Orders of the Day — Commission for Industry and Manpower Bill

Part of the debate – in the House of Commons at 12:00 am on 8th April 1970.

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Photo of Mr Will Howie Mr Will Howie , Luton 12:00 am, 8th April 1970

In view of the important decisions which hinge on the replies of my hon. Friend to the Member for Cheadle (Dr. Winstanley) I will not attempt to follow the hon. Member in any detail. I agree with much of what he said about the position of the employee in big firms, especially to do with mergers. The employee has a right to be heard with regard to a merger, not only after it has taken place but at the stage where it is under consideration. His position is at least as important as that of a share-holder.

I was very heartened by the hon. Member's admission that he was an interventionist. We have now had contributions from all three parties, claiming to be interventionists, but not from the Opposition Front Bench, although we know that they are interventionists. My view of the Bill is similar in part to the view held by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). Not totally so, because I am less interested in the judicial nature of the Monopolies Commission than he, but I, too, see the Bill as producing something in the nature of a hybrid. I must admit to having some slight hesitation on that score.

One central reason for the Bill is to deal with the use of abuse of market power. What interests me is that I am not certain that the use or abuse of market power is the same for a commercial organisation as it is for a trade union. These two kinds of bodies are operating in quite different markets. I know that sometimes labour is described as a commodity, bought and sold in the market in the same way as any other commodity, but this is not so. Labour is more than an abstraction, it is men. It has been said that the market power of the trade unions is a response to the strength of the organisations with which they have to deal and that it is therefore different in kind.

It will be remembered that some years ago the market power of the unions was described as a countervailing power, when Galbraith recognised that it was different. For that reason, I am not sure that it should be lumped in together with the market power of the capitalist. To some extent the Government are falling into the same error which the Leader of the Opposition has fallen into in his enthusiasm to apply the theory of legal restriction and limitation on trade unions and their activities, as though he was dealing with a commercial product. He is applying the idea of commercial law to a trade union situation which is quite different. It is not obvious to me at first sight that the same body should deal with both groups of problems.

In all probability this idea grew from the development of the Prices and Incomes Board. It became apparent during the recent life of the Board that to do its job properly and to investigate wages, salaries, prices, and so on, it had more and more to analyse industry in a managerial sense. To some extent the Board began to impinge on the Monopolies Commission. It was no doubt from the enlargement of the Board's activities that this idea grew.

I think that in combining two kinds of market situations in one Bill it is absolutely correct that wages should not be left to the market. To that extent the idea of a prices and incomes policy has always attracted me. The error which the Government made was that in the course of their struggle to put the economy right and to deal with the balance of payments, the prices and incomes policy came more into the centre of their economic strategy, whereas it should have remained nearer the periphery.

I have never doubted that the development of a reasonably acceptable prices and incomes policy would be a very slow process. It does not alarm me that the recent attempt appears at the moment to have failed. I expect that the development of a prices and incomes policy will be achieved by a series of efforts and a series of failures, and that sometimes one way will be taken and sometimes another way. In the fullness of time, wages will be taken out of the market, and that is absolutely correct.

My second misgiving about the proposed Commission, although I am not sure that I am right in having it, is that there occurs in the publication which accompanies the Bill, the consultative document, the idea that the Government are turning away from what the hon. Member for Guildford (Mr. David Howell) has called the fashion for bigness. My impression is that the Commission may develop a distaste for bigness in industry, for monopoly and for oligopoly. I am not opposed to bigness in industry, nor am I opposed to monopoly and oligopoly. I am not keen on monopoly and oligopoly in private hands, but in themselves they do not worry me too much. After all, there are ways of dealing with a monopoly if it is thought that it is unsuited for private control.

Leaving aside a very small number of firms, we must remember that the big British firms are not all that big in world or even European terms. Many of our firms who export 30 or 40 per cent. and sometimes even more of their production are often competing with much larger firms. Only a few firms in Britain are comparable in scale to the giants in the United States and the one or two in Europe. We still need a great deal of encouragement towards mergers in our industry, and to discourage the notion that bigness is going out of fashion.

That brings me to the I.R.C., which is one of the most valuable and supportable innovations of the Government. Its job is to promote mergers and sometimes to use public money to do it. By promoting mergers, it improves the competitiveness and strength of our industry. The hon. Member for Guildford referred to an example of its work, though he got it wrong. He gave the impression that the I.R.C. had initiated the notion of merging the British ball-bearing industry, whereas what happened was that the Swedish ball-bearing industry developed the notion of merging the British industry.

As a matter of fact, I thought that it was an excellent idea. I had a little quarrel with the I.R.C. about it. But what undoubtedly will happen is that, after a time, the merged British ball-bearing industry will, in turn, merge with at least the British end of the Swedish industry, and it will then achieve a size where the British will be able to take a larger part in the world's ball-bearing business.

As my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said earlier, the problem is that the I.R.C. and the proposed C.I.M. may find themselves pulling at the same rope in opposite directions. If a situation arises where the I.R.C. is trying to merge two companies, it is important that the C.I.M. does not get in its way. The priority must be given to the I.R.C. and the new Commission must yield to it.

My last misgiving arises from the power of the Government to make Orders. I am prompted to mention this as a result of the intervention of my hon. Friend the Member for Haywood and Royton (Mr. Barnett), who tried to suggest that we should initiate references to the new Commission from this House. To some extent, that is an attractive idea, but I refer on the whole to leave it to the Government, if only because I am anxious to avoid a kind of parade of debates in this House on Orders dealing with references before they have happened, rather like the interminable series of debates that we had on the prices and incomes policy, though at least they occurred after decisions had been taken.

I would not like to think that we shall have to go through that kind of procedure at the beginning each time we initiate a reference—[Interruption.] I notice that the hon. Member for Worthing (Mr. Higgins) does not agree with me It may be that I misunderstood my hon. Friend.

Leaving aside my misgivings, I am strongly in favour of Clause 26, which is perhaps the best Clause of all, a part from the Schedule removing from us the odious job of deciding our own salaries. It is long overdue for that to be done by an independent body, and the Bill provides that that shall happen.

Clause 26 gives the Commission a considerable amount of elbow room. As its first reference, I hope that it will report on any question relating to wages and practices of any description in the motor manufacturing industry. I select that industry deliberately, because one central reason for the industrial unrest in that industry arises from the complexity and confusion of its wage rates and earnings levels. The present turmoil in the industry over such matters as parity or comparability shows this. It is the very confusion of wage rates throughout the industry which has given rise to a theory of comparability between firms and between departments of firms.

I want to cite an example of the kind of situation which arises from the confusion. Hon. Members will be aware of the recent strike at Ellesmere Port involving 112 back viewers—a new kind of subspecies of inspector. My right hon. Friend the Minister of State will be familiar with the dispute, as it arose near his constituency. The strike was settled last week, but, in view of the fact that it was concerned with this mix-up of rates of pay, on terms which may sow the seeds of a number of not too dissimilar disputers.

It is worth considering how a strike of that kind occurs and to try to find who is to blame. It is easy to say that here are 112 men holding the rest to ransom and costing their employers millions of pounds. It may be argued that they should all be sacked. That is a natural response, but it is a superficial one. There is no doubt that the strike was unofficial, unconstitutional, wild-cat and totally deplorable. But it was a classic unofficial strike which could have come straight out of the Donovan Report.

A small group of men reacted to what they thought was an unjust managerial decision. They thought—rightly I think—that they had obtained a promise of status and position from the management, but in the next set of wage negotiations the promise was not fulfilled. So the managerial decision which they thought unjust was at best ambiguous. My point is that the managerial decision, unjust or ambiguous as it was, arose from the tortuous nature of the wage rates in that industry. I think that this is worthy of examination. The firm threatened to sack these men, although I believe that the central fault was the firm's.

What I find interesting about the Opposition's view is that, had the trade union laws which the Leader of the Opposition spoke about over the weekend been in operation, the firm would have been able to sack these men with impunity. This is an extraordinary situation.