Rail Dispute: Negotiations (Hansard, 6 July 1994)

§ Lord Haskel
My Lords, with the leave of the House and with the permission of my noble friend Lord Desai, I beg leave to ask the Question standing in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intervened in the recent rail dispute.

§ The Parliamentary Under-Secretary of State for Transport (Lord Mackay of Ardbrecknish)
My Lords, negotiations about the pay of signalling staff are a matter for Railtrack. My right honourable friend the Secretary of State for Transport made clear to Railtrack the importance which the Government attach to controlling public expenditure and restraining pay bill costs.

§ Lord Haskel
My Lords, I thank the noble Lord for that response. But is he aware that everybody in the House would like to know what the Government are doing to get the railways back to work?

§ Lord Mackay of Ardbrecknish
My Lords, the negotiations are a matter for Railtrack and the sole responsibility of Railtrack. It is therefore up to Railtrack and the RMT—particularly the RMT—to get the negotiations back under way.

§ Lord Barnett
My Lords, would not a straight Answer to the first Question have been, "Yes, sir"?

§ Lord Mackay of Ardbrecknish
No, sir.

§ Lord Clinton-Davis
My Lords, does not the Minister find the answer he has just given a little inconsistent when Railtrack conceded that the 5.7 per cent. increase in pay, which took account of past productivity, was not pursued because of the Government's intervention? How does that square with the Minister's bland innocence that the Government had nothing to do with the negotiations?

§ Lord Mackay of Ardbrecknish
My Lords, clearly at the beginning of the issue Railtrack looked at a number of options and decided that the option it wished to pursue with the RMT was the package put before the RMT. In addition, the chairman of Railtrack stated publicly that the Government's approach to pay is entirely consistent with his commercial approach to pay in Railtrack.

§ Lord Clark of Kempston
My Lords, does my noble friend agree that it is right for the Government Co occasionally remind any industry, whether or not in the public sector, that pay restraint is essential if we are to continue with our economic prosperity? Is it not regrettable that Members of the Opposition, not only in this House but also in another place, have not as yet condemned a strike which is unnecessary.

§ Lord Mackay of Ardbrecknish
My Lords, in response to the latter part of my noble friend's question, the messages coming from the party opposite are a little confused on the matter. Some of those seeking leadership are a little coy about whether or not they like strikes; whether they like this one in particular and approve of it; while others are more forthcoming and say that they approve of them. That reminds me of days I thought were long gone by.
With regard to the first part of my noble friend's question, it is right that the Government should make clear to all government-owned bodies funded by public money that they are expected to stay within the broad approach to public sector pay set out last autumn by my right honourable friend the Chancellor of the Exchequer.

§ Lord Mackie of Benshie
My Lords, does the Minister agree that it would have been better if the Government had made that position clear before the negotiations started rather than, apparently, in the middle?

§ Lord Mackay of Ardbrecknish
My Lords, I do not believe that last autumn was in the: middle of negotiations. My right honourable friend the Chancellor of the Exchequer made it perfectly clear last autumn that the approach to public sector pay he wished to see was that any increase in pay should be offset by improvements in productivity; it should be value for money, and there should be no growth in overall pay bills. It cannot be made much clearer than that.

§ Lord Marsh
My Lords, does the Minister accept that there is a great deal of history which demonstrates that Ministers' intervention in pay negotiations is seldom successful and almost always extremely expensive for the taxpayer? Does he further agree that the way the negotiations have been conducted from the beginning on the employers' side—though the employers have not been particularly involved—started with negotiations with British Rail? Railtrack then insisted, understandably, that it should take up the negotiations and they started all over again. The Minister then intervened and started us back to square one for the third time. It is naive for the Minister to say that governments are not intervening. Either they should openly conduct the negotiations themselves or, alternatively, they should do what has happened in the past and allow the employer to negotiate with the employees within the budgets approved by the Government.

§ Lord Mackay of Ardbrecknish
My Lords, the Government are allowing, and indeed encouraging, Railtrack to negotiate a deal with the RMT within the 1271 broad approach to public sector pay which, as I explained to the noble Lord, Lord Mackie, was outlined by my right honourable friend the Chancellor of the Exchequer. Mr. Horton indicated that it is entirely consistent with the commercial approach that he is taking at Railtrack. RMT's demand at the beginning was for 11 per cent. without any productivity gains or strings attached. That would have been expensive for the taxpayer.

Lord Bruce of Donington
My Lords, is the Minister aware—as I am sure the whole country is— that the Government intervened at a point when a 5.7 per cent. increase had already been offered to RMT? It had not been agreed but it was at least offered. Is it not true that the Government were completely horrified by the offer and did everything they could to destabilise it? That is in fact what happened. Would not the noble Lord's strictures regarding the necessity for pay restraint in the public sector be rather more appropriate if the Government themselves had not actively connived in colossal pay increases in the public sector quangos largely populated by their own party members?

§ Lord Mackay of Ardbrecknish
My Lords, as regards the latter part of the noble Lord's question, one of the problems of manning in the best possible way those parts of our industry which are still in the public sector is that we have tended in the past not to be prepared to pay the market rate and therefore we did not get the people best suited to run those industries. That has proved very costly for our country. As to the first part of his question, the board of Railtrack looked at a number of options at the start of the negotiations but, as I made perfectly clear at the beginning of my answers today, it decided to go ahead with a package of offers to RMT. The package has three component parts and in the present climate, with the low rate of inflation and looking to the future of the industry, is a very reasonable offer to the signalmen.

§ Lord Lucas of Chilworth
My Lords, does my noble friend agree that the present stance and utterances of the union leadership are hardly conducive to the achievement of a solution and to the removal of the misery of the travelling public?

§ Lord Mackay of Ardbrecknish
My Lords, I agree with my noble friend. If we are to get an efficient and effective railway system on which the customer enjoys travelling the one thing we must do is to put into the past the kind of strikes that we are seeing at the moment on the railway system. All that strikes can do is demonstrate to many of the travelling public that there are alternative ways for them to travel and, once the dispute is over, the railway may find that it has lost some customers forever.

§ Lord Richard
My Lords, perhaps I may come back to the point made by the noble Lord, Lord Marsh, with his experience of the industry, and ask the Minister two straight questions. Does he deny that a figure of 5.7 per cent. was part of the negotiations and was being put forward by Railtrack? Secondly, does he not accept that 1272 the Government did their very best to ensure that that offer of 5.7 per cent. was withdrawn? Those are two straight questions. I hope that we can have straight answers.

§ Lord Mackay of Ardbrecknish
My Lords, Mr. Horton himself made clear yesterday to the Select Committee in the other place that the board had considered a number of options prior to getting into detailed negotiations. However, as I said a moment ago, it decided to go for a package, the first element of which was a 6 per cent. increase to be self-financing from improved working practices. But it was a package with two other parts to it. The board thought that it was important to go for the whole package and not just part of it.

§ Lord Richard
My Lords, will the noble Lord answer my second question? Did not the Government do their best to persuade Railtrack to withdraw the offer of 5.7 per cent?

§ Lord Mackay of Ardbrecknish
My Lords, as the House will know, the Railtrack chairman himself has consistently emphasised that his board never authorised any such offer.

§ Baroness O'Cathain
My Lords, does the Minister agree that his assurance that the Government did not intervene in the dispute will be of little comfort to the millions who struggled to work this morning for the fourth time in as many weeks? Is there not a case for some kind of government intervention to try to get this dispute settled once and for all? Failure to do so will have an enormous detrimental effect on the economy of this country.

§ Lord Mackay of Ardbrecknish
My Lords, the noble Baroness tempts me down a road which—dare I say?—Ministers and governments have been tempted down before and against which the noble Lord, Lord Marsh, warned us earlier on. When governments intervene directly in pay talks and negotiate pay talks in order to get a settlement at almost any price, the cost to the economy and to the industry concerned is usually far greater than actually proceeding to a properly negotiated settlement.

§ Lord Eden of Winton
My Lords, does my noble friend agree that what matters is not so much the actual percentage increase offered but the way in which that increase is to be financed? If the increase, whatever it is, leads to higher unit costs, surely that would mean that the fare-paying public would have to pay the bill.

§ Lord Mackay of Ardbrecknish
My Lords, of course it means that, or that the taxpayer would have to pay, or a combination of both. What is important in this negotiation, especially for Railtrack setting out as a new company, is to get rid of some of the practices that have grown up in the industry over the years and to put the signalmen on a proper salaried basis, looking to the efficiencies that can be gained by the modern technology not just for their benefit and for the benefit of the travelling public but, I should have thought, for the benefit of the railway industry as a whole.

§ Baroness Seear
My Lords, I have a genuine inquiry for information purposes. Can the noble Lord tell the House how much of the productivity increases of the signalmen is due to investment and how much to improved practices or greater inconvenience to the signalmen?

§ Lord Mackay of Ardbrecknish
My Lords, I believe that they go together. Some of the improved practices can already be delivered and that is perhaps the first part of the package. The third part of the package relates to restructuring and productivity which can be delivered into the future. Some of that revolves around modern technology and getting away from what are still some very antiquated practices in signal boxes.

§ Lord Clinton-Davis
My Lords, is it not quite clear that it is offensive for a quarter of the present signal staff to be considerably worse off under the Railtrack offer than they are at present? Does not the Minister begin to concede that? Is he not aware that the whole country recognises that the Government have got their fingerprints all over the question of intervention as far as these negotiations are concerned? Therefore, does the Minister agree that it is time for the Government to come clean and to say that they want a settlement, otherwise they will be condemned for the strike, as they deserve to be condemned?

§ Lord Mackay of Ardbrecknish
My Lords, as regards the last sentence of the noble Lord's question, we are getting back to the old philosophy of settling at any price. I should have thought that the history of the 1960s and 1970s shows the fundamental error of that approach. With reference to the specific point about some signalmen facing a pay cut under the package which has been put forward, those are details which ought to be for Railtrack. I understand that Railtrack has said that there will be compensation for those signalmen whose earnings will fall.