Coal Industry (Wages Agreement)

Part of the debate – in the House of Commons on 21st April 1944.

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Photo of Mr Gwilym Lloyd George Mr Gwilym Lloyd George , Pembrokeshire

With the leave of the House I would like to make a statement.

The House will be aware that the Mining Association and the Mineworkers' Federation yesterday signed an agreement on behalf of their members, governing wages in the industry for the next four years. This agreement is of great public importance, because of its bearing on the production of coal during the rest of the war, and on the fortunes of this great industry in the transition from war to peace. I thought, therefore, that the House would wish me to give a short account of the events which have led up to the agreement and to say a few, words about its significance for the industry and for the country.

Early last December, I wrote to the two sides of the industry suggesting a series of meetings to consider a wide range of problems dealing with post-war security, including the future wage structure of the industry. This followed the undertaking given by the Prime Minister in the House, that he would arrange for such discussions, in order that what he described as harassing fears for the future might be as far as possible allayed. Before, however, any A these meetings took place an application was made by the mineworkers for an increase in the national minimum weekly wage, with consequential increases for piece-workers, to take account of any increase conceded in the minimum. The two sides failed to reach agreement and the issue was referred to the National Reference Tribunal for the coal mining industry, which made its award on 22nd January. In awarding a minimum weekly wage of £5 for underground and £4 10s. for surface workers, it rejected the application for an increase in piece-work rates, declared that its findings were intended to meet a temporary situation, and stated that an overhaul of the wage structure of the industry was long overdue.

The consequences of the award in their effect upon long-established differences of pay for the different clases of mineworkers were at once apparent to the industry as a whole as well as to my Ministry. It became necessary for me to inform the two sides of the industry that the Government could not permit the tribunal's award to be the occasion of very substantial all-round increases of wages, district by district, and grade by grade, at the expense of the Coal Charges Account and of the consumer. At the same time, I stressed the need for undertaking immediately the suggested overhaul of the wages structure, and I offered to give any help in my power to assist in carrying out the task. At the request of both sides, I presided over a joint meeting on 8th March to consider the principles on which changes might be made, and at that meeting I put forward for the consideration of the industry certain proposals. If alterations on the lines of these proposals proved acceptable, as a basis of stability for a period of approximately four years, the Government for their part were ready to make the necessary financial arrangements by some means, such as the continuance of the Coal Charges Account. Hon. Members will have seen the terms of the agreement reached yesterday by the two sides of the industry which embodies—with some few modifications though with none of principle—the proposals I had submitted. These proposals had two main objectives which, I was certain, would command general approval.

The first of these was to allay the fears of the mineworkers about their post-war position. I had found this to be a deep-lying cause of anxiety among the men with whom I talked during my visits to the coalfields, and it was for this reason that I proposed that the agreement should run for at least four years. The second objective was to offer as great an incentive as possible to the productive workers. Here, I suggested the conversion of the fiat-rate advances which had been given in 1936 and during the war, amounting to a considerable proportion of shift earnings, into percentage increases on piece rates. The additional percentages are being calculated on a formula, agreed in consultation with both sides of the industry, which ensures that the reward for greater output is substantially increased. In short, what I had in mind was not the adjustment of what have come to be called anomalies, but a stable wage basis, on which a better future for the industry might be built and, for the country, freedom from the disturbances of its economic life which are the inevitable outcome of wage dissensions in coal-mining.

Hon. Members will, no doubt, have noted that the agreement, as signed, includes a pledge by both parties to do all that lies in their power to implement its provisions. It is, however, proper to add that the owners' representatives have stated their doubts whether the agreement will succeed in realising the objects which I have described. The House will readily understand that the greater an increase awarded in the national minimum wage, the greater is the number of men brought within its scope, and that, in such circumstances, there is bound to be an obliteration of many differences in wage rates which have grown up by custom and agreement in the past. In other words, the more successful the pursuit of a higher national minimum wage, the greater will be the levelling-out of differences at the lower end of the wage scale.

In the recent discussions which my right hon. Friend the Minister of Labour and National Service and I have had with the industry, we have had forcefully represented to us the claims of men whose wages in the past have been round about the minimum now made operative by the tribunal's award. They are men performing important functions in the underground operation of the mines but the nature of whose work is incompatible with payment on a piece rate basis. The Government have accordingly arranged that some adjustment shall be made in the position of this class of men. Since there is difficulty in making a uniform national arrangement for this particular purpose, those entitled to benefit will be decided by district negotiations between the two sides. The Government, in granting this concession, have made it abundantly clear that they look for an increase in output sufficient to ensure that the cost of this latest adjustment shall not fall as an added burden on the consumer. We have also said that, if there is a material increase in output during the next six months, and a resulting reduction in cost per ton, we shall be prepared to consider the use of part of that saving to improve the wage position of some of those classes of workmen who are not, under the agreement, given an increase in their shift wage. It has, however, been emphasised in our discussions that part of any such saving must be reflected in reducing the cost of coal to the public.

The House will appreciate that in an industry where conditions are so diversified between district and district, and subject to so many changes brought about by the forces of nature, a national agreement will not, at first, be plain sailing, or easy to operate. I, myself, have seen in the course of the negotiations in which I have taken part, evidence of the survival of the district preoccupations and allegiances which have so long dominated the industry. I take this opportunity, accordingly, of stressing that when the Government, two years ago, set up the Board of Investigation to provide a national system of wage negotiation they accepted the principle of national agreements. I. for my part, earnestly hope that further attention will not be given to what are known as the anomalies, and thereby be diverted from the principle itself and its value to the industry. The successful application of a national basis of wage determination to the different districts, with their various individual problems, will require all the resolution, the cooperation and the good will of both sides of the industry. Only thus will it be made effective and capable of providing a period of peace and stability, in which the constructive tasks of the future can be successfully and harmoniously carried through.

The signing of this agreement coincides with the approach of the decisive phase of the war. I believe, for the reasons which I have given, that the agreement is a landmark in the history of the industry. I welcome, particularly, the speed with which it has been reached, because the tasks of the present day are heavy and pressing, and the nation is now entitled to claim from all in the industry that they shall devote their whole energies to the urgent task of producing coal.