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Clegg Commission (Abolition)

Volume 984: debated on Wednesday 14 May 1980

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8.3 pm

I beg to move,

That leave be given to bring in a Bill to abolish the Standing Commission on Pay Comparability; and for connected purposes.
The body, commonly known as the Clegg Commission, was set up as a result of a statement in the House by the then Prime Minister, now the Leader of the Opposition, last year. Hon. Members will recall that that was at the end of the winter of discontent when the Labour Government's prices and incomes policy was collapsing round their ears. There were disputes with local authority and National Health Service manual workers and with ambulance men. Rubbish was piling up in the streets of London, the dead were left unburied and the sick were suffering. The Government's aim was to get those workers back to work on what appeared on the face of it to be reasonable percentage increases, whatever the long-term cost.

As in the firemen's case, a year before, it would have been cheaper to give the workers a larger cash offer than to put off the evil day with a post-dated cheque. The firemen would have returned to work for about 20 per cent. When the deferred payments and the reduced hours were worked out, the settlement cost was no less than 84 per cent.

The advantage to the Labour Government was that they did not have to cash the post-dated cheques. The incoming Conservative Government had to pay the bills. The cheques were expensive. The full year cost of Clegg awards to date is £1·6 billion. That does not include the 13 outstanding references.

The awards have slowed down the Government's policy of bringing expenditure under control and reducing inflation. They have also caused public sector pay increases this year to rise at a faster rate than private sector increases which, in most areas, are higher than the inflation rate.

Those of us who are sceptical about the concept of comparability between public sector and private sector pay had our worst fears confirmed shortly after the commission was set up. The Labour Government made a payment on account of the comparability study even before the study started. They prejudged the issue. That showed that the exercise was a fraud aimed at increasing settlements by the back door in order to buy industrial peace.

In its first report, the commission gave awards to cleaners and catering staff. Most people accept that wage rates in the private sector, in the hotel, catering and domestic service industries are already lower than in the public sector.

Comparability is always a doubtful exercise. If it is to have any credibility, it must include not only pay but all the elements, including pensions, whether inflation-proof or not, length of holidays, hours and conditions, job security, market conditions and the surpluses and shortages of skills. I do not know how such factors can be assessed. How does one compare the stress on a production manager or foreman who has to deal with recalcitrant shop stewards with the problems of a teacher dealing with difficult children? If a teacher cannot cope, he can send a child to the headmaster, possibly to be caned.

The most important perk for public employees is the inflation-proof pension. What is the cost of that privilege? One would expect to find that cost in the Clegg report, but it is not there.

I asked a private insurance broker to quote on two schemes—a normal company pension scheme with no indexation and a fully inflation-proofed scheme. He quoted me for a scheme that would cost 12½ per cent. of gross salaries without indexation. However, he said " We cannot get a quotation for an inflation-proof scheme because no insurance company will gamble on the future rate of inflation." He said that if I wanted to chance my arm on the rate of inflation he could supply a figure based upon that. I asked him for a quote for a 10 per cent. inflation scheme. The cost was not less than 40 per cent. of gross salaries—27½ per cent. more than the non-inflation-proof scheme.

What value does Professor Clegg put on that great privilege? In his first report on local authority and National Health Service manual workers he valued it at between 1·7 per cent. and 4·5 per cent., depending on grade. With regard to teachers, the commission valued it at between 2·5 per cent. and 3·1 per cent. How on earth did it arrive at such a ridiculously small figure compared with the quotation that I received? It was simply by taking for comparative purposes not the normal non-inflation-proof private schemes, but the untypical, partially inflation-proofed private schemes which are enjoyed by relatively few people.

I tabled a parliamentary question asking for details of which scheme we used for comparative purposes, but I was told that it was confidential information. The average member of the public is appalled at that attitude, which clearly undervalues public sector pensions. He sees it as a cover-up by the bureaucracy to protect its privileges.

Many of my hon. Friends, especially my hon. Friend the Member for Knuts-ford (Mr. Bruce-Gardyne), have appreciated for some time the damage created by Clegg. It is a pity that my party, during its campaign at the last election, undertook to honour the Clegg awards. These things happen in election campaigns, and it is right and proper that, once an undertaking has been given, it should be honoured. However, it is regrettable that the Government did not announce immediately after the election that there would be no more references to the commission.

If any hon. Members have any lingering doubts about the need to abolish the Clegg commission, they must surely appreciate what a dangerous menace it is after its latest report on the teachers' pay claim. Professor Clegg had difficulty in finding comparisons because teaching is a particular profession. He asked a number of consultants for suggestions. He then selected consultants, and they carried out a study. Because the study did not produce the answer that he wanted, and he did not think that it was credible, he scrapped the whole lot. Professor Clegg did not take into account the longer holidays, shorter hours and job security, and he grossly undervalued pensions.

Finally, he based his recommendations on a comparison of teachers with other graduates, not only in the private sector but in the public sector. He made a mistake: he forgot to include the increments that teachers receive because they are graduates. That mistake cost Britain £140 million. Because the mistake was not brought to light before the local authorities accepted the recommendation, it must be paid for by the long-suffering taxpayer or ratepayer, or by a further reduction in the number of jobs for teachers. That final episode proves that the Clegg commission is not only a nonsense but that it is incompetent and should be abolished forthwith.

Quite rightly, the Government believe in payments for productivity. If we pay for productivity in the private sector, and that is followed by comparability without productivity in the public sector, it is a recipe for inflation. I trust that hon. Members will support my view that the Clegg commission should be swept away as soon as possible. I commend the motion to the House.

8.15 pm

It is with some degree of personal surprise that I find myself rising tonight to defend the Clegg commission, and thereby defending the whole system of the comparability of jobs. In my youth in the Labour Party and the trade union movement, I worshipped unashamedly at the altar of free collective bargaining. It is only in recent years that I have come to modify that strongly held view.

When we read the history of the 1960s Labour Government, and look back at our experience of the last Labour Government, we find that only some permanent and long-term system of pay comparability can be remotely fair to public sector workers, especially lower-paid workers.

Despite the eloquence of the hon. Member for Bridlington (Mr. Townend), may I say that under successive Governments over the years there has been a multiplicity of boards or commissions of inquiry considering pay in many different industries. Indeed, some of those organisations and institutions still exist. In the 1960s the then Labour Government established the National Board For Prices and Incomes. It was felt then that that might be the long-term solution to the vexed question of public sector pay. The incoming Conservative Government in 1970 abolished it in almost their first Act of Parliament.

Presumably the hon. Member for Bridlington wishes to return to those days, when there were no boards of comparability and pay increases for any group of workers were a matter of turning the clock back to the freedom of the market place. The Bill is based on a myth, commonly held by Conservative Members, that public sector pay and pay increases are greater than those appertaining in the private sector. I attempted to find some information about the decade of the 1970s to see whether that myth was correct. It appears that the hon. Member for Bridlington would like the present Government to emulate the example set in the first year of the previous Conservative Government.

The increase in weekly earnings for predominantly male manual workers hi 1971–72 showed some interesting statistics. The average increase for railway men, for example, was 8·6 per cent. It is difficult to find an exact equivalent in the private sector as statistics are fairly misleading, but the average increase in all private sector industries and services was more than 13 per cent. That indicates to me that, without some form of comparability and long-term and permanent pay arbitration, the lower paid will receive lower pay, especially in the public sector, and will fall behind even further.

In his speech the hon. Gentleman made great play of the question of index-linked pensions in the public sector. It is currently a frequent whipping boy for the Conservative Party. I wish that the hon. Gentleman, who spoke so eloquently about the matter, had been available to advise his right hon. Friend the Member for Sidcup (Mr. Heath) when he introduced the index-linked pensions in the early 1970s. Some Conservative Members who enthusiastically support the hon. Gentleman were in the House at that time and, presumably, supported the measure.

I do not know about the hon. Gentleman's experience in industry, but it appears to me to be difficult, once someone is given a privilege—and index-linked pensions are a privilege—to take it away. If the Government even attempt to do that, they will provoke a considerable outcry throughout the public sector.

The public sector manual worker is usually singled out when discussing index-linked pensions. Yet it means comparatively little to most ambulance drivers to have an index-linked pension by the time they reach the age of 65. It might mean a considerable amount to the chief execcutive of a local authority, especially one of the new local authorities. It is a pity that the hon. Gentleman and some of his hon. Friends were not in the House to advise the leaders of the last Conservative Government against reorganising local government and giving chief executives and other chief officers the rates of pay that they now receive. It is likely to be impossible to receive an index-linked pension. Members of the present Conservative Front Bench appreciate that, even if the hon. Gentleman does not.

It is possible to pray in aid various sources in defence of the Clegg commission, and comparability—whether or not under Clegg. Comparability for public sector workers, especially lower-paid workers, is not only about that subject. It is difficult to quantify the productivity of a member of NUPE in an average sized hospital. The fact that they do not sell their commodity in the market place does not make them any less essential or necessary to society. After all, the fact that lower-paid workers in the public sector were as discontented as they were during the period of the previous Labour Government—I note the gloats and scoffs of Conservative Members about that phase in our political history—indicates that they themselves felt that over the previous two, three or four years their pay, meagre and inadequate though it was, had fallen behind what they considered to be that of their equivalents working within the private sector.

It is only by reference to a long-term and permanent commission such as Clegg, if Clegg is to be long-term and permanent, that such long-term feelings of injustice can be corrected, particularly among low-paid workers.

I conclude by quoting from what is not a notoriously Left-wing source of information—the National Institute Economic Review—where in an interesting article entitled
" The reform of the wage bargaining system "
Mr. F. T. Blackaby, a member of the National Institute, says:
" There is a clear need to re-establish a single arbitral body to deal with all such matters "—
that is, pay and comparability within the public sector. He concludes:
" The need is not for an arbitral body substantially different from those which have preceded it ".
As I have said, there have been plenty of those under both Governments over the years. He adds:
" The prime requirement is for a body which will survive political change ".
I oppose the motion, not because I think that Professor Clegg ought to be proteced from the economics of the market

Division No. 305]

AYES

[8.22 pm

Alton, DavidHowells, GeraintRhys Williams, Sir Brandon
Aspinwall, JackJessel, TobyRobinson, Peter (Belfast East)
Beaumont-Dark, AnthonyKellett-Bowman, Mrs ElaineRoss, Stephen (Isle of Wight)
Beith, A. J.Kilfedder, James A.Skeet, T. H. H.
Best, KeithKnight, Mrs JillSpeller, Tony
Bevan, David GilroyLawrence, IvanSpicer, Jim (West Dorset)
Blackburn, JohnLloyd, Ian (Havant & Waterloo)Sproat, lain
Braine, Sir BernardLloyd, Peter (Fareham)Stanbrook, Ivor
Brotherton, MichaelMcCusker, H.Steel, Rt Hon David
Brown, Michael (Brigg & Sc'thorpe)McNair-Wilson, Michael (Newbury)Stevens, Martin
Browne, John (Winchester)McQuade, JohnStewart, Rt Hon Donald (W Isles)
Buck, AntonyMcQuarrie, AlbertTaylor, Teddy (Southend East)
Butcher, JohnMajor, JohnThompson, Donald
Clark, Hon Alan (Plymouth, Sutton)Marlow, TonyThorne, Nell (llford South)
Clark, Sir William (Croydon South)Mawby, RayTownend, John (Bridlington)
Cockeram, EricMaxwell-Hyslop, RobinTrippier, David
Colvin, MichaelMellor, DavidViggers, Peter
Cranborne, ViscountMills, lain (Meriden)Wainwright, Richard (Colne Valley)
Eggar, TimothyMills, Peter (West Devon)Walker, Bill (Perth & E Perthshire)
Fookes, Miss JanetMoate, RogerWalker-Smith, Rt Hon Sir Derek
Gardiner, George (Reigate)Molyneaux, JamesWaller, Gary
Gow, IanMyles, DavidWard, John
Gower, Sir RaymondNelson, AnthonyWheeler, John
Grant, Anthony (Harrow C)Neubert, MichaelWickenden, Keith
Griffiths, Peter (Portsmouth N)Page, Rt Hon Sir R. GrahamWilson, Gordon (Dundee East)
Hamilton, Hon Archie (Eps'm&Ew'll)Penhaligon, David
Hannam, JohnPowell, Rt Hon J. Enoch (S Down)TELLERS FOR THE AYES:
Hawkins, PaulProctor, K. HarveyMr. Bob Dunn and
Hawksley, WarrenRees-Davies, W. R.Mr. Christopher Murphy.
Henderson, Barry

NOES

Ashton, JoeFoulkes, GeorgeMarks, Kenneth
Cant, R. B.George, BruceMason, Rt Hon Roy
Clark, Dr David (South Shields)Hamilton, James (Bothwell)Owell, Rt Hon Dr David
Dalyell, TamHamilton, W. W. (Central Fife)Palmer, Arthur
Dean, Joseph (Leeds West)Haynes, FrankPowell, Raymond (Ogmore)
Dixon, DonaldHome Robertson, JohnRobertson, George
Dormand, JackJohn, BrynmorSnape, Peter
Dorrell, StephenJohnson, James (Hull West)Tinn, James
Douglas, DickJones, Dan (Burnley)
Dunn, James A. (Liverpool, Kirkdale)Kerr, RussellTELLERS FOR THE NOES:
Evans, John (Newton)Litherland, RobertMr. Austin Mitchell and
Foot, Rt Hon MichaelMcCartney, HughMr. Leslie Spriggs.

Question accordingly agreed to.

On a point of order, Mr. Deputy Speaker. As the Clegg commission was set up by what might be called a Prime Ministerial decree in 1979, it can surely be abolished in the same place or that he should be treated differently from anyone else in the country, but because I believe that the only way in which to achieve genuine social justice for lower-paid public sector workers is by having such a commission.

I hope that my right hon. and hon. Friends will join me in the Lobby to oppose what I believe is a misguided motion.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business): —

The House divided:—Ayes 84, Noes 32.

way. That being so, there was little point in the hon. Gentleman's Bill in the first place.

The hon. Member for Bridlington (Mr. Townend) had every right to introduce a Ten-Minute Bill. The hon. Member for West Bromwich, East (Mr. Snape) knows the relevance of such a Ten-Minute Bill.

Bill ordered to be brought in by Mr. John Townend, Mr. Ralph Howell, Mr. Eric Cockeram, Mr. Michael Colvin, Sir Nicholas Bonsor, Mr. John Browne, Mr. Keith Wickenden, Mr. Christopher Murphy, Mr. Bob Dunn and Mr. Tony Speller.

Clegg Commission (Abolition)

Mr. John Townend accordingly presented a Bill to abolish the Standing Commission on Pay Comparability; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 208.]