HL Deb 25 November 2002 vol 641 cc583-96

4.9 p.m.

Lord Williams of Mostyn

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Prime Minister to a Private Notice Question in another place earlier today on the firefighters' dispute. The Statement is as follows:

"The Government deeply regret the continuing firefighters' dispute and believe it cannot be justified. The firefighters are presently paid under a pay formula agreed at the conclusion of the last firefighters' strike 25 years ago. Under that formula, their pay has kept pace with pay rises in the economy as a whole.

"Following the election of the new general secretary of the Fire Brigades Union earlier this year, the union declared that it wanted to change the formula and tabled a 40 per cent pay claim.

"The employers agreed to discuss a new formula, and agreed in the meantime to pay 4 per cent, an above inflation pay increase roughly in line with the existing formula and pay awards to comparable groups of workers.

"The union refused this offer. In an effort to help in September, the Government appointed Sir George Bain, the highly respected chairman of the Low Pay Commission, to inquire into firefighters' pay and a possible new formula. We did so after consultation with the TUC, and also appointed Tony Young, the former president of the TUC. to assist him.

"Meanwhile, in August, we began preparations with the military for strike cover.

"The employers co-operated with Bain. The unions again refused even to allow their members to talk to him.

"When the time for the strike approached, as well as continuing preparation with the forces, we tried to facilitate negotiation. We brought forward Bain. He recommended that above-inflation pay increases could be paid, but only if accompanied by modernisation. Among his findings were: that full-time firefighters should lift the ban on working alongside part-time ones; that overtime, where needed, be worked; that management could change, where necessary, the rigid shift system of two days on, two nights on, then four days off to provide a better service; that firefighters could be allowed to do basic training as paramedics and carry resuscitation equipment like defibrillators; that the fire service could share control rooms with other emergency services to provide efficiency of response; that action be taken to improve the management of sickness in the service to reduce the high numbers that retire early through sickness and ill health.

"The employers welcomed the report. The Fire Brigades Union rejected it out of hand. Those changes to working practices are plainly reasor able. They would produce substantial savings that could fund a better pay award.

"The potential deal that may have been reached last Friday morning between the union and the local government employers was unacceptable for the very simple reason that it was not funded through modernisation. In addition, the agreement to modernise was only to talk about it, not a Firm commitment to do it; and the costings of the deal were not calculated or given, though plainly significant. In effect, the Government were 6eing asked for a blank cheque.

"The Government's position is that, over and above the 4 per cent claim already offered to the firefighters, there can be no further money without it being paid for by modernisation.

"If the existing pay formula of the firefighters—which for 25 years their union insisted on—is to be changed, it has to be changed by agreement. The Bain report offers increased pay above 4 per cent paid for by changes in working practices. It is a fair and reasonable report.

"The Government cannot be asked to find additional money outside agreed Government spending limits. To do so would risk fundamental and lasting damage to the economy. If the Government were to yield to this claim for pay increases way above inflation and not paid for by productivity, the consequences across the public sector would be huge. Nurses, soldiers—who are manning the fire appliances now on pay far below the firefighters—teachers and police officers would also be seeking similar claims; and all that we have done to produce the lowest inflation, mortgage rates and unemployment in Britain for decades would be put at risk. It is not a course we can take.

"Meanwhile, the military does a superb job in providing replacement fire cover. I want to pay full tribute to our Armed Forces—Army, Navy and Air Force. They have done brilliantly, as ever, and we can be proud of them—and I thank the public, who have responded in an intelligent and mature way to the strains put on the service. Up to this point, after six days of strike action, they have coped admirably, saving numerous lives in the process. But obviously the risk to the public is there, which is why even now I urge the union to call off the dispute, which cannot succeed, and to return to the negotiating table to discuss how modernisation can fund pay improvements over and above the 4 per cent.

"The Deputy Prime Minister set out the Government's position last Thursday. He had offered to make a further Statement to the House today, precisely to keep the House informed. That is now superseded by this Answer to the right honourable gentleman's Question, and with the permission of the Speaker my right honourable friend the Deputy Prime Minister will be making a Statement to the House tomorrow".

My Lords, That concludes the Statement.

4.15 p.m.

Lord Strathclyde

My Lords, I thank the noble and learned Lord the Leader of the House for repeating the Statement. However, is it not extraordinary that it took a Private Notice Question from my right honourable friend Mr Iain Duncan Smith in another place to force the Prime Minister to come to Parliament to make a Statement on this grave situation? This morning, the Prime Minister summoned a press conference to set out his views on the dispute. He was in any case coming to Parliament this afternoon. Should not his first thought have been to inform Parliament before grandstanding to the media? I very much hope that the noble and learned Lord the Leader of the House will take a very firm message back to the Prime Minister from this House that it is now far beyond high time that Ministers should make major statements to Parliament first and leave the spin until later.

Turning to the dispute itself, I should like to make it clear that we on this side agree that the pay claim put forward by the FBU is wholly unreasonable. We condemn strike action that puts the public at risk, and we totally condemn threats by other unions, masquerading under health and safety, to indulge in secondary action. The public already have enough to contend with without growing disruption to Tube and train journeys and the wrecking of holiday travel this Christmas.

Can the noble and learned Lord explain the legal position to this House? Will the Government seek an injunction under Section 240 of the 1992 trade union legislation to ban this strike? Can he assure the House that any attempt to launch secondary action will be immediately confronted in the courts?

Will the noble and learned Lord confirm the Government's position on the crossing of picket lines to secure use of the most up-to-date equipment? Was the Prime Minister right when he said that crossing picket lines would simply inflame the dispute? Or was the noble and learned Lord, Lord Falconer, right when he said that public safety has to come before picket lines? Has not the Government's handling of the matter been an utter, complete and total shambles? Just who is in charge here? Is it the Deputy Prime Minister, or the Chancellor of the Exchequer—or is it now the Prime Minister?

The dispute is no surprise. Just how is it that the Government seem so unprepared? When it started, they did not know what their policy was on reserve appliances, they did not know what their policy was on training troops to use fire equipment, and they did not seem to know whether they were a party to the dispute at all. All through the summer and autumn, the Government have been inactive and complacent over a growing threat to the safety of the public, and we now have a bitter and highly dangerous situation on our hands. This is undoubtedly partly because of the disastrous stream of mixed messages coming out of the Government.

Is the deal on offer from the employers "half-baked", as the Deputy Prime Minister said last Friday, or is it "still worth talking about", as he said yesterday? Is the offer simply unaffordable, as the Chancellor said, or are the Government, quite prepared to make an exceptional case", as the Deputy Prime Minister said? The fire-fighters do not know where Ministers stand; the employers do not know where the Government stand; and at times it seems that half the Government do not know where the other half of the Government stand.

What exactly is meant by this word "modernisation"? Is this whap we used to call "productivity"? In the view of the Government, will it mean an overall reduction in the number of firefighters employed; and, if so, how large? The Prime Minister's intervention this morning made good television, but it had not one single new proposal to solve the crisis, and many will feel that it has simply interjected new bitterness into the dispute.

What do Ministers think would be a reasonable settlement for the FBU? If Ministers were clear enough on that to pull the rug on the offer made last Friday, they must have some idea of the answer. If they propose to intervene as they did, should not a more competent senior Minister be on hand to give an answer at any time of day or night?

In conclusion, all Members of this House will want to express their thanks and admiration to the young soldiers in service on our streets and roads today. Many of them would welcome the pay and terms of service that some firemen currently receive. But our troops never neglect their duty. Some of those very young soldiers may be called on to put themselves in the way of a very different kind of danger in the event of war in Iraq. Will the noble and learned Lord therefore give an assurance that their battle-effectiveness and training will not be put at risk by the demands placed on them by the Government in an industrial relations fiasco of the Government's own making?

This whole episode has been shambolic. I hope that the Government will learn lessons from this shameful period, which has not only put the Government in the very worst possible light but has brought back shades of trade union activism that we thought had been relegated to history.

4.21 p.m.

Baroness Williams of Crosby

My Lords, I, too, thank the noble Lord the Leader of the House for replying to the Private Notice Question in another place. We regard the situation as seriously as he does.

First, I should like to express our deep appreciation of the work of the soldiers and nurses who have manned the green goddesses and echo what the noble Lord the Leader of the Opposition has said on that matter. They have put themselves at risk; in many cases they do not have full training for what they do; and they risk their own lives in our protection and defence. The public owes them a great debt of gratitude.

I also add a word of sympathy for the firemen. It is to their credit that on several occasions a number of them have broken their own picket lines because of lives being at risk. We should place on record that that is a more responsible attitude than some strikers have shown in other disputes and is perhaps one reason that they have managed to retain a degree of public support.

I should make it absolutely clear that we on these Benches believe that the Government were right to reject the extremely vague blank cheque that the employers proposed to achieve a settlement. There was no indication of how that settlement could be financed beyond the 4 per cent which from the beginning had been made plain was available under previous government arrangements to fund that sum of money, not only for the firemen but for other aspects of public services; no clear costing of how the rest of the claim was to be met; no clear indication of what the savings from modernisation would be; and, most importantly, no clear commitment to a programme of modernisation. We on these Benches therefore believe that the Government were right to reject that particular proposal made on Friday evening. We also have some sympathy with the Deputy Prime Minister's statement to the effect that there were no figures on which he could rely to indicate whether or not the Government could indeed support such a settlement.

However, I must add a note of criticism of the Government. I believe that the noble Lord the Leader of the Opposition is right to say that a good deal of vagueness and confusion has surrounded this matter. It has not been exactly clear from the beginning that the Government would not fund more than 4 per cent except on the basis of costed modernisation proposals. That was dangerous because the employers seemed to continue to negotiate without any clear awareness of that fact—although they should have known it from the outset—all the way through to the moment of crisis occasioned by the second strike. They went through the first strike without that issue being made clear to the public or, evidently, to the employers or the strikers. The Government should examine very closely the way in which they conducted that part of the negotiations. If it was clear that they would not finance more than 4 per cent in any situation, it is not altogether clear why they joined the negotiations at all.

My second point concerns modernisation. Our understanding is that the National Joint Council costed the modernisation proposals and indicated that they would yield a saving of about £71 million. It is not clear to us whether that costing of modernisation also allowed for what may he described as a costing of improvements in quality. We all know that one of the great difficulties with the relationship of the fire fighters to their employers has been the extraordinarily anachronistic structure of rules, shill proposals, guarantees and commitments that have been made over many years. For example, we all know that there are fixed shift patterns that do not alter according to the demands of the day, the time of the day or the seasons of the year. We know that there are fixed arrangements under which overtime is limited, even though there may be moments when no overtime is needed and other moments when it is. It is a hopelessly anachronistic, inflexible and rigid structure, and it may be that large savings could be made from its modernisation.

There is no clear distinction between modernisation involving changes in those existing rigid rules and modernisation in the sense of improving the quality of the service by, for example, firemen being trained—extraordinarily, they are not—in the use of defibrillators, in first aid and in becoming a multipurpose force, rather than one with a very limited set of requirements and obligations linked to out-of-date technology. Therefore my first question about modernisation is: what does the £71 million cover? Does it cover any estimated improvements in quality, which, as far as we on these Benches can tell, has not so far been costed?

If the employers and the FBU were able to reach an agreement about the costing of part of their claim from savings on modernisation and if there was a clear commitment to staged modernisation to finance an increase of more than 4 per cent, would the Government in those circumstances be willing to finance the necessary additional transitional funding involved in a payment of salary necessarily somewhat preceding the actual specific savings from modernisation? They are two different matters. Savings from modernisation cannot be immediate.

In conclusion, I should like to raise the much wider issue of public sector workers. We on these Benches have indicated our sympathy for the Governments approach to the fire strike and the ways in which we hope they can bring about the satisfactory settlement desired by both sides. However, with regard to the much wider repercussion for public sector workers, we take seriously the Government's real concerns about the possibility of undermining their very good record on inflation and public finances. However, have the Government given due consideration to the profound sense of injustice that reigns among public sector workers who see huge increases being offered to senior managers and directors, some with absolutely no record of success whatever, which has created deep bitterness among badly paid public sector workers?

In addition, will the Government consider how over a medium-term period they will attract teachers and nurses to the public sector at a time when property prices, especially in the south-east, are going through the roof and it is literally impossible for ordinary teachers or nurses to fund even minimal decent accommodation for themselves and their families? Will the Government give more sympathetic consideration to those problems than they have done so far?

4.28 p.m.

Lord Williams of Mostyn

My Lords, I am grateful to the noble Lord, Lord Strathclyde, and to the noble Baroness for their contributions.

The noble Lord, Lord Strathclyde, asked whether the Government had learnt any lessons. The answer is an unambiguous "yes". They are not lessons that we needed to learn from the present dispute, but lessons that we needed to learn from recent political domestic history. The Prime Minister and the Government are also adamant that we in this country do not want to return to interest rates of 15 per cent. That was the stewardship of the noble Lord, Lord Lamont. We do not want to go back to a situation in which hundreds of thousands of people may lose their homes because they are unable to continue to pay their mortgages; nor do we want to return to a situation of high unemployment. Under the Chancellor's stewardship, we presently have inflation of 2 per cent—an historic low. Unemployment has declined since 1997. Mortgage rates are very low as a component of most families' domestic expenditure.

We have learnt the lesson and no one in this House should be under any illusion: we cannot, we shall not, we must not give in to claims of 40 per cent when inflation is 2 per cent and mortgage rates are what we know them to be. So we have learnt the lesson but we did not need this present dispute to bring it to the centre of our mind. It has been at the heart and forefront of every pronouncement that the Prime Minister and the Chancellor of the Exchequer have made since 1997.

I agree with the noble Lord, Lord Strathclyde, that the pay claim is wholly unreasonable: 40 per cent when 2 per cent is the inflation rate and the general going rate has been of the order of 4 per cent. As regards the penultimate point made by the noble Baroness, Lady Williams, many public service settlements have been at a higher rate than those in private industry. I exclude the grotesque, aberrant awards that are given to chief executive officers; namely, on the basis that they have been able to demonstrate continued failure over a period of years.

What is the legal position? It is that there is the possibility of legal action being taken under the 1992 legislation if certain legal parameters are met and that is a matter for judgment. It is part of the legislation, as the noble Lord identified. Indeed, the noble Lord, Lord Tebbit, asked a particular question about it when he was in his place a few days ago.

The noble Lord, Lord Strathclyde, asked about two apparent divergences. They are not two divergences at all. The citations he gave—I am sure that they were in no way selective—were, first, that the Prime Minister said that to cross picket lines inflames tempers (of course); and, secondly, that my noble and learned friend Lord Falconer said that public safety must be above picket lines (of course). However, the point of being in government is to make judgments of that kind. They are never easy. They ought to be informed—they ought to be truly informed—and sometimes they are difficult.

The Government are not a party to the negotiations in the historic sense. The criticism of the present Government has always been that they are too centralistic; that they will not let go the levers of power; and that they constantly interfere with everything. So on this occasion the employers negotiated with the Fire Brigades' Union, but they were under no misapprehension—I beg your Lordships' pardon, they could not reasonably have been under any reasonable misapprehension—that the budgetary settlement was exactly that. It was a budget and it was settled.

Some people suggest that the Deputy Prime Minister in the early hours of the morning should have said yes or no—"Put your tick in the box, Mr Prescott"—on proposals which were not costed, were not detailed and did not condescend to any sensible defined proposals for rationalisation of working practices. I use that word in place of "modernisation". But he would have been grotesquely irresponsible to have said yes. The criticism of him for not saying yes and for saying that he needed further detailed material, access to legitimate costings and proper advice is wholly unreasonable and based on no understanding of the true economic situation in this country. The Government have had a consistent position throughout. There is no more money except within existing funding levels unless it is capable of being demonstrated to be savings by way of modernisation—or, as I say, rationalisation.

Both the noble Baroness and the noble Lord asked what we speak of when we speak about modernisation. I repeat the examples. Full-time fire fighters should lift the ban on working alongside part-time ones. If any of your Lordships can demonstrate to me even the beginnings of an argument against that proposition, I shall be pleased and grateful to hear it—although I think I shall be waiting rather a long time. Overtime, where needed, should be worked. This House is well accustomed to unpaid overtime and we do it. Why? Because we know that it is a necessary consequence of the work that we do. Management can change where necessary the rigid shift system of two days on, two nights on and then four days off. We have just voted by a two to one majority to change our rigid shift system, even in September.

Finally, let us examine this, which is deeply important. Fire fighters should be allowed to do basic training as paramedics and carry resuscitation equipment such as defibrillators. I point to what our own colleagues in this House did when it was necessary to provide defibrillators. Did they say that it was not their work? Did they refuse to assist? There is a moral there.

The past history of 25 years stuck in aspic with practices that cannot be justified on any basis is intolerable. Being intolerable, it is not to be tolerated and therefore it will not be. The one easy way out is the gross irresponsibility of not recognising that this claim does not stand alone—although it is not sustainable on its own. Everyone in this Chamber knows, and I believe that the majority of the public know, that this will not be the last such claim; that it is not proportionate; that it is not reasonable; and that it is not sustainable.

4.46 p.m.

Lord Tebbit

My Lords, perhaps I may ask the noble and learned Lord two questions. First, if everything above 4 per cent is to be paid for out of productivity gains so that the overall cost of the Fire Service does not increase, what scale of redundancies will be required? Improvements in quality will not reduce the overall cost of the 16 per cent package.

Secondly, does the noble and learned Lord agree with those lawyers who believe that a combination of measures under the social chapter and of human rights legislation have in effect granted a right to strike? If that so, is it any longer possible either to seek an injunction against strikers for doing what is their legal right or to seek an action in tort against a trade union for the same action?

Lord Williams of Mostyn

My Lords, the noble Lord, Lord Tebbit, is tempting me to revert to my former occupation. I do not believe that the Human Rights Act restricts necessary action. A human right is the right to withdraw one's labour, but it is riot an absolute right, as the noble Lord knows and did a great deal to bring about. All of the human rights legislation deals with proportionality and the balancing of different interests. To put it at its simplest, my right to free speech is constrained by the noble Lord's right not to be defamed by me. I do not believe that the social chapter and the human rights legislation will inhibit the Government from acting as they think appropriate.

I cannot give an answer to the redundancy point, which is a very important one. But I will put this question, if I may, because the noble Lord asked questions which were utterly devoid of any party-political advantage. What happened when the dispute arose? I will put it neutrally. The Government set up an independent inquiry. Could it be said that Sir George Bain was likely to be a placeman or a preacher? Emphatically not. He is respected by everyone in this particular field: he chaired the Low Pay Commission after all.

The Bain committee, which included a former president of the Trades Union Congress, said, "We must modernise. Here is a first report. We hope that you will be able to discuss it". The way forward is of discussion, of attempting to cost and attempting to forecast the future. It is difficult with firemen, as the noble Lord, Lord Tebbit, knows because they can retire at different times; one can retire after a certain period on a half pension and, with more years' service, on a two-thirds pension. All of those things will be actuarially difficult to propose unless we have negotiations.

The FBU would not co-operate at all with Bain, part one or part two. To my understanding, it has put forward no proposal for modernisation. I believe that if the Bain inquiry said, "Let us sit down and discuss. Here is our initial draft, please rejoin us in December", then some of the answers to those questions—I agree with the implicit point of the noble Lord, Lord Tebbit, that they are difficult questions—can be arrived at. But we shall never arrive at them if someone is holding a gun, with loaded chamber, at our head.

Lord Marlesford

My Lords, I echo the strong support given to the Government by my noble friend the Leader of the Opposition for resisting the 40 per cent claim, or anything like it. As the noble and learned Lord the Leader of the House said, it world be catastrophic for the public sector as a whole and for the economic management of the country.

I regret the rather unworthy little jibes which the noble and learned Lord directed towards the previous government's economic policy. Quite frankly, the present economic prosperity that Britain enjoys, which is well ahead of most countries in Europe, is based on the Conservative inheritance of very sound economic policy. So let us get that out of the way.

I strongly support the Chancellor in his apparent decision that to meet the shortfall that will occur in his revenues he will not increase taxes, he will not cut spending but he will increase borrowing. That is clearly right.

Does the noble and learned Lord agree that the firemen are led by a highly politically motivated leader, who is one of a group of such who have recently emerged? I have had the opportunity to talk to some of them. Does the noble and learned Lord realise that they are every bit as antagonistic and opposed to the new Labour Government as they would be if there were a Conservative Government? That is another reason why it is so important to try to separate them from the membership and to stand up against them.

I turn finally to a short technical point, which I raise after talking to people in Suffolk. Is the noble and learned Lord aware that some of the retained firemen are members of the Fire Brigades Union because in these days of liability claims the insurance facilities offered to members of other unions are not adequate to protect their apprehension of being sued if something goes wrong when they are tackling a fire? Will the noble and learned Lord at least feed that into the process of considering the wider aspects of the dispute?

Lord Williams of Mostyn

My Lords, perhaps I may deal with the noble Lord's latter point straightaway. I do not know the intricacies of the insurance position in his part of the world but, as he knows, my noble friend Lord Rooker will be repeating the Statement—if that is what the House wishes—to be made by the Deputy Prime Minister tomorrow and I hope that we may at least have made some inquiries about that. I undertake to do that. The noble Lord can see my noble friend Lord Rooker sitting next to me.

I was not making unworthy little jibes. I was making a serious point, which is this: if we do not stand firm we shall drift backwards into the old lethargy which was a characteristic of this country. It is not a party political point because a good deal of the inheritance left by the government in which the noble Lord, Lord Tebbit, served has been to the public benefit in this country. I was not making the point that everything was bad. I was making the serious and sober point that once we start to lose our resolution we will be in danger of returning to the bad old times—hyper inflation, people losing their houses, people losing their jobs and a general feeling of social insecurity and uncertainty which has endless social ramifications, as I know the noble Lord would be the first to agree.

The Earl of Onslow

My Lords, the noble and learned Lord was absolutely right in what he said in his last sentence. Perhaps I may ask him why there was no plan B. The Government have had months to know what was in store for them.

Is it not possible to look at—not necessarily to accept—the practice in both Denmark and the United States of a decentralised fire service, where each individual county or town runs its own fire service without the centralised block wage bargaining which clogs everything up? For example, Surrey or Yorkshire could arrive at their own arrangements, which could be different for each county because their circumstances are different. No one has thought of that.

I get the impression—I hope that the noble and learned Lord will be able to dispel it—that the Government have been caught on the hop. There is no plan B and no one has thought of an alternative. That is the criticism I would raise against Her Majesty's present advisers.

Lord Williams of Mostyn

My Lords, the noble Earl may raise that criticism but it would be mistaken. One cannot sensibly approach an industrial dispute by saying to the employees, "We may take away your jobs altogether and go a completely different way". The true plan B was the setting up of the Bain inquiry. It was a perfectly sensible thing to do. No one said its terms of reference were wrong; the employers were willing to contribute; its constitution in terms of the people on it was immaculately independent—and the union, I repeat, refused to have anything to do with it. It put forward no ideas for modernisation—not even on one side of a postcard—and forbade its own members to give evidence.

In those circumstances a government have to take a firm stand, and that is what we have done. It is being misrepresented—we shall have to bear that. It may well be unpopular in the short-term—we must bear that.

Lord Bradshaw

My Lords, I declare an interest. I am a county councillor and I have been involved in negotiating with both the Fire Brigades Union and the police.

The negotiating machinery is very bad indeed. It involves a huge number of people—about 40 on the management side and about 40 on the police side. I went to a meeting at the police national negotiating body two weeks ago, where all those people were in a room and only one person on each side was allowed to speak. They then went away into other rooms and talked among themselves, and then they came back again. I plead with the Government to give some thought to streamlining this negotiating machinery. There is no doubt that huge misunderstandings arise when so many people—some representing counties, some representing employers' associations and some representing national bodies—are all merged together. As soon as we get a simplified negotiating machinery, I am sure that in reasonable circumstances we can look forward to better and clearer outcomes.

Lord Williams of Mostyn

My Lords, the noble Lord, Lord Bradshaw, makes a very good point. But he said "in reasonable circumstances". I recognise in my mind the citation from the American President, I think, who said. "Come, let us reason together". But, mixing the citations rather inappropriately, it takes at least two to tango. There is no reason why we should not have different views of how we carry out negotiations. Lots of other professional bodies have to change; lots of other trade unions have to change. It is not reasonable simply to say, "Here is a 40 per cent claim; we will do nothing in the context of the Bain inquiry; we will offer no evidence; we will destroy none of your misapprehensions".

For the long term, to use the phrase of the noble Lord, Lord Strathclyde, of course there will be lessons to be learnt. But one of the lessons we are adamant about is that we will not give in to blackmail.

Baroness Turner of Camden

My Lords, does my noble and learned friend agree that although 40 per cent was the original claim there seems to have been a shift in the FBU position and that 16 per cent has been mentioned as a possible solution, phased in over a period, with £25,000 as the aimed for pay for firefighters? There seems to have been a shift in the union's position judging by the press statements which came out over the week-end.

Lord Williams of Mostyn

My Lords, I could be wrong, because I have not taken part in the negotiations and I am only doing the best I can with the material I have. It is not to my knowledge that the FBU has disclaimed, discarded or withdrawn its 40 per cent claim. In a context of 2 per cent inflation, without being properly funded it would not be responsible for a government to accept 16 per cent.

Lord Campbell of Alloway

My Lords, I support the noble and learned Lord's stance that the Government must now take a firm stand. I also support what was said by my noble friend Lord Strathclyde and the noble Baroness, Lady Williams of Crosby, about the problems of restrictive practices in the unions, which is not new. It very much exists in this union today and it must he dealt with. That being so, I ask for assurance, first, that our Armed Forces shall not be asked to cross the picket lines without an emergency Order in Council on the affirmation of both Houses; and, secondly, that in these regrettable circumstances the Government will use their best endeavours to repair their nets with the trades union movement as a whole. Only with its support will the general situation improve. Forget the FBU for a moment; a general situation of far greater importance is looming. Could the Government take the initiative and restore negotiations with the trade union movement?

Lord Williams of Mostyn

My Lords, I am grateful to the noble Lord, Lord Campbell of Alloway. I will consider his first point, which is one of legal technicality as well as having a wider purpose. On his second point about the Government's best endeavours to have amicable relations with the trade union movement, that is exactly what we wanted. The Prime Minister demonstrated that; the former president of the Trades Union Council was asked to sit on the Bain inquiry. No one could be more generous than that. He and I have the previous convictions of being members of probably the best organised closed shop that the world has ever known, of which we are still members. I was chairman of it, so I know. It is called the Bar Council—perhaps I should not utter those two words.

Immediately before the last election, and immediately after the 1997 election, the Prime Minister said that we would treat our fellow citizens in the unions fairly but without favouritism. That is a good star to be guided by. I hope I do not trespass on your Lordships' tolerance, but one needs to remember that every wage increase that cannot be justified is a burden on all other citizens in this country. I pay tribute to the public services; my parents were both teachers and my first full-time job was as a teacher. Nobody needs me to pay tribute to the quality of public servants. We must all change, particularly given that we benefit from the present good economic circumstances in this country, or at least we must all have open minds to arguments for change. I say with deep regret that that is what has been lacking. For instance, Mr Prescott approaches the situation with a sad heart because he went into politics to secure the rights, liberties and appropriate privileges of those who work for a living. But that history cannot blind him or anyone else in the Government to our present serious circumstances.

Baroness Hamwee

My Lords, to follow the noble Lord's analogy of it taking two to tango, it seems that three organisations are tangoing in this situation: the union, the Government and the employers. It is perhaps no wonder that there is a little bit of tripping over each other's feet. Can the Lord Privy Seal clarify the role that the Government are playing? Were I a local authority negotiator in this situation, I would find it very hard to know what my negotiating hand might be if the Government were to say, "no we won't give you the funds, but we are not taking a part in the negotiation directly". I am probably not alone in wanting to understand this. It goes beyond the fire fighters' strike but very directly to the points that the Lord Privy Seal made about the health of the economy.

My noble friend Lady Williams talked about the problems of public sector workers with housing and so on, particularly in London and the South East. We all need to ensure that their reasonable claims are satisfied with a view to the health of the whole economy, particularly that of London and the City, without which our economy would crumble just as fast as it would if wage claims spiralled out of control.

Lord Williams of Mostyn

My Lords, there are two points. Part of the Deputy Prime Minister's remit is to address those very problems. He is engaged in securing funds and applying them to the exact problems that the noble Baroness identified, and which were referred to earlier by the noble Baroness, Lady Williams.

The FBU's claim is 40 per cent, and slightly more than 50 per cent for control room staff. To paraphrase the point of the noble Lord, Lord Bradshaw, the local authority negotiators are there to negotiate within their budgets. Very substantial settlements have been given by the Chancellor. But he said time and time again that those are to be used for reform and renewal—not simply to be dissipated and diverted into excessive pay demands. In a negotiation, one needs to be a competent negotiator. The noble Lord, Lord Bradshaw, thinks that the mechanism is not competent. I am not sure whether he applied "incompetent" to the individuals; therefore I shall neither disagree nor agree with him. But the proposed draft offer winging its way to Mr Prescott in the early hours of the morning was uncosted, unfunded and unmonitored.