that there is a division—and we are arguing it in a tough way but fairly—within the trade union movement on this question.
Because the right to belong to a trade union of one's choice did not exist, the Bridlington procedures were introduced to resolve disputes between unions and membership rights. As recently as 6th December 1992 Mr. Gavin Laird, the secretary of the AEU, in the Sunday Times stigmatised Bridlington as:outdated and irrelevant in modern industrial relations".Therefore, I repeat that there are two views within the trade union movement.
483 Clause 13 ensures that the Bridlington agreement can no longer operate to compel an individual to belong to a union which the TUC considers to be appropriate. For my part, I believe that to put that as a TUC diktat is rather unnecessary because that system has worked for so long that it is a proper system to operate unless, on consideration, it were to be changed.
However, I am anxious to make a point which seems to have become lost in the debate and I think some noble Lords on both sides of the House have got it wrong. Those provisions are concerned only with inter-union disputes—disputes over membership which are relevant to recognition of the union by an employer. They are not concerned with disputes between a union and an employer as to recognition. The employer retains his freedom of choice as to which, if any, trade union he wishes to recognise. If that approach is right—and I hope it is—the question of affecting single union agreements, which has worried certain noble Lords, does not arise.
As regards the check-off, your Lordships will know that in 1913 a Liberal Government introduced contracting out. After the general strike in 1926 the 1927 Act introduced contracting in. The Labour Government's 1946 Act restored contracting out and now Clause 14 proposes to reinstate contracting in. I do not know but I would assume that it is common ground between us all that as a truth of life inertia infects contracting out. That was frankly admitted by the noble and learned Lord, Lord Shawcross, in the debate in 1946 when he was Attorney-General.
§ Lord Stoddart of Swindon
My Lords, I am becoming rather confused by the noble Lord's argument. He is talking about contracting out of the check-off system. Does the noble Lord not appreciate that it is not a question of contracting out? A unionist must contract in before his employer can take any union subscriptions at all. It is not a question of contracting out.
§ Lord Campbell of Alloway
My Lords, I take the noble Lord's point but he is mistaken in the analysis as to how, at the end of the day, it works. The system which is proposed to be introduced by Clause 13 reverts to the system of inertia because deductions are made at the check off irrespective of there being a written consent by the individual. That is all that I am saying. That element of inertia—perhaps I explained this badly; I probably did—was, frankly, dealt with by the noble and learned Lord, Lord Shawcross, in the debate in 1946. I read that debate but I shall not quote from it. The second matter of common ground is that on contracting out, I would have thought, disclosure of identity—
§ Lord McCarthy
My Lords, it seems to me that the noble Lord is talking about the political levy when he talks about the 1913 Act. When he talks about the noble and learned Lord, Lord Shawcross, and what the Labour Government did, he is talking about the political levy. That has nothing to do with the matter we are discussing. The clause the noble Lord is discussing is about the check-off not the political levy.
§ Lord Campbell of Alloway
My Lords, exactly the same principle applies to both. I know the difference between one and the other. As I sought to explain to the noble Lord, Lord Stoddart—I think he took the point—exactly the same principle applies on contracting out where disclosure of identities to trade union executives is liable to create embarrassment and victimisation. That point was made by Lord Wolmer in the Report stage of the Act of 1913. The threat of victimisation was rejected by the Liberal Government.
The third matter that surely is common ground between us is that it is not desirable that inertia, or the threat of victimisation, should be able to operate or should operate. I say quite specifically that this is not an attempt to inhibit trade union activity, as was roundly suggested by the noble Baroness, Lady Turner of Camden.
The fact that for some 45 years both employers and trade unions have operated the system as a method of administrative convenience has to be taken into account, but the position of the members of the union also has to be taken into account. Automatic deductions without individual written consent will no longer be possible. The freedom of the individual to be able to exercise his rights without being subjected to a system akin to direct debiting without a written authority ought to come to an end. I do not propose to deal with the abolition of wages councils as there is not time to do so. I adopt all that has been said by other noble Lords who have spoken. However, for reasons which are slightly different, I would have also supported the abolition of wages councils.
§ 7.33 p.m.
§ Baroness David
My Lords, I shall not tangle with the noble Lord, because the clauses I wish to deal with were not mentioned by him. I always admire the noble Lord for taking an independent line. He is prepared to support the other side occasionally, or at any rate to take the line he thinks is right. I believe we shall perhaps have his support on one or two matters in the course of this Bill.
I wish to discuss Clauses 37 and 38, which deal with the careers service. As has been said by some of my noble friends, these clauses amend the Employment and Training Act 1973 to transfer responsibility for the careers service from local education authorities to the Secretary of State, who will be free to arrange for the service to be delivered by local education authorities, by others, or by LEAs and others in partnership.
When the then Secretary of State consulted on this proposal in 1991, the local authority associations responded that the case for change had not been established and they advised against structural reorganisation of the service in order to experiment with different arrangements. Whether we should have had the same response after Mr. Major delivered his speech at the weekend is something I cannot comment on. My noble friend Lord Dean referred to that speech, in which Mr. Major said we should stop bashing one another about. I thought most of the bashing had been from the Government's side as regards local authorities. However, there we are.
485 Local authorities remain concerned about the further fragmentation of their education services; the distraction of staff and management time from much more pressing issues and about the continuing uncertainty in the longer term because the Bill leaves the Secretary of State free to change arrangements at will. My noble friend Lady Turner said she thought privatisation might be the end result of this. I am anxious about what the Secretary of State might do.
Significant improvements in the service to young people and in the relationship with educational institutions have been achieved since the careers service was first made a responsibility 20 years ago. More recently, new partnerships with the training and enterprise councils have begun to be created but they still need time to develop and prove themselves. If the boundaries of the TECs and local authorities had been coterminous, matters might have been much simpler for them. However, the recent Audit Commission/OFSTED report entitled Unfinished Business on education for 16 to 19 year-olds states:students portray a guidance system which is working well".That statement comes from a report that is highly critical in many areas of what is happening in certain establishments. However, the Government's passion for centralising knows no bounds.
I intended to say a few words about the disabled and those with learning difficulties, who rely greatly on the careers service. However, my noble friend Lady Fisher covered that matter very well and I shall leave it at that. If we fail to delete these clauses from the Bill, we must have safeguards. The Bill is currently silent on those safeguards and it needs strengthening in that respect. The Bill is open to abuse by a Secretary of State of whatever political persuasion, as she—at the moment we have a female Secretary of State—will be accountable only to Parliament, without even being required to produce an annual report on how her duty has been discharged.
The Audit Commission and OFSTED have recommended that the new framework for the careers service should preserve and enhance the service's role as the champion of students. I would add that it must do just as well for adults, who will be needing guidance on careers and on change of jobs for a great part of their lives. What we do not want is to risk the service being seen simply as a recruiting agency by any particular interest that might secure the contract to provide it.
It seems to us quite inappropriate to put the careers service out to tender. Those qualified in careers counselling are almost entirely taken up within the local authority service. The likely outcome of attempts to seek competitive tender would either involve reshuffling of existing personnel or would bring into the management of the service those without prior experience who nevertheless believe that they could control existing staff better than the current managers.
Clause 38 allows a local authority to provide goods and services to other persons and bodies who are providing the careers service in the area of that authority for a period of two years. While welcoming that relaxation in local authorities' powers to provide 486 goods and services, local authorities are concerned that the limit may prove too strict. The Government's assumption that during this period a market will grow up to supply relevant goods and services may well prove false. I hope we can persuade the Government to extend that two-year period to ensure that careers service providers are not left unable to attain the relevant goods and services. I remind the House of what Mr. McLoughlin said in another place in Committee. He said:The present system has been in place for nearly 20 years. It has done well in the circumstances in which it has been required to operate. We know of very good work being done by the service to help many young people, but the service is constrained by a bureaucracy that governs local authority structures and systems".—[Official Report, Commons, Standing Committee F, 2/2/93; col. 709.]One can only wonder what central government may do.
Current arrangements generally work well. Throughout the country, local accountability ensures that local citizens receive careers guidance services which meet local needs. Local accountability is open and public. In replacing that with a new, national accountability, we need to ensure that the Secretary of State consults with representatives of education, training, employment and community interests in discharging the duty. It surely will be unacceptable for the Secretary of State to consult only Civil Service officials in drawing up specifications for the careers service, guidance on its operation, the award of contracts and the inspection of performance for the new careers service contractors.
At present there are checks and balances through local councillors, who are accountable to their electorate. If we are not to have that accountability we must have something else, and the proposal for a National Council for Career Guidance has the support of Sir Bryan Nicholson of the CBI, the local authority associations, education officers, head teachers and careers teachers, as well as of careers officers and the Institute of Careers Guidance. There is a need for such a national framework. The council's key role would be in advising the Secretary of State on issues of quality assurance in careers guidance. It should advise on the quality threshold against which all would-be service providers would be judged.
Last month I attended a first class Royal Society of Arts conference on careers education and guidance, at which Sir Bryan Nicholson and Tony Watts, the director of the National Institute for Careers Education and Counselling, made excellent keynote speeches. Sir Bryan and Tony Watts stressed the fact that guidance offers public as well as private benefits and has an economic as well as a social value.
The CBI report, Towards a Skills Revolution, helped to place guidance higher on the public policy agenda than ever before. It also made two very important points. First, it emphasised that careers, and by implication careers guidance, should be for all. Secondly, it proposed that career development, and by implication careers guidance, should be lifelong. We need the broader vision and the longer-term view.
A letter from Sir Christopher Ball, who chaired that conference, Sir Bryan and Tony Watts appeared in 487 The Times last Wednesday. In it they urged the principle of partnership, especially that between local authorities and TECs, and commended to the Government the creation of a national council to define standards, monitor quality and offer strategic leadership to organisations and individuals providing guidance for learning and work. They say that such a body would have a wide remit and broad membership. Without it the nation risks allowing bad guidance to drive out good. I hope that in this House the Minister will be more receptive to those powerful arguments than was Mr. McLoughlin in another place.
The Secretary of State has assured another place that, in preparing guidelines for the operation of the new careers service, she will ensure that professional service remains. We need to know more about what she means. The current service is staffed by careers guidance professionals who, through their skills, training and experience, are manifestly providers of quality. The overwhelming majority possess the diploma in careers guidance or its equivalent. To safeguard the interests of individuals receiving guidance we must ensure that all new careers service contractors are required to employ professional practitioners at least to the existing level of competence and training.
It is those key areas of quality assurance, open accountability, wide consultation on a national framework, publication of independent inspection reports, clear evidence of accountability and acceptability of contract providers to local people and the requirement to employ skilled and competent staff that need to be addressed in this House. For that, we need a broadly based and independent national council to advise the Secretary of State on the definition and monitoring of quality standards. It could help to ensure that guidance services meet the interests of consumers as well as the wider public interest. It could focus not only on quality but also on coherence and continuity of guidance provision. In short, it could provide strategic leadership.
§ 7.44 p.m.
§ Lord Eatwell
My Lords, I wish to address just one part of the Bill, namely Clause 31, which will abolish wages councils.
As your Lordships will be aware, this is the second stage in a two-stage process of abolition which began with the Wages Act 1986. That Act removed the protection of wages councils from young people, as we have already heard this afternoon. Then, as now, the Government claimed that taking away the ability of wages councils to fix minimum wages would increase employment. Indeed, it was reported in the Financial Times of 18th July 1985 that the Government estimated that between 50,000 and 100,000 new jobs would be created by withdrawing wages council protection from young people. Later, the Government became more cautious. On 6th June 1986 (at col. 1240 of Hansard) the noble Lord, Lord Trefgarne, conceded to your Lordships that it was "impossible to predict" what the employment effect would be.
It might be thought by rational people that to introduce a measure the prime objective of which was 488 impossible to predict was, to say the least, somewhat odd. Yet that is exactly what the Government did. Fortunately, there is no need for that to happen again. Now, at least, the Government have the fruits of the experience of the 1986 Act to guide them. It is important that in his summing up the Minister should tell your Lordships' House what that experience has been. Will the Minister tell us how many jobs have been created for young people by the abolition of wages council protection in 1986? He must know. How else could he have the confidence to proceed with this measure?
When the Minister tells us how many jobs have been created, will he explain to your Lordships' House how the Government's analysis differs from that of Messrs. Machin and Manning of the University of London in a study produced as recently as May of last year? I referred to that study earlier and I can assure the noble Lord, Lord Skidelsky, that it was a serious study which took account of cyclical effects. Machin and Manning concluded that:there is no evidence of an increase in employment from the decline in the effectiveness of the Wages Councils. If anything, our conclusion is that employment has declined".I am sure that the whole House will look forward to hearing what evidence of job creation among the young the Minister has to offer.
Clause 31 of the Bill before your Lordships' House today will continue that process by removing wages council protection from about 2.5 million low paid people—mostly women, as we have heard—who work in areas such as retailing, hotels, catering, hairdressing and the textile trade.
Much has been made of the fact that about two thirds of workers in wages council industries are paid at above the minimum levels. But that, of course, means that one third of all workers in those industries are paid at the minimum levels. We are talking about the well-being of one million of our fellow citizens.
As before, we are told that this measure will increase employment opportunities in those industries. At the Second Reading of the Bill in another place the Secretary of State said that the effect of statutory minimum wages by the wages councils was:damaging both for competitiveness and for jobs". —[Official Report, House of Commons, 17/11/92; col. 177.]She did not feel it necessary to present any evidence to support those assertions.
Similar sentiments have been expressed by the noble Viscount, Lord Ullswater, the noble Baroness, Lady Young, and the noble Lords, Lord Boyd-Carpenter and Lord Skidelsky.
Will the Minister tell us how many new jobs will be created by the enactment of Clause 31. Surely we shall not be told again that the figure is "impossible to predict". Surely, despite all the evidence to the contrary, the Government have some idea of what they are doing. Surely they have some notion of the consequences of their actions.
Since the Government argue that new jobs will be created by the removal of minimum wage protection, then they must expect—and the noble Lord, Lord Skidelsky, gave the game away—that wages will fall. That is the mechanism of job creation which is being invoked. That is why minimum wage protection is to 489 be removed. Will the Minister tell us by how much the Department of Employment estimates that wages in the industries covered by the 24 wages councils will fall as a result of the enactment of Clause 31? The noble Viscount must have some idea, otherwise it would be quite irrational for him to argue that employment will be increased. How much will wages fall?
Assessing the economic impact of the measure and predicting the probable fall in wages and the number of jobs created, if any, is not the end of the story. Removing minimum wage protection will have significant Exchequer costs too. Your Lordships will be aware that wages councils cover some of the most poorly paid people in the country. If their wages are cut—that is the only rationale underlying Clause 31 of the Bill—many of the families, even when the person affected is not the principal breadwinner, will become eligible for family credit, housing benefit, rebate of council tax and a variety of other means-tested social security benefits. Families which have never in the past had to rely on the social security system will now be forced into dependence on the state by the very mechanism—wage cuts—which the Government promote. Is that increased dependence desirable on economic or social grounds?
To those Exchequer costs must be added the loss of income tax revenues and national insurance payments due to lower wages. Even if employment increases, wage cuts will result in many workers being placed in lower income tax and national insurance bands, including lower bands for employers' national insurance contributions. Therefore overall revenues are likely to fall.
Taking together the falls in revenues and the increase in payments benefits, will the Minister tell us the Government's estimate of the overall cost to the Treasury of abolishing the wage-setting powers of the wages councils? Will he also tell us why the Government consider it wise to add that extra burden to the PSBR at a time when all government departments are being urged to cut expenditure? The answers to those questions are central to the Government's case for abolishing the wage-setting powers of the wages councils.
The removal of the floor to low pay which the wages councils provided will result in an increase in government social security expenditure to maintain family incomes at the minimal level of decency as defined by the social security regulations. That was revealed by the Department of Employment in its consultation document on the wages councils published in 1988. In that document the department argued that family credit will take up any fall in wages which follows from the abolition of minimum wage rates set by the wages councils. The Department of Employment document makes a mockery of the image put forward by the noble Viscount of women earning pin money to add to the incomes of prosperous families. Is he repudiating the document published by his own department?
The Government's case is clear. With the abolition of wages councils, the responsibility for paying a living wage will have been shifted in part from the employer 490 to the taxpayer. Where once wages councils insisted that employers maintain minimum standards of decency, now the taxpayer will have to take up the burden. Allowing the employer to cut wages will result in the taxpayer subsidising low-paying employers. That subsidy is Government policy. We must give the Department of Employment credit for owning up to that fact.
Will the Minister tell the House the Government's case for using the taxpayers' money to subsidise some of the least efficient employers in the country? If the Government are determined to throw around largesse in subsidies in this manner, why do they not subsidise the most efficient employers who might at least hold out some prospects for the future competitiveness of the country?
The cuts in wages which the Government hope that the abolition of the wages councils will bring about, will enhance the competitive strength of the least efficient employers in the country. It will prolong the use of obsolete equipment. It will encourage backward producers to cut wages to undercut those who might invest in new techniques. It will encourage the use of casual labour and discourage the firms which invest in the training of their workers. As the CBI put it in its evidence to the Select Committee on Employment in another place,Wages Councils had an important role in preventing the competitive under-cutting of labour, which would create a climate of uncertainty within the industries affected".Does the noble Viscount really wish to create a climate of uncertainty in these times in which investment is already depressed? If Clause 31 of the Bill is enacted, the best competitive strategy in the industries affected will be no longer to invest for the future, but to cut wages and indirect labour costs and to go downmarket. That is why forward-looking companies, including leading retailers like Tesco, Sainsbury and Kingfisher, are opposed to the abolition of wages councils.
Clause 31 of the Bill is a logical extension of the Government's entire labour market strategy. The abolition of wages councils fits in with that part of the strategy which has consisted of a series of changes to tax and benefit systems and to employment regulations which have in turn resulted in systematic increases of subsidies to those employers who pay poverty wages and offer only casual employment. The firms which exploit those subsidies best are the firms which survive. The continued survival of those firms becomes dependent on the maintenance of the subsidy. The result is a vicious cycle in which the employer and employee are increasingly dependent on the public purse, in which the working of the labour market is not improved and in which public expenditure is not cut. It is called the Speenhamland system.
The abolition of the wages councils will increase poverty, inefficiency, dependence on social security and the public deficit. It is both a shameful and an incompetent measure. At a time when unemployment is set to reach a post-war high, and when the future prosperity of our country depends vitally upon investment and the quality of our labour force, it is totally counter-productive to proceed with a measure 491 that can only add to the degradation of labour in the industries affected and will push this country yet further downmarket. I believe that it is the duty of your Lordships to reject Clause 31 of the Bill.
§ 7.57 p.m.
The Earl of Stockton
My Lords, first, I thank the House for its indulgence in allowing me to take part in the debate at this stage. I was happy to see that my friend and author the noble Lord, Lord Eatwell, has jumped neither out of his academic nor his political tramlines. I must also apologise for a somewhat tardy arrival. I was engaged in developing the forward plan for the provision of a comprehensive careers service, including assessment and aptitude counselling, in the London boroughs of Camden, Hammersmith and Fulham, Westminster and Kensington and Chelsea, in full co-operation with the local education authorities and the relevant FE colleges.
As chairman of CENTEC, the training and enterprise council for central London, I should declare an interest in Clause 37. I listened to the noble Baronesses, Lady Fisher, and Lady David, and the noble Lord, Lord Stoddart. I can honestly say that the TEC movement and the officials of the more enlightened local education authorities welcome the flexibilities that the clause introduces. On the issue raised by the noble Baroness, Lady Fisher, as the co-founder of the special needs group of the national TEC network, I cannot see why the proper provision of careers advice and training for those with special needs will not be improved by the rights outlined in the Bill.
A number of noble Lords have boasted rightly of their trade union links. I wish that I could say the same. I was a member of the National Union of Journalists, at one time a deputy father of the chapel in Glasgow, and a delegate to the Scottish Trades Union Conference. However, sadly, when I joined my present company I was obliged to give up my membership, although the company recognises the National Union of Journalists and that union represents the largest group of workers in the company. Perhaps the union did not feel that having the proprietor's son as a member was appropriate, particularly as by now I think I would have been easily the most long-standing member of the union on the staff.
Having studied the position of unions in Europe, I hope that before your Lordships reach the Committee stage of the Bill I shall have taken part in a European seminar organised by Cologne University. I hope to be able to confirm that the Bill brings us into a practice closer to that of our EC partners. However, I am sure that my noble friend Lord Mottistone is correct in saying that the current practice of bureaucratic tack-on is much in evidence and should be avoided if we can do so.
I must express my concern about the abolition of the Bridlington principles. I recall my late father and the noble Lord, Lord Murray of Epping Forest, being much concerned with them in the early 1970s. As an 492 employer I have used the Bridlington principles to considerable effect, I believe, both for the company and for the workforce.
There are of course opportunities to improve any Bill, especially in your Lordships' House. I am sure that my noble friend Lord Ullswater will listen carefully to responsible and constructive suggestions. But I trust that he will turn his face against any attempt to put the clock back to the bad old days.
§ 8.1 p.m.
§ Baroness Seear
My Lords, being temperamentally unwilling ever to follow the crowd—and that may be one reason why I am on these Benches—I have been searching for something nice to say about the Bill. I was much encouraged and helped by the speech of the noble Baroness, Lady Platt. I too welcome the improvements in maternity benefits and the fact that the two-year limit has been removed. With it goes the nasty little practice—pursued, I am sure, by only a minority of employers—of getting rid of people just before they come up to the two years. That will end at least one objectionable way of behaving.
However, I am afraid that this is where my enthusiasm for the Bill comes to an end, even though there are points about safety which are much to be applauded. I agree with the noble Baroness, Lady Platt, in relation to part-time workers and the benefits of the rights for part-time workers. She made the point which is surely right that because so many women are part-time workers in relation to the number of men who are part-time workers any adverse conditions for such workers could be regarded as indirect discrimination. That perhaps is another point rather than being central to the discussion today.
The point I wish to make about part-time workers is that in the present, and I think future, labour market, particularly if we take seriously the analysis of Professor Handy of the London Business School, an increasing number of people at all levels, both male and female, are likely to be employed on a part-time basis. In many ways there is a great deal to be said for that. But if part-time work is to become a regular and desired feature of the labour market, surely part-time workers should pro rata have the same rights as full-time workers. We shall not encourage the sensible development of part-time work, which I think in labour market terms is desirable, unless those rights are in place. For that reason, quite apart from justice for part-time workers, I hope that the Government will think again and take more seriously the line given to us by the European Community on the position of part-time and temporary workers.
Viewing the Bill as a whole, it seems to me that the Government do not do themselves justice in relation to what they have achieved in the past. On all previous legislation except the last Act we on these Benches have supported the Government. It is no good the Labour Benches pretending that everything in the trade union movement was always sent straight from heaven. A great many things were wrong with the trade union movement from the days before Donovan and onwards, as the noble Lord, Lord McCarthy, knows. He had a big hand in the Donovan report and 493 even employed me to do some work on it, which shows his discretion. There was abundant evidence in those days of a great need for trade union reform.
The point I wish to make is that, as a result partly of internal changes following Donovan brought about by the trade union movement itself and partly of the legislation by this Government and the previous Conservative Governments, a great deal has changed for the better in the trade union movement. But, why can they not leave well alone?
We on these Benches were very much in favour of giving the trade unions back to the members. It was one of those slogans. It rolls off the tongue and sounds rather good. The objective was certainly to be applauded. But a great many rights have been given back to the members. Ballots were fine. All manner of changes have strengthened the position of the member against the bureaucracy of the trade unions. That we wanted; it has happened. Why try again?
Trade union members are quite big boys now. They can look after themselves. If they think that the union is behaving in a bossy and bureaucratic way, they can stand up and say so and make feelings known. Union members are not too feeble—there is plenty of evidence of that—to make themselves felt. If the union is not doing the things it ought to do, it is up to the members to do something about it. It is very much the nanny state coming back again and I find that extraordinary from a Tory Government. The nanny state is rushing in to protect the poor little union member against the big bully union boss. Surely that is not the way to go on.
I wish to take up a few of the points raised, although it is impossible to cover them all, even in a winding up speech. On the subject of Bridlington have mixed views. We all liked the idea of the freedom to choose our own unions. This is an instance in which the improvements in the trade union movement have made a considerable difference. In the days of the unreformed electrical trade union which led to court orders of a most monstrous kind, many members tried to get into other unions but were unable to do so because of Bridlington. I remember being told a great deal about it at the time.
However, that is all past history. It is 30 years ago. The changes have been put in place. Against the desirable idea that people should choose their own union—with which I have much sympathy—I put strongly the development of the single union. We have talked about investment from Japan and elsewhere in this country. All of us who know anything about it realise that one of the major demands of the Japanese employers was for single unions. The development of single unions, desirable as it is, has come in no small part because of the insistence of the Japanese employers and the inducements that they offered in order to get single unions.
I wish to know from the Government whether it is true—to answer the point made by the noble Lord, Lord Murray—that there is no danger to the single union from the retention of Bridlington. If there is none, if one can have the freedom to choose and also have the single union, that is fine by me. But if it is a 494 choice between the two, I come down in favour of maintaining the single union because of its great importance for the development of trade unions in the future and also for industry in this country.
As regards ACAS, may I put in a plea not to get rid of the non-legal assessors, the union and the employer? When the industrial tribunals were set up, we were told that they would be informal, unlike courts of law. People would be able to go along on their own and plead their case. It would be understood by people who knew about industry, both from the employer's and from the employee's point of view. Little by little the process has become more and more legalistic. I still belong to the school of thought in industrial relations that the fewer lawyers there are on the scene the better for everybody. In my view the legalisation of labour relations is a very great pity—I know there are many in your Lordships' House who have done very well out of it—and a great mistake. I want the lawyers' sticky fingers taken out of it in every possible way.
To hand over tribunals exclusively to lawyers seems to me a most retrogressive step. I would rather they were without any lawyers at all; I would rather leave the employers and trade unions to sort things out. But that is another issue. I ask the Government to think again. It is against all the traditions. If it is left to the lawyers, one will not get people who have a real feel for what is going on behind the case that has been brought forward.
With regard to the wages councils, it would be marvellous to get rid of them under the right circumstances. The Liberal Government of 1906 introduced the Trade Boards Act in 1909, which was a forerunner of the wages councils. They did that because of the weakness of trade union organisation. The whole idea was that wages councils should be set up and with encouragement toward the strengthening of negotiations between employers and employed in those industries they would fade away. I am all for such fading away. However, this is scarcely the moment to fade them out. This is not the time to do it. The alternative is simply to leave people to make such arrangements as they can for themselves.
A great deal has already been said and I do not want to say much more about wages councils except to add one point which I believe has not been made by other noble Lords who spoke against their abolition; namely, that if wages drop still further below the wages council level, the poverty trap will get bigger and bigger. There will be practically no inducement to get out of unemployment if wages are so low. Surely we want to reduce the significance of the poverty trap and not increase it.
I take the greatest exception to the argument put forward by the Secretary of State and others that some of the lowest paid people are women whose husbands are in jobs and therefore it does not matter. That is a most dangerous argument. In this country we pay for the value of the work done. We do not pay according to whether a woman does or does not have a rich husband. Otherwise a lot of people—not me—would do extremely badly indeed. Once that argument is accepted—namely, that one looks at the family 495 income and need not pay much because the husband is doing nicely—one is on a very slippery slope indeed. I do not want to take up more time on those points.
Let me finally make what seems to me to be by far the biggest point of all. I had never thought until I read this Bill that what the Government were about was trying to get rid of collective bargaining and collective organisation altogether and move towards a situation in which all contracts of employment were individual contracts between the individual and the employer. My support for previous legislation was given on the basis of an assumption that we were reforming collective bargaining, not that we were trying to abolish it. That is an extremely important point which runs through the way in which the Bill is written and at any rate some of the speeches made in support of it. Let me pass on to your Lordships the words of the noble Lord, Lord Chapple, whose experience in trade union matters is most extensive. On leaving the Chamber—it was good to see him here again despite his illness—he said to me that three countries abolished trade unions—Franco's Spain, Nazi Germany and China—and they are all putting them back. That is not a very good precedent for people who are thinking of abolishing trade unions.
If the Government want another trade union Act they ought to ask: what sort of collective bargaining do we want to have in the future? One cannot run an industrial economy without proper organisation of the people who work in industry. One cannot work changes in industry unless there is proper representation through which to explain, develop and extend those changes. We need proper trade union organisation. We need to work out the rights of trade unions and the rights of employees as distinct from being members of trade unions, and we need to define where their powers reach and where they are limited. We must know whether we want something like the German system, the French system or a reformed system of our own. We need that extremely badly. Instead, we are dismantling the system and not putting any reformed system of industrial relations in its place. That is what this Bill should be about. In fact that is what it is not about.
§ 8.15 p.m.
§ Lord McCarthy
My Lords, we have had a very interesting and far-reaching debate. There have been 20 speakers, and rather more from the government side than is usual in debates of this kind. There have also been some new faces. Eight Members have supported the Government and 12, in one way or another, have attacked them. But it has been an interesting and rewarding debate.
I begin by thanking the Minister for making as far-ranging a speech as that made by the Secretary of State in another place but in less than half the time. He covered all the ground that she did.
I should like to make one thing absolutely clear and I know about this matter. This Bill is the eighth son of Frankenstein. The noble Lord, Lord Wedderburn, and I have been at the birth of every one of them: the 1980 Employment Act; the 1982 Employment Act; the 1984 Trade Union Act; the 1986 Wages Act; the 1988 496 Employment Act; the 1989 Employment Act; the 1990 Employment Act and the 1992 Trade Union Reform and Employment Rights Bill. I do not mention sundry other Bills. This is the latest son of Frankenstein. Each one of those sons had three heads—I shall come back shortly to the way in which the latest son is a little different. Each of the previous sons of Frankenstein was designed to do three things: first, to remove the rights of workers against their employer (they all did that, particularly those which are never mentioned; for example, the 1986 Wages Act which took away a great number of workers' rights against their employer); secondly, to remove the protection of trade unions and the protection of workers involved in industrial action. In addition, every measure—there are more provisions in this field than in all the others —sought more systematically to regulate trade union government.
The great dichotomy in this Government's mind has been to deregulate throughout the country, except in the area of trade unions where regulation gets more extensive and more precise. This Bill, this son of Frankenstein, is not quite the same. The noble Lord, Lord Campbell of Alloway, asked why we should have a Bill at all. There is a rather special reason for it. As everybody in the House knows, this Government are dominated by the problems created by the division over Europe inside the Government and inside the party. That is the secret of the Bill. For this Government the Bill is most unfortunately timed. At this moment they have to introduce a whole range of measures which they would much rather not have to do; namely, the most significant advances in individual employment rights that Europe has forced upon this Government. Noble Lords must admit that they come at a frightfully embarrassing moment.
One therefore has to do something to cover up, as it were, the little bit of jam in the middle or the little bit of meat in the sandwich. That is why they have dug up all these old ideas, most of them old friends of ours. We know them. We have had them before—only this time they have gone further. That is why we have all this about trade union government; that is why we have all this about strikes; that is why we have a whole range of pseudo rights for members against trade unions because this time we have a number of real rights for workers against employers.
That leads me to my first question for the Minister. If the Government had had their way, is it not the case that there would not be any improved maternity rights? There would not be additional employment particulars. The Government got rid of them a few years ago and reduced the number of rights. There would also not be any improvement in worker rights in relation to transfer undertakings. The Government do not favour that. Moreover, all these measures would have been introduced several years ago, in a much more extensive form, had the Government not been opposing them through every corridor in Brussels over the past few years.
I ask the Minister to say whether or not it is the case that, were it not for those devils in Brussels, there would be nothing that anyone on our side could support. In fact, there might not even be a Bill and, if 497 there were, it would not look like this. Is it not the case that the Government have their hands up their back producing the whole of Part II of the Bill and wish it was not there at all?
When I come to the other parts of the Bill I see the point made by the noble Baroness, Lady Seear. She twits us with the fact that we have been to this Dispatch Box for 14 years or so fighting strenuously against every attempt by the Government to regulate the trade unions. I accept that. It is partly because we knew the direction in which they were travelling, which seemed to surprise the noble Baroness, Lady Seear, this evening. It was obvious where it was all going to end and indeed it has ended there. To be fair, the noble Lord, Lord Tebbit, let the cat out of the bag in 1982 in his Second Reading speech. From that moment on it was clear that the Government had in mind the reduction of trade union power as a prelude to a reduction of the scope and coverage of collective bargaining.
One of the main reasons why we opposed them—and I would oppose them all again—is that we said that the case for them was never proved. The Government took isolated examples of scandals. The noble Baroness mentioned dear old Frank Chapple.
§ Lord McCarthy
God bless him. They dug up Frank Chapple and told us what happened to him back in the 1950s. That was their paradigm case of a scandal at that time. Now they do not have to dig up Frank Chapple; they dig up Arthur Scargill. They then created a character called the CROTUM. At the time we said that it was a great mistake and we opposed the establishment of the CROTUM. Had we known what we know now we might have supported it because it went out into the highways and byways of this country looking for union scandals. I last met the CROTUM officials at the national conference of the Institute of Personnel Management. I asked what they were doing there and they said, "We go everywhere".
They tried to use £5 million to drum up business. Last year they had 10 cases. In the end they secured redress in five cases at an average of £58,000 each—this at a time when the Government were doing what everybody says they were doing to other forms of legal aid. The CROTUM failed them. It could not find anything. I sometimes wondered why it did not find a little more because certain maladministrations did occur. Everything is not perfect in the trade union movement, as everybody says, but the CROTUM goes into the highways and byways and finds virtually nothing. Nevertheless, as we must have a Bill, we must keep on about the CROTUM. In fact we are now to have a second CROTUM. I will make a prophecy: the second CROTUM will be amalgamated with the first CROTUM; she will have two heads and find nothing.
I therefore move to Part III of the Bill. Most of what I wanted to say in regard to Part III and the abolition of wages councils has been said by previous speakers, notably by my noble friend Lord Eatwell. I look forward with enormous pleasure to the Minister's response to his questions. I know that he 498 will respond because his helpers have been scribbling away and that is what happens when they do that. But I should like to make one point in regard to the contradictions in what the Government say about the wages councils.
The Government have been so keen to demonstrate that wages councils should be abolished that they have created five different arguments, all of which I believe the Minister mentioned. The trouble is that three arguments point in one direction and two point in the other. First, they say that the wages councils are outdated. That arose because the Secretary of State in another place was saying something in regard to wages councils and a rather impolite Member of the Labour Party shouted out, "What about Winston Churchill?" The Minister said that he was a Liberal at the time. Apparently she then thought that that was not good enough and on 17th November at col. 177 she said, in effect, that when Winston Churchill brought in the wages councils he did not realise that in time there would be statutory employment rights and health and safety protection and social security provisions, and now we do not need them. Anyway, he was a Liberal.
The point is that that is not what wages councils do. They protect wages. They do not protect employment or dismissal. If they were necessary in 1909 then they are necessary today. Secondly, the Government say that they are also ineffective; that 75 per cent. of the workers covered get more. Moreover, a million or so low-paid workers are outside the net. One might think that that was an argument for improving the scope of the wages councils. If they are not doing their job well, it might even be an argument for a national minimum wage. But to this Government the fact that an institution is ineffective is not an argument to make it more effective. They want to abolish it.
Thirdly, the Government say that wages councils are irrelevant. We have been through this already. An article in the January Gazette said that since 1986:There is no widespread evidence that the relative pay of young people fell in wages council trades when compared with the figures for the relative pay of all young full timers".The Government made a great deal of this finding: that young people had done just as well outside the area of the wages councils—now that they have been abolished—as those who have never had wages councils. But, as my noble friend Lord Eatwell says, if that is the case why do we expect them to put people into work? They can only put people into work if they reduce wages, and if they have not reduced wages they will not put people into work.
The net effect of all those arguments is to ask why all the fuss. At this moment in time why should we for our part be so firm in our desire to oppose the abolition of wages councils? Why should the Government be so keen to press for it? On the basis of those three arguments it is difficult to justify why the Government are pressing on and why the Opposition are worried about them pressing on.
The Government therefore turn to their two further arguments. The first is a strange one. On 17th November at col. 177 of Hansard the Secretary of State also said that the trouble with wages councils is 499 not that they protect the low paid but that they push up the wages of the highly paid. That is amazing. She said further:the effect of statutory minimum rates is to push up the rates of pay of those earning above that level, with results which are damaging both for competitiveness and for jobs".I ask your Lordships to think about that. A 5 per cent. rise to a part-time barman earning £3 per hour necessitates a 40 per cent. increase to Rocco Forte. It moves all through the system; it is inevitable. Anything one does for the little man at the bottom goes through the system and produces a 40 per cent. increase for the chairman of the board. That is what we are being asked to believe.
To put the matter another way, if the retail wages councils were abolished, the chairmen of Sainsbury's and Marks & Spencer would never give themselves a wage increase again or they would narrow their wage increases. That is rubbish. It is nonsense.
We know very well that the good employer moves his rates in line with the general movement in rates. We know that he maintains his real wage differentials and that he would do that if there were no wages councils. Wages councils do not push up rates throughout the whole range. They protect a small number of workers who are in an extremely weak position. All the evidence suggests that without that protection a number of workers in a very weak position suffer a reduction in their pay. Apart from that, in almost every case that has been studied—not via simulations, because one can do anything with a simulation but in studies —where people go out into the countryside, into shops and offices, and ask what happens, what one finds is that any modest employment effect is totally smothered by all of the other things that are happening to the economy at the same time.
So what can be said in favour of the Bill? I suppose that the Government must say—and that includes the noble Lord, Lord Skidelsky—that it is not so much this particular son of Frankenstein, it is all the other sons of Frankenstein way back from 1980: they did good. They improved the state of the economy. They contained trade union power. Therefore, even if this Bill does not seem to be doing very much in that direction, or does not seem to be necessary, have faith: we are proud of our legislation. It has transformed British industrial relations; let us have another one. Do not look at the industrial base; feel the industrial peace that we have produced through our legislation.
That kind of argument had a certain plausibility in the middle 1980s—yes, it did. In those days, when manufacturing productivity was above trend and when unit labour costs were relatively low, in the heyday of the Thatcherite miracle between 1983 and 1987, one could argue that that miracle was the result of the legislation. There was never much evidence to connect it with the legislation, but that could be argued. However, one cannot make that argument today because there is not a miracle. We have had a two-year recession. The level of unemployment has been above the OECD average and above the EC average.
More importantly, in the last two or three years it has become quite clear that even without trade unions, 500 in areas where trade unions are not recognised, where they do not exist, a new form of earnings drift is developing. The non-unionist is getting more than the trade unionist, the well paid is getting more than the lesser paid, and nowadays rates of pay are being dragged up from the top and not from the bottom. In other words, the British wage structure, without trade union power, is no more under control than it was in the bad old days of the 70s or the 80s.
So what are they going to abolish now? What are they going to restrict now? Will it be the CBI?—now things are seen to be much more complicated than the simple nostrums that have been in past Bills. For that reason we are not convinced that the Bill has any function, any role or any future and we shall oppose it at every stage of its passage.
§ 8.32 p.m.
§ Viscount Ullswater
My Lords, we have had an interesting and informative debate covering a wide range of issues. That should come as no surprise, for this is an important and wide-ranging Bill whose provisions extend across large areas of industrial relations and employment law. Its proposals warrant proper and serious analysis, and I am delighted to acknowledge that they have been accorded precisely that in our debate this evening.
The noble Baroness, Lady Turner, stated that the Bill was out of place at a time of high unemployment and that there was no pressing need for such legislation. She stated that trade unions were not the oppressive ogres that they once had been. I am pleased that there is a recognition that the trade unions were oppressive ogres.
§ Baroness Turner of Camden
My Lords, I have never stated that they were oppressive ogres. The Government have said so in some parts of the media.
§ Viscount Ullswater
My Lords, I listened very carefully to the noble Baroness and I believe that there was recognition that there was a need for some reform.
I am pleased also that many of the provisions in the Bill have been welcomed by your Lordships. Again, that is not something which should come as a surprise. As I made clear in introducing the debate, much of the Bill is concerned with enhancing and improving individual rights, and in particular the rights of employees and of trade union members.
My noble friend Lady Young encapsulated the Bill by stating that we were building on success, and I agree with the noble Lady. My noble friend Lord Boyd-Carpenter welcomed the introduction of the Bill. He stated that it contains measures that will help unemployment and quoted the inward investment from Japan in particular resulting from our stable and peaceful industrial relations. The Bill will build on that foundation.
I recognise that in one or two respects a number of speakers have urged us to go further in developing these rights. That will always be the case in matters of this nature, and I shall deal with some of the issues 501 that were raised in a moment. However, the important point is that the House has shown strong support for the nature and direction of many of our reforms.
The noble Lord, Lord McCarthy, took me to task, claiming that we would not be proposing any of the reforms if we had not been forced into doing so by EC directives. I believe that the noble Lord is wrong. The reforms appear in our manifesto as commitments. We went into the election signalling these changes, and I should like to highlight the improvement of rights for women and the proposal for clear written statements of their terms and conditions of employment. It would be wrong for the noble Lord to think that we had been pressed into these matters by the European Community.
§ Lord McCarthy
My Lords, the noble Lord does not deny that the Government have been arguing successfully in the European Community councils for a reduction in the rights and that they are a great deal less extensive than they would have been if the Government had not taken the view they have.
§ Viscount Ullswater
My Lords, I could argue with that premise but for the moment it would be better if I got on with the speech.
Many points have been raised by noble Lords in the debate. I should like to address them in detail, but I suspect that it would be best to do so in Committee. However, I will deal with some of the most important issues during the course of my wind-up speech.
The noble Baroness, Lady Turner, the noble Lord, Lord Rochester and the noble Baroness, Lady Seear, amongst other noble Lords, were concerned that Clause 13, which deals with the Bridlington rules, would undermine the single union deals. There is nothing in the clause that would undermine an employer's right to enter into and maintain single union deals. Trade union recognition is a completely separate matter from trade union membership. Single union deals are a form of union recognition, whereas the clause concerns union membership. My noble friend Lord Campbell of Alloway was correct in his analysis of the matter.
However, I am quite certain that we shall argue about the matter in Committee. That will be the best place to do it and it will also be the best place to reassure the noble Baroness, Lady Nicol.
The provision establishes the important point of principle that individuals should not be prevented from exercising their free choice about which union, if any, they wish to join. We do not believe that it will lead to instability in the workforce or mass defections from one union to the other, and neither does the Engineering Employers Federation, whose members have considerable experience of single union deals.
Where an employer has entered into a single union deal, he will doubtless have chosen a union with a number of factors in mind, including its ability to attract the membership of a significant number of employees.
The noble Lord, Lord Murray of Epping Forest, asked whether the legislation was an attempt to prevent a worker from being a member of a trade 502 union. There is nothing in the clause that would suggest anything of the kind. It would be up to the union to provide the service that the individual required.
§ Lord Murray of Epping Forest
My Lords, does the Minister accept that that service, which the individual requires, must be borne of representation and that, therefore, the union must seek representation and recognition? Furthermore, the TUC could not stop it engaging in a strike. Does the Minister agree that the inevitable outcome will be extra unions at the bargaining table; or does he deny that the individual, having moved, can seek representation from that union?
§ Viscount Ullswater
My Lords, I see the evolution of single union deals as being a forward-looking way which the trade union movement has decided for itself. I welcome single union deals and I suspect that the individual freedom that we are providing in this legislation will not interrupt such deals.
It is hard to believe that members will defect en masse when the clause becomes law. If some of those members want to change union, that should be and will be their right. It is wrong to prevent them from doing so. My noble friend Lord Campbell of Alloway quoted from an article written by Gavin Laird which appeared in the Sunday Times on 6th September 1992. In that article Mr. Laird also said:in the past, Bridlington rules have been used to force workers to join a particular union. Their replacement must have as a guiding principle the fundamental right of freedom of choice".The noble Lord, Lord Underhill, asked who wanted a change in the Bridlington rules. I suggest that there has been an active debate within the trade union council movement. The article by Gavin Laird was in anticipation of last year's Trades Union Congress meeting. That is where the impetus for the debate has come from. The noble Lord, Lord Wedderburn, ticked me off for calling it a TUC diktat. I stand corrected; perhaps the word I chose was unsuitable. However, I still stand by the fact that we wish to support individual freedom.
§ Baroness Seear
My Lords, I must follow up the point made by the noble Lord, Lord Murray. Let us suppose that a group of workers in the transport department of a company decide that they are fed up with the single union and that en bloc they join an outside union. Perhaps they say, "We want to negotiate. We are transport workers and we are fed up with the process workers and of being lumped in with them. We want recognition to be able to bargain on our own terms". If they push the matter to strike level, as they will, what will happen? Is the employer to fight it out in the interests of the single union or is he to concede and break the single union principle? That is what we are worried about. We may be worrying unnecessarily but it is a real worry and the event could easily occur.
§ Viscount Ullswater
My Lords, I believe that the noble Baroness is worrying unnecessarily. At present there is no reason why trade union members at one plant should be members of one particular union. We 503 are saying that they should not be excluded from a union of their choice and that is what Clause 13 provides.
I turn next to check-off, which the noble Lord, Lord Stoddart, said he opposed originally. The noble Baroness, Lady Turner, and other noble Lords commented on the provisions in the Bill. Employers and many employers' organisations indicate that they support the provision. However, we must remember that its basic purpose is to protect the interests of employees who pay their union subscriptions through the check-off and who currently have little legal protection. The current legal position regarding the check-off is unsatisfactory for two reasons. The first is because it can, by virtue of a collective agreement, be imposed on a worker without his prior knowledge or consent. The second reason is that currently a worker has no legal right to withdraw from the check-off without leaving his union, which he may not wish to do.
Let us also remember that employers are not obliged to operate the check-off. They do so voluntarily and any administrative burden is therefore voluntarily assumed. My noble friend Lord Mottistone was anxious about that matter. Moreover, we have made a number of amendments to our original proposal in order to reduce the administrative cost to employers who choose to operate the check-off, including extending the period of reaffirmation from one to three years.
I fully agree with my noble friend Lord Boyd-Carpenter that unions should notify all their members, not simply those who pay their subscriptions through the check-off, when there is an increase in the subscription rate. But, when employers are deducting sums of money from their employees' wages at source, it is only right that they should inform those employees before deducting a higher amount. Employers are responsible for ensuring that any check-off deductions that they make from their employees' wages are made lawfully. That includes notifying employees of any increase. Again, I am aware of the administrative burden outlined by my noble friend Lord Mottistone.
§ Lord Stoddart of Swindon
My Lords, I am worried about a comment which the Minister made. He said that if an employee wishes to withdraw from the check-off system he must leave his trade union. I know of no such cases and I should be obliged if the Minister would give chapter and verse.
§ Viscount Ullswater
My Lords, if the check-off is done by collective agreement it is implied not only that the employee has given his consent but that it is done under a collective agreement by the employer. If he wishes to withdraw, the only way in which he can do so is by leaving the union, otherwise the employer will deduct—
§ Baroness Turner of Camden
My Lords, that is not true. In my experience as a union official I was aware of many people who preferred not to pay by check-off where such arrangements existed. They still belonged to a union—there was nothing to prevent them from 504 doing so—but they did not want the employer to know that they were union members. Therefore, they were not part of a check-off system.
Moreover, it is customary throughout the trade union movement—I do not know whether it is required in law—for individuals to sign a piece of paper stating that they want check-off to be operated.
§ Lord Wedderburn of Charlton
My Lords, it is a simple point. The Government have based their case upon collective agreements implying the consent of the individual. Will he bring to the Committee stage an example of that and explain how it works in law, because we do not believe it?
§ Viscount Ullswater
My Lords, I shall be happy to do so. The noble Lords, Lord Rochester and Lord Murray of Epping Forest, were concerned about the frivolous or vexatious nature of some of the Citizen's Charter rights. It is difficult to foresee that that should happen in practice. First, in order to exercise the new rights, individuals must be able to satisfy the court that they are deprived of goods or services as a consequence of unlawfully organised industrial action. Secondly, those seeking assistance for proceedings under the new right from the Commissioner for Protection Against Unlawful Industrial Action will, of course, have to satisfy the commissioner that they have reasonable grounds for proceedings. The commissioner is hardly likely to assist proceedings which he or she judges to be frivolous or vexatious. I do not believe that "DoT" will get through the commissioner, if I may borrow a phrase used by the noble Lord, Lord Wedderburn.
I turn next to the maternity provisions. My noble friends Lady Young and Lady Platt asked whether the 14-week period was too short for maternity leave. Both my noble friends have requested the extension of maternity leave to 18 weeks. I am sure that we shall return to this on Committee, and I certainly take note of what they say. However, the Government consider that 14 weeks is an appropriate period for statutory maternity leave, and strikes a proper balance between the rights of employees and the obligations on employers. All EC member states have recognised, under the terms of the pregnant workers directive, that 14 weeks is a reasonable statutory leave entitlement. Employers and employees can agree longer contractual leave if this accords with their own priority and needs.
I think that the noble Baroness, Lady Platt, was talking about her own experience of maternity and the problem about babies coming late. To protect women who start their maternity leave at the earliest permissible date and whose babies arrive unexpectedly late, the Government introduced an amendment on Report in another place to ensure that maternity leave can never run out before the birth. Of course every 505 woman will benefit from the two weeks' ban on working following the birth required by the directive, and again women employed in factories are protected by the Factories Act from working for four weeks after giving birth. I believe that there are protections there.
My noble friend Lord Mottistone—and I understand the direction from which his speech came —asked me to think carefully whether we should consider a requirement to notify return from maternity leave. Again I am certain that we shall return to this at Committee stage. He also asked why it is proposed that details of hours, pay and holidays should now be given explicitly in the written statement rather than by reference to another document. He asked me to consider carefully whether these provisions went further than any of the directives.
The proposals that details of hours, pay and holidays should be given explicitly rather than by reference to another document was contained in our White Paper, People, Jobs and Opportunity, and received widespread support, including from many employers and employers' organisations. The Government consider it only right that employees should be notified individually about such fundamental terms of employment rather than be referred to a collective agreement, which they may not have seen or even been a party to. It may indeed go beyond the EC directive, but it has been carefully considered and, as I said before, it is a manifesto commitment.
Perhaps I should usefully turn to wages councils, because a great deal of our debate has centered upon that. Practically every speaker, with a few exceptions, has concentrated their remarks very much on this. Your Lordships have raised concerns that are felt all the way round the House; that is, about the Government's decision to abolish the remaining wages councils. I made clear in my remarks at the beginning of the debate why we believe this decision to be correct. However, I recognise that the concerns that have been expressed are genuinely held, and I hope that I can demonstrate now and in the future that they are ill-founded.
In particular I want to deal with two criticisms that have been made about the abolition of the councils. First, that it will have an adverse effect on women, and, secondly, that it will lead to an increase in poverty. The first is, of course, the effect on women. I believe that the noble Baroness, Lady Turner, called it "this gender issue". Wages councils have never been seen as playing a part in equal pay. The Equal Pay Act and the introduction of equal pay for work of equal value provides redress for women who believe that they do not get equal pay because of their sex. The gap between men's and women's earnings has narrowed over each of the past five years, and women's earnings to men's are at their highest level ever.
I note the remarks made by my noble friend Lady Platt to consider the part-timers. They form an extraordinarily useful part of the labour force, and we must always hold them in our minds. We shall continue to improve the job prospects for women. We shall continue to reduce barriers to employment. We 506 shall continue to promote flexibility in working arrangements to allow women who have family commitments to combine them with job opportunities. We do not believe, and I simply cannot accept, that the wages councils represent an essential or effective means of protecting the pay of women. Indeed, to the extent that statutory minimum wage-fixing destroys jobs, the councils clearly have an adverse effect on women's employment prospects, and therefore women's earnings.
Similarly I must emphasise that there is no inevitable link between low pay and poverty in the way that a number of noble Lords appeared to suggest. Some 80 per cent. of wages councils workers, including many women, live in households with more than one income earner, and the statistics show clearly that very few lower paid workers live in poor households. I of course recognise that some individuals find that at times they cannot earn the money they need to support their families. That is why this Government have introduced family credit, and a range of other benefits designed for those in work on lower pay.
My noble friend Lady Young asked me how many would be affected by the abolition of the wages councils, and the number on family credit. I cannot give details about the number of wages councils workers claiming family credit. However, there is no reason to think that abolition of the wages councils will give rise to any significant increase in benefit payments.
Those on lower pay are frequently young people, or new entrants or re-entrants to employment. A lower paid job represents the vital first step on the employment ladder. My noble friend Lord Skidelsky, in a useful and interesting speech, made two important points. He said that what we ought to be doing is helping young people into jobs. I believe that this will be a great help to them, and what we should be concentrating on is improving the long-run prospects of employment. We need more flexibility in the workforce rather than less, and I would agree with him.
It makes no sense to outlaw every job that does not pay wages high enough to support a large family. That is the way in which those who confuse low pay and poverty would point us. It ignores the existence of far more effective means of tackling poverty through the social security system. Of course it would leave many of those who are in lower paid jobs infinitely worse off if, as a result, their jobs ceased to exist and they received no pay at all.
The noble Lord, Lord Eatwell, asked me whether I could demonstrate the number of jobs that will be gained by the abandoning of wages councils. I believe he quoted a study by Machin and Manning that there was no evidence that a decline in the effect of wages councils in the 1980s had increased employment. That study is controversial, and other economists take an opposing view. The basic data used by the authors seemed to have excluded part-time workers, who make up a large proportion of the workforce covered by wages councils.
507 In 1985 and 1988 the consultations carried out by the employment department showed that employers found wages councils had an adverse effect on employment. Since 1988 employers have made it abundantly clear that statutory wage fixing destroys jobs. Hundreds of representations about the abolition of the councils have been received since the publication of the Bill. Some 90 per cent. of employers and employer bodies have stated that they support the abolition.
I believe that in considering this issue we come back to the essential economic truth which I set out at the beginning of this debate. Statutory minimum wage fixing can only hinder the creation of new jobs. It interferes with the employers' ability to set wages at levels they can afford to pay. To that extent, it harms the very people it seeks to protect. For those reasons, the Government have repeatedly made clear that wages councils have no permanent place in the modern labour market. It is right that we should take this opportunity to bring their activities to an end.
§ Lord Eatwell
My Lords, I asked the noble Viscount a number of specific questions concerning the evidence for the assertions that he has made. He has simply repeated those assertions. He has produced no evidence whatsoever for them. He has simply told us just now that a group with a particular interest in the employment process wanted the wages councils abolished, but there are many other groups (including the representations which I have quoted from the CBI) which ask that the wages councils system be maintained. When will the Minister produce any evidence whatsoever to back up his assertions?
§ Viscount Ullswater
My Lords, this is a Second Reading debate of a long Bill, and I am trying to wind up in under half an hour. I believe that I have addressed the anxieties of many noble Lords in some detail. If I were to deal in the detail that the noble Lord, Lord Eatwell, wants in relation to his particular worry, we may be here a lot longer. I believe that it is right in such a debate to try to address as many points as I can, rather than concentrating my remarks on just one question.
After some interruptions, perhaps I may now turn to the careers service before I sit down. This was a particular anxiety addressed to me by the noble Baroness, Lady Fisher, the noble Lords, Lord Stoddart and Lord Underhill, and the noble Baroness, Lady David. The Government thought it right after nearly 20 years to look carefully at the current arrangements and accordingly to make changes. It is not change for change's sake, and it will not be introduced irresponsibly and at once.
Change does not imply criticism. We are not saying that the existing services have failed. They have provided—and I am confident that they will continue to provide—a valuable service. What we are saying is that they could be better if they were not constrained by having to work within the current restrictions of a local education authority organisation.
508 We want to open up options for managing services. We want services to work more within a framework of private sector disciplines and able to enjoy commercial freedoms.
The noble Baroness, Lady Fisher, asked me one pointed question which I should like to answer by quoting the words of my honourable friend Mr. McLoughlin in Committee in another place when he said:Can I make it absolutely clear at the outset that the core service as defined in new section 8, regarding the new duty on the Secretary of State will remain free of charge".—[Official Report, Commons, Standing Committee F, 2/2/93; col. 716.]He was referring to the fact that the career, information guidance and employment service will continue to be provided free to all young people in education and those who have recently left it. I hope that that reassures the noble Baroness.
I should have liked to address a number of other points, but I see that time is running on. I understand that we shall have the opportunity of a number of days in Committee when I am sure that we shall address these points. I shall of course study the record of our debate carefully. My noble friend Lady Denton and I look forward to the opportunity of the more detailed consideration of the Bill's provisions that will arise during the Committee stage later this month. I know that many of your Lordships will want to contribute fully to those deliberations. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.