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British Railways (Pay Settlement)

Volume 894: debated on Monday 23 June 1975

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(by Private Notice) asked the Secretary of State for Employment if he will make a statement on the settlement of the pay claim by the National Union of Railwaymen.

As the House will be aware, the British Rail Board opened its pay negotiations with the railway unions in April by offering an increase to match the movement in the retail price index over the preceding year, an offer which it considered to be in accordance with the TUC guidelines objective of ensuring the maintenance of real incomes.

This offer was rejected by all three unions which then, however, accepted without commitment British Rail's proposal to refer the matter to independent arbitration under the railway's negotiating procedure. The Railway Staffs National Tribunal, after a full examination of the evidence given by British Rail and each of the three railways unions, recommended on 29th May an increase in basic rates of 27·5 per cent. and other improvements including a higher minimum earnings level for railmen.

This award was accepted by ASLEF and TSSA, but the NUR Executive rejected it and gave notice to the board of its intention to call a national strike from 23rd June unless the board conceded an increase of 30 per cent. to all railwaymen on rates above £36 per week and 35 per cent. to those whose rates were below that figure.

After lengthy negotiations in which the NUR indicated a willingness to move from its claim, the board made an offer which in the view of the union negotiators was acceptable, and this was subsequently unanimously accepted by the NUR Executive. Under this agreement the arbitration award will be payable from the settlement date, 28th April, and there will be a further increase in basic rates of 2½ per cent. from 4th August. In addition, from the same date there will be a temporary allowance on a sliding scale to the lower paid railway workers.

British Rail estimates that the total cost of the settlement, which includes consolidation of threshold payments valued at £4·40, will be 29·8 per cent. in the current year. The cost to the industry's pay bill will be £123 million, which is some £9·3 million higher than the cost of the RSNT award.

The House will join with me in welcoming the fact that the two sides reached an agreement by negotiation and that a damaging rail strike has thus been avoided. The Government would of course have preferred that a settlement had been reached on the basis recommended by the Railway Staff National Tribunal, even though the settlement was significantly less than the NUR claim.

In making its original offer British Rail drew attention to the serious financial problems facing the industry and has made it clear that the cost of this settlement will have to be met by economies and improvements in productivity which will be worked out by the board in consultation with the unions.

Will the Secretary of State say what proportion of this settlement will be paid for by higher taxes, higher railway fares, or the cutting of railway jobs and available services? Secondly, would he not agree that the settlement demonstrates yet again that militancy pays handsome dividends and has undermined the authority of wage arbitration and the credibility of the ASLEF and TSSA leaders who bravely honoured the arbitration award? Thirdly, does he realise that the Government are making themselves an international joke by punctuating their strong and abrasive weekend cries and speeches for wage restriction by repeated examples of the most humiliating surrender to militancy?

The hon. Gentleman's description of what has occurred is a travesty of the situation and a travesty of what has been said. It has already been indicated by British Rail—and I said it in my statement—that of course the extra cost of this settlement will have to be borne in extra fares or by rearrangements in manpower and productivity. So the hon. Gentleman should not have made the statement in his first question.

The figures do not bear out the suggestion that this was not a negotiation, which is apparently the implication of the hon. Gentleman's remarks. The settlement is above the amount proposed by the arbitration award, and certainly we should have preferred the arbitration award to be accepted. But although it is above the amount proposed by the award, it is below the amount claimed by the NUR. [HON. MEMBERS: "Oh."] I am sure that the only thing that many Opposition Members wanted was a strike. All they wanted was not merely that the whole country should be held to ransom but that we should have a national strike of the most serious proportions. That seems to be the implication of their remarks. But that certainly was not our view. We wished to see a negotiated settlement, and I am glad that that has been secured.

Does not my right hon. Friend agree that the agreement was based on fair play and justice for the basic rate railwaymen? In spite of the hysterical shouting by the Opposition, does he not agree that the new money element involved in the settlement is still one of the lowest to be reached in the public sector over the past 12 months? Would he not also agree that the leaders of the NUR have said repeatedly that they believe in a pay policy but—[Laughter.] —Hon. Members opposite may smile, but is not one of the gravest problems facing the country how to have a basic pay policy that can be seen to be working? Is not the basic reason why the leaders of the NUR wanted a settlement the fact that they could not and cannot accept a policy based on their members subsidising cheap railway fares or services at the expense of their wages?

I fully accept my hon. Friend's statement that the NUR had a strong case, which it put with great strength. I must tell my hon. Friend and the House, however, that that case was put to the arbitration tribunal. As I have said, the Government would have preferred the arbitration award to be accepted, but the NUR made it clear before the issue was referred to arbitration that it was not necessarily committing itself to accepting the arbitration award. It also made clear that it would continue to press its case in negotiation. It had a case, and that case was accepted in negotiation, and that has led to this award.

Will the right hon. Gentleman say whether the settlement is within or without the social contract? If it is outside the social contract, can he say what proposals the Government have to ensure that future wage settlements are made within the social contract? Finally, can he say whether there is any assurance from the NUR that it will take part in meaningful discussions with British Rail on the manpower reductions to which the right hon. Gentleman referred?

The NUR has always been prepared to engage in meaningful discussions with British Rail, and I am sure that it will be prepared to do so in future. The figure at which the settlement has been reached is certainly outside the guidelines of the social contract. Indeed, the award of the arbitration tribunal was outside the guidelines of the social contract. I am not seeking to conceal these facts. They are evident to anybody who examines the matter.

As for future policy, as the House knows the Government have been having discussions with the trade unions and others concerned about how we may produce a better observance of the guidelines in future than we have had in the past, and what we are seeking to do, and what I advise the House to continue to seek to do, is to secure by consent and persuasion results that certainly cannot be achieved by force and statutory provisions.

Does my right hon. Friend recall that the people who are now urging that we should have a brutal confrontation with the railway workers are the very same people who, when confronted with a series of one-day strikes by the signalmen, were repeatedly, continually and vociferously asking my right hon. Friend to interfere and to prevent a strike? Does it not seem that the Opposition want to have their cake and eat it?

I am grateful to my hon. Friend for recalling that series of occasions on which Opposition Members urged upon British Rail that they should abandon the agreement they had reached with the unions and proceed to make a special agreement with the signalmen. We resisted that because we said that these matters must be dealt with in the discussions between British Rail and the unions, according to the normal negotiating procedure. Part of our policy and part of our understanding with the unions is based on our agreement to restore collective bargaining between British Rail, other nationalised bodies and other employers and unions. We have restored free collective bargaining, and we cannot be interfering with it right and left, as Conservative Members seem to suggest.

Will the right hon. Gentleman now admit that the so-called social contract has completely broken down? Will he pay attention to what Mr. Scanlon is saying, because it seems to make a great deal more political sense than what he and his right hon. Friends are putting forward? Is he aware that the proposals for a new social contract are just so much gobbledygook in view of the complete failure of the present arrangements?

I do not think that the right hon. Gentleman has followed as closely as I have what Mr. Scanlon said last week. What he did at his national committee meeting was to uphold the social contract. Unfortunately, he was defeated in the vote, as happens in other places. People are sometimes defeated in the vote. We have to repair the situation as best we can when such things occur.

That does not mean that the social contract has failed or that the whole idea of trying to secure agreement between the Government and the unions, not merely on wages but on a whole range of policies, has broken down. It is the only way in which we can secure a democratic solution to the problem. I think that some Conservative Members want a quite different kind of solution.

Order. We cannot have a debate on this matter or on the social contract now. I am determined to maintain the Opposition's rights with their Supply Day. I will take one more question from each side.

Does my right hon. Friend realise that there will be general satisfaction that there is no railway strike? Does he recall that last week it was said that if there were a strike it would be disastrous? Should there not be some sign of appreciation from Conservative Members that a strike has been avoided? Does my right hon. Friend realise that he is more likely to secure the future of Britain by pursuing a policy of cooperation and conciliation in industry than by pursuing a policy of conflict and confrontation, such as we have had from the Conservatives?

We believe that the best way to settle these problems is by conciliation and negotiation and restoring faith in these procedures. We intend to persist in this policy despite all attempts to push us into a quite different policy which could lead only to ruptures and to the destruction of our industrial relations—a position we knew a year or so ago. That is the fact of the matter. The House had better face the choice. Either we do these things by consent or we seek to use dictatorial methods which will never succeed.

How can it ever be fair if the Government give way to the strong and then hammer the weak, which is what is happening in our society? If the right hon. Gentleman now admits that this settlement is outside the social contract, may I ask him to give one example of a pay settlement in the public services that has been within the social contract? Can he also tell us what guidance the Government gave to the Railways Board when it said that there was no more money other than that which was available to meet the arbitration award? Is he not ashamed of the fact that his inaction in dealing with the inflationary wage situation, now totally out of control, means that thousands more people will be out of work this winter, including a large number of school leavers? What does the right hon. Gentleman intend to do about it?

If the right hon. Gentleman wanted a serious debate on this subject I am surprised that he did not select today's Supply Day rather than this tuppenny ha'penny motion which is on the Order Paper. [HON. MEMBERS: "Answer".] It is the right hon. Gentleman who is running away from real debate on the subject. He could have had a debate on the subject today. I will certainly be happy, at any time that the House decides and it is so agreed, to have a debate and general discussion on these matters.

The right hon. Gentleman's suggestion that we are hammering the weak and letting the strong through is a complete caricature of the situation, particularly when it is allied with the right hon. Gentleman's suggestion that there have not been settlements in the public sector within the guidelines of the agreement——

I could start with the agreement made by the local authority manual workers last November, which was within the guidelines laid down by the TUC. On the occasions when we have had a debate on the matter I have sought to elucidate this as best I can for the benefit of Conservative Members. But they are not very eager to learn. That is one of their troubles. The right hon. Gentleman asked me what I said when British Rail said that there was no more money to meet the claim. I do not know what he has heard from British Rail. As I understand it, British Rail was conducting these negotiations, and that was the right way to go about it.