§ 6.34 p.m.
§ Lord Campbell of Alloway rose to call attention to the effect on the community of any excessive or disproportionate industrial action taken by trade unions without the consent of the majority of members entitled to vote; and to move for Papers.
§ The noble Lord said: My Lords, the purpose of this debate on this Motion, which I beg to move, is as stated on the Order Paper. But the debate may also afford general discussion on other aspects of the proposals of my right honourable friend the President of the Board of Trade in the Green Paper Industrial Action and the Trade Unions —perhaps the last step in the step-by-step approach of my noble friend Lady Thatcher, whom we are so delighted to have with us today.
§ The doors as to representation on these proposals are not due to close until 28th February, so perhaps contributions from distinguished speakers from all sides of your Lordships' House may serve some constructive end. There will inevitably be dissention; there will evidently be argument. But I seek some practical, constructive end.
§ The views of the noble Lord, Lord Paul, a mega-industrialist, and of the noble Baroness, Lady Symons of Vernham Dean, an erstwhile doyenne of the First Division Association, who have not been so long with us, are indeed very welcome and are awaited with particular interest. A debt of gratitude is tendered to all noble Lords who are to speak in this debate as without an exchange of informed information and opinion, there is no debate.
§ The Motion calls attention to the freedom under the law of a trade union official, without the consent of the majority of the rank and file membership entitled to vote, to initiate strike action on seven days' notice, to maintain strike action without any requirement as to reballoting—strike action (and I use these words advisedly) known and intended to inflict wholly excessive disproportionate expense, hardship and inconvenience on the community.
§ Let us not mince matters. This is a matter of consequence to the electorate. It is a matter on which there is no prospect whatever of political convergence, save as between the parties opposite. The importance of debate is wholly evident, for the industrial action of scale of this order poses an untoward danger to our competitive economy, in particular to inward investment, and to the City of London—and this is where this debate dovetails with the first debate; I heard my noble friend on the Front Bench say the remarkable success story, and so indeed it is—but not only that, to our balance of trade in goods and services and to the integrity of our currency in the markets.
§ Exploitation by the Royal Mail and the London Underground unions in August 1996 of this gap in the step-by-step approach has afforded a most unwelcome, unacceptable precedent—a gap (and I say this because I know) which was advisedly left open in the hope that no further step would have to be taken—and a hope which was justified until August 1996, but no longer.742
§ The London Underground strike was called on seven days' notice—albeit with the support of 50 per cent. of the membership entitled to vote—but there was no provision for reballoting. In the result, on each day of each strike about 2 million travellers suffered disruption in their everyday life, and substantial damage was caused to the economy, estimated by some in the City as of the order of £50 million a day—at the behest of 1,500 train drivers.
§ This is a situation which no government ought to accept. I know my noble friend Lady Thatcher well enough to say that she would not accept it, and I know that my right honourable friend the Prime Minister will not accept it, and he is committed to seek to ensure that the community is not held at random hostage.
§ The purpose of these proposals of the President of the Board of Trade is to maintain and increase favourable trade. Assuredly, it is not to slight the trade unions, the trade union movement or any of the many responsible activities of trade unions. However, as membership and recognition of trade unions is dominant in the public sector, some settled framework—for which beer and sandwiches or whatever at No. 10 affords no substitute—is needed to discourage disproportionate industrial action.
§ There are rumours that the parties opposite favour the reintroduction of self-regulation, voluntary conciliation and arbitration. But is it realistic to suppose for one moment that any such regime could be any more effective than the facilities that already exist, or indeed that the trade unions would ever accept a system of compulsory arbitration?
§ As to the economy, the Thatcher administration—I think I can say it in the presence of my noble friend Lady Thatcher—was the first to recognise that the economy was—and I heard this expression used in the other debate—the goose which laid the golden eggs. In 1979, with 30 million working days lost through industrial action, double the days lost on the OECD average—about 10 per cent. in the public sector—no eggs could even hatch.
§ Those were the old days, the tough days, and we now are indebted to the legacy left to us by that administration. We were then the sick man of Europe. Our economic viability was only such as was accorded by the IMF; hence the step-by-step approach as implemented for the past 17 years under this Conservative administration. Today the state of our thriving economy is the envy of Europe. From 1992 to 1995 the working days lost through industrial action, on average, were less than half a million a year. But in August 1996 more working days were lost than in the whole of 1994 or 1995—in the main due to the series of strikes on the Royal Mail and London Underground.
§ Notwithstanding the article in The Times on 2nd January with the heading "List of candidates cuts links with unions", as the noble Lord, Lord Callaghan, affirms, that link must be maintained. This symbiotic relationship between the trade unions and the Labour Party shall inevitably hobble Labour, whether in or out of office, in taking any relevant initiative in this context. Why so? By force of circumstance. It is a no-go area 743 for Labour because, by tradition, it is a no-go area for the trade unions. In this respect the trade unions are neither able nor willing to put their own house in order.
§ It is much to be doubted whether Mr. Blair, if in office, could ever be in a better position than that of Lord Wilson or the noble Lord, Lord Callaghan, as regards taking any effective action. Indeed, the brave initiative of the noble Baroness, Lady Castle of Blackburn— In Place of Strife —as we know from the copious references in Volume 3 of the Crossman Diaries, split the Wilson cabinet right down the middle. It never took root.
§ The Callaghan administration, which was unjustly—I stress that—deprived of trade union support, died a dingy death at the behest of militants in that winter of discontent with the three day working week. The economy—Tony Crosland's solution to the dilemma of democratic socialism—was in ruins.
§ As to the present policies of the Labour Party, such it would appear, could only widen the gap to which this Motion calls attention. It is understood that it is proposed to enforce statutory recognition, to enlarge legal immunity, to enable industrial action to ensue without fear of dismissal, although in breach of contract of employment, by affording such entitlement as from day one to all employees, whether full-time or part-time. The proposed automatic deduction for trade union dues from wages affords anxiety as to victimisation and as to intimidation. I gave evidence before the Donovan Commission and paragraph 924—I looked it up the other day—adverts to the very considerable benefit to the political funds of trade unions and concludes that this is a political question, not a question of industrial relations.
§ The Conservative Party proposes a relevant and constructive resolution that the majority of those entitled to vote must be obtained on a pre-strike ballot; that 14 days' notice must be given to enable business customers and the public to make preparations and alternative arrangements if statutory immunity is to be conferred, and that there should be some requirement as to the reballoting for the continuance of industrial action. It is also proposed to remove immunity from industrial action where there is a manifest disproportion between the purpose of the strike and the consequences to the community as inflicting serious damage on the economy or subjecting everyday life and business activities to significant disruption.
§ I accept that the drafting of such provision to reflect the concepts of paragraphs 2.4 to 2.8 of the Green Paper and establish a new framework based on legal criteria will require meticulous attention.
§ In conclusion, my Lords, surely it is now wholly apparent, almost irrespective of party, that some effective initiative must be taken by any government to discourage strikes, the cost and inconvenience of which the community is no longer able or willing to tolerate. This package of Green Paper proposals may also commend itself to your Lordships to safeguard the economy, the wealth of a nation which can ill-afford disproportionate industrial action or a kingdom disunited. I beg to move for Papers.744
§ 6.49 p.m.
§ Lord Paul
My Lords, sadly, during the 1960s and 1970s we had a history of industrial disputes in this country which created a "them and us" attitude. This was an important factor leading to our poor competitiveness.
When she became Prime Minister, a distinguished Member of your Lordships' House—I am delighted that she is in the Chamber—decided that something had to be done if British industry was to regain its competitive edge. Contrary to popular belief, at first she encouraged unions and management to work together. But after a few years this even-handedness was disregarded.
Managements were pampered and labour unions reviled. The result was that labour was squeezed and management awarded themselves higher rewards. Predictably, this produced a return to the "them and us" society, worse industrial performance and a more severe recession than that suffered elsewhere.
In my opinion, good relationships between management and employees cannot be created by legislation. New legislation will create new problems and so, although I congratulate the noble Lord, Lord Campbell of Alloway, on introducing this Motion, I do not welcome it. An attack on the right to strike is a charter for the bad employer. I know, because I come from a family business and we believe that we must all work together for the betterment of British industry and British society.
Industry today operates in an environment of intense competition. Trade unionists know that employer and employee are both subject to this pressure. Employees also need to know the aims and rules of a business in order fully to identify with it. Motivation and action require clarity of purpose. That is what managers are struggling to achieve and if it is absent there is no point in penalising the employees.
We should be looking at how to get rid of the need to strike, not the right to strike. That can be done only by building relationships at work based on partnership and trust. People expect to be treated fairly and to have a say over matters that concern them at work. Good management is about fostering co-operation, not confrontation. Lawyers have no role here. That is why most disputes are settled by negotiation. If there is a feeling of fairness and unity of purpose with the company, everybody wants to work. Therefore, in practice, the circumstances of the Motion would hardly arise. In an establishment where there is a dispute, no union would embark on industrial action if fewer than half its members had not participated in a ballot.
When Ian Lang introduced his Green Paper on industrial relations in another place on 19th November 1996, he introduced the concept that abstention would count as a "No" vote. Obviously, the noble Lord, Lord Campbell of Alloway, agrees with this. In exactly the same way, it is equally impractical to assume that a trade unionist will consider an abstention as a "Yes" vote.
745 In any industrial relations, the way to deal with disputes is not to try to brow beat people into a docile state of mind. It is to identify a community of interest. This is why the key words in modern industrial relations are "empowerment", "involvement" and "commitment".
For our businesses to be more competitive in today's commercial world, employees have to understand what is going on in a company, so that they can become involved in its progress and use their own initiative to encourage and achieve this. Staff have to be empowered because companies can no longer afford detailed supervision. People have to be trusted to get on with their work. They need to become better skilled and educated to handle new technology and deal more intelligently with problems and decisions as they arise. This is what is required to compete in business today, and it can be achieved only in an atmosphere of perceived fairness.
The Government's Green Paper contributes little towards achieving this. The Green Paper seems to be designed to feed the prejudices of noble Lords opposite about industrial relations, and thereby perhaps the Government seek to acquire some advantage in the forthcoming election. This only reflects the Government's incompetence at managing people, which they have demonstrated time and time again.
If there is a real problem, it could be in the regulated and sheltered service industries. But these do not reflect the British economy as a whole. Recent disputes in these organisations, such as the Post Office and London Underground, have had a lot to do with employees' frustration at lack of progress, lack of investment, and lack of perceived fairness in these organisations. Legislation will not solve these problems. Management, investment and competition will.
§ Lord Campbell of Alloway
My Lords, may I ask the noble Lord to give way? He has a minute left, could he possibly condescend to give us a hint of Labour Party policy?
§ Lord Paul
My Lords, it would be difficult to give Labour Party policy in one minute. The Labour Party wants to have good relations with business and industry.
It could well be that the unrest in these service monopolies is caused by a feeling of job insecurity. The way to deal with this is to tackle the insecurity and not the balloting rules for industrial action. These companies had a tradition of lifetime employment, but today employees have to make a difficult transition from a job in an industry where there was little change, to a new job in a new industry requiring higher and different skills and abilities. Nothing less than a re-employment system is required, because it is the individual who is at risk.
If the noble Lord wishes to protect the community from industrial action—however it is voted on—the law is a poor instrument. The real way to protect the community is to improve the quality of the staff working in the businesses which service it, and help people to improve themselves.
746 This has been the message from industry for many years now. People can earn a satisfactory living, and get job satisfaction, if they have the encouragement and opportunity to improve their skills, knowledge and education to tackle the new challenges which are bound to come.
§ 7 p.m.
§ Lord Rochester
My Lords, it is a pleasure to follow the noble Lord, Lord Paul, with his industrial experience. I believe that, like me, he is fond of cricket—but that, I suppose, is another story.
I am glad that the noble Lord, Lord Campbell of Alloway, has, by introducing today's debate, remedied an omission in our proceedings, for when on 19th November last the Secretary of State made his Statement in another place on the Government's Green Paper on industrial action it was not repeated in this House.
However, as the noble Lord knows, I am sorry that the Motion is worded as it is, for what the Government are now proposing is not to make it unlawful for trade unions to call for industrial action which has disproportionate or excessive effects unless it has the support of the majority of union members entitled to vote. They are proposing to make such action unlawful, irrespective of whether it has that support.
On a number of occasions since 1979 my noble friends and I have found ourselves in broad agreement with the Government's step-by-step approach to the reform of industrial relations law. Indeed, in at least one instance—namely, in seeking to extend the use by trade unions of secret ballots—we were ahead of the Government. In this case, however, I do not feel able to support the Government.
The noble and learned Lord, Lord Fraser of Carmyllie, will know that in the light of responses to the 1981 Green Paper on trade union immunities the Government decided that they should not then seek to restrict the right of workers in essential industries to strike. But now they are contemplating legislation which could have even wider effects.
As Liberal Democrats, my noble friends and I are naturally predisposed to safeguard the right of individuals in the last resort to withdraw their labour. But apart from the question of principle—and I do not forget that the community, too, is dependent for its protection on the law—as someone who has had first-hand experience of handling industrial relations in a large company, I am concerned about the practicality of what the Government now have in mind.
First, there are problems of definition; in particular, what is to constitute a strike which has, in the words of the Green Paper, "disproportionate or excessive effects".
The consultative document attempts to deal with that problem by listing a great range of factors that the courts would have to take into account. It is claimed that these legal criteria would allow a judgment to be made as to whether in a particular instance industrial action had, or was likely to have, unreasonable effect. But the 747 Government cannot deny that such judgments might be difficult to reach. Indeed, the Green Paper concedes at paragraph 2.8 that in determining these matters:there would inevitably be some initial uncertainty, but this should reduce as case law builds up".Judges have made it plain enough in the past that they do not relish getting embroiled in the minutiae of industrial disputes, and although, understandably, none of them is taking part in the debate, the initial reactions of industrial lawyers to the Green Paper suggests that the judiciary are unlikely to welcome participating in the Government's proposals.
However that may be, as I see it, the main danger in what the Government now have in mind receives only scant attention in the Green Paper. Paragraph 2.32 rightly argues against taking action to ban specific strikes in selected areas, thereby avoiding, as the document puts it,the problems of definition and targeting inherent in any general approach".I wish to ask a question because, frankly, I am uncertain of the answer. If those groups had no assets, could the individuals comprising them be brought to court and their property seized? If so, one wonders whether the Government have taken sufficient account of the findings of the Donovan Commission in 1968 on unofficial action and of how, four years later, the Government's face was saved in the infamous case of the dockers who were rescued from imprisonment only by the intervention of the Official Solicitor.
I know it will be said that any worker who strikes can be sacked and could, in theory, be sued by his employer for breach of contract. But as the Government acknowledge in Section 2.25 of the Green Paper:In practice this never happens because even when the employer does not reinstate sacked employees it is not worth while to sue them".Then it is proposed that the period of notice of strike action after a lawful ballot should be doubled from seven to 14 days; that such action should be legal only when a majority of those entitled to vote are in favour, rather than a majority of those voting, a point emphasised by the noble Lord, Lord Campbell; and that strikes, once started, should be subject to fresh ballots at intervals of two or three months. But these changes would tilt the balance even further than at present in favour of employers.
That point is referred to in paragraph 2.26 of the Green Paper, which discusses the case for partial removal of immunity to allow trade unions to be sued for damages caused by any industrial action which they induce. In dismissing such a step, the Government say:It would fundamentally shift the balance of power towards employers".The trouble is that there are differing views as to where that point of balance should lie. A further proposal is to end the right of officials of recognised trade unions to take time off for union activities and to be given information for purposes of collective bargaining.
748 In the past, I have argued, particularly in debate on what became the Employment Act 1982, that it is in the interest of employers to consult and provide employees or their representatives with adequate information on matters affecting them. I am sure that the noble Lord, Lord Campbell of Alloway, will recall the discussions that took place at that time and the sympathy he then expressed for the amendment that I put forward which formed the basis of what ultimately became Section 1 of the Act. This requires companies employing more than 150 people to include in their annual reports a statement describing the action taken during the financial year to develop arrangements aimed at involving employees in the company's performance in a number of specified ways.
I suggest it is significant that that section forms part of an act concerning industrial relations. I have given notice to the Minister that I should be grateful if, in replying to the debate, he would give a general indication—I realise it cannot be much more than that—of how during the past 15 years companies have responded to this statutory requirement.
The Green Paper does not appear to take any account of such a positive approach to the problem with which it is concerned. I simply do not understand why the proposals it contains are put forward now, except perhaps as a populist measure in contemplation of the forthcoming general election. It might be that they will do nothing to improve this country's industrial relations.
I can compliment the Government on one point: that their proposals appear in a Green Paper rather than in a White Paper and in the precipitate legislation which was threatened at the time of the last Conservative Party Conference. This at least permits the canvassing of alternative ways of dealing with what I acknowledge is a serious problem.
Perhaps I may give an example of one such alternative. In its initial reaction to the Green Paper, the Institute of Personnel and Development suggested that managers and unions should be encouraged to reach no-strike agreements and commit themselves to arbitration if no common ground could be found. This voluntary approach to arbitration receives some support in paragraph 2.30 of the Green Paper. In the view of the institute, only if a union were to reject such a framework or submit to it only to embark on industrial action in the face of an arbitrator's decision should remedies like those now proposed by the Government be brought into play. This, it was said, would put employers just as much as unions on the spot, for under the scrutiny of independent arbitrators they, too, would have to ensure the integrity of every decision made in their dealings with trade unions.
I do not say that that is necessarily the course which the Government should now follow. I quote it as only one example of how, in the view of managers having wide practical experience of industrial relations, the Government's proposals might at least be modified. In conclusion, I urge the Government to think long and hard before committing themselves to the action proposed in the Green Paper.
§ 7.10 p.m.
§ Lord Harris of High Cross
My Lords, I wish to join in thanking the noble Lord, Lord Campbell of Alloway, for initiating this broad debate on the future of trade union law. However, at the outset I confess to a certain lack of zest in taking part. I thought hard about that. I believe that it is due to more than advancing years and general degeneration. In the first place, even in this House in the past all the debates that I can recall on trade union powers have generated a great deal of party political heat from which it is well known that we innocents on the Cross-Benches shrink in some horror. Either we have never been in the kitchen or we have retired here to recover from the burns.
I am afraid that it is even worse in my case because I must tell your Lordships that the noble Lord, Lord Wedderburn, and I are both old scholarship boys of Queens' College, Cambridge, where we arrived in 1945 from our respective grammar schools and spent the next two or three years in endless undergraduate debate. It is one of my great personal sadnesses that the intervening half century has not brought us much closer together except on the unmentionable issue of Europe.
Another reason for my lack of enthusiasm is that, much as I go along with Her Majesty's Government on the next steps on union reform outlined in Mr. Lang's Green Paper, I fear that the coming election is likely to deprive the Tories of the power to carry them into effect, although the noble Lord, Lord Paul, thinks that they would be politically popular and are really for the purpose of the forthcoming election. My old friend the noble Lord, Lord Wedderburn, may therefore have the last laugh, at least for the time being, until, perhaps, new Labour comes round to stealing this further remnant of Tory clothing. It is true that the winter of discontent is fading from public memory but I believe that the next postal or underground strike is likely to revive in acute form public support for removing the wrecking power from union militants invariably lurking in the woodwork.
However reluctant I was to join in the debate, I overcame my hesitation at the pressing invitation of the noble Lord, Lord Campbell of Alloway, with whom I share an ashtray in the corner of the Library, much, it is believed, to the disapproval of the noble Baroness, Lady Blackstone. The noble Lord was very persuasive, although I emphasise that no cash changed hands, not even a pipeful of our favourite Three Nuns tobacco. The noble Lord merely drew my attention to the Green Paper and suggested artlessly that I should read it. That did it. At once memories came flooding back of the early 1980s. Indeed, it was highly nostalgic. Soon after I came to this House in 1979 there was a succession of Bills to withdraw immunities from strikes; to enforce closed shops; to contest union demarcation; to engage in secondary action, and so on. Although those Bills were advanced in this House by the most amiable and emollient noble Earl, Lord Gowrie, who was here a few moments ago, they were bitterly opposed tooth and nail by old Labour. Indeed, the noble Lords, Lord Wedderburn, and Lord McCarthy, vied with each other in denouncing those measures as unjust, vindictive, unworkable and all that.
750 And yet, so far from a future Labour Government promising to restore the full panoply of union immunities, I gather that Mr. Blair and his more moderate colleagues know that reversing the major Thatcher reforms in this and other respects would tear the mask from new Labour and render it again unelectable.
Therefore I find it difficult to know how seriously to take Labour's opposition to the Green Paper. After all, it was the noble Baroness, Lady Castle, some 30 years ago, who first discovered with great surprise, which she announced, that if unions are left with wrecking powers, even the most moderate union leaders will not always be able to prevent them being deployed by shop floor militants. I remember her great speech about power having passed to the shop floor. Why leave those dangerous weapons lying around as a temptation to the militants? Indeed, I believe that was the point of In Place of Strife, on which I shall not dwell to save the embarrassment of those on the Labour Benches.
My view is that strikes are always and everywhere a crude and iniquitous weapon. The power to inflict indiscriminate hardship, damage and danger on the community has no necessary correlation with the merits of any particular dispute. As we saw with the railway signalmen some time ago and the postmen and tube train drivers, the threat of disruption is invariably deployed to defend out-dated working rules and other Spanish practices.
The question is what can be done to protect the vulnerable public interest? A ballot may serve as a trip wire against wholly frivolous strikes. But I believe that the Government deserve backing for their proposal to require a majority of 50 per cent. of all members rather than 50 per cent. of those who take the trouble to vote. I also approve of the notion of periodic reballoting.
As a lifelong market economist, I rejoice that we now have a wider consensus on the link between unit labour costs and unemployment. As a result, again and again we see that where reason prevails, the risk of unemployment itself will check strike blackmail in the cause of preserving old-fashioned practices or demanding unearned wage increases.
But, where strikers supply essential services with strong local or national monopoly power, they may hope to pass the unemployment effects of higher costs on to other workers. In such circumstances a check on unjustified strikes would be in the long-run interests of the employees as well as the employers and the consumers.
Therefore, I welcome very warmly the Government's central proposal to withdraw legal immunities from what it calls "industrial action which has disproportionate or excessive effects". Perhaps I may say to the noble Lord, Lord Rochester, that the clinching argument in relation to the legal difficulties which he raised is dealt with, it seems to me, by the annexe to this Green Paper. There we discover that similar restraints or even outright prohibitions are implemented in other advanced countries to maintain public safety and to prevent disruption. A wide variety of measures are listed there, including compulsory arbitration, which the 751 Government rightly reject, forbidding strikes in specific jobs and the conscription of strikers, which I thought rather spirited. In America there are compulsory fact-finding inquiries to set out the rival claims.
The final argument is that familiar case which this Government have made popular and understood and which the Opposition increasingly show glimmerings of understanding; namely, that we face an era of unprecedented change in products, processes, competition and global trade. We all understand that the accommodating adjustments in working arrangements are always unwelcome to mostly conservative workforces. Yet as the noble Lord, Lord Paul, said, lifetime employment is no longer available. Flexibility is indispensable for employment prospects and continued economic and social advance.
What these proposals boil down to for me is the removal of a major remaining obstacle to the necessary erosion of obsolete working practices. We all recall the bad old Fleet Street days of strikes and restrictive practices which gave well-paid, short-term security to printers only at the expense of long-run redundancy. The defeat of SOGAT and NATSOPA removed a major barrier to the redeployment of labour and capital, which the noble Lord, Lord Paul, wanted but for which he would not accept the conditions necessary to exploit new and exciting opportunities. Those opportunities will continue to beckon. They should not be obscured by the threat of union disruption in the service of preserving outdated working practices.
§ 7.20 p.m.
§ Lord Carr of Hadley
My Lords, it is a long time since I last spoke on industrial relations either in Parliament or indeed outside. I am grateful to my noble friend for introducing today's debate. It has brought to life old memories, as indeed, more vividly still has the sight opposite me of two old opponents in argument. I refer to the noble Lords, Lord McCarthy and Lord Wedderburn of Charlton. Our arguments were sometimes fierce but, speaking for myself, I found them enjoyable.
The vividness of my memories has also been slightly stirred, because it so happens that last week marked no less than the 26th anniversary of having my home bombed by the "Angry Brigade" as part of the violent protest against the Industrial Relations Bill. I merely mention that fact because, after those 26 years, what I most remember about the aftermath of that incident is the fact that among the literally hundreds of letters, telephone calls and telegrams that I received expressing sympathy for me and my family about what had happened, a large proportion of them made clear that those sending such messages were members of the Labour Party and/or members of trade unions. They also made clear that they disliked the policies which I and my government were following but they stood up very strongly indeed against actions of that kind.
I suppose in difficult times that feeling helped keep alive within me, and even perhaps strengthened, a conviction which I have held for a very long time about the importance to society, and indeed to industry itself, 752 of having strong, independent trade unions with large representative membership, provided—and I emphasise the word "provided"—that such unions are controlled in a genuinely democratic way and that both unions and employers operate within a good comprehensive framework of industrial relations law. The great contrast between then and now is that then the great debate was whether there should be a framework of law. It was not about what it should be; it was about whether or not there should be such a framework. That was the main point of contest. However, I am glad to say that the existence of a framework of law and the need for it are generally accepted. The argument is much more about the contents of that legal framework rather than about whether it should exist.
I believe that all of us can now see the benefits of having a framework of law. The law does work. I remember people saying both loudly and clearly in those days, "The law can't work; the law won't work"; and, in the early days of difficulty perhaps saying, "The law doesn't work". But—and it is a very big "but"—what has happened since then supports the belief that I have also always held; namely, that in the long run, while law does not turn bad men into good men, a good framework of law, or any framework, affects for good or for ill the way in which individual men and women and the organisations to which they belong do their business together, the way in which they exert their rights and the way in which they accept their obligations. I believe at last, thank goodness, that that general proposition is held. We are all seeing the benefits of it. Perhaps that basic principle is no longer a matter of deep political controversy within this country.
However, having said that, there are still gaps in the protection which society enjoys. It is not a matter of tilting the balance in favour of the employer or of the union; it is a matter of tilting the balance in favour of the consumer—in other words, the public, the ordinary citizens of this country. That is what we ought to be talking about. Employers and trade unions as such are unimportant in comparison with the interests of the public at large. They have their interests and the public must grant them, but it is the interests of the public which must be put first.
In this day and age when we look at what happened during the past year in only small sections of the employment field—notably perhaps as regards London Underground and the Post Office—the public at large have been subjected to more than a degree of inconvenience simply for the sake of potential advantages to employees, which are minimal compared to the disruption caused. I believe that the Government are right to come forward with further proposals. That is part of the step-by-step process which I believe has rightly been followed over the past 20 years. If I may say so, I very much approve of the spirit in which that has been done. I like the tone and, in general, I like the content of the Green Paper.
I welcome the tone of the Green Paper because the Government are putting forward for open discussion a whole range of proposals and seeking opinion upon them; they are not rushing into action beforehand. But, at the same time, they are making clear their own dislike 753 of some of the more prescriptive and restrictive of the possible actions open to us. I believe that they are right to turn their faces, for example, against measures to ban strikes in certain areas of employment. They also appear to be against compulsory arbitration and against compulsory conciliation—and I emphasise "compulsory". They are also against Ministers making ad hoc judgments on particular strikes. I welcome that because I believe it is the right way in which we should try to take the next step forward. We should do so in a way which, with reasonableness on both sides, can be constructive for the good of everyone in industry as well as the public at large.
I wish to support in principle the broad proposals which the Government are putting forward for our discussion. I welcome the proposal to increase the period of notice. When the public are going to lose basic services—and, of course, this applies also to particular industries—they must be given longer notice than they have often received in the past. I also think that the Government are right to consider the need to qualify the conditions applying to strike ballots. I believe that they may have gone too far in suggesting that there should be a majority of all those entitled to vote. That is very difficult to achieve. This is not quite the same, but I believe I am right in saying that only one government in the whole of this century have taken office with a majority of the electorate behind them.
However, on the other hand, it is equally wrong and much more damaging to the whole country if only a small percentage of those entitled to vote—and a bare majority of a small percentage—can cause a strike to take place. I believe that the Government are proposing to move in the right direction, but I would prefer a prescribed percentage of 70 per cent. of those entitled to vote rather than 100 per cent. If we are not careful, we might bring ballots into disrepute, whereas I believe that they have been gaining in repute in recent years. That is the sort of issue that the Government wish to discuss. I certainly support the proposal in principle. When one thinks of how the public are made to suffer, we must accept the need to reballot in long-drawn-out strikes. How frequently is another matter, but I believe that the Government are right to go for a period every so often rather than leaving it to each occasion when an employer makes a different offer. Nevertheless, in principle, it is the right thing to do.
I also support the concept of applying the principle of disproportionate effect. This is done in a number of other countries. Not being a lawyer I find it difficult to judge how the courts would cope with this, and the practicality of it, but in principle the concept of trying to check action which is totally disproportionate in the damage it does to the community as a whole in relation to the issue at stake is something which we ought strongly to consider bringing into our law.
I warmly welcome this debate and I warmly welcome the direction in which the Government are proposing to move. I trust the Government will continue along the lines they have suggested—as I am sure they will—to put these matters forward for discussion and to listen to 754 what is said before they decide the details of action. I hope they will not in any way resile from the need to act in a way broadly along the lines they propose.
§ 7.30 p.m.
§ Lord Wedderburn of Charlton
My Lords, I join in welcoming the Motion of the noble Lord, Lord Campbell of Alloway, on the two items which it selects from the Government's Green Paper. On the whole, I shall confine my remarks to those two items which are stated on the Order Paper, rather than follow the will-o'-the-wisp of trawling through the Green Paper, or indeed following the historically bizarre musings of the noble Lord, Lord Harris of High Cross, whom I have known a long time. That is perhaps why, as he progressed through his speech, I said to myself, "Ah, yes, I know it well".
The items in the Green Paper deserve to be discussed in detail. That is another reason I shall confine myself to the matters mentioned on the Order Paper. We are reminded that the Government's step-by-step engine of legislation concerned with the liberty of combinations of work people has not stopped. I mention my next point advisedly because I care about it. No mention is made of the fact that the international organisation's distinguished committee of experts—namely, the International Labour Organisation—in each of its annual reports since 1989 has pronounced upon matters germane to the Green Paper when it has stated that our law has been brought below the standards of the convention on freedom of association. Some noble Lords may not care about that or they may get round that by saying, "It has not been presented to the governing body as a separate issue in a certain procedure". However, the ILO is clear in its statements both in its reports and in its freedom of association committee. This is a matter which should be looked at carefully.
The first of the two items would introduce the doctrine of proportionality into strike law generally. At the moment the doctrine of proportionality finds a place in remedies because if in an interlocutory injunction case, or an interim injunction case in Scotland, the employer or other plaintiff can demonstrate a serious case, the court has to decide what is the balance of convenience. I quote the words of Lord Justice Stuart-Smith in 1989 when he said that account must be taken of,the impact on innocent third parties and the economic wellbeing of the nation".The Government use that concept in their Green Paper as a reason for extending proportionality as a test for substantive liability. However, the position is precisely the opposite. To extend proportionality into substantive liability would make for a test in our courts where either the employer would win every time—instead of often, as now—or where the tests are so uncertain as to be unworkable within the rule of law. One of the first propositions one puts to a student is that what constitutes part of the rule of law is the reasonable predictability of the norms involved.
755 It is true that a similar test is applied in the German labour courts. That is extremely important. In my submission the Government are wrong in citing the labour law of the Netherlands and of Belgium and their rather different systems. However, in Germany the proportionality principle infuses the entire system of law, based on a wide institutionalised consensus. Professor Weiss of Frankfurt, an authority on labour law, has stated that the,proportionality principle…must be observed in the context of the law on dismissal and on industrial action".Of course that must be the case, because it underlies the whole system. It underlies the institutions of obligatory works councils, of co-determination rights, of constitutional rights to strike and so on. One cannot simply cherry-pick a little bit from another system and bring it home. The noble Lord, Lord Carr, will remember that some of us disagreed with the efforts made in 1971 to import into Britain, as it were with scissors and paste, parts of the American Taft-Hartley law on national emergencies. Rather as in the case of a transplant, the system rejected what was put into it because it was not part—institutionally or in any other logical way—of the system as a whole.
If noble Lords want proportionality, they must have proportionality far beyond unfair dismissal or doctrines of that sort which protect workers. They must introduce it into all sorts of other areas of co-decision. Then we could discuss proportionality. But taking the word "proportionality" from the German as it were—which is what the Green Paper does—is not worth many marks. It is a rather low grade operation after all these years that we have discussed the matter.
The second item in the Motion is what I call the gross majority demand; that is, the demand for the approval of industrial action in strike ballots to come not from a majority of votes cast but from a majority of all the members entitled to vote in a dispute. I cannot understand how anyone can take that seriously. That provision would mean that the right to abstain would be abolished by law. If one abstains, one is considered to be voting no. All absentees, for whatever reason, are probably counted as voting "no", unless a special paragraph is included to cover the situation where people are ill. That provision appears in the same paragraph of the Green Paper which states that industrial action requires substantial support. If one assumes that all those who have not voted have voted no, one is further away from knowing whether the action has substantial support.
The gross majority principle is not a normal part of our law on associations, so why introduce it here? I believe there is a reason for that. The reason has nothing to do with good industrial relations. It cannot possibly have much to do with what has been called the community at large. I wish I had time to discuss that because the phrase "community at large" is probably more misused in debate than any other. Indeed, we have seen that this proposal has little or no support from management. The Government once introduced a gross majority provision in the Employment Act 1982. It was stated there that if a new union membership agreement received a certain percentage of support, it could be 756 valid for certain purposes. The percentage was to be an 80 per cent. majority of those entitled to vote. There was little explanation at the time of that mysterious provision and it was repealed four years later. I suspect that the weak arguments in the Green Paper—of all the bits to pick, this is the weakest argument—may also be seen, quite properly, as proposals to weaken the position of organised work people, from whom, of course, it is always said all ills come: if there is an ill to the community, or to society, or to the Tube, it comes from those who have taken industrial action. I suspect the noble Lord, Lord Carr, would agree that behind every piece of industrial action there is a long history of stoking up the fires on both sides. We do not need the stoking up of fires, but more conciliation and rapid arbitration procedures.
A recent survey of some 559 strike ballots over six months, covering 273,000 workers in 24 unions, disclosed that 81 per cent. resulted in a positive vote for industrial action. Those are probably the best figures that we have at present. But in the positive ballot cases—that is those cases in which approval of industrial action was successful—63 per cent. saw no industrial action followed. One could mount an argument, although I do not, that in certain cases the ballot has a utility in the working out of sharp industrial relations differences. But I suggest to noble Lords that there is no simple answer as to the function of ballots at present. I suspect that there are hawks in the Government, certainly those who wrote the Green Paper, who do not and did not expect this situation to be the result of their complex and sometimes highly unfair legislation. Complex? A solicitor of my acquaintance has 93 points through which he takes his unions. It is remarkable that the unions get through with so few injunctions. The Government did not expect that. Unfair?—yes. It is unfair, for example, to have to give the employer the name, if need be, of those who take part in a dispute. I have never heard anyone defend that in any sensible discussion. It would be useful to have a Green Paper which considered again some of those points.
The party opposite should dust off from its shelves the works of its two great Ministers of Labour, Walter Monckton and Ian Macleod. They both well understood the need of the community at large in industrial relations law not for one-sided legal formulae but for new initiatives in conciliation and arbitration for the rapid settlement of disputes.
§ 7.42 p.m.
The Viscount of Oxfuird
My Lords, I join with other noble Lords who have spoken in thanking my noble friend Lord Campbell of Alloway for giving us the opportunity to discuss this important matter.
In December 1953 I arrived at Southampton on the New Zealand shipping company's ship "Rangatiki". The following day I found my photograph in the local news section of The Times. The reason my photograph was in the local news section was that as we tied up in Southampton the dockers went on strike. The heading 757 was "Southampton dockers strike. New Zealanders unload own ship". I have long believed that God looks after those who look after themselves.
Industrial relations is a subject which tends to raise strong emotions and it is therefore heartening that this afternoon this debate has largely avoided recourse to partisan points. A few political points may have been made. I shall try to do likewise but I do not promise to refrain from political points.
In reviewing the current status of industrial relations legislation in this country, I suggest that two words should be paramount. Those two words are balance and dignity. That is balance in the weight that we give to the rights of industry and the community over the rights of the individual; and dignity for the working man and woman.
It has become fashionable these days, and rightly so, to promote the philosophy of total quality management (TQM). I have spoken several times in your Lordships' House on this subject. One of the prime tenets of total quality management is the belief in continuous improvement. That is a belief that there is no institution or organisation which cannot do just a little bit better. It is in the spirit of achieving continuous improvement in our industrial relations legislation in this country that I ask your Lordships to view the Motion this afternoon. Continuous improvement is not an attack on the right to strike. I am sorry that the noble Lord, Lord Paul, is not in his place. I think that he would agree with me on the tenets of that philosophy.
From the time of Edward I to the end of the first quarter of the 19th century, there were more than 30 legal enactments all of which extended the common law to prohibit and prevent the combination of workers for industrial action. With the coming of the Industrial Revolution, and the far reaching industrial changes that took place in the 18th century, a new impetus was given to the establishment of embryo trade unions. This culminated in the 1799 Combination Acts, which rendered illegal the combination of workers for industrial action.
By 1824 the wisdom of such repressive action was beginning to be questioned and a Select Committee of the other place reported that,Those laws—had a tendency to produce mutual irritation and distrust between masters and workmen, to give a violent character to the combinations and to render them highly dangerous to the peace of the community".Following this report, and the resultant Acts of 1824 and 1825, there followed a period of relative immunity for trade union activities until the Trade Union Acts of 1871 and 1876 and the Conspiracy and Protection of Property Act 1875, which made provision for the registration of trade unions and legalised peaceful picketing. Those Acts relieved the unions from certain penalties under the criminal law. The Trades Disputes Act 1906 did the reverse and established the legal immunity of trade unions before the common law. It was followed in the immediate pre-World War I period by a significant increase in industrial unrest.
758 Perhaps your Lordships will forgive me for giving this brief history. My purpose is only to demonstrate that for more than 200 years we have been striving in our own way for continuous improvement in our industrial relations, or at the very least to achieve the right balance between the needs of the workforce and the wider needs of the community as a whole.
Moving on to the specifics of the Motion, it is important to recognise the dynamics behind the changes that have occurred in industrial relations legislation in this country over the past few decades. I well recall the 1970s, when I spent most of my time travelling the world exporting and promoting the sale of British manufactured engineering products. It is not too strong to say that we had become the laughing stock of the world. It was soul destroying to return to a customer seeking new business when the first thing one had to do was to explain why his last order had not been delivered due to a strike at the works or their suppliers, or by the coal miners or railway workers, or at the docks.
Thanks in part to the far-sighted industrial relations legislation of the 1980s, that position has now been transformed. The Green Paper published last year provides factual evidence not only that the number of working days lost through strikes in the United Kingdom has fallen dramatically since the 1970s, but that our record stands up well compared with other countries in the European Union or the OECD.
This sea change has not been obtained easily. It has been resisted at every step of the way by the trade union establishment. Perhaps that is understandable. They were, after all, defending a well-entrenched position. To quote the words of Ernest Bevin at the Trades Union Congress of 1927:The most conservative man in the world is the British Trade Unionist when you try to change him".So we come right up to the present day and to the proposals which are up for consultation in the Green Paper, one of which is the subject of today's debate; namely to introduce legislation to raise the threshold required for a pre-strike ballot to confer immunity on a trade union only if industrial action is taken by a majority of those entitled to vote.
I am inclined to support such a change as a further step along the road towards continuous improvement of our industrial relations laws and the creation of a total quality environment here in the UK, although I do not for one moment claim that that would be anything more than just one piece in the jigsaw that we must complete if we are to achieve such a challenging total quality goal. It must be pursued in parallel with other equally important initiatives such as the Investors in People standard, the raising of the levels of numeracy and literacy of young people emerging from our educational establishments, continued low inflation, encouragement of inward investment, and many more.
The most important point is that such legislation would target that area where an analysis of the available facts indicates that action is necessary. The analysis in the Green Paper shows that in recent years around 70 per cent. of all working days lost through strikes are 759 in industries where the employers come from the public sector, and often from industries that enjoy a monopoly or near monopoly in the service that they offer.
That highlights the need for balance. Is it right that a relatively small number of postal workers or underground train drivers should be able to inflict hardship on whole communities? I believe that they should certainly be allowed to do so only as a measure of last resort, and only when they are able to demonstrate a strong level of support for the action that is proposed from the majority of their membership. I submit that recent experiences have demonstrated that here we have an example of where the interests of the community as a whole override the sectional interests of a small group of trade unionists.
In conclusion, noble Lords may well think that the concepts of balance and dignity to which I referred in opening are fairly reflected in the relevant proposals in the Green Paper as being essential to the maintenance of a viable economy and as giving comfort to those who wish to invest in the United Kingdom.
§ 7.53 p.m.
§ Lord Monkswell
My Lords, it is engendered in us to thank the initiator of such debates. However, the wording of this Motion is unfortunate. It shows the lack of understanding of trade unions and industrial relations on the part of the Conservative Party. I shall address these issues and try to redress the flaws in Conservative understanding of the real world.
Noble Lords may ask on what basis I can do that. I can only speak from personal experience. In my time I have been an ordinary trade union member, a shop steward and therefore trade union official, a manager in industry and also chairman of the board of a medium-sized enterprise. So I have seen the whole situation in industry and commerce from top to bottom.
First I point out that trade unions are not distinct and separate from their membership. They are comprised of their members. Without them they have no existence, and can do nothing without their support.
Perhaps I may say a little about industrial relations. One of the problems that we have in this country, partly as a result of the misconceived view that industrial disputes are caused by unions, is that the trade unions and working people generally are effectively excluded from playing a positive role in industrial discussion and decision-taking. They are forced almost, by virtue of their situation, to play a reactive role. In most cases trade unions react to decisions made by managements in which they have had no involvement.
A number of noble Lords referred to recent industrial problems in the postal system and on the London Underground, and suggested that they were all the fault of the workers and that workers should have some sort of penalty imposed upon them. But if we view the matter the other way round we may see that the public lost those valuable services as a result of bad management. We have heard no calls today 760 for the managers who caused those disputes to be surcharged, to pay a penalty—a personal penalty, I suggest—for their actions.
I give just two examples, one that is second-hand, the other from first-hand experience. The second-hand example was recounted to me by a very good manager with whom I had the privilege of working. He had served his apprenticeship at the Ford Motor Company in Dagenham.
In the 1950s in the Ford company at Dagenham the foreman had the power to hire and fire. One of the problems that resulted was that if somebody's face did not fit he could be fired. To counteract that practice, the trade unions evolved a system whereby, if a foreman took unfair action against any of their members, the shop steward would get up on a bench and ring a bell, and everybody would walk out. There was no question of taking a ballot and counting the numbers. It was an instant reaction to an instant problem with which they were faced.
That problem was resolved by the introduction of procedure agreements and by taking that power away from foremen, who had often used it arbitrarily, and bumping it up the management tree, together with the institution of sensible forums for discussion, debate and the resolution of conflicts.
My other example is that of Massey-Ferguson, the company for which I used to work, in the 1970s. The company had introduced a new range of tractors. They started to come off the production line, got into the hands of customers and almost immediately started breaking down. There were flaws in the new design.
The company caused a strike on the shop floor by precipitately changing the procedures that were the well understood custom and practice for the introduction of new models. The management changed those procedures and created a strike which stopped the production line. The company did not want to produce the tractors because the design flaw needed to be sorted out. The strike hit the national headlines. There were references to "Bolshie workers", and all the rest of it. The strike was resolved by management as soon as it started to affect the engineering department. Obviously if it affected that department they would cease to be able to get the work done. The situation was created by management and yet workers were blamed for it.
Industrial disputes erupt as a result of unfairness. The British people are fair. They will not put up with unfairness. The noble Lord, Lord Carr, referred to an incident in his experience where there was an upsurge of resentment at his being treated unfairly, as it was perceived. It was a very vivid example.
Of course we need rules of behaviour, and they are very important, but they should be agreed by all concerned—negotiated, if you like. They should not be imposed. If they are imposed, they will not work.
Speakers on the other side of the Chamber have said that the climate has changed over the past 15 or so years. They attribute that to a large extent to the changes in industrial relations law. The noble Lord, Lord Harris of High Cross, cannot be anything but 761 honest, and he let the cat out of the bag. He effectively said that the reason why there were fewer industrial disputes was because we had mass unemployment; it was used as a weapon against the workers.
§ Lord Monkswell
My Lords, I may have paraphrased the noble Lord in a way which he does not appreciate; but, put succinctly, that is effectively what he said.
The cost of working days lost due to strikes during the 1960s and 1970s was raised. Conservative politicians take great delight in highlighting the terrible figure for production lost. However, when we look at the number of days of production lost due to 1 million people being unemployed over and above those who were unemployed in the 1960s, 1970s, 1980s and halfway through the 1990s, we can see that the figures are completely different. That puts a very interesting perspective on the situation.
I said that fairness was important, and I think we all agree about that. One of the problems is that we are faced with yet another occasion when the Conservative Party seeks to change the rules. I think we all appreciate that they do not seek to change the rules in order to improve industrial relations; their talk of changing the rules is like a stick to beat the trade unions with, to put them into a corner and suggest that they are bad and need to be controlled. I believe that the British public are waking up to the realisation that they have been conned by the Conservative administration over the past 18 years and I am very hopeful that at the next general election they will mark their ballot papers as if to say: "We are not prepared to be conned any more. We demand fairness in our industrial relations, fairness between management and trade unions, between those who are in a position of power and the ordinary working people whose only way of combating that power is by working together to seek a society in which everyone can be fairly treated."
§ Lord Carr of Hadley
My Lords, before the noble Lord sits down, I wonder whether he would like to answer a question. In view of all he said about the wickedness of those on this side of the House, why was it that a Labour Government removed from the statute book a provision which I put onto it on behalf of the Heath Government to the effect that all companies above a certain size should have proper joint consultative machinery?
My Lords, one of the difficulties that often arises within companies and industrial relations is that good things may be thrown out as a consequence of a greater bad. I have seen that situation enough times in my experience in industry to realise that good relations between individual managers and the workforce can unfortunately be soured by some bad managers and bad attitudes.
§ 8.4 p.m.
§ Baroness Symons of Vernham Dean
My Lords, I too am grateful to the noble Lord, Lord Campbell of Alloway, for introducing this important debate.
Thirty years ago the playwright and novelist Michael Frayn wrote:Public opinion, so far as I can tell, unquestioningly concedes the right of men in a free society to withdraw their labour. It just draws the line at strikes.It is a good point. Strikes are not the simple, union-engineered issue which the current Government have liked to characterise them as being. They are a complex and serious matter—both more complex and more serious than the Government's latest pre-election Green Paper on strike resolution suggests.
I address your Lordships as someone who before entering this House was for 20 years a trade union official. In that work, the overwhelming amount of my time was spent in resolving, not creating, conflict. Where they work best, trade unions act as a kind of hinge between employers and employees, facilitating their working well and completing their mutual purpose. That constructive, positive role of employees and employers working together in partnership is how we on this side of the House see trade unions: as contributors to the efficient—and, where applicable in the private sector, the profitable—working of business and organisations.
Let us be clear. We on this side of the House do not want to return to the industrial relations of the 1960s and 1970s. So much of the contributions of noble Lords on the other side of the House concentrated on aspects of those unhappy years. My right honourable friend the Leader of the Opposition said only yesterday that, if Labour forms the next government, it has no proposals for changing the bulk of employee relations legislation. That is right. Full membership, decision-making and participation by secret ballot in trade unions and at work has become part of the bedrock of good, stable industrial relations.
However, strikes do occur. In 1981 there was a Civil Service strike which lasted for five months. At that time I saw at first hand the human dimension of what happens when workers strike. I saw the effects of the strike, not on union militants but on ordinary men and women with families who felt that they had no alternative but to strike when their employer had simply torn up a pay agreement which had existed for over 20 years. Strikes are not easy affairs of first resort in employee relations; they are rather the last resort, often a desperate public demonstration of how badly wrong employee relations have become and how much they need to be improved.
Some of the Government's moves in this area have been sensible—balloting before strikes, for example, or for the election of trade union officials. I speak as one who was twice elected as a trade union general secretary under these laws. However, together with these entirely sensible reforms, we have seen other moves which have been either vindictive or irrelevant: repeat ballots on union check-off arrangements, for instance. In what other situation does an individual have to say every 763 three years that he or she really did mean to join an association? Certainly members of political parties do not have to do that. Another move was the creation of the Commissioner for the Rights of Trade Union Members, a government agency so little used that the new commissioner is working his way into his job by asking a range of people and bodies, including the trade unions, if they have any idea what his job is actually supposed to be.
In their latest Green Paper the Government try to deal with the hoary old question of strikes in the so-called essential services. In doing so they have come up with one or two clever little ruses to deal with the serious problems surrounding legislation in this area. However, they are tricks which, even if put into effect, would have little, if any, practical consequence for the improvement of employee relations, organisational performance and overall competitiveness of Britain's economy today.
Since coming to power in 1979 the party opposite has looked with monotonous regularity at the "problem" of strikes in key services. The pattern is a familiar one. Ministers feel the need to do something about a strike and they light again upon the idea of industrial legislation.
I should like to deal with two major points in the Government's latest proposals. The first is the difficulty of defining what is meant by "an essential service" and "excessive or disproportionate" effects. The Green Paper states that it is action which carries risks to life, health or safety; threatens national security; does serious damage to property or the economy; or brings about significant disruption of everyday life or activities in the whole or part of the economy.
On that definition, it would seem that every strike would or could be so defined. But who are essential workers? Perhaps doctors and nurses in the NHS are essential workers but what about hospital porters, the people who work in hospital kitchens, the people who bring food into the hospitals? Instead of theorising, let us look at practical examples. There was a real strike in the Post Office last summer. In practice, that strike was nowhere near so damaging as it was claimed at the time and nowhere near so damaging as it has just been portrayed on the other side of the House. Only this week the chief executive of the Post Office, who had issued near apocalyptic warnings at the time of the strike about the future of postal business in Britain, admitted that the strike had had no effect on the Post Office's business volume, its finances or its profitability. So it is not only the difficulty of defining which strikes could be classed as falling under such legislation, but the difficulty of when the assessment takes place.
A second worrying point is the Government's proposal to raise the threshold required for an industrial action ballot to confer immunity on a trade union from the majority of those voting to a majority of those entitled to vote. Where else do we seek to impose such a test? Certainly not on a political party going into government for five years, which is not only able to influence but to legislate on health and safety, able to fashion the national economy and able to affect virtually every part of our lives in this country. When voting for 764 the government of the day, we do not even demand an overall majority of those voting. In the 1992 election, the Conservative Party secured 42.3 per cent. of the vote, but fewer than one third of those eligible to vote voted for the Government. They obtained merely 32.6 per cent. of those eligible to vote.
But it is quite clear that the electoral timetable and the lack of a government majority in the other place mean that there is not only no realistic prospect of legislation going ahead before the election but that there is no prospect at all. So far from being a piece of government business, this document is in fact a piece of Conservative Party business. It is a run-out for an idea to be contained in the Conservative Party election manifesto.
It is not only we on this side of the House who find these proposals so implausible. Take the arguments of Britain's employers: the Confederation of British Industry, the British Chambers of Commerce, the Institute of Management, the Engineering Employers' Federation or the Institute of Personnel and Development. Even the most free market of the employers' groups, the Institute of Directors, is sceptical. Not a single major employers' organisation is in favour.
We on this side of the House take a rather different, more serious and more searching view on strikes than the prejudice dressed up as policies in this document. A new Labour Government would not be about trying to fight once again the long gone battles of the past. We will be about a real agenda facing Britain; about jobs, security, improvement and competitiveness. A new Labour Government would not be about trying to deal with the effects of industrial action, as the Green Paper does explicitly. It would be about dealing with its causes, through fostering new concepts of partnership at work, such as the recent job security agreement freely reached by the leading cement manufacturer, Blue Circle, in painstaking but ultimately rewarding negotiations with its trade union.
A new Labour Government would not go back to the old ways of the 1960s and 1970s. As my honourable friend the Shadow Chancellor rightly showed this week, there will be no yielding to inappropriate and unwarranted demands on public sector pay, however they are backed up. A Labour Government would be tough on strikes, but tough on the causes of strikes as well. More than the dried-up doggerel in this document, that approach will be a real help to our employers, our employees, our economy and our country.
§ 8.15 p.m.
§ Lord McCarthy
My Lords, there have been nine speeches in this extremely wide-ranging debate. So far as I can see, five of those speeches opposed all and everything in the Green Paper and four speeches said that there was something to be said for the Green Paper. So, in a way, there is a majority but not a gross majority, because nobody has a gross majority. That is what the Government want to impose on the trade union movement.
765 Even those who spoke in favour of the Government qualified what they said. If I understood him rightly, the noble Lord, Lord Harris of High Cross, said that it did not matter because they would not get a chance to put it into effect because they would not win the next election. He did not know why we were debating this matter at all. I am glad to say that the noble Lord, Lord Carr, came down in the end, against the gross majority rule. He thought it was as silly as I do. In exchange, let me tell him that I agree with him about joint consultation, which dropped through the net when it should not have done. The noble Viscount, Lord Oxfuird, took his time but came round in the end to saying that he thought there was something to be said for the Green Paper.
So I come to the speech of the noble Lord, Lord Campbell of Alloway. I was looking forward to the debate with him. I thought, as did my noble friends Lord Wedderburn and Lady Symons, that the noble Lord wanted to debate a particular aspect of the Green Paper; indeed, something wider than the Green Paper and more relevant: the problem of high turnout. That is a very real problem.
The first version of the noble Lord's Motion, which appeared on 19th December in the Minutes of Proceedings for 22nd January, wanted:To call attention to the effect on the community of industrial action taken by trade unions without the consent of the majority of members entitled to vote".That is all. There was nothing whatever about this nonsense of "excessive or disproportionate industrial action". As I saw the issue, he wanted to debate the very real problem of high turnout. It has been shown to be a problem which derives basically from the abolition of the workplace-based vote.
There is a very distinguished study by Undy and company—I shall not read out all their names—called Managing the Unions. It shows that, with a postal vote, unless there are very good relations with the employer, so that the employer will assist in combating the distancing effect of the postal vote, there will be a lower turnout. It is a very real problem.
Unions, contrary to what many people in this House seem to think, desperately want the highest possible turnout. It tells them what members think and gives them some idea of how people will react. Of course, not to vote means something. Very often it means, "I'll leave it to the rest of you. I don't know what to say or what to think but I'll back what the majority say". That is a very simple and honest way of looking at things. But one would much rather that people thought about the issues and voted. So the trade union movement is very much interested in the problem of high turnout.
Unfortunately, the noble Lord, Lord Campbell of Alloway, muddied the waters. His second Motion on 16th January was:To call attention to the effect on the community of any excessive or disproportionate industrial action"—that is put into his Motion before he goes back to his earlier wording:taken by trade unions without the consent of the majority of members entitled to vote".766 I do not understand that at all. I hope that he will clarify it when he comes to sum up the debate, if he has the time. There seem to be three possibilities: one, he is not bothered about the consequences of a strike so long as the majority say yes—which seems bizarre to me, but it is one interpretation of his Motion. Two, he is not bothered about how many say yes so long as it has no impact on the community—which is even more ridiculous. Three, some of the words got lost; or maybe the Government persuaded him to widen the Motion—but not particularly effectively. Therefore, I want to focus, first, on what I call the pre-Christmas Motion, because that is the one I like.
§ Lord Campbell of Alloway
My Lords, in case there is not time, no one has persuaded me to do anything.
§ Lord McCarthy
My Lords, I am not surprised about that either. It was spontaneous intellectual combustion.
I turn to the pre-Christmas Motion. It is important to all parties—the unions, the Government, the community and employers—that there should be high participation rates and high votes. I wish to make four brief points about the problem. First, despite the effects of the withdrawal of facilities, particularly in the public sector, where it is very, very bad, we support the introduction of postal balloting. And, if I may quote from the survey from which my noble friend Lord Wedderburn quoted, the number of votes is holding up well. In the sample taken, the turnout was 60 per cent. on average. It was even higher in recent public sector disputes. It is interesting that several public sector disputes have been quoted in this debate, for example, the London Underground dispute. I would argue that in that dispute the unions passed the new gross majority test. So turnout is holding up well.
Secondly, so is the pro-strike voting, as, again, my noble friend Lord Wedderburn pointed out. In 1995 the number voting pro-strike was 61 per cent. In 1996 it had moved upwards to 81 per cent. So, on the present evidence, we could in many cases even now meet the gross majority rule. Thirdly, as has also been said by my noble friend Lord Wedderburn, the fact that we have these ballots and have this turnout does not mean that the result is strikes. Indeed, in most cases, we do not have the strikes. For the most part, the ballot has become part of the negotiating ploy in industrial relations, and things are none the worse for that.
Finally, I want to give a concrete example of the current position in order to find out what the House thinks. I shall take a concrete example which is frequently talked about—the Royal Mail. In the Royal Mail dispute there were two ballots. There was a ballot in June 1996 and a ballot in October 1996. In the first ballot the turnout was 74 per cent. In the second ballot the turnout was 78 per cent. It was a good turnout on both occasions. In fact, the turnout rose on the second occasion. In the first ballot the affirmative vote was 68.1 per cent. In the second ballot it was 61.5 per cent. There was thus a marginal fall in the affirmative vote. As a result, whereas the first ballot would have passed the gross majority test because it would have represented 50.3 per cent. of the total voting roll, the 767 second ballot fell away by less than 3 per cent. and as a result the majority was 47.4 per cent. So the second strike would have been unlawful.
Does anyone seriously suggest that an insignificant shift of that kind at that time in that dispute would have helped to produce a settlement? It would undoubtedly have led to unofficial action. The union would have been forced to repudiate the strikers and there would have been chaos in the Royal Mail. Everyone knows that. The management knows it, which is why you will not find management in the Royal Mail or the Post Office supporting the Green Paper. There would have been chaos because no one could have said in advance whether a strike would have been lawful or unlawful. If the ballot went the wrong way, those who voted—in favour of a strike by 70 or 75 per cent.—would have considered that they had been betrayed by their union. That is the kind of thing the Government are wanting to encourage.
At this point I wish to say a few words about the second proposal—proportionate non-excessive action. A good deal of this has been debated by my noble friend Lord Wedderburn. The point I wish to make is that we would not be trying to work out whether such a strike had a significant impact upon the economy or was causing serious damage to the economy; or whether part of the country had been affected in some way. Because the employer would be using the injunctive weapon, all the employer would have to show is that there was a "serious case to answer". It would be very difficult for a judge to say that there was not a serious case to answer. If one puts the injunctive remedy on top of what the Government are saying, it becomes much more serious and dangerous. Indeed, it is an attempt to put strikes out of court.
My final point is that if the Government were really making a case for measures of this kind, there would have to be something very funny happening to the strike statistics. The noble Lord, Lord Campbell of Alloway, was very proud of this Government's strike record and of the way the numbers of working days lost had fallen compared with most of our competitors, and of the way they had fallen more in Britain in recent years than in many other European countries. The Government are very proud of that too. Yet they come along with this Green Paper.
It is the first Green Paper I know which has a white cover and if you turn to the back you are told that if you want to get it you have to go to the accredited agents in the Yellow Pages. So it is a very strange paper; it is a sort of Brown Paper really. And if you read it you find that, by massaging the figures with a degree of subtlety, the Government have used August to September 1995-96 and compared that with the average of August to September 1992-95. When you see strike statistics starting in August of one year and ending in September of the next year you know you are being fiddled. On the whole, strikes statistics use calendar years. The Government have done it this way because it helps. There were three large strikes in the summer and 84 per cent. of the increase is caused by those strikes in those three months of the year. Unfortunately, however, after the Government produced the Brown Paper, the 768 Employment Gazette of the Department for Education and Employment, published this month, showed that in October the figures fell away again, and now they are back to the average of the previous three years.
So it is all a statistical fiddle. It is all manipulation. It is all, as my noble friend Lady Symons said, aimed at the general election. We are surprised—mildly surprised—that the noble Lord, Lord Campbell of Alloway, has lent himself to that.
§ 8.27 p.m.
§ The Minister of State, Department of Trade and Industry (Lord Fraser of Carmyllie)
My Lords, I am grateful to the noble Lord, Lord Campbell of Alloway, for initiating this debate and to my noble friends and the noble Lord, Lord Harris, for welcoming the Green Paper which the President of the Board of Trade published some two months ago. Perhaps I may say to my noble friend Lord Carr that I have no doubt that my right honourable friend the President of the Board of Trade will be particularly reassured by what he had to say about the tone of the Green Paper.
Today's debate is timely. It provides a useful opportunity for the Government to hear the considered views of your Lordships. If though what my noble friend hoped he would achieve would be to flush out to what extent and with what conviction New Labour has accepted the industrial relations of this Government in the 1980s and to hear an acceptance of that from the Front Bench, he will have just heard that his hope was a vain one. But I suppose that for the noble Lord, Lord McCarthy, it would indeed have been an impossible pirouette to have asked him to perform. However, I certainly appreciated—
§ Lord McCarthy
My Lords, I can repeat what my noble friend Lady Symons said. However, it would be easier if I said that I agreed with it because the noble and learned Lord will then have been answered already.
§ Lord Fraser of Carmyllie
My Lords, I was certainly going to say that the noble Baroness seemed to me to earn Brownie points for the loyalty with which she repeated the words of the Leader of the Opposition. However, what I was saying was that in many respects what we appreciated more was the distant thunder of the old Wedderburn views.
I say to the noble Baroness, Lady Symons, that, with her experience, what she might have addressed more specifically was last summer and autumn when this country did indeed see a resurgence of industrial action on a scale that we have not experienced since the early 1990s. In the year up to November 1996 it is a fact that there were 1.3 million days lost. That is nearly four times more than the corresponding period in the previous year.
The most significant feature of this strike activity was its concentration in the public sector or in companies which were until recently part of the public sector. These sectors have accounted for a growing share of all days lost. In the 1970s, strikes in the public sector and 769 the now privatised utilities usually represented less than 15 per cent. of all days lost. Last year they had risen to around 70 per cent.
In contrast, much of the private sector is now strike-free. Days lost through strikes in this part of the economy remain close to all-time lows. That is a major achievement. It shows how much has changed for the better in our industrial relations. We have also seen some improvements in the public sector's industrial relations, but there the pace of change has been relatively slow. There are many possible reasons for the slower progress in the public sector and in some utilities. One contributory factor is the lack of competition in these sectors. The Government are therefore pursuing their policies of privatisation and increased competition. Meanwhile, it is clear that industrial action in sectors with a monopoly or near-monopoly have the potential to cause substantial disruption or worse. My noble friend Lord Oxfuird asked some searching questions about the position within that area.
We all experienced some disruption last year. Londoners and visitors to the capital suffered when the Underground was closed down. Millions were inconvenienced by the actions of a few workers. Other parts of the country also suffered. For example, rail services were disrupted in Scotland; fire services were withdrawn in Derbyshire and Merseyside; and, of course, virtually everybody in the country must have been affected in some way by the strikes in the Royal Mail.
In formulating the proposals contained in the Green Paper, we were guided by four broad principles and objectives. First, we wanted to ensure that industrial action was taken as a genuine last resort only. Without going as far as the noble Lord, Lord Harris, in describing them as "crude and iniquitous", I would have hoped that on both sides of the Chamber there was a realisation and appreciation that strikes should indeed only be a genuine last resort. It is for that reason that our proposals on balloting, including raising the threshold, are designed to meet that objective.
Secondly, we wanted to ensure that the spill-over effects of industrial action on third parties, including the general public, were minimised. My noble friend Lord Carr identified with acuity exactly how that had been the shift of the focus in the approach that we wanted to take.
Thirdly, and subject to these considerations, we wanted to preserve the freedom of workers to take industrial action. Fourthly, we wanted to build on our previous achievements in extending the democratic rights of union members to control the activities of their unions.
When we drew up the Green Paper, it also made sense to take the opportunity to look again at other aspects of the law on trade unions and industrial relations. In general, we found that much of the existing law was working well. I welcome the approval by the noble Baroness, Lady Symons, that 770 is now bestowed on the reforms that we introduced. However, we did identify a few areas where improvements could be made.
Of course, proposals for reform must be workable. We knew that there were difficulties in developing practicable proposals for reform in this complicated area. Previous attempts to formulate workable proposals had foundered on the apparently insuperable problem of defining the essential services in question. Our proposals therefore avoid the need to specify a list of sectors where strikes should be restricted, although in a number of other countries that is the route that has been followed.
Instead, we propose a different and, I would argue, a better targeted and accordingly a fairer approach. Other countries often outlaw any form of industrial action in sectors regarded as essential. I say to the noble Lord, Lord Wedderburn, that I agree with him that one cannot set about a cherry-picking approach to it. But if we were to adopt the German approach in its entirety I am sure that pre-eminently among your Lordships he would appreciate that large numbers of those who are described as the Beamten are deprived of any right to strike at all. That would include some of those who enjoy the right to strike in the United Kingdom.
§ Lord Wedderburn of Charlton
My Lords, as the Minister has gone off on the subject of the essential services generally, which I for one was unable to debate because the subject is not in the Motion, will he agree that in many of the countries which he obviously has in mind such as Italy and Spain and to some extent Germany—there are other examples in Western Europe too—it is the case that the law requires the employer and the unions to try to agree on what is an essential service or, in the case of Italy, an indispensable minimum service? Does he not have that in mind?
§ Lord Fraser of Carmyllie
My Lords, I appreciate that there is a wide variety of models that have been followed through seeking to define what are essential services. The approach that we have taken is that that route is too complicated. It is for that reason that we have spelt out the approach that we have taken in this Green Paper.
As the noble Lord appreciated, under our proposals even in a sensitive area a union can call industrial action provided it acts responsibly and organises that action in a way which avoids the risk of serious damage and disruption to third parties. In some countries that would simply not be permitted even if there were not the risk of serious damage or disruption.
§ Lord McCarthy
My Lords, this is the last time that I shall interrupt. I thought I heard the noble and learned Lord refer to the right to strike in this country.
771 If there is a breach of contract one can be dismissed for doing that. There is no right to strike in this country.
§ Lord Fraser of Carmyllie
My Lords, if the noble Lord wants me to elaborate on that shorthand, I believe that he will appreciate exactly what I mean. For example, if at the present time one works within the Royal Mail and the right procedures are followed through, it is open to one to go on strike. If one happens to be in much the same position in Germany, that is not an opportunity which is open to the worker. That distinction is perfectly obvious to the noble Lord.
The centre part of this debate turns on the issue of the disproportionate or excessive effects. I say again to the noble Lord, Lord Wedderburn, that I am grateful for his acknowledgement that the concept of proportionality is understood in our law, certainly at the stage when one is looking to interim interdictus, as I would describe it, or an interim injunction.
The noble Lord, Lord Rochester, rightly made the point that judges are not much enamoured of becoming embroiled in the details of an industrial dispute. Perhaps I may refer him to paragraph 2.7 of the Green Paper where it is specifically acknowledged that that is an issue. It points out:However, the courts would not be required to judge the merits of a dispute. The notion of 'disproportionate or excessive effects' relates to whether the impact on those affected by the industrial action is reasonable, not to any relation between the purpose of the action and its effects".So that point is readily enough understood in the Green Paper and I believe that we are in agreement on it.
We also spell out in that part of the Green Paper how we believe the legal criteria might be established and how the courts might interpret them. I am bound to say that I do not see, certainly at the stage of seeking an interdict or an injunction, that there would be anything like the difficulties that some have claimed would follow from it. I predict that, were such a change to be introduced, as is the case at the present time, the prospects of anyone following through to the time when damages might be sought would be very limited indeed. If the matter had been resolved at the time of injunction or interdict, I would anticipate that the narrowing of the immunity to exclude actions with disproportionate or excessive effect would mean that actions for damages would continue to be rare.
Another matter that has been raised is the threshold for a ballot majority. It is worth recalling that under the existing legislation those who have to participate in the ballot do not now have any great task to perform. After all, ballot papers are now sent to their homes with a reply-paid envelope. Members have every opportunity to vote. They do not even have to leave their own homes to achieve that level of participation.
The noble Lord, Lord Wedderburn, and others will be aware that there are other examples of thresholds higher than a simple majority in our company law. Perhaps I may take another example which I have no 772 doubt will not appeal to the noble Lord. Nevertheless, he might like to look to the arrangements in the European Parliament where such a weighted majority is required. I accept that that example will not appeal to all Members of your Lordships' House. Indeed, I looked around to see whether my noble friend Lord Pearson was in his place before I dared to make it. My simple point is this: the idea that there has never been any circumstance in which such a majority has been required or is considered desirable is nonsense. It is absurd to describe it as somehow being anti-democratic when it is in fact part of the procedures of the European Parliament. However undesirable one may find that, it is absurd to caricature it as something that no civilised society would ever contemplate.
§ Lord Wedderburn of Charlton
My Lords, the noble and learned Lord is putting words into our mouths about civilised societies. He mentioned company law, but we are speaking not of a qualified majority of, say, three-quarters or two-thirds; we are speaking of a majority of the electorate or of what I would call the "gross majority". Where in company law can one find that?
§ Lord Fraser of Carmyllie
My Lords, if the noble Lord looks to what I said, he will see that I did not say that there was such a majority in company law; I said that there were examples of special majorities. I am sure that the noble Lord recognises that I deployed that phrase because it covers a range of circumstances and more than a simple majority of those voting.
§ Lord Monkswell
My Lords, I wonder about the prospect for government business if the same rules were to apply in this House and if the Government had to secure 600-odd votes to get their business through.
§ Lord Fraser of Carmyllie
My Lords, I have now made the point rather too clear. It would be a great help if the noble Lord could sometimes listen to just something that is said. As far as I am aware, it is no part of our arrangements that we shall allow for ballot papers and reply-paid envelopes to be delivered to the home of every Member of your Lordships' House. As the noble Lord has not understood that, I am given the opportunity to repeat in the simplest of words how easy it is for any member of a trade union to participate in a strike.
The noble Lord, Lord Rochester, caused my jaw to drop by indicating that he had given me notice of a question. I am afraid that I have not received that notice, but I hope that I can answer his question now. The statutory requirement for company reports to contain a statement describing the actions taken within the financial year to promote various forms of employee involvement has, frankly, generally added little to our knowledge in this area. That is a pity because other evidence shows that British companies have a multitude and a growing number of ways of involving employees. The wealth and diversity of voluntary employee involvement reinforces the 773 Government's view that rigid legislation, such as the works council directive, would be disruptive and damaging if ever applied in the United Kingdom.
Despite what the noble Lord, Lord McCarthy, said about the colour of the cover of the document, I emphasise that it is, indeed, a Green Paper. This is a complex area and we have benefited from listening to the expert and informed opinion of noble Lords. The consultation period on the Green Paper lasts until the end of next month. Once all the responses are in, the Government will consider how to proceed. The President of the Board of Trade has already made it clear that legislative proposals are unlikely to be forthcoming before the election. Anyone with any understanding of parliamentary procedures will recognise the impossibility of achieving such legislation within that period. However, I urge all those who have views to respond to the document.
The noble Baroness, Lady Symons, referred to a number of organisations and their views. I must advise her that at present, not unexpectedly, we have not yet received any significant range of views in the department. However, I anticipate that such views will be received before 28th February.
I rather suspect that we shall see a repeat of what has happened at almost every stage of our gradual approach to the reform of industrial relations. As each step has been taken and after each step has been taken, it has grudgingly been agreed that that step was the right one to take. Once again, it seems that in this debate we have heard the same "A bridge too far" speech which we hear repeatedly from noble Lords on the Opposition Benches.
We believe that there is a strong case for limited and targeted action in this area. Last year's disputes demonstrated all too clearly how intemperate industrial action can disrupt normal activity. Our Green Paper puts forward limited, fair and workable proposals to address the problem. The proposals provide the necessary protections for business and the general public while—and I emphasise this—preserving the essential freedoms of workers to exercise democratic control over their unions.
§ 8.46 p.m.
§ Lord Campbell of Alloway
My Lords, my noble and learned friend has taken a remarkable line which has covered the whole of the argument that I would have wished to address in reply, so all that I wish to do is to thank all noble Lords for having spoken. They have not spoken in vain because it has been demonstrated beyond all peradventure that neither the Labour Party nor the Liberal Party has any policy whatever to deal with this situation. The noble Baroness, Lady Symons, said, "I have had a word with Mr. Blair. He is going to be tough on strikes". That is no good. How does Mr. Blair propose to deal with a situation analogous to that of London Underground or the Royal Mail? That is what we want to know. That is why I put down this debate—to try to find out whether the parties opposite have any policies at all. They have not.
774 I am obliged to all who have spoken. This has served one purpose that I sought, but I am a little disappointed. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.