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Wages Councils: Modification

Volume 413: debated on Friday 10 October 1980

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11.26 a.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what steps they are taking to modify the operation of Wages Councils and the Agricultural Wages Board.

My Lords, the Government keep the operation of these bodies under review, and are concerned that they should operate fairly and efficiently. In particular, the Government are prepared, subject to the statutory requirements, to abolish wages councils no longer needed to fix minimum wages, or to reduce their scope, and to amalgamate councils where appropriate.

My Lords, in thanking my noble friend for that very helpful reply, may I ask him what is the mechanism for securing that these bodies are aware of the Government's view of what would be the acceptable level of awards?

My Lords, the reality of the situation is that the wages councils' minimum rates are lower by some 20 per cent., on average, than wage rates in other sectors of the economy. Nevertheless, the Government are concerned that, particularly in a time of inflation, there is often publicity about the percentile increases awarded by wages councils, which could have damaging "knock-on" effects in other areas. I have no evidence, as the Minister directly responsible here, that there have been such damaging effects, but we are concerned about it and we are watching that closely.

My Lords, I think the noble Earl has given a reasonable Answer to the noble Lord, Lord Boyd-Carpenter, and quite rightly stresses in his reply that this deals really with the lower-paid workers. However, I should like to ask him this question. In the field of agriculture, especially—and I was connected with that—there have been problems, and generally the controversy has been the role of the independents. I hope that in any inquiry there will be a careful look at that, and I trust that the TUC and the unions concerned will be consulted.

My Lords, I think some concern about the role of the independents has been expressed, not only, as the noble Lord, Lord Peart, has said, in the agricultural wages board sector but also in the wages councils system. I have, as a result of representations, looked very closely at the role of the independents, and I am satisfied that they have not shown any consistent bias which could be called inflationary. They seem to me to have operated very evenhandedly between the different sectors represented. I should perhaps just add, as a follow-up to what I said to my noble friend, that of course no Minister is able by statute to intervene in the wages councils system, but that does not mean to say that we do not have a close interest, and therefore we monitor their operations very carefully.

My Lords, there is a caveat here. Having been a country bumpkin in my day, I am concerned with the relative position of these valuable people in agriculture, the farm labourers and others, so far as their income is concerned. Can the noble Earl assure me that there is no hidden factor in this question—that we want to screw down lower still the lowest-paid producers in the country?

My Lords, I, too, am a retired bumpkin, if I may put it that way. My advice is that the agricultural wages boards have the general support of the farming community, but I notice that my noble friend the Minister of State for Agriculture, Fisheries and Food is sitting beside me and I will relay formally what the noble Lord, Lord Davies of Leek, has said.

My Lords, will the noble Earl ensure that in a review of the operations of the wages councils care is given to ensure that the wages inspectorate is afforded more resources and is able to inspect and enforce the wages orders? At the moment it appears to engage in only a small number of inspections but, in regard to average inspections, it secures for the workers many tens of thousands of pounds of wages which ought to have been paid to them but which had not been paid.

My Lords, I think that the House would be surprised if I gave any suggestions that there would be large resources released to any part of the public sector at the moment. I have not had complaints about the operation of the wages inspectorate system. I have seen wages inspectors and their role is advisory rather than punitive but, so far as I can see, the system is working reasonalbly well at present.

My Lords, in view of the fact that historically the wages councils were introduced in industries where wages were felt to be reasonably low, do I take it that my noble friend's indication of a Government review includes reconsideration of their position in industries in which that situation no longer continues?

My Lords, my noble friend is quite right. The Government have no power to intervene in the deliberations of the wages councils but they have enabling powers to abolish wages councils where they are no longer needed because collective bargaining arrangements are coming into force. In my own time of office, we have abolished a number of such councils.