HL Deb 26 March 1996 vol 570 cc1567-9

Lord Dean of Beswick asked Her Majesty's Government:

Whether the trade union rights and conditions of employment of employees in the privatised utilities are being respected by their new employers.

Baroness Miller of Hendon

My Lords, privatised utilities are subject to the same statutory obligations towards their employees as other companies in the private sector.

Lord Dean of Beswick

My Lords, the former Secretary of State for Energy, Mr. Parkinson, gave guarantees on privatisation that existing conditions would be honoured. Is that no longer the case? Is the Minister aware of attempts in the north west by the newly joined facility of North West Water and North West Electricity to impose individual contracts on members? Does the noble Baroness understand that such a policy cuts across the basic trade union principle of collective bargaining? If collective bargaining by trade unions is not allowed or is done away with, the whole purpose of the trade union movement would go, and trade unions would be no more than Christmas clubs. Will the noble Baroness do something about the issue?

Baroness Miller of Hendon

My Lords, I well understand the purpose of the noble Lord's Question. The company to which he refers, United Utilities, was formed on 1st January of this year following the takeover of NORWEB, the electricity company, by North West Water. United Utilities plan to operate an internal facility called Vertex. The purpose is to provide facilities common to both companies, for example, metering and billing. The truth is that the vast majority of North West Water's employees who are being transferred to Vertex are already on individual contracts not covered by collective bargaining. On the other hand, the majority of the transferees from NORWEB—I believe that they must be the people to whom the noble Lord refers—are covered by collective bargaining.

It makes sense that NORWEB transferees are offered individual contracts because the new parent company wants to have a common approach to pay and conditions for the employees of Vertex. Despite what the noble Lord says, my understanding is that they were offered four different alternatives and all but a handful have accepted one or other of the options.

Lord Clark of Kempston

My Lords, does my noble friend agree that as regards privatised industries, the employee buy-outs, in particular in coal and the National Freight Corporation, have been of great advantage to the employees of those previously nationalised industries? Does she further agree that the privatisation policy of this Government has resulted in a turn-round from a subsidy to nationalised industries of £50 million per week to a profit to the Exchequer of £55 million per week?

Baroness Miller of Hendon

My Lords, I agree totally with what my noble friend says. Privatisation has been one of the greatest successes. Prices are down; there are better standards of service; investment is up; productivity is up; and there is more consumer choice and competition than ever before. I believe that we should be proud of that success.

Lord Ashley of Stoke

My Lords, the Minister makes the position sound cosy. Will she bear in mind that there will be more takeovers in these utilities and more refusals of trade union recognition which will lead to bad industrial relations? Will she also bear in mind that strong trade unions are vital to democracy? In those countries where trade union rights have been emasculated or destroyed, they have totalitarian regimes.

Baroness Miller of Hendon

My Lords, the noble Lord opposite is worried about nothing, if he does not mind my saying so. There are already about 1 million trade union members whose unions do not bargain with their employers. There are benefits to the consumer of lower prices. For example, electricity prices in domestic terms are 7 per cent. down and in industrial terms 11 per cent. down. Industrial gas prices are 50 per cent. down in real terms; domestic gas prices are around 24 per cent. down. Dealing with just one of the better standards of service, the number of domestic electricity customers disconnected for debt since 1990 is down by 99 per cent. That is what happens when we have privatised utilities.

Baroness Gardner of Parkes

My Lords, to return to the original Question, I should declare an interest as someone who sat as a member of an industrial tribunal for 20 years. Is it not a fact that any employee is now protected in his employment by the law? Anxiety has been expressed about those transferring. Under the transfer of undertakings provisions, are not those people equally protected and able to bring a case if they are receiving unjust treatment? Further, are not the trade unions specially provided for in employment legislation?

Baroness Miller of Hendon

My Lords, the answer is yes. The same enforcement procedures of employment law apply to privatised companies as to all other companies in the private sector, including going to the civil courts and industrial tribunals.

Baroness Turner of Camden

My Lords, is the noble Baroness aware that I have been in communication with her noble and learned friend the Minister of State at the Department of Trade and Industry concerning a trade union representative? Following privatisation under the Atomic Energy Authority Act 1995, he was made redundant in circumstances which clearly indicate that he is being discriminated against on grounds of his trade union activity. The individual concerned is a Dr. Wickett who has had a long and distinguished career with the Atomic Energy Authority. There seems no reason for his redundancy apart from the fact that he was a trade union representative with distinguished service. Is the Minister aware of his case?

Baroness Miller of Hendon

My Lords, I am certainly not aware of the case which the noble Baroness has just mentioned. Obviously, she would not expect me to comment on a case for which I do not have the facts. However, the same enforcement procedures of ordinary employment law apply to the privatised utilities. If the gentleman concerned has been unfairly dismissed, he has the right to go to an industrial tribunal. It is against the law to discriminate because someone is a member of a trade union or not a member of a trade union. Such people have all the opportunities to go to civil law or industrial tribunals if they wish.

Lord Dean of Beswick

My Lords, the Minister made a cosy reply to my supplementary question. However, is she aware that 3,500 employees in the electricity section of the company whom the Minister described as highly satisfied voted only in the past few days to withdraw services for emergency repairs? Does the Minister understand the chaos that will be caused for old and vulnerable people if services are withdrawn? Does that not indicate that the position is not as acceptable as the Minister is trying to make out from the nonsense she has been fed with?

Baroness Miller of Hendon

My Lords, the last thing I have been fed with is nonsense, I must tell the noble Lord. I have been fed with the facts. If he thought my reply cosy, it was cosy because the facts are cosy. The bottom line is that there were four alternatives and all but a handful accepted them. The noble Lord opposite referred to the possibility of a strike.

Noble Lords


Baroness Miller of Hendon

My Lords, I heard it clearly; yes, indeed, he did say so. The company at the centre of all this is Vertex. That company provides services such as billing and metering, as I mentioned. Let us be absolutely honest. Any disruption to the services, although extremely unwelcome, would not deprive consumers of access to electricity and water supplies. I do not believe it is appropriate to suggest that it would.

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