Orders of the Day — Civil Service (Dispute)

Part of the debate – in the House of Commons at 2:32 pm on 8 May 1981.

Alert me about debates like this

Photo of Mr Willie Hamilton Mr Willie Hamilton , Central Fife 2:32, 8 May 1981

The Civil Service pay dispute, about which we now have a short debate, has origins which are not too well known. I want to put them on the record—I hope accurately, even though briefly.

In October 1980 the Government unilaterally, almost overnight, threw overboard the machinery on which Civil Service pay awards had been made. The Pay Research Unit system of settling Civil Service pay was destroyed by the Government at a stroke—despite the Prime Minister's commitment of 18 April 1979, just before the general election. She said: The Conservatives protested very strongly at the suspension of the Pay Research Unit, and we welcomed the announcement of its restoration. We see no reason why the restored and revised research system should not continue to provide the basic data for pay settlements, as in the past. Not only has that commitment not been fulfilled, it has been flagrantly destroyed. The pay research system has been abandoned and the Government are refusing, and have steadfastly refused, to publish its findings—perhaps because they are too embarrassing in the present circumstances. Because they have not been published, the Civil Service trade unions are bargaining in the dark.

The Government subsequently barked out their order, "Six per cent. increase, take it or leave it". They later increased the offer to 7 per cent., but with no guarantees for the future. The Civil Service unions proposed arbitration, as is provided for in the procedure, but the Government rejected that, contrary to their undertakings incorporated in the ILO convention 151, article 8. That states: The settlement of disputes arising in connection with the determination of terms and conditions of employment shall be sought, as may be appropriate to national conditions, through negotiation between the parties or through independent and impartial machinery, such as mediation, conciliation and arbitration. Those are the terms of the convention that the Government signed 13 months ago, and of which they are now in breach.

On 22 February 1981 the Council of Civil Service Unions rejected the Government's 7 per cent. offer, gave notice of industrial action and spelt out to Ministers what it wished to negotiate on: first, more than 7 per cent.; secondly, guarantees for 1982; and, thirdly, further details of the Government's intentions on future pay negotiations.

On 3 March the unions put those three points to the Minister of State and his officials. The result was continuing inflexibility and no guarantees. The Government were staying put. It was obvious that the Government were ready for a showdown or complete capitulation by the civil servants. It was no wonder that, for the first time in history, all the Civil Service unions joined in hostility against the Government. But the Government were determined to make their incomes policy in the public sector stick, even if it meant substantial cuts in the standard of living of many thousands of civil servants.

It seems that the Government's calculations were based on certain suppositions. They judged that civil servants were unpopular, that they had little public sympathy and few friends. The Government have actively fostered the belief that civil servants are faceless, non-productive, over-paid, under-worked bureaucrats with inflation-proof pensions and job security. They also calculated that strike action would lay civil servants open to the charges of being unpatriotic, disloyal to their employers and greedy.

No one has done more to encourage those prejudices than the Prime Minister. What an unmitigated disaster she is proving to be. In her tediously harsh, hectoring, repetitive way, she has never stopped nagging about civil servants having job security. Yet she has thrown three million people on the dole, with more to come. She implies that civil servants should consider themselves lucky to have jobs. It may be that they are. The right hon. Lady has pointed out that civil servants enjoy index-linked, inflation-proof pensions. So does she, as a Member of the House, and so do millions of other people. The right hon. Lady also bellyaches about civil servants having had a 50 per cent. pay increase in the past two years and that therefore they are lucky to be offered 7 per cent.

Let us examine the Prime Minister's allegations and the facts. The allegation that civil servants have had a 50 per cent. pay increase in two years is not true. I have the latest figures from the Library. In the past two years, top civil servants had a 48·7 per cent. increase and clerical grades 46·9 per cent.

Even if those figures are right, there are other facts that the Prime Minister prefers not to publicise. Two-thirds of all non-industrial civil servants earn less than national average earnings. One-third earn less than £75 a week, which is the official poverty line.

I should like to quote from an article in the Glasgow Heraldof 5 May. Raymond Kirk, aged 18, a young civil servant living in Musselburgh, is one of 232,366 civil servants, one-third of the entire service, living below the poverty line. Raymond, who has a wife and child, takes home £45.29 a week. In addition, he draws £7 family income supplement because he is below the poverty line. There are hundreds of thousands in similar circumstances in the Civil Service. If they have had a 50 per cent. pay increase in the past two years and are still on those rates, I wonder what starvation rates they were on two years ago.

Even assuming that the claim of a 50 per cent. increase is right, what is so terribly generous about 50 per cent? I have the figures for other professions. The Library supplied them. they are much more truthful than some of the figures emanating from the Civil Service Department. In the past two years the net remuneration of doctors and dentists within the Health Service has increased by 57 per cent. and by more than 60 per cent. in hospitals. The remuneration of those in the Armed Forces has increased by 58·5 per cent. in the past two years. Those in the police force below the rank of superintendent have received an increase of 56·6 per cent. over the past two years.

The Prime Minister and the department are careful to select their years when they make comparisons. They have taken the past two years, but over the past five years Civil Service increases have been between 70 per cent. and 73 per cent. It is fair to say that they have been about 70 per cent. over the past five years. In the same period those in the Armed Forces have had increases amounting to 89 per cent. The police have received increases of 78 per cent. Doctors in hospitals have been given increases of 95 per cent. and High Court judges have been given 71·3 per cent. Few of the members of those professions are below the poverty line and virtually all of them have had increases in excess of those granted to the Civil Servants.

All that the civil servants have been doing over the past two years has been catching up. The purpose of the exercise of the Pay Research Unit is to enable civil servants to catch up with those engaged in comparable jobs outside. It is clear that the Government are seeking to impose a rigid pay policy in the public sector with no such imposition in the private sector. It will not apply to those with industrial muscle such as the coal miners, the water engineers or the power workers. The Government Actuary estimates that average earnings in 1981–82 will increase by 10·5 per cent. The Government are seeking to thrust on civil servants a 6 per cent. or 7 per cent. increase while all the indications are that average earnings over the spectrum will increase by 10·5 per cent.

That is precisely what the Prime Minister warned against during her recent visit to the United States. She was quoting a success story. It is rich of the right hon. Lady to go to America and to say how successful she had been in Britain. She was reported in Time magazine of 16 February as saying to President Reagan: Never, never, never, I beg of you, go the way of incomes policy in the sense that you say 'You can only have X per cent.' You build in all kinds of rigidities. Never go that way because you will spend the next two years unwinding the rigidities and they always unwind upwards. However, the right hon. Lady and her Government are now insisting—they have repeated this time and time again—that they will go no further than 7 per cent. for the civil servants. They might win the struggle. They boast prematurely about getting inflation down almost to the level that they started with two years ago. They have done so at the cost of untold misery, with millions on the dole and more to come. The price of winning against the civil servants is certain to be a lasting legacy of anger, bitterness and mistrust that will take years to eliminate. I ask the Government to unbend, to be a little more flexible and to set up another independent outside commission and/or submit the process to arbitration. There is much to be gained by the Government's showing flexibility. If they do, I think that there will be a response from the trade union side.