HL Deb 26 November 2002 vol 641 cc656-69

4.16 p.m.

Lord Rooker

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by the Deputy Prime Minister. The Statement is as follows:

"I would like to make a Statement on the Fire Service dispute.

"Mr Speaker, as you know, I was available to give a Statement to the House yesterday in line with my undertaking to keep the House informed on the fire dispute. In the event, the Prime Minister made a Statement in response to an urgent Question from the Leader of the Opposition, so I will not repeat what he said.

"The Government have always made clear that they want a modern, efficient and effective Fire Service. We want: a fair deal for fire-fighters; a fair deal for other public service employees; and a fair deal for the public they serve.

"I am sure the House will want to join me in thanking the Armed Forces, the police and other emergency services for the thoroughly professional job they have done so far. Anyone looking at the pictures in some of our papers today of the Wren, Amy Stubbs, rescuing a young child, can see the professionalism and care they are applying to their role and I am sure the House would want me to thank them for it.

"Since Friday morning, the Armed Forces have attended over 5,000 incidents. Their remit is to give priority to category A life-threatening incidents. In fact, they are coping well and most of the calls they have attended have been the less dangerous category C calls. There has been no reported instance of property being left to burn.

"I also want to take this opportunity to thank the retained fire-fighters for the continuing work they have done and to acknowledge that striking firefighters have left their own picket lines to deal with some emergency incidents, as they did in the case of the rescue by Amy Stubbs.

"Finally, I am sure the whole House will join with me to thank the public for their extra vigilance. However, although hoax calls have fallen from 11 per cent on the first day of the dispute to 7 per cent yesterday, that is still 7 per cent too high.

"Following the breakdown of negotiations an Friday morning, I held a discussion with Sir Jeremy Beecham on the way forward. Sir Jeremy is the chairman of the Local Government Association but is not a member of the negotiating team. He agreed with me, and has made public, that the document that was negotiated between the employers and the employees on Thursday night and Friday morning abandoned the essential link between pay and modernisation that has been the touchstone of the Government's approach to this dispute.

"I met Sir Jeremy again last night. He is working to put together a new group on the employers' side which will oversee the process of modernisation of the Fire Service, drawing on the work of the Bain review. My right honourable friend the Minister for Local Government will be meeting the employers tomorrow to discuss this further. Officials from my department met the employers yesterday and are meeting officials again today to work on the costs and benefits of the modernisation proposals. We will continue to work with the employers in order to help them to come to a clear view about the process of modernisation and the costs of any pay deal for the fire-fighters.

"There has been a great deal of speculation about how this fire strike will be brought to an end. It is very important to bear certain absolutely clear principles in mind.

"First, as my right honourable friend the Prime Minister said yesterday, this 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. An inflationary pay rise for the fire-fighters would lead to inflationary pay rises elsewhere in the public sector, and that in turn would lead to job losses, inflation and mortgage rises. That, I think, is coin non ground between the Government and honourable Members opposite.

"Secondly, any pay rise in addition to the 4 per cent already on the table has to be paid for by modernisation. That has been the clear message I have given in every meeting I have held with the employers and the FBU since the early summer. It is the same message that has been repeated by the Prime Minister, the Chancellor and other members of the Government ever since this dispute started. It is the reason why the Government set up the independent Bain review immediately after negotiations between the Fire Brigades Union and employers broke down in early September. And it is the reason why we asked Sir George Bain to bring forward his position paper, which was published on 11th November.

"Following the Prime Minister's press conference and Commons Statement yesterday, there was some real debate in the papers this morning about the issues involved. The Fire Brigades Union found itself having to justify its opposition to the kind of change that other public services have faced up to and are indeed carried out by some individual fire brigades. The Fire Brigades Union even claimed that it was willing to discuss modernisation all along, which, of course, begs the question: why did it boycott the independent Bain review in the first place'?

"So the debate on modernisation is properly under way, and to help that debate I have today placed a copy of a principles paper submitted by the Government to the Bain review in the Library of the House. The Government's evidence sets out a clear vision for the future of the Fire Service and the principles which we believe should form the foundations for modernisation.

"The Fire Service is a front-line service whose effective functioning is essential to the quality of life in this country. The Government's evidence says the Fire Service is well regarded by the public and is effective in many aspects of its performance. But it is also a service that is in need of change and reform; a service which can make much better use of its existing resources; a service which has to consider new ways of working; a service which needs to forge better partnerships; and a service which needs to attract a more diverse workforce that better reflects the community it serves.

"The Government's principles paper sets out our general approach to public sector pay. It sets out our determination to maintain economic stability and meet our 2½ per cent inflation target. It emphasises the need to avoid unnecessarily high pay increases which divert money intended to improve public services. And it stresses the need to link pay to performance and reform rather than tenure and time served.

"The Government's evidence also sets out the five main drivers for change in the Fire Service. Those drivers are: first, our better understanding of the management of risk and the importance of prevention; secondly, the need to reduce the number of fires that occur and the deaths, injuries, and economic and social costs that they cause; thirdly, the Fire Service's contribution to community safety and action on social exclusion; fourthly, the importance of partnership in delivering best value; and, lastly, the broadening range of the Fire Service's work in response to emergencies other than fire including the new threats posed by terrorism.

"The position paper published by the Bain review on 11th November set out the considerations on pay and conditions that were needed to deliver this vision of a modernised Fire Service. His final, fuller report will be published in three weeks. The position paper set out a vision for a single, more broadly based and modernised service with multiple roles offering a wider range of services and expertise. It proposed a reward structure in which individuals would be valued for the contribution they made. It encouraged a more diverse workforce with a wider range of career paths, responsibilities and skills and made clear that pay and modernisation had to go hand in hand and be consistent with the Government's public sector pay policy.

"The position paper recommended an increase in the pay bill of up to 11 per cent over two years subject to necessary and long overdue modernisation. As I said to the House on 14th November, the Government remain convinced that the Bain review is the key to resolving this dispute and providing the basis for a modern Fire Service equipped to deal with modern demands. Let me be clear: that remains the Government's position, as I have said in every Statement to the House and every discussion with the employers and the Fire Brigades Union.

"And, also to be clear, Sir George Bain is proposing a menu of modernisation that is familiar to public sector workers in every other walk of life. What he means by modernisation specifically with regard to working conditions is: full-time firefighters and part-time fire-fighters manning the same engine together; shift patterns to better match the daily ebb and flow in the number of fires that occur; overtime where it is sensible and necessary; training fire-fighters to carry out some essential lifesaving paramedic functions which could save hundreds of lives; and joint control rooms, where the Fire Service and other emergency services can work together.

"Bain also set out a route map for achieving this vision. He proposed a four-strand approach to negotiations under which discussions would begin on the whole package of reforms at the same time but would be completed under different time-scales. The first strand would be completed in four to eight weeks. The second strand would be completed in about six months, and the third strand would take about a year to complete. Under that model there was a direct connection between staged payments linked to implemented modernisation. In exchange for that, Sir George recommended that fire-fighters should receive a 4 per cent pay rise immediately and a 7 per cent pay rise next November, each rise linked to the implementation of modernisation. There would also be a fourth strand, which would depend on action to be taken forward in partnership with local and central government and which would take longer. Sir George also said that the question of a longer-term up-rating mechanism should be dependent on the implementation of the reform package and that he would return to this in his final report.

"As in any industrial pay dispute, there are lots of variables which can be combined in different ways in order to achieve a final agreement. Bain talks about 11 per cent. The general secretary of the Fire Brigades Union has again confirmed today that its claim is for 40 per cent. The way forward is for the employers and the union to sit down and discuss how quickly the service can be modernised, how much can be saved, and when the fire-fighters will get their extra pay. What is abundantly clear, however, is that this strike will have no influence on that process. The Government are not willing to abandon the clear principles I have set out in the face of industrial action.

"I believe this dispute will be settled only by sitting down at the table to reach agreement. We have to lift our eyes above the bile and recriminations of the current dispute and focus on the long-term future of the Fire Service. We have a once-in-a-generation opportunity to introduce radical change in order to provide a modern Fire Service for the 21st century. It is in the interests of everyone—the public, the employers, the Government and the fire-fighters themselves—to achieve that vision.

"The Bain review has proposed the way forward. That is the basis for discussion. These issues of modernisation have to be addressed. So we will continue to seek to bring the employers and the union together to engage properly on the issues of pay and modernisation. The two have to go hand in hand. And the sooner the Fire Brigades Union faces up to that, the sooner the two sides can get into meaningful negotiations that can bring this dispute to an end.

"I once again urge the fire-fighters to get back to talking and stop walking".

That concludes the Statement by the Deputy Prime Minister.

4.28 p.m.

Baroness Hanham

My Lords, I thank the Minister for repeating this very long and comprehensive Statement. I also thank him for providing me with Reforming our Public Services, a paper that has been laid in the Library, and on which some of the evidence that the Government gave to the Bain inquiry was based.

The Statement has rehearsed, quite properly, the entire position of the Government and has drawn attention to the interim Bain report. I remember that many weeks ago we were all asking for Bain to report more imminently—clearly, that was done. It will ultimately play a valuable role in the resolution of the problem. As my noble friend the Leader of the Opposition said yesterday, and as I have said before, it is our utter, entire belief that the Fire Brigades Union is whistling in the wind over the 40 per cent pay claim. It is not going to get anywhere near 40 per cent. A nought off that figure would be nearer. The sooner reality enters the situation and enters the union's hearts, the better for the union and, more specifically, for its members, many of whom, I feel, will by now be beginning to wish that they were back at work. I hope that is the situation.

It would perhaps be unkind to suggest that the Deputy Prime Minister's thunder was slightly stolen by the events of yesterday, when the Prime Minister tried to bypass Parliament and had to be called to order by my right honourable friend the Leader of the Opposition in that House. I know that he was always going to make this Statement today and I am grateful for the fact that that has now been brought forward.

However, despite the Statement there are still some unanswered questions about the past few days. Despite the clarification that the Deputy Prime Minister has given of the events of Thursday night and the fact that he has now strong-armed Sir Jeremy Beecham into agreeing with him, it is clear from all the statements that have been made over the past few days that something very strange happened in the early hours of last Thursday night. Will the Minister try to provide some clarity on that situation? It is obvious that there was a deal that was, if not scuppered, at least refused and rejected by the Government. I know that in his press conference yesterday the Prime Minister said that the Deputy Prime Minister could not agree to an uncosted bill. I do not think that anybody would disagree with that. But how was it that the employers' negotiating team felt confident enough to put forward such a deal without having some idea of the costs, including the transitional costs, and their acceptability to the Government?

We believe that the deal had been costed by a member of the Deputy Prime Minister's department and that it amounted to £240 million. If that information was available, why was it not made clear to the negotiating team that there was no possibility that this would be acceptable? If no costing was done, is it therefore a fact that there was no one representing the Government sitting alongside the negotiating team? If there was not at that juncture, why was there not?

In view of the directive approach the Government have adopted, it seems surprising that there was not at least a senior member of the Office of the Deputy Prime Minister, if not a Minister, immediately available to assess the implications of what was being put forward and to give guidance on its acceptability. Such advice could have prevented the debacle that followed, which has ended up in the current stand-off.

In light of the changes to the employers' negotiating arrangements, can the Minister tell us who is now in charge of the negotiations? Is it the Government or the employers? If it is the employers, does that mean that it is the team who were carrying out the negotiation, or is there a new team being set up by Sir Jeremy Beecham? It was not clear from the Statement whether the team set up by Sir Jeremy Beecham is to take forward the modernisation or whether it is to deal with the negotiations when they start again.

In view of the fact that the Prime Minister made it clear yesterday that there would be no advance on 4 per cent without a compensatory release of resources from modernisation, who is now making the decisions on what those would be? Are the Government waiting for the final Bain report or can the negotiations—if they can be restarted—proceed on the basis of what has already been produced, bearing in mind the fiascos that have taken place since the Bain publication? Do the Government accept that modernisation, however desirable, can take place only against a background of a reduction in the number of fire-fighters to enable the release of resources? Is it the Government's view that that would involve the loss of fire stations as well as fire-fighters?

In addition to the problems being faced over this major and grievous dispute, we now have the prospect of more public sector workers jumping on the bandwagon. Today our children cannot go to school in many areas because of action by teachers. Strike action is being balloted on London Underground on the basis of health and safety. It looks like secondary activity to me. London airports are also under threat, although those involved have said that they are not going on strike at the moment. Never mind a winter of discontent; we seem to have a late autumn and Christmas of discontent.

When we last discussed this matter, I asked the Minister whether the Government were considering using the law at their disposal to prevent further action. The Minister replied that everything was being considered. Will he say now whether, as I asked before, Section 240 of the Trade Union and Labour Relations (Consolidation) Act 1992 should be invoked?

In the City yesterday I watched while a Green Goddess thundered past to an emergency, being cheered on by people standing by. My thoughts turned then, as ours all will today, to the members of the Armed Forces who are now in the front line of firefighting. We are fortunate that we have services to which we can turn in times of such trouble. This is no exception. I join the Minister in passing our thanks and admiration to the soldiers and to the part-time fire-fighters who are still working. All I can say is that I do not think anyone can expect all of them to carry on in this way for much longer. I hope some common sense enters into the situation before too much longer.

4.36 p.m.

Baroness Hamwee

My Lords, the 'Government have today reiterated their concern for the knock-on effect on the whole economy of this substantial claim. Before I turn to the fire-fighters, I shall repeat a point made by my noble friend Lady Williams yesterday about the dangers to the whole economy if our key workers—I use that term in the broad sense of those who keep our society operating—are priced out of our capital city and the south-east of our country. I do not regard the action of teachers and others in the education service today as jumping on the bandwagon that the: firefighters have started to roll. They have a real concern. Whatever view one takes about how they express that, we should bear it in mind and measure the issues that the Government are bringing forward about the effect on the economy against the problems for the economy if our key workers are not paid at a level that enables them to survive and practise their profession.

Perhaps the most startling line in the Statement today was that the FBU has reiterated its claim for 40 per cent. I had not heard that. Can the Minister confirm that that was requested with no caveats and no movement towards modernisation? It seems a substantial backward step from the union.

I have said before that we need to look for modernisation on both sides, recognising the role of a 21st century fire service. I hope that the Minister can leaven or balance the Statement that has been repeated with some comments about the costs of modernisation that will not be met from productivity. For example, a first responder or co-responder scheme is being discussed, involving fire-fighters being trained to use defibrillators and so on. I understand that the chief fire officer in Cleveland has extrapolated from figures in his area that if that extended health training were available, up to about 9,000 lives a year might be saved. One could say that that was investing to save, but without the immediate cash saving. However, it should not be taken out of the equation simply because it does not result in direct productivity savings in the way the Government are talking about.

Another example comes from the Government's submission to the Bain inquiry, which I thank the Minister for providing, along with the Statement. It refers to the low proportion of smoke alarms found in the Bangladeshi community. That may appear to be a small aspect of fire prevention but it is significant as regards the need for modernisation and fire prevention work that will not provide an immediate cash saving to be high on the agenda. However, it would provide enormous savings for our communities.

Bain mentions what he calls the "pay bill". I put those words in quotation marks as that is the term that he used. He appears to recognise that not all modernisation will achieve cost savings. I am unclear what is meant by the pay bill in that connection. I hope that the Minister can clarify that. He mentions figures of 4 per cent and 7 per cent. Does he mean a net figure or the gross increase in fire-fighters' salaries? What is meant in that connection? How do the Government regard the transitional costs that will have to be met before the cost savings that modernisation can confer are achieved because, clearly, it will take some time for them to come into effect?

On the theme of modernisation, I welcome the Government's recognition of the role of the Fire Service. However, it is not recognised in statute. If the Minister cannot respond to the matter today, will he at least report back to his colleagues the strong feeling of many people that parliamentary time should now be allocated to discussing the recognition in statute of the role of fire-fighters in dealing with flooding, cutting people out of vehicles after accidents and, as I have said, in fire prevention?

I believe that the Government have discussed preventing local authorities adding the cost of settling the dispute to the council tax. Those of us with experience of local government have unhappy recollections of capping powers. They have not disappeared entirely. The Government still have reserve powers. I hope that the Minister will confirm that capping powers will not be exercised. Like the noble Baroness, Lady Hanham, I have difficulty in understanding quite what the role of the Government is in the tripartite negotiation, or perhaps it is a negotiation between two parties with someone with a strong arm behind them. Unless the Government pick up the tab, what role do they have in intervening so directly in the dispute?

Finally, I turn to an issue that was raised by a number of noble Lords last week. Can the Government give us some news in regard to access to equipment such as fire appliances in training establishments that are kept as back-up?

4.43 p.m.

Lord Rooker

My Lords, I am grateful to the noble Baronesses for their comments.

I cannot go into all the details of what occurred last Thursday evening. I was prepared to repeat in this House the Statement made by the Deputy Prime Minister in another place at 6.50 p.m. last Thursday evening. However, it was decided that that was not required. I was probably more up-to-date on the situation last Thursday evening than I am today due to other ministerial duties that I have performed today. I assure the noble Baronesses that nothing that emerged from the employers or the negotiation during the course of the afternoon and evening prior to the Statement being made last Thursday revealed anything about costings. It is extremely surprising that so-called professional negotiators and a so-called professional organisation, the Local Government Association, had no figures to give the Deputy Prime Minister at that point.

The Statement indicated that negotiations were continuing and that the strike had not been called off. The situation is slightly different now as the strike has proceeded. Whatever emerged from the negotiations in the early hours of Friday morning it was still the case that no one had produced any costings. At six or seven o'clock in the morning my right honourable friend was invited to sign a blank cheque. He was chastised for saying that he needed a few more hours to consider the matter further. We shall not be rolled over in terms of public expenditure. It is as simple as that. It has been made abundantly clear by the Prime Minister, the Chancellor and the Deputy Prime Minister that there is no division here. Throughout the summer it was made clear that a pay settlement above 4 per cent would have to be paid for by modernisation.

The Government do not employ the fire-lighters and we have no seat at the negotiating table. It is an incredibly large negotiating table but that is the way the negotiations have been conducted. I do not know whether that is the most sensible way to conduct negotiations. I do not even comment on it. However, it has not achieved a very good result. The Government do not have anyone sitting at that table. Everyone knew what the Government's position was. We published our public expenditure spending round in the summer. In July the Chancellor made clear that the purpose of the extra money was not to fund wage inflation in the public sector but to improve public services. There cannot be any doubt about the matter.

The employers are charged with the responsibility of finding the relevant resources. I refer to what was said to the Fire Brigades Union in September, October and the early part of November. It was asked to wait until the full Bain report was issued. We have always said that that would be in December. If the Fire Brigades Union does not like the full report, it has a mandate. It was even told by the employers that they would be prepared to extend the strike mandate and that there would be no argument about the law. The fact that the union has not given evidence to the Bain review, and shows no sign even now of wanting to do so, causes a problem. Whatever the union may say, there has been a flat refusal to discuss the details of the preliminary review. The full review will be published in three weeks' time. I and my right honourable friend appeal to the union to call off the strike and to give evidence to the Bain review so that it constitutes a full report. It does not have to accept what Sir George Bain and his colleagues say and can reach its own judgment. However, there is no excuse for being on strike in advance of the full Bain review being issued.

As regards a bandwagon, I have not heard a single trades union official give a categorical, legally binding assurance that his members will not press for parity with any settlement that may be reached in the fire dispute. No trades union leader with any sense would say that. Therefore, one has to take with a large pinch of salt some of the statements that have been made.

The legal issues are a matter for the Attorney-General. The Deputy Prime Minister has given him his views on that matter. I welcome the support of both noble Baronesses for the role of the Armed Forces. I cannot give any details of the costs of modernisation. We want those who run the fire-fighting service to work out the costs of modernisation.

As regards key workers, I accept the point that was made yesterday. The Government have a major programme—we shall comment further on it in January—to provide housing for key workers. Key workers in short supply comprise teachers and nurses but not fire-fighters. There are still 40 applicants for every job in the Fire Service. One cannot simply equate one group with other groups. We must be realistic about market forces. If we cannot recruit enough nurses to work in our hospitals, we take special action. Nurses do not withdraw their labour. Given the situation, we must consider providing accommodation for them. That cannot possibly automatically read across to the Fire Service where there are 40 applicants for every job.

As regards access to equipment, over 100 Red Goddesses have been made available to the military. If they want more, we shall obtain them. As we have repeatedly said, there will never be 400 available at any one time as they are used to replace appliances that have a puncture, have broken down or need to be serviced as, obviously, they need regular servicing. Therefore, some of them will not be available. We have made over 100 available. Anyone who has watched the television news, as I have tried to today in order to find out what is happening, will have seen Red goddesses as well as Green Goddesses on the streets. The retained fire service, the fire-fighters who are leaving their picket lines and the military personnel are doing a fantastic job.

I repeat what was said in the Statement. We say "thank you" to the public. It is quite clear that they are taking extra precautions. We hope that they will continue to do so after the dispute, because it is important that we should protect ourselves from fire.

4.50 p.m.

Lord Prior

My Lords, as the Minister has just said, one of the weaknesses of the Government's position is not knowing the cost of modernisation. Presumably, a great many will be made redundant. Generally speaking, the sooner they are made redundant, the sooner matters will settle down. The cost of making people redundant, however regrettable, is generally cheaper when done earlier rather than later. It is equally clear that extra costs in the form of increased pensions to be brought forward and redundancy pay have to be borne in the early stages of those redundancies.

It would not be unreasonable of the Government over a three-year period, if that is the period that we are considering, to allow the management side extra money to bear the initial cost of those redundancies, which should be known, provided that over the three-year period the total did not exceed the cost to the industry as a whole. That would enable a much quicker start to be made on resolving what inevitably will be a very unhappy time for the fire-fighters.

Lord Rooker

My Lords, I have tremendous respect for the noble Lord, Lord Prior. However, I should make it absolutely clear that I have not seen written down, nor heard uttered in the department in any way, shape or form, the word that he has used several times during his question. I suspect that the "R" word will not appear in George Bain's final report in December, because we have no plans to implement such redundancies. The concept is, therefore, purely hypothetical. We should await Sir George Bain's full report. It will not be as full as it would have been had the Fire Brigades Union had the courage to give evidence to the review.

Lord King of Bridgwater

My Lords, the Minister is aware that, basically, I support the Government's central position. However, I have not known whether to laugh or cry at the way in which they handled this issue over the past weekend. Neither he nor the Deputy Prime Minister is the first Minister in British government to have had to cope with the difficulties of a local government negotiating organisation faced with the Government having a clear interest in the outcome and a vital need for the Government and the local government negotiators to have the closest possible contact.

Rather than hark back, I suggest that two messages should go out to the Fire Brigades Union from this House today: first, that this House believes they are entitled to negotiate with local government negotiators who are properly empowered and properly working with the Government on reaching a satisfactory outcome to the negotiations; secondly, that, as the Minister said, it is quite clear that change and reform is long overdue in this industry, which at the present time gives every indication of being run by its union in a very real and significant way; and, thirdly, that the core, as the Minister has said, is the full, not the interim, Bain report. There will be no smash and grab—40 per cent without any concessions. The Government have now made that abundantly clear.

The question, therefore, is whether there is to be sensible negotiation on the full Bain report, which involved complicated concessions by the unions. Are their members to be kept out on strike, losing pay, during the whole of that period, and is it not also in their interests to get back to work? The longer this strike goes on and the more it is shown that the Armed Forces and the retained firemen can do as well as they have done so far, the more singularly unhelpful it will be to the Fire Brigades Union's case for a huge increase in pay with no concessions whatever. There should therefore be a return to work with a view to agreement being reached by both parties, based on genuine and proper negotiations, on consideration of the full Bain report.

Lord Rooker

My Lords, I suspect that the Fire Brigades Union leadership will take on board the points made by the noble Lord, Lord King, when they see the success of public co-operation, the effects of the part-time retained fire service and, of course, the effects of the military and the Green Goddesses. The more they do, the better they will become, and questions will be asked about that.

The noble Lord, Lord King, is quite right about messages being sent out. However, I have to say that no good will come of the employers and the unions reaching a deal by negotiation and then, as they did last Thursday evening/early Friday morning, putting in a paragraph at the end of the document saying—I paraphrase—"We do not know how much, but we need some more money from the Government". That would be very unprofessional and would not lead to a settlement.

Baroness Gibson of Market Rasen

My Lords, I have listened carefully to the Statements made and to the debate that has taken place in the Chamber, and this is the first occasion on which I have intervened. I am sure that we would all agree that this strike becomes sadder by the day. It is not a happy situation for anyone, including, as the noble Lord opposite said, the Fire Brigades Union's members and their families, particularly with Christmas approaching.

I do not want to discuss the negotiations. I understand that the Government do not have a seat on the negotiations between employers and employees. I also know that a number of different statements were made, or not made, last Thursday night. I believe that in some ways the Government are being hammered, but not through their own fault, and I believe that the employers have a lot to answer for in respect of the discussions that took place last Thursday. If it is known that no money is available to pay for it—in my view, the employers knew that before they entered into the negotiations—then a deal should not be agreed.

I note that a new group will now be established on the employers' side. We always hope against hope when new groups are established. However, there is one organisation that has not been mentioned throughout the duration of this strike—the arbitration service ACAS, which was established to deal with situations of this kind. I have not heard of that very valuable service being involved. Can my noble friend tell the House whether or not there has been any involvement of that body at any time? It seems to me that its expertise is needed.

Lord Rooker

My Lords, I regret that I cannot answer my noble friend's question concerning ACAS. Within a couple of days of the breakdown of negotiations, the Bain committee was formed to conduct an independent review—the kind of review that ACAS would normally have undertaken—because we wanted to get to the bottom of the issue, consider the way forward and consider a new formula. Although two years ago Mr Gilchrist was saying that it was the best formula they had ever had, it was accepted that it had existed for 25 years; so this matter had come quite quickly to his mind. The fact is that it is agreed that the formula is outdated, and part of the remit of the Bain review remit was to consider that.

Having once been a pupil of his in the days when I was at the feet of Alan Flanders and Hugh Clegg at Warwick, I have to say that George Bain is a one-man ACAS and has a good track record; but that is not a criticism of ACAS. I should also tell my noble friend that many things have been said and not said about last Thursday. It just so happens that I know how moderate the Government's response has been to what was said about last Thursday. We would only make the situation worse by simply repeating our views. That is not our intention. Because we want a resolution of this dispute, we shall have to take a little flack. At the end of the day there will have to be a solution, but it will not be in the terms of the 40 per cent increase sought.

The Earl of Mar and Kellie

My Lords, I should like to ask the Minister whether a different solution can be achieved to resolve the strike in Scotland or whether the United Kingdom Government are in fact negotiating in respect of the whole of the United Kingdom. I am not quite certain whether that is a devolved or reserved matter. Fire-fighters would appear to involve a devolved matter; the Armed Forces clearly do not.

Lord Rooker

My Lords, I shall take advice on that. The matter is devolved but pay is not.

5 p.m.

Lord Crickhowell

My Lords, the whole House will be grateful to the Minister for repeating the Statement and most of us will probably warmly appreciate the robust way in which he put the Government's position. However, I am left with a question, which is related to the point raised by my noble friend Lord Prior. I believe that the Minister said that anything above 4 per cent has to be met out of modernisation. I am not clear about what happens during the interval before modernisation produces savings; nor am I clear about whether there is any room for funding to be produced in some way to bridge the gap. That point is repeatedly raised by union representatives and commentators. It was striking that the Statement was very unclear about the position. Can he clarify in any way how one gets from A to B?

Lord Rooker

No, my Lords, I cannot. I have not been involved at ministerial level in the day-to-day negotiations but I have heard comments by people who are obviously leading on the Government and employers. I do not accuse the noble Lord, Lord Crickhowell, of doing that. That approach is very seductive because it involves a common-sense question. In fact, in the absence of any menu of the costs of modernisation and of any agreement from one of the parties to discuss any real modernisation, posing the question begs many questions if one starts to discuss transitional arrangements. It is clear that at the end of the day there will have to be transitional arrangements to get from A to B. Suppose that one starts discussing that; before one knows it, others will claim, "Ah! You have conceded that and we will therefore negotiate from that position". In other words, one has already lost part of what one wanted to negotiate. We were not born yesterday and we shall not fall into that trap.

Lord Graham of Edmonton

My Lords, like many colleagues in the House, I take a deep interest in these issues and listen to what Ministers say here and in the other place. I hope that the noble Lord the Minister will convey to his ministerial colleagues our gratitude for their patience and control in not going down the route of producing inflammatory rhetoric at this time. Those of us who have been around a while in both Houses, who have served in local government and who have other interests are well aware of the enormity of what is at stake for the economy, the trade union movement and the peace and welfare of the people of this country. I believe that the Statement made by the Deputy Prime Minister, which was repeated by my good friend the Minister, goes a long way towards answering many of the questions, but not all of them; we will not know all of them until later. I hope that the Minister and his colleagues will stick to their last. This is undoubtedly a battle—perhaps of wills, perhaps of common sense and perhaps of endurance. My advice to the Minister is, "Keep at it".

Lord Rooker

My Lords, I am grateful to my noble friend. However, we do not regard this as a battle. We genuinely want a solution. We have enormous respect for the Fire Service but the fact is that the dispute must be settled around the negotiating table. It would be much better settled without a strike. There is money on the table and more money is on offer. It is much better to talk about that rather than to lose money by going on strike.