§ 3.9 p.m.
§ LORD WILLIAMSON rose to move, That this House congratulates the British Productivity Council for organising Quality and Reliability Year and for focusing the attention of the nation on this essential aspect of industrial efficiency. The noble Lord said: My Lords, I hope that noble Lords will bear with me if, before discussing the terms of the Motion, I make some reference to the British Productivity Council, which is sponsoring the National Campaign for Quality and Reliability Year, and my connection with it.
§ The British Productivity Council was formed in 1952 as a logical successor to the Anglo-American Productivity Council, which operated from 1948 to 1952 295 and made a valuable contribution to industry during that period when we were changing over gradually from war-time production to peace-time production. I was privileged to be a member of both these organisations, and honoured to be the Chairman of the British Productivity Council in 1953. It is a happy coincidence that the Chairman of the Council this year is my noble friend Lord Cooper of Stockton Heath, who is unfortunately prevented by important business abroad from being present for this debate.
§ Over the past few years the B.P.C. has achieved much success in spreading the gospel, among managements and workpeople alike, of the value of the reward to be gained by striving for industrial efficiency and productivity. The organisation is operating all over the country through some 132 local productivity committees and associations, all composed of representatives of managements and organised labour and other industrial and commercial organisations. It will not be disputed—indeed it cannotbe—that much of the credit for our prosperity since the end of the Second World War is due in no small measure to those dedicated people in industry, trade and commerce who have contributed and are now continuing to do so to the work of the British Productivity Council.
§ If there have been shortcomings and disappointments—and it would be idle to deny that there have been—they have been due to a measure of indifference and complacency, often a lack of cooperation between managements and labour in some sections of British industry. It is a sad reflection that notwithstanding the massive educational effort over the past fourteen years or so there are still many who do not appreciate the pressing need for efficiency and higher productivity and have yet to be educated in the simple facts of our economic life. I hope—I am sure we all hope—that they do not have to learn the hard way.
It is the British Productivity Council, in co-operation with the National Council for Quality and Reliability, which is sponsoring the Quality and Reliability Year. This campaign, which will be sustained throughout the coming twelve months, was launched last week by a great representative gathering in the
Festival Hall, probably the largest gathering of its kind ever to be held, graced by the attendance of His Royal Highness the Duke of Edinburgh who is Patron of the campaign. In an encouraging message his Royal Highness said:
The whole point of this campaign sponsored by the British Productivity Council is to help and encourage manufacturers of finished goods, as well as component manufacturers, to achieve the highest possible reputation for quality and reliability in the markets of the world. A good reputation for well-designed goods or components, fit for the purpose, which do not fail or break down, is the criterion for certain success. A bad reputation is a costly luxury which this nation cannot afford.
And at the Festival Hall last week His Royal Highness said:
Britain will be back on the road to prosperity if every Ministry, boardroom, manager's office and union headquarters responds to the standards of Quality and Reliability Year.
That is the message that Prince Philip gave to the Conference.
§ The campaign is under way. A massive programme of activities has been drawn up for the next twelve months to focus the attention of the nation on the paramount importance of quality and reliability in our productive and commercial operations. But, more important, it will take practical steps to encourage and ensure better standards wherever it may be possible. All the leading organisations in industry, employers and trade unions, have pledged their support, and the enthusiasm all over the country is extremely encouraging.
§ It should not be overlooked that a great deal has already been done and is being done to encourage quality and reliability in production and other services by individual firms, trade associations, employers' organisations, research associations, and the National Council for Quality and Reliability. The British Standards Institution's work in the field of standards has also made an important contribution. So this national campaign is intended to give further impetus to the work which is constantly going on and to widen the area of interest and endeavour.
§ Recent investigations have shown that there is much room for improvement in some sections of industry, and it is not denigration to say so. Our best firms 297 in every industry are highly efficient and possess and practise good "know-how". But it would be most imprudent to ignore the fact that there are others where some improvement is possible. Anything which can be done to raise the level of the less efficient to the standards of the more efficient must be to the advantage of industry as a whole and certainly of the national economy as a whole. The 132 local productivity associations and committees and the 80 or so quality and reliability groups which they have specially formed have planned programmes of activity commencing this month. They will provide the fullest publicity of the outstanding achievements in quality and reliability of certain British firms. They will assist firms to review their methods of achieving and maintaining their own requisite standards and, of course, in many firms help to raise their standards. They will endeavour to make quality and reliability everybody's business, to ensure the involvement of everyone in a firm from the boardroom to the shop floor. There will be extensive interchange of experience among individual firms to help spread the knowledge of quality techniques. This therefore will be a great opportunity for showing what British industry is doing and what it can do to maintain and improve its reputation for quality and good standards.
§ There are firms in all industries which are not sufficiently aware of the many new techniques for the control and improvement of quality in products, and certainly not aware of the savings in cost which these can bring about. All the evidence goes to show that substantial savings in production costs can be made quickly by adopting methods of scientific quality control and thereby eliminating or reducing to a minimum faulty or unusable products. A large amount of money can be lost in scrap and re-work. Products which are faulty and have to be rejected are a sheer waste of material, labour and plant. There is no virtue in producing faulty goods and then boasting that efficient inspection sees to it that they are scrapped or re-processed. These methods are inefficient and costly. Unfortunately, inspection does not always spot the faulty products, so some of them go out to customers, including overseas customers, to damage our reputation and trade. The aim should be to ensure that faulty goods are not produced at all. It may well be 298 that over the past few years, in the drive for higher production, in some areas of industry quality has suffered to some extent. If this is so, the whole value of increased production is diminished. Higher productivity becomes meaningless if quality and reliability of the products suffer in the process.
§ In all this, of course, there will be the sceptics and the critics. It may be suggested that this is an exercise seeking absolute perfection, and pursuing an objective that what we produce should be designed to last for ever. It does not mean this. What it means is that the product should conform to the specification set for it. It must be right for the job for which it is intended, and should give reasonable service for the lifetime for which it is designed.
§ It cannot be too strongly emphasised that success depends on everyone in a firm being constantly alert to the concept of pride in work and quality of production. This not only applies to the men on the machines and those engaged in the actual productive operations, but involves all employees, in whatever capacity they may be engaged. In these Islands we have an inbred and inborn experience and "know-how", and we are rich in great skills and inventive genius. Nearly every, if not every, recent great invention is British. Why should we not continue to lead the world in the quality and reliability of our products? We are as well equipped as any other nation to do so. It is sometimes alleged that we are becoming too complacent and a little too easy-going; and perhaps prosperity, and with it mass production, is encouraging the dangerous attitude that "anything will do". If there is any validity in this suggestion, the tragedy is that it might get along for a time, but not for long, because counterfeit can have no stable currency.
§ It may be, and probably will be, asked: Is this campaign just another gimmick that will arrive in a blaze of publicity and then gradually fade out? It is to be hoped not; and I do not think it will be so. To discourage slovenly methods and "couldn't care less" attitudes which result in bad work, and to encourage pride and satisfaction in the job being done, can be justified on any grounds. The spirit of wellbeing and mental uplift which results from a job well done is a 299 sufficient incentive in itself, or should be. But there is another reason. In this thickly populated Island we must maintain all the time a high level of exports. If we fail in this, no power on earth can prevent lower standards of living from being forced upon us. This is the price we shall have to pay for our neglect, and no one can buy us out of it.
§ Why is it that this plain simple fact has to be stated, restated and emphasised ad nauseam? It is because there are many of our people who either do not believe it or are too complacent to realise it. All of us know that British industry is capable of standing up to the best of our competitors; but it is no good our being ostrich-like and burying our heads in the sand while our competitors take steps intended not only to overtake but, ultimately, to surpass us. Other countries are challenging us now more and more determinedly, and more than ever they did in the past.
§ I have already stated that British products have earned an international reputation for high quality, but this is becoming more and more a competitive world, with more and more countries competing for our share of markets. Those countries which have developed and which use modern techniques of quality control have also achieved a high reputation for their products—for example, the emergence of Japan as an important exporter of high-quality goods in the last twenty years. There is no doubt at all that firms, or countries with a good reputation for quality and reliability, have a decided commercial advantage, and it is no accident that has led to Japan's achieving the position she now holds. Japan has had a sustained campaign on quality and reliability which has featured in all the Japanese efforts to win new markets. I am informed that Japan has organised national campaigns on this subject for the past seven or eight years, with the astonishing results we now see. Not many years ago an article made in Japan was usually something of a crude reproduction of our own products. Today their reputation for high-quality goods at competitive prices stands on its own merit and poses a serious threat to our own position.300
§ Here, then, is our opportunity, a national drive in which we can all join. The Government have welcomed it. The national industrial organisations, like the Confederation of British Industry and the Trades Union Congress, are giving their full support. The professional bodies are bringing their own expertise to bear, and firms all over the country, over 4,000 of them so far, are taking up the theme. The ordinary man or woman, the consumer, can readily grasp the relevance of this national effort, directly to the wage packet, and indirectly to the maintenance and improvement of all our social services. The improvement of quality and reliability in our enterprises is a continuous and never-ending process, and an exciting one. If we accept this, and practise it in the years to come, we ought to be able to look back on Quality and Reliability Year as an historic year, and the beginning of a new advance in our national fortunes. My Lords, I have much pleasure in moving the Motion on the Order Paper.
§ Moved, That this House congratulates the British Productivity Council for organising Quality and Reliability Year and for focusing the attention of the nation on this essential aspect of industrial efficiency.—(Lord Williamson.)
§ 3.28 p.m.
§ THE EARL OF DUNDEE
My Lords, I must first make an apology to the House, and particularly to the noble Lord, Lord Shackleton. At 4 o'clock I have to attend a meeting of Scottish Peers to discuss impending Parliamentary business, and as your Lordships know, the distance which separates Scotland from Westminster, which is one of the great disadvantages of the Act of Union, often makes it necessary to fix these things a long time ahead and difficult to change them at short notice. So I hope that your Lordships will forgive me if I am absent from this Bench from 4 o'clock until such time as my Scottish colleagues have finished talking.
I should like to compliment the noble Lord, Lord Williamson, on the manner in which he has moved this Motion. He has introduced it with skill and brevity, with the purpose of enabling us to express the thanks of this House to the British Productivity Council for the work which they are doing. I think they deserve both 301 our thanks and congratulations. I have no doubt that there may be some undercurrent of feeling in the minds of some of your Lordships that almost everything which the present Chancellor of the Exchequer has done throughout almost his whole period of office might almost have been deliberately calculated to frustrate and retard everything which the British Productivity Council is trying to do. But that is not the fault of the Council, and this is not an occasion for offering any remonstrance of any kind against the economic policy of the Government.
The noble Lord, Lord Shackleton, like many Peers who hold office in any Government, has to make himself responsible in Parliament for several different Departments, as I had to do a few years ago. I remember very well in 1962, just four years ago, that the British Productivity Council, with the support of the Government, had what they called a Productivity Year to encourage greater productivity in industry. This Council is not just a body set up for the purpose of exhortation or for the purpose of producing truisms about the needs of our export trade. It is a body which, with the help of local Productivity Councils, holds numerous courses of instruction and conferences in every part of the country which are attended by representatives of a large number of firms, great and small, who derive great practical value from the instruction which they receive and the views exchanged. I should say that last year's Board of Trade grant of £270,000 to the Council is a very small expenditure in relation to the value which the country receives from it.
The Council cannot, of course, cure every restrictive practice or every case of industrial inefficiency. As I have often tried to tell your Lordships, I believe that a prices and incomes policy will succeed only if and when we can get a great deal more competition into British manufacturing industry than is the case at present. In the same way, we must introduce a great deal more competition before we can cure restrictive practices and board-room inefficiency of every kind. But however that may be, the knowledge of how to reduce what are called failure-costs, which is one of the main objects of the Productivity Council campaign this year, and how to spend more money more profitably on preven- 302 tion costs will be of the very highest value to British production and British export trade.
When we make journeys abroad, as some of us often do, to attend British industrial fairs, or to see tradesmen abroad who are interested in doing more trade with us, whether it be in Europe, Canada, the United States, South America, or wherever it may be, I do not think that the complaints we receive about the actual quality and reliability of British goods are very numerous; they are mostly confined to a few special cases which are not typical. The complaints which we get on a much larger scale are that we are very slow—much too slow—in delivery, and also very often not resilient enough: we have not enough adaptability.
To give one small example, we may not always take the trouble to find out that the Canadian housewife may like some pattern of floor covering which is not quite the same as the pattern which the British housewife likes but which nevertheless could be mass-produced and exported with very little addition to overhead costs. If we have another special year of effort of this kind it might well be devoted to quick delivery and adaptability. But these, of course, are highly relevant in every way to what the Council is trying to do now. The noble Lord, Lord Williamson, quoted one or two passages from what the Duke of Edinburgh said last week. I should like to quote a passage from what the Duke said last Thursday, when opening the initial conference at the Festival Hall. What he said was that if industry could not succeed in doing what the Council is trying to persuade it to do, then both those who "couldn't care less" and those who think "I'm all right" will be defeated, because there will not be anything left to care less about and there will not be anybody left who is "all right".
In supporting this Motion, I would ask the Government to do two things. First, I would earnestly ask them to stop trying to prohibit productivity wage agreements which were confirmed before July 20 this year. I consider that it is quite unnecessary to any prices and incomes policy, and that it is likely to have very serious effects on future productivity agreements. The second thing I would 303 ask them to do is to study very carefully the article which was written by the noble Lord, Lord Cooper of Stockton Heath, Chairman of the Productivity Council—and we are very sorry that he is unable to be here to-day—for the Board of Trade Journal last month in anticipation of this Quality and Reliability Year. What he said was this:I have mentioned profitability. It is the hope of reward which inspires effort. In more down-to-earth terms, most of us work to live, firms and employees alike. The managing director no less than the man on the shop floor looks for adequate reward for his responsibilities and efforts, but this reward depends on results. The firm which is not producing a satisfactory return on the capital employed will soon be put out of business. The profits will not be there to finance essential progress in step with technological advances, competitiveness will wither, and with it the job-security of everybody in the firm.Those were very wise words spoken by the noble Lord, and I hope that the Government will try to persuade the Party which they lead that the profit motive is not the same thing as avarice. I think it was Dr. Johnson who said that men are seldom more innocently employed than in making money, and if we are going to treat the profit motive as a deadly sin, as I am afraid many elements in the Party opposite often do, to be punished and stopped by every fiscal measure, then we shall very soon destroy British export trade and ruin the British economy.
§ 3.40 p.m.
§ THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON)
My Lords, before I turn to the Motion, I should like to congratulate the noble Earl, Lord Dundee, on the quality and timely delivery of his speech. Indeed he is 21 minutes early. He gave the impression in his opening remarks that he might be going on until 4 o'clock.
§ LORD SHACKLETON
The noble Earl has made very sure that he will be on time. I shall not follow him into these tempting partisan remarks, except to say two things. First of all, if Sir Paul Chambers is able to contain himself on non-Party occasions, I would even 304 believe that the noble Earl, Lord Dundee, might manage it. Secondly, I have taken part in many of these debates in Opposition. It is always tempting to tease the Government, although I usually managed to resist it. But we do not object to the noble Earl's remarks, and I would agree entirely that in private industry profits are essential. I have said this before in this House, and I hope that the noble Earl will derive some comfort from that remark.
I should like to congratulate my noble friend Lord Williamson. Again, he has been exceptionally timely. To mount part of one's public relations campaign—and in a sense the House of Lords provides the sort of opportunity that one wants for spreading the gospel—within a week of the opening of Quality and Reliability Year shows a very good sense of timeliness. I think the House not only greatly enjoyed his speech, but is very well aware of the great contribution he has made. Before my noble friend Lord Cooper of Stockton Heath, who is the present General Secretary of the General and Municipal Workers' Union, my noble friend Lord Williamson was Chairman of the Productivity Council and has played an important part. Of course, the Government, and I am sure the whole of your Lordships' House, wholeheartedly support this Motion. I am particularly glad that my noble friend Professor Lord Ritchie-Calder, with his wide experience particularly in the scientific field, should be taking part in this debate.
As my noble friend Lord Williamson said, Quality and Reliability Year has been organised by the British Productivity Council in association with the National Council for Quality and Reliability, and as he made clear it has been supported widely throughout industry, by trade unions and organisations. I will not go into this beyond pointing out again that something like 40 per cent. of the labour strength of manufacturing industry is involved in some way or another. But, of course, the problem, as my noble friend made clear, is not necessarily that of the 40 per cent., although they themselves are well aware of the improvements that can be made; it is the 60 per cent. who also need to be interested. Of course, this is a basic problem of industry. We are wel laware that there is some very high quality management 305 in this country, but there are some managements who, although no doubt they try hard, are not aware of all the aspects of manegement technique and responsibibility which are open to them.
The aims of the Year have been set out pretty fully, and I do not propose to do more than just stress very briefly what they are: to give the fullest publicity to outstanding achievements; to assist every firm that is not yet doing its part in this matter to review its methods of obtaining improved quality and reliability; and to make it everybody's business from the boardroom to the shop floor. Although this is aimed primarily at manufacturing industry, the hope is that all sectors of the economy will take an interest and derive benefit. I am very glad that the noble Lord, Lord Sieff, with his wide experience of his firm in quality and reliability—if I may pay tribute as a former director of another firm in the retail business—is taking part, as indeed are the consumers in the person of the noble Baroness, Lady Elliot of Harwood, and of course my noble friend Lady Burton of Coventry who has been so interested. There is a great deal of literature and any of your Lordships who want to see it can do so.
The whole point—and there have been references to His Royal Highness's speech at the Royal Festival Hall, which was quite a remarkable occasion—has made very clear the importance of this campaign to achieve the highest possible reputation for quality and reliability in the markets of the world. Of course, as was also pointed out on that occasion, this means the home market, too. It is not only a question of competing in the overseas market; it is also competing with imports from abroad. Of course, quality and reliability are only one aspect of the drive for higher productivity, reduced costs and greater competitiveness. There are so many other techniques which it would be tempting to go into, but I shall refrain from doing so now, though no doubt your Lordships will continue to debate aspects of management and industry in the future. But it is worth noting that the Prime Minister's Conference on Productivity—the Q.R.Y. was conceived before this Conference—is none the less an important spearhead of the follow-up arising from it.
Here I should like to attempt a definition of "quality and reliability" 306 which I think will mop up some of the points which the noble Earl, Lord Dundee, made. "Quality" means a product which conforms to specification for practical purposes and it must be right for the job it is designed for, and must give reasonable service for its designed lifetime. This is to some extent summed up in the expression, "Value for money" No one is saying that all products must last for ever. Indeed, it is possible to build into the specification too much reliability which may price the product out of the market. For instance, in the military field it is no use producing a manpack radio which is meant to be rainproof and which is so rainproof that it is still working a month after the man who was carrying it has been drowned. There has to be a balance in these matters and there is a place in the market for all price ranges and all lifetimes. In other words, the product must do the job it is designed to do.
This question of quality ties in inevitably with reliability, and the British Productivity Council's definition of "reliability" is:The degree to which a product will function satisfactorily under given conditions of use for a given period.It does not apply exclusively to the product or to the inspection services; it applies equally to the observation of delivery dates and completion dates. This takes us very much wider than manufacturing industry. The principle effect of improving quality and reliability—and this may escape some people's notice—is the reduction of manufacturing costs and indeed costs to the consumer.
Some information on this has been published by the British Productivity Council and they have divided the expenditure into three categories—failure costs, appraisal costs, and prevention costs. By failure costs—and my noble friend Lord Williamson referred to this—they mean scrap and re-work through defective goods. Appraisal is inspection and testing; and prevention is the investigation into the causes of the scrap and failure to conform to specification and improvement in quality control methods.
The possibility of savings in total quality costs—the gold in the mine—is very great even in an advanced firm, and we are not talking about British industry only. There has been an international survey of leading firms in Europe and 307 the United Kingdom which shows that in manufacturing industry quality costs might average around 10 per cent. of the turnover; and to the noble Earl, Lord Dundee, I might say that possibly in many firms this might be as much as the gross profit. When one breaks down these quality costs one finds that the failure costs represent about two-thirds, about 65 per cent., and this could mean—and I apologise for giving these figures, which I admit are very rough but they give an indication—a figure equivalent to over 6 per cent. of the gross profit, which I must say I find rather a shocking figure. The British Productivity Council have deduced further figures, of the amount of savings which might be made, and these again could amount to anything from 1.5 to 5 per cent. of the gross turnover. A saving of only 1.5 per cent. would mean a saving to industry as a whole of £150 million a year. I am giving these figures really to show that this is not an airy-fairy thing: there is a great reality in economic terms.
Connected with this—and, again, my noble friend Lord Williamson indicated this—are a number of side effects, including, of course, the increase in job satisfaction. The purpose of this Year is to emphasise quality and reliability, but that, of course, is only one aspect and one facet of the work, which will be never ending in this field. One of the gratifying things about Quality and Reliability Year is that it is not going to operate solely on a basis of exhortation. There is a great deal of co-operation and self-help in industry, and many leading firms which are conducting their own quality and reliability campaigns are also arranging to show other firms in their area, under arrangements made by the local productivity asociations, how they have achieved their results. This is comparable, again, to some of the excellent co-operation of which your Lordships are aware—inter-firm comparisons, and so on. It is recognised that everyone must realise that he is personally involved.
I have said before in your Lordships' House that management must take the main responsibility and must give the lead; but, of course, it is the worker who often knows more about the quality of the work that he is producing than anyone, and it is true that here good 308 management can get the help from the shop floor which good management always will get provided that it realises the importance of this and that the advantages in terms of price and profit are very great.
I will not spend time going into the question which has been discussed and undoubtedly will be further discussed at great length of our standard of quality and reliability in relation to other countries. My noble friend Lord Williamson referred particularly to Japan, and I agree with everything that he said; but I think we are all agreed that we have to raise this standard and that this is a fundamental part of the successful economic progress of this country.
However, I should like to say something about Quality and Reliability Year from the standpoint of the Services, and it is here perhaps that Government most of all is in a position to help and to influence this matter. My own Ministry, the Ministry of Defence, is vitally concerned in the improvement of quality and reliability of equipment used in the three Services. We invariably demand a high performance with extreme accuracy and reliability.
For example, in the case of Her Majesty's ships—and my noble friend Lord Winterbottom who, like myself, was a businessman before he became a Defence Minister will be able to confirm this—with shore support no longer as readily available from overseas bases, opportunities for maintenance are fewer and the consequences of breakdowns and delays are more serious. Therefore quality and reliability have assumed a new and growing importance.
The same thing is true of the Army. With continuing technical advance, tanks, and indeed aircraft and weapons also, are becoming more costly and complex. This year we are spending £700 million on equipment for the Armed Forces. Clearly, for such sophisticated and advanced equipment it is more important, because of the cost and the relative fewness of the numbers involved, that we should have the maximum reliability and efficiency, and it has been the view of the Armed Forces that we have a duty to seek to influence industry in this field. This has been reflected in two very interesting papers—and if any of your Lordships want to see them an opportunity will be provided—presented, one by the Navy 309 and one by the Air Force Department for one of the major events of Quality and Reliability Year, the National Conference to be held at Blackpoool next month. I hope I shall not be accused of immodesty if I say that the Services' interest in this field is also illustrated by the fact that, as Minister of Defence for the Royal Air Force, I have been invited to open the conference.
Another point that is relevant here is that not long ago there was a two-day colloquim on aircraft reliability, held at the Royal Aeronautical Society, and there were over 250 delegates drawn from all branches of the aircraft industry, the three Services, the civil airlines and the Ministry of Aviation. Here again it was valuable, in that it enabled a free exchange to take place, in discussion with manufacturers, on the importance of better standards of reliability. Of course reliability is not a new subject for the Ministry of Defence, but the current drive, as I have indicated, springs from the evidence that the cost of greater reliability and better maintainability can be more than offset over the total life of equipment by a reduction in the cost of maintenance and spares. This is particularly significant when our expenditure on maintenance effort is as heavy as it is in the Armed Forces. For example, the technical maintenance effort in the Royal Air Force, very largely due to the unreliability of equipment, is quite serious indeed, and an improvement of only 1 per cent. would save about £2 million annually. It is not too much to say that the front-line effectiveness of our Armed Forces, depending as they must on a fixed Annual Vote, depends greatly on improvements, and this effectiveness would decrease unless there were significant advances.
The point I should now like to make is that reliability can be quantified and reliability targets can be set in terms which can be assessed during development and production. It starts in the early stage of design. "R and D." staffs are engaged both in the theoretical aspects of reliability and on the application of reliability engineering techniques to components and assembled equipment; and we are now calling for reliability requirements as a quantitative target in the same way as other performance characteristics. In the electronics field, in particular, specific reliability is now being included 310 as a parameter in specifications. Here again the Americans, with their usual gift for liguistic inventiveness—I will use a neutral phrase—have a technical term describing the ultimate in this field as "zero defects".
It is the policy of the Defence Inspectorates to rely as much as possible on the contractors' own inspection and test organisations, and for this purpose contractors' organisations are required to meet high standards. This again, we believe, has helped to raise the level of these organisations. In saying all this, let me not suggest for one moment that the Government always know the best, but the important thing is that they are the customer in this matter, and it is the influence of the customer that must be exercised either through the market or through the buying power that is involved. We have now established, or have very nearly established, a Quality Management Requirement Specification which will be published during "Q and R" Year as a Defence Standard. It will be used in contracts placed on the basis of required performance and will outline comprehensive requirements for the quality control of all phases of the manufacturers' operations. We expect, indeed, that it will be called up in some of the prime contracts in 1968. Similarly with shipbuilding, a new specification will form part of the contract conditions for the building of modern warships.
At the same time it is important—and I hope that we have taken care of this—that quantitative reliability requirements do not inhibit designers from introducing their own ideas as to the best and most economic method of meeting over-all specification. But, here again, such figures are essential if the correct selection is to be made on a cost effective basis; and although "cost effective" is one of the favourite phrases in the defence field, it is a simple phrase which applies to all forms of production and use. We shall be requiring the manufacturer to furnish a programme of reliability activities, and his submission will be evaluated and a programme agreed which balances development costs against the savings to be achieved by increased operational effectiveness and lower maintenance costs. This is a most important thing because the value of a reliability programme is subject to the 311 law of diminishing returns: the more reliable an equipment is, the lower is the cost saving to be obtained from increasing its reliability.
Another essential aspect of this matter, which again, I think, has significance for industry, is the partnership that must exist between the producer and the consumer. This means an efficient system of feeding back information about the experience of products in use or service. Again, if I may draw on our experience in the R.A.F., we have about three and a half million defects annually in front line technical equipment and we spend about £30 million annually on corrective modifications. The need to codify and analyse the mass of data available and to feed it back into industry is a very formidable undertaking and we are well aware of its shortcomings. But with the establishment of the Ship Maintenance Authority, which is charged with analysing defects in ships, the Navy Department is developing a new instrument for collating the evidence. The Army and the Air Force Departments are setting up computer installations for the collection, processing and dissemination of defect data on the behaviour of equipments in use. In other words, our aims are perfectly simple: they are the aims of industry and consumers generally, to improve quality and reliability and to ensure that money and effort can be properly apportioned for worthwhile modifications or redesign so that in the long term a data bank can be built up and used to advise on the design of future projects—the very area where real advance in equipment reliability can be made. There are other aspects which I will not go into, such as the question of project management and so on, which may not apply quite so widely although they are vital in the defence field.
In the electronics field, Government and industry are working together to devise common standards for electronic parts of assessed reliability for industrial use and for military use. The Government have accepted the Report of a Committee under the chairmanship of Rear-Admiral Burghard; and the British Standards Institution have begun to prepare the necessary range of specifications, and standardised procedures will be operated by the manufacturers' own inspection organisations. We, hope that 312 the new system will be in operation soon, although perhaps not throughout the whole range of parts just yet. It will give maximum benefit to both Government and industry from more extensive mass production and testing.
By setting high standards for our own requirements, industry will be helped to introduce the quality reliability techniques which will benefit not only the Ministry of Defence and the taxpayer, but the country as a whole, in terms of national economic success. Of course, a part of this involves the sale of military equipment, but I should like just to touch briefly on another major aspect of quality and reliability, the ability to measure more accurately. That aspect is of course the keystone of industrial technology and the Ministry of Technology are active in this field. Last March Her Majesty's Government announced the setting up of the British Calibration Service which will provide a nation-wide service to industry for the calibration of measuring equipment. We hope that very shortly laboratories will begin to be licensed to check particular parameters and the standards will be linked to the National Standards and hence to International Standards.
The British Standards Institution, which is now sponsored by the Ministry of Technology, has expanded and is providing guide-lines with a production crash programme of revising British standards not only to bring them up to date but also to "go metric". In the field of testing and equipment, I mentioned the Burghard scheme. The Ministry of Technology are preparing also a substantial number of other schemes for inspection and approval of quality control techniques. The best known of them, and one which is well known to your Lordships, is the Kite Mark scheme of the British Standards Institution.
What I have said shows that Her Majesty's Government are deeply involved and greatly welcome the initiative of the British Productivity Council. I should like to pay tribute to the British Productivity Council—I have from time to time had some dealings with them—in regard to the enthusiasm they have brought to this work and, indeed, the thoroughness with which they have prepared the material. There are, too, those Government Departments, the Board of Trade and the Department of Education and 313 Science, which have also played their part in disseminating information in this campaign.
The themes I have touched on are relative and applicable to the relationship between firms which complete a final product and their suppliers and sub-contractors. Much is being done during the Year to spread the idea of such techniques as "vendor rating" and also to persuade more firms to follow the example of those who already find it good business, from their own expertise, to help suppliers to meet their Q.R. requirements.
I should like to repeat from my own experience that these ideas are fully as important and relevant in retailing as in manufacturing. For retailers and manufacturers alike, the reaction of the customer, whether it be the man or woman in the street, the industrial consumer at field trials, or the importer overseas, is vital information as an essential feedback which can lead to improvements in design and production methods. I am glad to know, since we are all of us more or less producers and consumers, that this aspect is being highlighted during the year.
I do not doubt that your Lordships are unanimous in the view that Quality and Reliability Year is a worthwhile endeavour. Whatever we may feel about major economic issues with a political content, it is an endeavour in which we can all unite. The support, which I am sure your Lordships will encourage today, is growing stronger, and I hope we shall be able to look back on this Year as a further step in the economic progress of this country. I am sure—
§ LORD FRASER OF LONSDALE
My Lords, would the noble Lord allow a question before he reaches his peroration?
§ LORD FRASER OF LONSDALE
There is the question of the sale of arms which the noble Lord has mentioned. He did not elaborate upon that, and I was wondering what the connection was, and what he had in mind.
§ LORD SHACKLETON
My Lords, I said "sale of defence equipment", which your Lordships might think was a euphemism. I was merely emphasising—perhaps in too much verbal shorthand— 314 that quality and reliability in the development of defence equipment was not only of importance to the Armed Forces, but was important in relation to our exports overseas. And, of course, there is a very large sale of defence equipment in electronics and aircraft. There are many spheres of defence equipment in which quality and reliability is also important. That was the point. I thought that the noble Lord, Lord Fraser of Lonsdale, was probably going to challenge me on the point I made about the need to go metric; but since he has now successfully intervened in the middle of my peroration, I will not detain your Lordships any longer beyond commending the Motion to your Lordships' House.
§ 4.11 p.m.
§ LORD RITCHIE-CALDER
My Lords, I ask your indulgence for my maiden speech in your Lordships' House. This will be the last occasion on which I shall ask for any compassion. Henceforth, I shall expect no quarter and shall take what is coming to me, which recognise now after some observation is the verbal knuckle-duster in the velvet glove, which I have noticed in your Lordships' debates. I am supporting my noble friend Lord Williamson in commending Quality and Reliability Year, except that I should add "Suitability" to "Quality and Reliability", and emphasise the slogan "Right for the Job".
My Lords, I am proud to be descended from generations of what we call in Scotland "makkars"—not the poets of our "La'land Scots" but skilled craftsmen; the "makers", whose poetry was not on their lips but in their fingers. In the Valley of Strathmore, you will see the dry-stone dykes which my grandfather built, still standing, like solid battlements, over a century later. I do not know if ever one has paused to think about the craft and skill that goes into a dry-stone dyke. That wall to-day would probably be a strand of electrified wire. The rude mechanicals of my family took inordinate pride in the perfection of their skills; like taking a block of tempered steel and filing it to a perfect cube, with precisions of thousandths of an inch. To-day, an unmanned machine, computer-controlled, can take a huge ingot and fashion it into complex shapes with precisions of a millionth of an inch. 315 I can remember our workshop where my brothers made their first wireless sets, laboriously soldering the wires and terminals of a three-dimensional circuit and fitting the vacuum-tube valves. They could feel pretty certain then that no machine could overtake them and no one could provide a substitute for such skills. To-day, we have printed circuits—just a plate of insulating material on which the circuit, however complicated, is etched like a diagrammatic illustration in a text-book, the troughs filled in with conducting metal and the match-head transistor replacing the valves. The designers in this case have completely bypassed my brothers' skills. The jig and the die-press and new materials, such as plastics, can reproduce repetitively the craft skills of the original prototype.
My Lords, there is an inevitability in the machine. This country will ignore this fact at its peril. There is a clear and present danger. Britain has been preeminent in science. Britain has reason to be proud of its technicians; but in so many areas of industry what we have been lacking is getting the science to the factory-floor. This is technology, what A. N. Whitehead calledThe greatest invention of the 19th century—the invention of the method of invention.In the last century we in Britain were far too complacent, and too greedy. The word "avarice" was mentioned earlier. In the 19th century we were avaricious. We had fathered the Industrial Revolution and, with our head-start, we had captured the markets of the world. But we had mechanised illiteracy. We had taken the craft-skills of the unschooled apprenticeship system and had turned them into factory processes. The factory workers had the know-how but they did not have the know-why. If they wanted education, they had to find their own in the mechanics' institutes, or in self-sought adult education. I would remind your Lordships that the Education Act came 120 years after the invention of the steam-engine. Yet, when Sylvanus Thompson lectured on electricity in Cardiff a century ago, the miners came from the Welsh Valleys in their thousands in special trains, as though going to a football match, in order to hear somebody talking about the things they knew were 316 important to them. As Vice-President of the Workers' Educational Association, I am proud of the initiative which the workers took in those days in seeking the knowledge which they were being denied.
While Britain was marking time, Western Europe was setting up the polytechnics and the technical universities like Zurich and Charlottenburg. In America, they had the land grant colleges, which were endowed by gifts of Government land to provide education to pioneer communities; not just the three R's, but technical education, specially prescribed to meet the needs of a pioneer country. One of these land grant colleges was the Massachusetts Institute of Technology founded forty years ahead of the consolidation of the Imperial College London. I do not need to remind you that the M.I.T. is one of the great brain factories of the world, and certainly paramount in technology. Science fed knowledge into technology. Technology in return fed science with new instruments and new challenges and produced the present age of "Big Science"—not the string and sealing wax laboratories of beggared genius, but laboratories of unlimited facilities. I know that art and literature are supposed to spring from starving and tuberculous artists and writers working in garrets. That same romanticnotion—which I deplore anyway—cannot apply to science. No matter what financial stringency may dictate, if we curtail in any way the proper growth of science and technology—even by temporary restraints—we shall lose the impetus which we are beginning to gather, and our place as an industrial nation. And then the brain-drain will become real.
Aneurin Bevan once described Britain as "a lump of coal entirely surrounded by fish". Today, we might add North Sea gas, but I am still not quite sure what the gas will do to the fish. Anyway, it is a fair description of our limited natural material resources—except that we have exceptional natural resources in our native brains and skills. We have to use these brains and skills to convert the raw materials that we have, or have to import, into overseas earnings. What Britain has to sell is not materials; it is brains and skills. It is quality and reliability and everything else, but also ingenuity. More than that, however, we can survive only as a prototype country. 317 By that I mean that our scientific ingenuity and imagination must always keep us one jump ahead of our competitors—giving us the high-earning advantages of novelty before mass production, for which—I say this without decrying our own powers of mass production—some of our competitors have a greater capacity, universalises the idea.
We have this ingenuity. But I would remind your Lordships that the first patents for penicillin stand in the British Patent Office, not in the names of Fleming, Florey and Chain, but of a gentleman of whom I doubt whether any of you have heard. Mr. J. A. Moyer, of Peioria, Illinois. That is because the Americans, with technological acumen—and, in this case, I may add, a little sharp practice—patented the deep-culture process. We were well ahead in radar, which we initiated, and in the miniaturisation of equipment for airborne radar. For instance, Sir Henry Tizard took the powerhouse of airborne radar, the magnetron, to the United States during the war in his pocket. He described it once as the most important cargo Britain had delivered to America since the shipment of tea to Boston. Yet, somehow, the Americans pushed ahead of us in electronics, with transistors, semi-conductors, lasers and masers.
We were well ahead on computers—apart from the historic fact that it was our Babbage who had the idea at the beginning of last century. We had predictors on the anti-aircraft batteries which defended Britain during the war, which tracked, pre-calculated the position of aircraft or the flying bomb and laid the guns in a system of feed-back responses we now identify with automation. And Professor F. C. Williams, of Manchester, had the essential, the indispensable, idea which is now embodied in the fantastic evolution of computers. Having dragged our feet, we are now trying to catch up again.
One thing on which we did establish our money-earning priorities was the jet engine. Every jet aircraft which flies, whether with British engines—still unexcelled—or not, pays tribute to the genius of Whittle. I believe I am right in saying that the fundamental research which produced polythene, which in terms of plastics is almost as universal as 318 aluminium in metals, cost I.C.I. £19,193—including the postage stamps. I also think that I am right in saying that the recovery in royalties from that discovery is probably as great as, if not greater than, the return from the sales of I.C.I.'s own production. Hovercraft is probably the greatest breakthrough in surface transportation—amphibious at that—since Stephenson's Rocket. We must assert our advantages in this and everything else.
It is a matter of deep concern to many of us that the great advantages we could have had in development of industrial atomic energy have not been achieved. It is true that Britain, beyond all other countries, has demonstrated its capacity and ability, as well as its methods of the peaceful use of atomic energy, but those of us concerned about this, still feel that many years ago we should have foreseen and studied the possibility of packaged reactors, by which we could have obtained for this country the position which we had in the first Industrial Revolution as the initiators and makers for the world.
Ingenuity, however, at the receiving end is not much use without quality and reliability. We properly boast of "Clyde-built" and "Rolls Royce" as the hallmark of durability and mechanical perfection. In these days of built-in obsolescence, deliberate or inadvertent, "Clyde-built" has a wry sound, particularly to some of us in Scotland. A friend who this week crossed the Atlantic in the "Queen Mary", said, "The old girl is good for another fifty years." And I thought back to that other credit squeeze, over thirty years ago, when the hull of the "Queen Mary" was rusting on the stocks and David Kirkwood was fighting to get work re-started.
My Lords, I say, with some diffidence in this House of traditions, that we cannot live on traditions, however admirable. My friend Chaim Weizmann, first President of Israel, once said, "Tradition is remembered experience". The operative word is "experience," which does not mean nostalgia. Experience is invaluable, but it has to be up-dated. It has to be converted into contemporary idiom and, above all, into the awareness of a new generation. This is a generation which, in the context of the scientific and 319 technological revolution, of the Atom Age, the Cybernetic Age and the Space Age, regards everything before 1945 as prehistoric. We, of our generation (with due apology to your Lordships), are surviving Neolithics. The future lies with a generation which takes for granted the fantastic chances which we are still trying to rationalise. We have to try very hard—and we are not always successful—to cope with a generation which is not in the least surprised when an astronaut steps out of a space capsule travelling at 17,500 miles an hour and, like a bargee leading a horse, ambles across a continent from California to Florida in twenty minutes—which is about as long as it takes a Member of your Lordships' House to park his car in the middle of London.
If, therefore, we are to maintain as absolutes—and absolutes they are—quality and reliability, we have to translate them meaningfully for a generation, which by huckstering of the apostles of built-in obsolescence, regards most things as expendable—like the paper cup at the drinking fountain, or last year's motor bike, or a Carnaby Street suit. British goods for export are not thus expendable and if we make them so, we shall lose markets in less affluent countries which need goods that will last. What I am saying is that, whatever we do in the domestic market in expendability, we cannot do that abroad.
That brings me to the last moments of your Lordships' indulgence—to my addendum of "suitability". In the last fifteen years, I have travelled over one and three-quarter million miles, mainly for the United Nations and its Agenices and mainly to see how science and technology can best be applied to the desperate problems of the developing countries. I know that in terms of balance of payments we have to go for markets in the affluent countries. I do not, how-every, believe that the future of this country can be assured by selling mini-cars to buy Mercedes cars, nor Scotch whisky to buy surplus American T.V. films. It must lie in the developing countries, because we need their natural resources as fodder for our factories and because we can, by increasing their prosperity, build up markets.
320 We cannot do this by offering them our leftovers. We have to establish "suitability". We must go out and find out what they want, and not offer them what we insist they need. They cannot afford to shop rashly in what Professor Patrick Blackett has called "the supermarket of science", nor can they afford the extravagances of our sophisticated goods. For example, a tractor, which we accept readily, is in fact a complicated mobile power-house. What they need is a mechanical tool-bar; something to haul their farm tools; something as simple as Henry Ford's Model "T", which served a whole generation of farmers. They had a simple tool kit to do simple repairs, and the local blacksmith could mend a broken back axle. It has, if it is to be suitable, to be as simple and durable as that. I could go on citing dozens and dozens of similar needs which, with imagination and enterprise, our industries could satisfy. I could cite them as examples to show that if we had the enterprise to go out and find them, we could in fact meet, in terms of British production, the necessary needs of those countries. But I will underscore the tractor example by a final illustration.
In the jungle of the Uttar Pradesh and the Indian terai the World Health Organisation some years ago—and I was involved—cleared a 2,000 square miles area of malaria which had made it practically uninhabitable. The Food and Agriculture Organisation went in and helped to clear the jungle, to expose the rich arable acreages. The Indian Government brought in Punjab farmers and gave them tube wells and ploughs, seeding machines and harrows. The World Bank subsidised a tractor scheme. It did not work. The farmers had no mechanical experience. There were no trained mechanics—there are now; there were no repair shops—there are now. But then, in the first instance, the tractors became useless. The F.A.O. had to send out an expert to design harness for the elephants to haul the farm tools. You see, my Lords, the local elephants had quality, reliability and suitability, and they did not need running repairs.
§ 4.33 p.m.
§ LORD SIEFF
My Lords, before I try to participate in the discussion on 321 the Motion of the noble Lord, Lord Williamson, I should like, with your permission, to express my warm and admiring congratulations to the noble Lord, Lord Ritchie-Calder, on the occasion of his maiden speech. I think we can all agree that he has made an original and worthy contribution to the discussion which the noble Lord, Lord Williamson, has initiated to-day. I have personally known the noble Lord, Lord Ritchie-Calder, for a long time, and I have had the privilege of listening to him from time to time on a wide variety of subjects. I think your Lordships will agree with me when I say that his ideas are original and interesting, leading one on to a different line of thought. I should also like to add that, speaking for myself, I have learned a great deal from him. I am sure your Lordships will agree, having heard his maiden speech, that we shall look forward with pleasure and with a sense of high expectation to the speeches that he makes in this House in the future.
I want to join the noble Lord, Lord Williamson, in congratulating the British Productivity Council on organising a Quality and Reliability Year; and, of course, I wish them success. It is my firm belief that the problem of ensuring reliable quality standards of British merchandise and industrial goods is pertinent to our very economic survival as an industrial nation. We are, indeed, all facing a challenge—not only the Government, industry and the trade unions, but every man and woman throughout the country. In the long run, it is not only our standard of living and that of future generations which is at stake, but also the survival of the moral values for which our country has been justly renowned.
We have many friends all over the world who wish us well and who have faith in our ability to overcome our economic difficulties. We may be confident that the British people possess enough ability, enthusiasm and will, as well as ample resources, for us to put an end once and for all to the bouts of doubt that sometimes strike our minds. This situation, however, calls for good and intelligent leadership and effective co-operation. Our real enemies are found where we are inefficient, slavish and wasteful.
322 In time of economic stress and transition there is no dearth of advice from far and near on how we should conduct our financial, economic and industrial affairs. The difficulty, of course, is how to translate theory into practice. The initiative to organise a Quality and Reliability Year comes, I believe, at a very critical point of time. We must make sure that we use this opportunity constructively. This is no time to exchange platitudes, pay lip-service to the concepts of quality and reliability and pat ourselves on the back. Nor do I believe that a year is a long enough period for making a lasting impact.
Nearly half a decade has elapsed since the opening of Productivity Year, and I think we should also look back and ask how much in fact has been achieved since 1962 in terms of improved productivity and human relations in industry. Good and consistent quality, as well as good values, can be maintained and improved only if our efficiency is improved first. We have a right to expect that modern industrialists will take advantage of the immense technological possibilities now available to show such improvements. As taxpayers, we have the right to expect greater efficiency in the nationalised industries and in central and local government. All of us, as customers, expect to see these benefits in lower prices, better values, and at least not higher taxes. Those of us who are engaged in production, distribution and services, at whatever working level, expect to see an improvement in human relations, better working conditions and greater mutual understanding. When we have good reason to be satisfied on all these scores, we can be sure that the world will also be satisfied that the pound sterling is a worthwhile currency.
My Lords, there is an unfortunate tendency to talk of "productivity", "quality" and "reliability" as if they were purely philosophical concepts. Taken in isolation, of course, they become academic abstractions. Everyone readily agrees that we must improve quality and values and strive to secure greater reliability in large-scale production. But merely to agree with a general statement of aims is not enough. This would hardly get us much further. To those in industry who are battling to improve efficiency, lower costs, better 323 quality and tight quality control, there is nothing abstract about these problems. But is this so with the Government? How do some of their actions help to improve productivity and the quality of British goods? During the last two years a growing burden of taxation has been imposed, leading to a steady escalation of costs. There has been a widening area of restriction and control, all limiting the scope for enterprise and all involving costly bureaucracy.
In the retail trade, the selective employment tax discriminates against part-time workers, who can make a special contribution to efficient staffing, particularly during the busy part of the week. Again, the building controls discriminate against large stores, where economies of scale produce much larger gains in productivity than elsewhere. These are not just isolated examples. How can one achieve productivity and lower costs if, because of the economic restrictions, the economy is stagnant and costly capital equipment stands idle? How are we to improve costs and quality if manufacturers, now faced with recession, reduce their investment?
A few months ago the seamen's strike showed how devastating the aftermath of a large industrial dispute can be. Now the wage freeze is jeopardising productivity agreements negotiated laboriously over many years, and there is the threat of a return to restrictive and wasteful practices in some industries. These are only direct effects. The indirect results will be a lack of quality and reliability as they are immensely susceptible to human reactions. The other side of the White Paper, Prices and Incomes Standstill, will have an equally detrimental effect on the aims of Quality and Reliability Year. Where prices are frozen, where taxes are rising, where financial liquidity is stretched to breaking point, where rewards are limited, quality could suffer. This would be a disaster.
As I have already said, "quality" is a term which is meaningful only in a specific economic, commercial and technical context: in terms of a working situation; in terms of Government policies; in terms of merchandise on the store counter; in terms of goods on the factory floor, or in terms of the policies of a specific business. Even then, these 324 terms are only fully meaningful if expressed in terms of technical specifications, at given prices and against a background of consumer demands and preferences. I can assure your Lordships that to me and those who are immersed in these problems every day of our lives they are, for us, very "down to earth" concepts. They are real because they are part and parcel of an overall approach to our businesses which embraces not only technology but the whole of the economic environment and particularly human relations.
I do not see how I can make a useful contribution to the debate to-day without once again drawing on my business experience. I can assure your Lordships that I do not intend to treat this as an occasion for self-congratulation. This is precisely what Quality and Reliability Year should not be. There is no room for complacency. Anyone engaged in production on a large scale knows only too well that 100 per cent. efficiency is only an ideal even within the limits of specified tolerances. Anyone engaged in distribution on a large scale knows only too well that faulty merchandise will be censored by his customers, who are both his friends and his critics.
My Lords, quality control begins on the factory floor, as a failure to spot faults at that stage would wipe out the contribution of the whole subsequent process of production and distribution; it continues throughout the whole chain, right up to the counter on which the goods are sold. Our technologists, and those of our manufacturers, have common quality standards based on a technological evaluation of the most suitable raw materials and the most suitable processes. Our production engineers are available to help our suppliers where necessary. Under this guidance our suppliers are making very good progress in productivity and quality control.
Quality and Reliability Year, as I have said, should be an occasion for self-criticism. In the business with which I am associated, we run from time to time exhibitions called "Customer Returns". Representative stores across the country send in to our head office all articles returned by customers because of unsatisfactory performance. In our desire to satisfy our customers, we make it possible for them to exchange the articles 325 they have purchased from us, and, when necessary, to have their money refunded, if they so desire. Our standards and our system of quality control ensure that the amount of refunds is infinitesimal compared with our total sales. But still this is to us a warning light. This arrangement is not only an additional safeguard for our customers and a guarantee of the quality standard of our brand, but also a salutary reminder to us and to our suppliers of the need for constant vigilance. It also reveals some promising ways in which quality control can be tightened, waste eliminated, and values improved.
My Lords, for years manufacturers have concentrated their energies and resources on building up assembly plants, organising supplies of parts for assembly and finishing processes. Over this long period we have seen progress and development and innovation with faster and more versatile machines. Powerful, speedy assembly machinery and procedures are now available to those producers who desire to take advantage of them. A section of industry in which I am greatly interested—the making up or finishing of knitted goods—is a highly labour-intensive process. Here, once again, we come up against the human factor. There are just not enough hands to go round. More important, however, is the need for improvement of the conditions in which people work, both physical conditions such as lighting, cleanliness, good layout and so on, and a contented staff. Good human relations, good management/trade union relations, and the general feeling of security and proprietary interest by the staff in the work they are doing can make all the difference to both production efficiency and quality control.
There is scope for all kinds of new machines and gadgets, semi-automatic machinery, labour-saving devices to avoid unnecessary work and secure greater consistency of quality, but perhaps the biggest contribution that can be achieved is by improved training or retraining of operators and supervisors, by better layout and by better organisation of the plant. Much can be learned about equipment and methods from progressive manufacturers in this country as well as in America. May I say that quality con- 326 trol may also be improved by a range of equipment which will make the work of the inspector easier and more consistent. Ultimately, however, the result depends on the human eye being capable of discriminating between what is acceptable quality and what is not. Once again we come up against the human factor.
The ability to discriminate and see fine detail depends upon such physical factors as good lighting but also, more subtly, on psychological factors such as the awareness of desirable standards of quality, on fatigue, and more generally on the state of mind of the inspector. There is a general lack of awareness of the special problems and demands of inspection operations and of the standards of human efficiency that may be expected. The performance of the inspector depends not only on his personal capabilities and the physical conditions of work, but also on the nature of the instruction that he has received and also the manner in which he deals with the varying and diversified social frameworks within which he works.
I am sure your Lordships will agree that the whole question of staff amenities and staff welfare should receive more attention than it does now. The conditions under which people eat their meals or have their tea-breaks, the space given to canteens and recreation rooms, the quality of the food that is served, are just as important as the provision of a good inspection bench and good lighting. Above all, it is only when the people at work have a sense of involvement, interest and participation that they are likely to give of their best. This is one of those imponderable and intangible aspects of efficiency and industrial management.
My Lords, I have described "down to earth" problems of quality control, particularly in the industries which come within my own orbit of interest. Similar problems arise throughout the whole of industry where materials and parts produced by automatic or high speed machinery are combined into the final product. If there is a fault resulting from human inefficiency, the whole cost of the investment in the expensive plant and the whole value of the raw material purchases will be wasted. The customer has no interest in raw materials, in yarn 327 or fabric, nuts and bolts, but only in the finished product. Nor is the customer satisfied with a badly finished and assembled garment, car or machine, even though the materials or individual components are perfect. I do not want to leave your Lordships with the impression that human relations in industry in Britain are not good. Many employers are proud of their record in the sphere of the staff amenities they provide and of the loyalty of their staff.
As on the previous occasions when I addressed your Lordships, my train of thought has brought me once again to this question of quality and human relations. It is hardly surprising, as this is the central problem of our economic plight. We in Britain cannot compete with the low-wage countries in producing cheap, labour-intensive, mass produced goods of indifferent quality. We cannot hope to win on price alone. It is only by maintaining and improving our reputation for quality and reliability that we can sell goods in the very competitive foreign markets and stave off the inflow of foreign manufactures to our home market.
§ 4.54 p.m.
§ BARONESS BURTON OF COVENTRY
My Lords, I am particularly pleased to follow the noble Lord, Lord Sieff, and at the end of my remarks I want to come back to his organisation. I do not know whether I should say that he represents or runs that organisation, but I should imagine that every one of us in this Chamber to-day is familiar with it; and, so far as I am concerned, any discussion of quality and reliability—and I pay him this compliment—must, I think, include mention of his organisation. Perhaps I might at this moment congratulate the noble Lord, Lord Sieff, on something I read in the Press this morning, that he is to be the first President of Political and Economic Planning, an Association which is known to very many of us in this House and in another place.
I am sure it does not need me to say how much we enjoyed the maiden speech of my noble friend Lord Ritchie-Calder. Ritchie-Calder was a name known to many of us who read the News-Chronicle, and who greatly regretted the passing of that newspaper. Perhaps he will 328 allow me to say how very proud I feel that he sits on this side of the House, how much I enjoyed his speech to-day, and how much we all look forward to hearing him again in the future.
My noble friend Lord Williamson showed not only amazing skill in the timing of the Motion on to-day's Order Paper, but I think we are all greatly indebted to him for the way in which he spoke. It was not only what he said; I felt particularly that it was the drive and vigour that he put into his speech—and it seems to me that drive and vigour are necessary on this particular subject. I say that for a special reason, because I do not know how many of your Lordships noticed the leader in The Times on Friday last. I am sure that The Times does not need me to say I have a great admiration for it, but I have, and I propose to say so. I was very disappointed when I read that leader because, however generously one reads it, there is little doubt, according to that leader, Quality and Reliability Year had failed even before it got off the ground. If this year succeeds in focusing the attention of the nation on this essential aspect of industrial efficiency, then anyway I personally, and I think your Lordships, too, will feel that it will have been more than worth while. One can argue whether or not such focusing should be necessary but, unfortunately, one cannot argue that it is not. But I should certainly not agree with what I think The Times implies, that one day could do this. It rests with all of us as to whether one year will succeed. I hope we shall succeed, and I thought The Times leader was a pretty poor contribution to that end.
In common with a great many other people, and with many of those who have spoken to-day, I was present at the Royal Festival Hall last Thursday at the opening conference. If I would not be thought to be lacking in respect, I should like to say that we had a mixed bag of speakers. They were certainly mixed. I thought they were excellent, and perhaps if I mention one or two names your Lordships will see how mixed they were. We had the Duke of Edinburgh, the Secretary of State for Economic Affairs, the Chairman of I.C.I., the Chairman of the T.U.C., the Chairman of the C.B.I., and so one could go on.
329 We had of course, as I think my noble friend Lord Shackleton implied, a certain amount of give and take in those speeches, but they were all delivered very good-humouredly, and I think everyone in the audience would agree that there was not one speech which was not first-class in every way. What particularly impressed me was that there was no pie-in-the-sky attitude from anyone. These men—I am sorry there were no women, but that was nothing to do with Lord Williamson—really knew what they were talking about, and I came away from that conference having noted particularly one thing, which was that from every one of those speakers, from that very mixed bag, there was complete unanimity that Quality and Reliability Year was necessary. There was complete unanimity that it must succeed. We were told that already more than 800 companies in all parts of Britain have committed themselves to running special internal campaigns for improving the quality and reliability of their products and services and, furthermore, that another 4,000 companies are likely to follow suit shortly.
I believe that the concept of quality and value are interlinked. If we purchase quality and value then surely we must purchase reliability. Good business and manufacturing organisations exist to create and deliver value—and I would say to the noble Earl, Lord Dundee, that I believe they should do so at a profit. This month in London the Council of Industrial Design arranged a Congress. It was a Congress that brought together some 370 delegates from top management in many of Britain's leading companies and also from European, American and British design organisations. The theme of this Congress was "Profit by Design", and later in my remarks I should like to return to the place of design in quality and reliability.
Perhaps here I should declare an interest in that I am a Council member of the Council of Industrial Design. Some nine or ten years ago, when I was a Member of another place, much opportunity came my way of looking at the quality aspect of some British goods. A true comment at that time was the comment made by the Duke of Edinburgh on Thursday last relating to to-day, namely, that we can do things superbly well, but the layer of the cream of excellence is 330 uncomfortably thin. As recently as four years ago, I think it was true to say that many of our competitors, notably in the United States and Japan, recognised more than we did that an objective approach to the task of controlling product quality and reliability not only improves the product but at the same time improves manufacturing efficiency and reduces costs substantially.
To-day, four years later, there is growing acceptance of this. It is realised that quick gains can be made in productivity and profitability by attacking marginal losses. We could all cite various marginal losses, but it seems to me that these consist of the effort and the material wasted in producing unsatisfactory parts, the cost of scrap and re-work, the cost of excessive inspection, the cost of excessive servicing, the cost of warranty claims. So I could go on. Attention to quality and reliability can reduce these losses.
When I was thinking over how I would try to make this point to-day I was glad to note, as probably others of your Lordships did, some outstanding examples of this in an article in the Financial Times of October 19 last. One only I wish to mention, and that concerns the Reed Paper Group—and I mention that for a particular reason. The Financial Times said:Reed makes paper tubes for use as centres for reeling paper, plastic film, and linoleum and other products. A quality control programme aimed at producing tubes of more consistent weight and dimensions yielded a direct saving of 2 per cent. in raw materials, equal to more than three times the cost of the quality control department.Those words:equal to more than three times the cost of the quality control departmentare my particular reason for choosing this example.
Last Thursday I was particularly interested to hear Sir Harry Douglas say at the opening conference that inquiry had revealed that the percentage of quality defects due to poor workmanship had been shown to be very small indeed. He said that the vast majority had been due to such factors as poor design, inadequate specifications, incorrect tooling and slow machine corrective action. Some three years ago, in the magazine Design, of November, 1963, Miss Elizabeth Gundrey had an article entitled, I thought most aptly, "The 331 trade in afterthoughts", from which I should like to quote just two sentences:A lot of supplementary enterprises thrive on the dropped stitches of incompetent designers. That they can exist and prosper merely through repairing the omissions of inadequate design indicates on what a large scale bad designs sell, and go on selling, even when generations of purchasers have recognised their badness.I believe that for far too long far too many industrial and business organisations have regarded design as a luxury, as something that increases cost. In my opinion, top management has not regarded top design as being of paramount importance. I suggest to this House that surely five canons (if that expression be the right one) of quality are: market research, policy-making, management; appropriate design; conformance of the product with specification; inspection, and after-sales service. I believe that these five canons are the job of efficient management.
What about the man on the shop floor? Where does he come in? It seems to me, looking around the world today, that our society has created a paradox. I believe that modern industry has made this problem of the man on the shop floor more difficult, by modern machinery that should have made it more easy. When a skilled craftsman feels that his skill has been replaced by a machine, the problem is to give him back the feeling of responsibility that he had before. This is the price of progress, and somehow we have got to solve it. If indeed we do get the co-operation of the 5,000 or more firms and companies estimated already as taking part in Quality and Reliability Year, then we shall get through to the shop floor. What we want is to see examples like those quoted in the Financial Times quoted and used in all industries.
I believe that all achievements, big or small, show that what we are talking about is not just hot air but of practical attainment, if management and shop floor combine. The sort of examples I am talking about prove that the shop floor is all-important, that given the right tools and the right design the shop floor alone is responsible for the quality. Poor quality results in losses. This, somehow, must be got over, and this I regard as our job in Quality and Reliability Year. I would 332 accept that quality and reliability and design rest in the first place with efficient management, but without understanding of the problem by the shop floor we shall not get anywhere.
I think that a shopper, male or female, would put reliability at the head of the queue. If what we buy serves the purpose for which we bought it, if it is reliable, then we are satisfied. The quality would, I think, come second, and the design third. But the design might well be the reason for our buying it in the first place. The quality might come next. One might like the way it was made. We can separate this from design because, after all, something ugly can be well made. But the reliability I should have to find out for myself, either from past usage or a salesman's advice, or from acceptance of a brand name and/or a company that I knew.
That brings me back to the noble Lord, Lord Sieff. I hope that I shall not embarrass him because when I prepared these notes I did not know he was going to speak to-day. I believe that one of the best-known examples of this last-named must be Marks and Spencer where, more than with any other firm in Britain, I believe, the British public equates value for money. The public equates this with price, with reliability and with quality, knowing full well that anything faulty will be replaced without argument. I would, of course, say to the noble Lord, Lord Sieff, that the world of manufacture realises the other side of the coin: manufacturers making for Marks and Spencer have many a headache and many a problem; but it is a problem of meeting high standards with low costs for the shopper.
My Lords, I make no excuse for specially selecting Marks and Spencer once more in this House. I do it to-day for three particular reasons, and they seem to me quite special ones. First of all, the firm sell in great quantity, but in this quantity they have not lost, or rather forfeited, quality, reliability or prices. Secondly, I believe that they have played a major part, and a major practical part, in making Britain a quality-conscious nation. Thirdly, and to my mind most important of all, they have made shoppers quality-conscious in a revolutionary way—a way in which quality is no longer reserved for a privileged few.
333 I do not propose to-day to say much about shoppers in general. The noble Baroness, Lady Elliot of Harwood, is to follow me, and I think we should be a little surprised if she did not deal with that particular matter. It is obvious to everyone that if shoppers, be they individuals, be they company or organisation, be they international, do not buy our goods, then we shall fail as a nation. Consumer organisations, consumer magazines, the Consumer Council—all these have the responsibility of helping shoppers to know what is good value and what is not; to know what is reliable and what is not. I am sure that Lady Elliot of Harwood will agree with me that here we have a long way to go, particularly in consumer research and test methods but we have made a beginning and I am sure we all acknowledge the contribution which has been made in this matter by the noble Baroness herself.
In the campaign we are discussing today I believe that one of the most encouraging aspects is that specific examples are being publicised, and publicised in a big way. Management can see that, even apart from the benefit of quality control, the cost of this is more than offset by savings made. The shop floor can see that quality at that end is decisive. If only management, shop floor and shoppers alike will join together, if all of us will recognise the mediocre and refuse it, then in this way we can narrow the gap between our best firms and our average ones; we can make thicker the cream of excellence, because we shall be on the way to justifying Quality and Reliability Year in the achievement of well-designed goods to meet required needs at all price levels at home and overseas.
§ 5.15 p.m.
§ BARONESS ELLIOT OF HARWOOD
My Lords, I rise to take part in this debate, to which I have listened with the greatest of interest. I should like to congratulate the noble Lord, Lord Williamson, on having inaugurated this debate at this particularly apt moment of time. I should like also from this side of the House to congratulate the noble Lord, Lord Richie-Calder, on his fascinating and interesting speech. I hope we shall hear him often, and I think we would all agree with what he said to-day. I assure him that there are some people in 334 Scotland who can still build dykes; I happen to have several very good dykers in my own farm, though I agree that electric fencing has its uses. I am delighted that he has broken his silence to-day, and I hope we shall hear him in this House very often. What the noble Lord, Lord Sieff, has to say is always worth listening to, for he speaks with rich authority and wide experience. I was going to say a lot of nice things about his speech, but it has all been said by the noble Baroness, Lady Burton of Coventry; she said it so much better than I could, and has exactly my feelings in this matter.
So far our debate has been one of great interest, and I hope it has given support to Lord Williamson in his work. As Lady Burton of Coventry said, I speak entirely as Chairman of the Consumer Council and represent the consumer. I do not represent a manufacturer, I do not represent anybody on the shop floor; I represent no one but the person who goes and buys. It was in that capacity that I was invited to the great meeting to which Lady Burton of Coventry referred and at which Lord Williamson also was present. The Consumer Council is very much concerned with Quality and Reliability Year. We have had representatives on the Council ever since it was inaugurated, and also we have taken part in meetings all over the country organised by the Quality and Reliability Organisation to which they have kindly asked us to send speakers to take part. We are hoping to do all we can in order to help in Lord Williamson's campaign.
The acid test of quality and reliability lies with the buyer—with the consumer. Unless he consumes, it is absolutely no good producing. If what is made cannot be sold it will be of no value to the manufacturer. At the Festival Hall meeting I was most impressed by some of the remarks made by Sir Paul Chambers, many of which were most apposite. He said:The main thought of any manufacturer of goods or of any supplier of services is not to increase productivity; it is to provide what the customer wants, whether that customer is in Britain fighting foreign competition here, or in an export market.Then he went on to say:The third purpose of production is to satisfy the needs of customers, and if the quality or reliability is inadequate, that is as 335 important as a deficiency in quantity and represents low productivity—whatever the statistics may show.These are important words coming from the Chairman of one of the biggest companies in this country, if not in the world.
The question is: How do we find out what the customer wants? We still have a long way to go in this matter, although the noble Lord, Lord Sieff, and his organisation have come nearer to discovering the answer than many other firms. We want to find out what the customer wants, and we want to discover whether he knows what he does want. It is surprising to realise that very often he does not know what he wants. These are rather imponderable factors, and are just some of the challenges which lie at the door of the Consumer Council.
We do not want to encourage grumblers; we want to encourage knowledgeable and informed buyers. A great deal of information comes to the office of the Consumer Council through the Press, through correspondence, and through our own studies of consumer goods. We have made quite close studies in many fields, including furniture, toys, and have examined the shopping habits of people throughout the country. We have studied footwear, school clothing, and of course services, because in many ways we get more complaints about services than in regard to any other consumer need.
The comments we receive cover the use and wear of goods bought, and then we get at once into the realm of quality and reliability. If the furniture you order is damaged in delivery, then the delivery services are unreliable. If the textiles you buy are of poor quality and wear out, it may be because you have bought far too cheaply, or it may be because you have used those particular textiles for the wrong purposes; it may be because the quality and reliability is not good and the manufacturers are at fault. All these things lead to waste of time and material. The noble Lord, Lord Williamson, said, quite rightly, that waste was one of the worse aspects in manufacture since it was an alley of no return. This also leads not only to waste from the point of view of the manufacturer but also to great irritation and annoyance on the part of the customer. That in its way 336 is also a difficulty in the sale of goods which faces manufacturers.
It is essential that we should do everything we can to eliminate the waste in manufacture, and that would go a long way to reduce costs and to satisfy the customer. It is not only waste inside the factory, but all the aspects which have been mentioned: faulty production, breakdown in machinery and so on. The noble Lord, Lord Shackleton, gave us the most terrifying figures of the waste resulting from unreliable delivery of expensive and vital machinery and weapons. There are hundreds of other wasteful practices which also make for a serious increase in costs. This is one of the matters which cause exasperation and irritation, and then customers do not come again. In fact it is a negation of what we are trying to get for this Quality and Reliability Year.
We have also had a great many complaints about the building industry. I do not know whether any of your Lordships have recently endeavoured to build—I expect you have—either in factories or in private building. But it is a very frustrating experience when the job is badly done. It adds enormously to the cost, because faults or defects have to be put right and both the builder and the person who owns the house at once get into very deep water indeed. Reliability in the building trade is at the present time one of the greatest necessities, and judging from the correspondence we have in our office this is often very sadly lacking. Incidentally, we have recently issued a small booklet called Buying a House, which lists a number of facts that a prospective buyer should know about, and needs which he should demand. I hope that it will to some extent help with one of these problems, which from our experience is very great, in this consumer world in which we all work.
I should just like to say one word that is apart from the debate. I was engaged with the late Lord Cohen of Brighton, who was a great leader and very knowledgeable about the building trade, in working on a Private Member's Bill which I think would have given a great deal of help on the question of quality and reliability, with which we were both deeply concerned. He sponsored the Bill and I backed him up. Remembering that, I should like to say how sad I 337 was to read of his very sudden death, and how much we shall miss him in this House. He was not here for very long but he made a great contribution to our discussions. He sat opposite to me but I worked with him very closely, and although it is perhaps not appropriate here to pay my tribute to what he did, I should like to say how sorry we all are at his death recently.
As the noble Baroness, Lady Burton of Coventry, has said much better than I can, our job is to get people as informed as possible as buyers. One of our activities on the Council is to try to get an education programme which will both help people to be discriminating buyers, and also help the manufacturers; and in that education programme Quality and Reliability Year will play a very great part. As I think the noble Baroness said, shoddy goods, badly designed, whether ordinary household goods or expensive permanent goods, would soon go off the market if there were no buyers for them. That is one of the problems which I should like to see eliminated. Buying is a much more complicated affair to-day than it was in the past. There are so many new processes, so many new materials, such a range and variety of manufacturing as has never before been seen. There are all the plastics, all the synthetics, all the different materials which are used, and they baffle a great many ordinary housewives who buy in the shops. Although we should often get help from advertisers, those advertisers can also be misleading. But that is another subject on which I do not want to embark now.
However, there are methods by which we can help the buyer, the consumer; and one of those concerns the labelling of goods. We in the Consumer Council thought that the point at which people wanted to know about the goods they were buying was at the counter, and the label which we should like to see put on the goods is one which would tell the characteristics and the performance of the goods. The people going to buy them would then know what they were buying, and what the performance of those goods ought to be. I think that that scheme, which is now beginning to get under way—the "Tel Tag" label we call it—will be of some help both to the manufacturer and to the buyer.
338 I said at the beginning that the consumer could decide about buying the goods, and we hope that he will ask for, and want, quality and reliability. But in order to get them, he will need to have as much information as possible about the performance and characteristics of the goods. This is one of the contributions which my Council hope to make to the Quality and Reliability Year. One of the slogans of the campaign is, "Quality and reliability is everybody's business", and it is one of the slogans which I hope will be put across to the public, because I am sure it is correct. To the consumer, quality and reliability is an essential part of getting his money's worth, and it is an essential part of the needs of foreign buyers as well as home buyers. I can only say to the noble Lord, Lord Williamson, that my Council, the members of the staff, and I myself, will do all we can during this Year to speed on his campaign and to help in every possible way, and I hope that it will achieve the greatest possible success.
§ 5.27 p.m.
§ LORD CROOK
My Lords, I should like to join with others in congratulating my noble friend and my good trade union colleague over the years on putting this Motion down to-day. I should also like to associate myself with all that has been said in tribute to the maiden speech of my noble friend Lord Ritchie-Calder, whom I knew as both a friend and a near neighbour for years before he went back to his native Scotland as a professor. We all know how some of the things he said to-day stem from the great work he has done for the F.A.O. and the W.H.O. We all know how he has written of his experiences in the heat of the desert and the cold of the Arctic. Now he can add the experience of the warmth of the reception which everybody here has given him this afternoon.
May I just add (and I copy the noble Earl, Lord Dundee) to my noble friend Lord Collison, who is another trade union colleague and who will follow me, that I shall not be paying the proper compliment of staying for the speeches after my own, because the time has run on and I have an engagement elsewhere. So, like the noble Earl opposite, I claim the necessity of going and of being pardoned for doing so.
339 The observations which I want to offer to your Lordships are quite deliberately on rather different lines from any made so far, and I make them in order to rivet attention on certain of the questions which are part of the background to the problem of quality and reliability. I refer to the communication between the top and the bottom in industry, and, in particular, to the training of workers. It has already been pointed out that everything must flow from the board room down through all the stages to the shop floor. What is obviously essential is that everybody must understand exactly what it is that the firm is doing, why it is doing it and why quality is needed in the production of goods if the firm is to remain in business. As has already been pointed out, it is on the people at the bottom that this demand for quality will largely fall.
In the smaller organisations, which are inclined to be forgotten, these people work too often with poorly designed tools, outmoded equipment, oft-times in poor work places, and certainly without those many facilities of welfare to which the noble Lord, Lord Sieff, as I was glad to note, paid some attention. I know the comparison between what his own firm does and what other firms do. In those other firms, even a modicum of welfare conditions is completely missing. Obviously this is hardly conducive to the production of good quality, reliable products.
What is more, in many of these factories the men doing the job oft-times do not really know what they doing at all. The T.U.C., in an excellent brief which they have prepared for this Q. and R. Year, have made this clear by an example. They quote a worker as saying, "I operate a machine that makes special washers for use in special pumps. I am on piecework. The bosses keep on about the need to maintain quality standards, but I do not see why quality is important in regard to these washers. "This worker had no idea what the washers did in the pump and, what is more, he admitted he had never seen one of the pumps. How easy it would have been, the brief of the T.U.C. points out, to give that worker an induction procedure, when he might have learnt that the pump was of tremendous value. He might have learnt that it was for an oilfield in 340 Bahrein, or to ensure the water supply out-back in Australia, and that his washers had a very important part to play in the pump. In all too many organisations there is no training at all for the workers. They arrive, and they are told what to do. That is bad at any age, but it is shocking that this should happen to young people going to their first job and entering a new and strange environment. These young people are left to follow the practices that have been followed for years by their elders in the factory, picking up as they go along; and I am quite sure that one of the essential aims of Q. and R Year must be to secure that there is trained personnel.
In my view the Industrial Training Act 1964 and the work of the Central Training Council are vital. Training "off the job" in a firm's training workshop for all levels of craftsmen and technicians, under competent supervision, is obviously a real need, together with an explanation of what they are to produce and the vital importance of the part which their job will play. I think more use should be made by many more firms of the Government training centres run by the Ministry of Labour, which do an excellent job of work. Theoretical training is available at technical training colleges under day-release schemes, and that will be good for others. But it is not only at workshop level that training is needed. The task starts with management. In the past, British industry has tended to suffer from the fact that, outside the larger and more progressive firms, management has not been trained. As in the case of shop-floor workers, there was—and, I regret to say, there still is—a belief that the best thing to do was to learn on the job.
I welcome the fact that since the National Productivity Year there has been a large growth in the standard of training for management. Thousands now take part-time courses. There have also been many excellent developments in the universities. Students go to courses run by the British Institute of Management and by the T.U.C. at its headquarters and in industrial areas. Now there are the new graduate business schools in London and Manchester, as to which I am glad to note the University Grants Committee have indicated that they will help by matching industry's 341 contribution. More use must be made of these facilities—and this is an angle of the Year which must not be left out of account. But I venture to suggest that training must not stop at management and workers on the floor. It must go all the way, in the executive and clerical fields, from top to bottom, for training is essential if firms are to guarantee quality products which are reliable. The people in the professional, executive and clerical grades of the organisation must know what the production is about, what are the snags and how to deal with the problems that arise in the office.
The noble Lord, Lord Shackleton, I believe, and one or two other speakers have already referred to the need for reliability in dates and timing of delivery. The need for such reliabilityis an essential part of the knowledge of the people inside the executive and clerical parts of the organisation. It is for this reason that I welcome the publication last month, just as this Year was about to commence, of the report, presented to us by the Ministry of Labour, of the Central Training Council's Commercial and Clerical Training Committee.It is essential"—says the report—that so large a section of the country's youth (one might say one-quarter of our future') should have adequate training and further education at the start of their careers. Unfortunately the evidence is that a majority of employers give little attention to the systematic training and development of office staff".The Committee's conclusions were reached after studying commercial training facilities in various countries on the Continent, and after making a sample survey of training schemes in some 2,000 organisations in this country; and they make general recommendations for each of the groups to which I have referred: the professional and technical, the executive and the clerical. But the nature of the problem is made the more clear in the report when they analyse what has happened in this country during recent years. The number employed in offices, they say, has grown in the last 40 years from 1¼ million to over 3 million to-day, and their survey shows that only 8 per cent. of the people in those offices ever receive training under any formal scheme, and only 7 per cent. are allowed to be 342 released for courses of further education. I welcome the proposals which the Committee make with a view to improving this situation—a situation which must have in it threats to the reliability and quality of the products which are being dealt with by the employing firm.
The Committee conclude their report with an expression of their confidence that investment in training in the "white-collar worker" field will yield handsome dividends in increased productivity in years to come and in helping the main trend of improving quality and reliability in industry; and their suggestions to deal with the matter fit in well with problems already being postulated by Quality and Reliability Year: that is, that larger firms should get together to aid the smaller ones in trying to improve the general level of training in the country. I hope that the Government, if not to-night then as soon as they can, will say that they welcome the report which the Minister of Labour has tabled, and that they will do all they can to help to carry out this vital part of the scheme.
My Lords, I will not keep your Lordships much longer. To conclude, I would say that we are a country which, in the past, has led in industrial production; and because we led we established for ourselves a very fine position in the world and gained a great reputation so far as the quality of our goods was concerned. But it is useless disguising from ourselves the fact that to-day many British firms are less well equipped than are our foreign competitors who have come on in the world. It is equally futile to disguise—and it is printed by the Treasury for all to see—that during the last decade Britain has not invested at home as much as other industrial countries have. From 1955 to 1963 investment in West Germany was 23 per cent. of her output; in Italy it was 22 per cent.; in France 19 per cent. Ours was the low figure of 16 per cent.
There is nothing to stop us from improving in all the fields referred to this afternoon; and if we really worked to improve those things there is nothing to make us fear the future. But in trying to improve ourselves there is no reason why we should have too much of the British self-deprecation. We were the first in the industrial field; we earned a good industrial reputation. We still have reason to be proud of our achievements. 343 We can afford to pat ourselves just a little on the back to encourage us perhaps to do better, and to try to make certain, as His Royal Highness the Duke of Edinburgh said in his opening speech last Thursday, that it is true to say that "British is best".
§ 5.42 p.m.
§ LORD COLLISON
My Lords, I rise to participate in this debate for three reasons. I have a personal interest in the British Productivity Council. I have been a member of its agricultural subcommittee for many years and was a member of the father committee. Also, I wish to give support to my noble friend Lord Williamson, and I should like to thank him for bringing this matter before the House and giving us this opportunity to have such an interesting and, I am sure, useful debate. I would also join my other friends who have congratulated the noble Lord, Lord Ritchie-Calder, on a fascinating maiden speech. We all listened with great interest and shall look forward to hearing him on many occasions.
As your Lordships know, the British Productivity Council, together with the National Council for Quality and Reliability, have instigated this Reliability Year. The idea is to call the nation's attention to the need not only for maintaining but for improving our standards of reliability and quality. The three aims, which have already been mentioned this afternoon, are as follows: to provide the fullest publicity for the outstanding achievements of British firms in quality and reliability techniques; to assist firms to review methods of achieving their own requisite standards and of raising their standards of quality and reliability; and to make quality and reliability everybody's business, ensuring the involvement of everyone in a firm, from the boardroom down to the shop floor.
We all endorse these objectives, and I am prepared to maintain that British inventiveness is still as high in quality as it has ever been. I believe, too, that the quality of many of our products is recognised throughout the world. I am thinking of the jet engine, which was mentioned earlier this afternoon; I am thinking in terms of the Rolls-Royce engine, and many other products. I mention these just to give instances. We 344 still stand high in the eyes of the world in terms of quality and reliability of the products which we produce.
Having said that, however, I would hasten to add that in my view there is no reason why we should be at all complacent. One must be frank about this. We often hear about the failures, perhaps in small things: of equipment falling from motor cars just out of the factory; of television sets which, for some reason, do not operate a week after delivery; of gas stoves which arrive in homes with the enamel chipped, and so on. One must recognise that these things happen; and without denigrating our managers and workmen it is proper that we should be vigilant to correct these tendencies and return to 100 per cent. standards, so far as possible, in this field. Therefore it is important and satisfying to know that the lead which is given by the British Productivity Council is being taken up extensively.
As your Lordships know, it is supported by the Confederation of British Industry and by the Trades Union Congress. Both the C.B.I. and the T.U.C. took steps to ensure that their constituent bodies were informed of the significance and importance of Quality and Reliability Year. The C.B.I. carried in their Journal an article by Mr. J. Murray Grammar, Chairman of the National Council for Quality and Reliability, and Mr. George Woodcock, the Secretary of the T.U.C., sent information about the Quality and Reliability Year to all our affiliated trade unions and to all trades councils. We have also prepared speakers' notes for trade union speakers who want to give support to this Year. It is good to know that the matter is being taken up so avidly by people and organisations of this kind—and the two I have mentioned are not by any means the only ones, for over a hundred organisations are giving this effort their support. Local productivity associations are doing a wonderful job throughout the country as are the Quality and Reliability groups. They are planning programmes of action for the Year, and they began to do so immediately after the national announcement on October 28. The response from industry has been, and continues to be, encouraging. Over 3,000 firms are supporting the activities of the local Quality and Reliability groups. So I come to the subject which 345 is being debated and which is being pressurised in the country by this effort.
My Lords, what do we mean by quality and reliability? It goes without saying that everyone would agree that quality and reliability are very necessary and that the need for them is self-evident. But clearly it is not quite so simple as that. Quality has been defined—and I would agree with the definition—as meaning the production of an article that is right for the job for which it is designed. The article must have a defined lifetime, and it must give reasonable service for that lifetime. My last phrase, "service for that lifetime" also, to my mind, defines reliability. A Mr. Bonis, writing in the American Society for Quality Control Journal, in an article entitled, "Industrial Quality Control" defined reliability as "the probability that a product will do what it is supposed to do for as long as it is supposed to do so under a given set of circumstances."
In order to achieve this degree of quality and reliability, leads have to be Oven within industry, and the Productivity Council have declared, roundly and correctly, that quality is everybody's business. I concur in this view; but I think the lead within industrial units must clearly come from top management. It requires certain activities to be undertaken, activities such as market research and careful attention to design and specification. It means accurate specifications and stringent quality standards for materials brought in from outside. I also agree with the noble Lord, Lord Shackleton, when he says that it is just not good enough to have a vague definition of what quality means. We must have precise standards and lay them down, so that people may relate what they have done and what they have produced to those standards, to see whether their product conforms. This applies from the finished article down to the integral parts of that article, even if it be only a nut and a bolt. Everyone, in any kind of industrial unit, has a responsibility for the quality of the firm's product.
In this regard I should like to refer to what has been said already about the need for good communications within industry. Good industrial relations have been talked about a great deal, but communication and understanding of what reliability and quality means in terms of 346 the finished article and what the consumer has revealed as what he or she wants is also necessary, so that the workman who may be producing only a small part of the finished article may understand what it is all about. The idea of quality and reliability must permeate the whole firm.
There are a number of ways of endeavouring to achieve this. Communications?—yes, most certainly as the base. The provision of films, the introduction of lectures and seminars, and contact with shop stewards, apart from the general programme of communications on a clay-to-day basis—these things can help. I think that the result of this aspect of good communications and good relations can bring about a much more acute sense of belonging by workpeople; a feeling of belonging to the firm, and having a part to play. I also believe that it is not a difficult thing to get people to understand that they are producing a commodity not only as a matter of self-interest, as a means of earning wages, or, on the management side, of earning profits and paying dividends, but as a service; that they are producing a good article for the community. That feeling can be encouraged and made to grow, and I think that the general development of such a feeling is of vital importance.
The British Productivity Council has an agricultural sub-committee which has done magnificent work. At the outset it introduced to agriculture the concept and technique of work study and became the major agent for spreading understanding of the work study technique in agriculture up and down the country. Two years ago a leaflet was produced called Farmers, Know your Costs. This was designed to persuade farmers to know their costs of production and returns on individual enterprises. I would pay tribute to the voluntary work of many people on the local productivity associations and on the agricultural committees of such associations, for the work they have done in organising seminars and meetings which unquestionably have provided a splendid forum to bring together representatives of management and workers. We owe a great deal to the British Productivity Council and the local bodies in that respect.
I call attention to the fact that quality and reliability is just as important in agriculture as in any other industry. It 347 may be that this objective is more difficult to attain in relation to agriculture, but in my view that does not mean that it should not be tackled. There are three difficulties. There is first the production angle. We have so many units in agriculture, many of them very small, that to get production on a standard basis is not as easy as it might be elsewhere. There is also a lack of standards in marketing and there is a need not only to develop marketing activities but to obtain accepted standards throughout those markets.
People may imagine that this cannot be done in agriculture, but clearly it has been done already in some directions. Quality and reliability are already established in milk production and this is the result of organised marketing. Within the standards laid down, thousands of producers with hundreds of thousands of cows produce a good standard of quality and reliability. We have standards for potatoes—standards of size but not of quality, although seed potatoes do have standards. Standards of grading are rapidly coming into existence for some fruits, particularly apples and pears. We have standards for eggs. But much more still needs to be done. I am thinking about meat, cereals and horticultural products.
In passing, I would call attention to the success which the Land Settlement Association has achieved in gaining recognition under their trade-mark for the standards which they have set for themselves and the uniformity with which they keep to these standards. I would remind your Lordships that the buyers of agricultural produce are getting fewer. Many small shops are disappearing and sales are made through multiple stores. The housewife has become acclimatised to standard packs in other kinds of purchases. She buys these packs because she appreciates that the quality is there and that the purchase is reliable. I am sure that retailers will demand similar trends for farm produce.
Chain stores and supermarkets must be out to secure supplies of a quantity and quality on which they can rely. I do not believe that producers are sufficiently organised to meet this demand. I think organised marketing will help, but in the meantime producers can do much to help themselves, because each producer could, 348 if he so wished, set his own standard of quality and reliability for his produce and organise his production to meet those standards. If packing and grading is beyond his capacity, I would advocate that a producer should get together with his colleagues in order that they might combine to forma bulking centre.
The question has been asked of me, what will happen to produce which is below standard? If you set a standard, you cannot expect all the produce—at least not in agriculture—to meet that given standard for size and quality. But if you have a standard, it does not mean that produce falling below it will not sell. There will always be a market for the whole of the agricultural produce in this country, provided that people know that what they are buying conforms to a standard quality, or is something below that standard. There will never be a market for bad produce. Therefore I maintain that farm produce can be produced to a standard, and I think that the existing quality groups are proof of this. One East Anglian farmer is producing packs of carrots to a very high limit of measurement and quality. The fruit packing centre in Kent is making a great success of quality and reliability. That can be done in farming if in the Quality and Reliability Year agriculture can be made more inwardly conscious of this. If the Year gives an impetus to the work already being done in this field, it will be a significant step forward.
I regret to say that there is often too much truth in such stories as the pounds of soil found in a bag of potatoes, of the bad, small and unripe strawberries at the bottom of the punnet and of the small cabbages at the bottom of the pile. This means that we, as an industry, have not yet fully appreciated the real meaning of quality and reliability. I hope that your Lordships will excuse me for having spoken at some length, but I was anxious to introduce the question of agricultural produce, in which quality and reliability are important. I very much hope that the British Productivity Council and the sponsors of Quality and Reliability Year will give some attention to the agricultural side of this campaign.
§ 6.1 p.m.
§ LORD HANKEY
My Lords, I should like to join those noble Lords who have 349 already thanked the noble Lord, Lord Williamson, for introducing this Motion. It is of great value that we should study this question and that the quality and reliability campaign should be pressed forward. I think that it is a good thing that your Lordships' House should be able to give it further publicity. It is particularly important when we consider the need for productivity in general, and I make little excuse, even at this stage in our debate, for slightly widening the scope of the discussion to include productivity in general.
One of the essential features of our time is better co-operation between Government, industry and trade unions. They tend to live in separate boxes and one of the values of the British Productivity Council is that it brings them together. I believe that this is a real service to our country. The same applies to the National Economic Development Council and I hope that "Neddy" has a great and illustrious future.
Frankly, everyone must regret deeply the squeeze which is now going on, and in particular the higher unemployment which it seems about to bring. There is a dilemma here as regards the question of productivity. It is fashionable to say behind one's hand that a local fear of unemployment is nowadays almost essential to get many workers who are only interested in their pay packets to pat their backs into their work and produce proper quality. But I would say that the fear of unemployment makes many men unwilling to admit the introduction of new machines and techniques which are essential if we are to raise productivity and hold our position in the world. I warmly agree with what was said by the noble Lord, Lord Ritchie-Calder, in his fascinating maiden speech, on which I should like to congratulate him, by the noble Lord, Lord Shackleton, and by other noble Lords in this debate. Further to that, there is no doubt that actual unemployment over the nation as a whole does mean lower productivity and a great waste of resources. I think that a squeeze, necessary as it may be temporarily, is no solution at all. It really is an admission of failure.
The O.E.C.D. statistics on unemployment are rather revealing. An interesting series of graphs show the unemployment figures in O.E.C.D. countries from 350 Sweden across Europe, the British Isles and North America to Japan. All those graphs trend steadily downwards or more or less level, with the sole exception of Britain which rushes into a mighty Matterhorn of unemployment, centred around January, 1963, and stretching for a year on either side. I believe that we have to search here for one of the reasons why we have had a change of Government and I invite the Government to reflect on it.
I believe that our difficulties are not solely due to excessive pressure on demand or on the labour market. It is revealing to look at the German statistics. Since 1963 the Germans have had on an average 600,000 posts vacant and only 150,000 unemployed. Even allowing for the inflow of workers from East Germany, these statistics contrast strongly with our own showing. Sweden, Switzerland and the Netherlands have a somewhat similar position. All these countries have had difficulties, but they have not been so grave as ours; and they have never run into a Matterhorn of unemployment, so that Britain is unique among O.E.C.D. countries in the extent of the "Stop" and "Go" swings which we seem obliged to suffer in order to control our economy.
In spite of the admirable work of the Productivity Council, and of the excellent efforts of the Prime Minister and the Minister of Labour in explaining to people up and down this country why it is vital to produce a day's work for a day's pay, we have not yet brought home to the workers on the shop floor, or even to all managements, what a real increase of productivity means. There has been a great failure of communication. I believe that the Productivity Council show us the right road. It is necessary, though, to carry its work much farther forward and in particular to carry it on to the shop floor. It is almost impossible to get at every man on every part of every floor of every factory. It will always be possible to find people who do not know the points of better quality in the items they are making. But what I believe is essential is that this should be brought home to the shop stewards. They are the key to a better understanding among the workers themselves, and therefore it is necessary to train the shop stewards.
351 I understand that the Productivity Council already instructs shop stewards very considerably on the need for higher productivity, but these efforts need backing up. In particular, I wonder whether what must be an occasional and short effort in this connection is sufficient. It is interesting that in Sweden, and I believe in Germany, the trade unions run schools to which prominent trade unionists and shop stewards are sent for courses of several weeks in industrial economics. Something on this scale is essential in our own country. But if the trade unions are going to do this, we have to face the fact that many of them are just not large enough. We have nine hundred unions. Many of them—I believe, about three-quarters—are not even affiliated to the T.U.C. It just is not possible for this training to be done unless we have more large industrial trade unions. I hope that Lord Donovan's Royal Commission will in due course deal with this, because otherwise I do not see how the training of shop stewards and leading trade unionists is to be brought to the standard where they can play the part which they ought to play in our industrial community.
In the short term, we can make another start next January, when some further progress may be allowed for real productivity agreements. I hope that the Government will actively promote their conclusion and also their execution. I hope they will see that such agreements are linked to this drive for quality and reliability, and that they are real productivity agreements and not just a cover for higher pay to keep workers who are in short supply.
Some time ago a very good friend of mine took a job in a motor factory not a hundred miles from your Lordships' House. As he was a temporary employee, he was put on to night work. He found, to his astonishment, that after about 11 p.m. many workers went to sleep. They woke up early in the morning and had a good breakfast, and then they did a little more work. That was the night shift. What sort of management is this? And what sort of foreman allows this to go on? There is no point in having a night shift unless they do some work. This is the sort of thing that I believe has been so harmful to the drive for selling British goods abroad and to 352 our ability to keep out position in the world.
I should like now to carry the argument one stage further. I believe that we are suffering gravely from the fact that the Government have not been in the habit of consulting the leaders of industry, nor for that matter the T.U.C., in sufficiently good time and in sufficient detail. I very much welcome the assurance given by the Government yesterday that there will be better consultation with the Confederation of British Industry in future. It really is of the utmost importance that the Government should carry the highest levels of management with them when they formulate national policy, in executing the measures which have to be taken, and in assisting to carry out those measures.
I feel that driving the economy is a little like driving a motor car. In the motor car one has to drive with gradualness. You cannot go charging into a corner and suddenly give a wrench on the steering wheel, because it is a terrible shock to passengers, who are apt to scream that they are about to be killed, and other road users find it acutely embarrassing. I hope, therefore, that measures will be taken in good time to correct any tendency for this country to charge into large unemployment. It really ought to be possible, by developing the British productivity drive and so or to find other measures which will pull us out of the dive. I hope that the Government will choose a better route long before they rush up another Matterhorn. In this connection, I would appeal to the Government not to double the redundancy charges. Many of these charges—and this goes for social insurance benefits of all sorts—have a compensatory effect on the economy of this country. Perhaps, if the redundancy charges are not doubled, this will do something to protect the sheep against the severe wind which seems to be blowing.
Then I should also like to make a plea to management. I feel that management is much too inclined to blame the Government for everything. In my opinion, the Government are bound to take an active part in economic policy. The laissez-faire type of economic policy has had its day. Quite frankly it has led us from one "Stop" to another "Go", 353 and from one disaster to another. I believe that any Government who do not try to control the course of the economy will run into a great deal of trouble and be severely criticised. But it follows that the Government have to act on the economy in such ways as they can, and selective measures are better in many ways than general measures. I do not mean by this that I want to defend some of the measures which have been taken recently because they seem to me to be extremely theoretical. But at least, if the Government could bring themselves to consult management, in spite of the difficulty of revealing secrets about proposals for taxation, I believe that we should all be better oil; and if management could realise that measures such as this are essential, I believe this would be much better.
In general, I would urge that if management, through the National Economic Development Council or by other means, can learn which way the wind is likely to blow, as it would do in such consultations, it would find itself in a much safer atmosphere for investing money in new factories. I feel that management must try to ensure that there is real productivity. We must ask them to comb out the slackers and not to put up with restrictive practices. Recently I have been in the Midlands and South Wales, and I believe that many restrictive practices are put up with because management have given up the struggle and are not carrying out their full responsibilities. I am also sure that if management can bring themselves to consult more with the workers and have a better system of communications in industry, this would make things much easier.
Finally, I would not wish to say so much about the Government and management without also saying something about trade unions, because I think it is up to them to ensure discipline and the observance of agreements; to raise real productivity and to train shop stewards; to stop wildcat strikes and to ensure in general that agreements are executed.
By the time January comes, and certainly by next Spring, I hope that, if we are going to take corrective measures in good time, we shall be considering how we can preserve future stability. One of the troubles about the British economy 354 is that as soon as it starts to re-expand it is always imports that lead. In Germany exports lead, but in Britain, unfortunately, it is imports. I think it is necessary, as Mr. Heath has said, that there should be a better system of incentives. I feel sure that some better incentive for exports is required if we are to hold our own when we start to expand. We must rely on the quality and reliability of our goods, but we must also rely on their price and more especially on their export price. I should like to see an internationally agreed system by which a nation which has a persistent and prolonged deficit in its balance of payments, such as the British unquestionably have, should receive a permissory certificate from O.E.C.D. and be allowed to introduce for a specified time, and up to a specified percentage value, some type of export subsidy.
We have at present a rather small export rebate of purchase tax which was introduced at the same time as the import charges. The import charges will lapse next month, but the export rebate is permanent. I have always felt that the present export rebate is really too little and too late, and if we want to have a real system of stability I believe it is necessary to provide some such sort of incentive which will ensure that exports keep pace with the situation as required. I do not believe that these export rebates would become general or that they would become universal, because I cannot imagine the O.E.C.D. Council ever agreeing to give a permissory certificate of indefinite length to anyone. But if the certificate was for a specified period, I believe that a system such as this would do something to ensure that the Government do not have to take restrictive measures.
It is quite clear that something has to be done: either we give encouragement or we apply restriction, and of the two it is much better to give encouragement. After the war we had a very good system with the Scandinavians. I recall that at that time there were a great many trade and payments restrictions of all sorts, and the governing principles of international trade were essentially bilateral balances. We had an understanding with the Scandinavian countries that when our trade accounts got out of balance we would always balance them up and not 355 down, and within a few years our trade with Scandinavia ran on such a wide basis that we were able to give virtually unlimited currency to travellers wishing to go there, in spite of the restrictions on travellers going to other countries. I believe there is the germ of an idea there which we could apply, and that encouragement and not restriction should be the aim.
§ 6.22 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE ROYAL NAVY (LORD WINTER-BOTTOM)
My Lords, I am certain that everyone in your Lordships' House, and indeed in the nation as a whole, will be grateful to the noble Lord, Lord Williamson, for having given us the opportunity to-day to debate the very important initiative which has led to the start of this Quality and Reliability Year. In his opening speech the noble Lord, Lord Williamson, raised the question which often comes to one's mind on occasions such as this: that the Q. R. Year is a sort of gimmick; that it is really a placebo to show that something is being done, and that when the crowds have dispersed from the Royal Festival Hall that will be the end of the operation. But I think he said, quite rightly, that because in this country not all firms—perhaps not even a majority of firms—are doing as well as they could if the higher standard were applied, it is necessary to state and re-state the problem until it becomes part of everyone's thinking.
The object of the Quality and Reliability Year is to create a climate of opinion, and of course that is also the function of this debate in your Lordships' House to-day. I must admit that I myself am finding it somewhat difficult to reply to the debate, because it is unusual in one aspect: there is a complete measure of agreement, and for someone who learned his Parliamentary procedure in another place the absence of strong disagreement makes the reply a little difficult. We have heard one or two minor criticisms of economic policy but they were too small to shatter the harmony. We are helping the general effort. I can assure the noble Lord, Lord Ritchie-Calder, that what we say in this Chamber is taken note of outside, and I should like 356 to take this opportunity of congratulating the noble Lord on a most stimulating and interesting maiden speech. Of course it did not surprise me, because for many years I have read his writing with extreme pleasure, and we all look forward to hearing his future speeches with pleasurable anticipation.
Our voices will go out from this Chamber, and the first point I would make is that perhaps the naming of this particular operation "Quality and Reliability Year" is a slight mistake. This is not merely a year, it is more than that: it is a campaign that is intended to last longer than one year. We start with the sound of trumpets to focus attention on it, but although the quality and reliability committees which have been set up throughout the country will work with special intensity during the coming year, in fact their work will continue for as long as is necessary.
The noble Lord, Lord Williamson, pointed out in his introductory speech that the Japanese, when trying to raise their own standards, in point of fact took seven to eight years to condition, to indoctrinate an average firm in their country to the need for high levels of quality and reliability. I believe that if we are to change the climate of opinion in this country we shall not do it within a year, but only if we persist steadily over a number of years, as in fact the main Productivity Council has done.
This is a campaign, and as with all other campaigns we are all involved in it. The first need, of course, is co-operation between industries and the sharing of experience, and I think this is one valuable aspect of the plan which is being brought forward. This is something which the British are good at: we are willing to share our experience, one with the other, and I know that the example of those firms which are best in this field will in due course be absorbed and used by other firms whose standards are not yet as high. Perhaps at this moment one ought to mention with gratitude, as indeed my noble friend Lord Shakleton did, the very great help given to us by our American friends in the earlier stages of our productivity campaigns.
While we must have co-operation between industries, we must also have it within each individual unit. This was 357 the point made by my noble friend Lord Shackleton, the noble Lord, Lord Sieff and the three noble Lords who are deeply experienced in trade union affairs. There must be total involvement of all individuals in every organisation, from management down to the individuals on the shop floor; and a number of speakers have stressed the importance of communication, so that everybody within the organisation understands the objectives, the reasons for the objectives and his own role in achieving those objectives.
Again, the best of British industry does this very well; but the average firm in British industry must do better. While, as my noble friend Lord Shackleton has said, the initiative must start with management, the role of the trade union movement in this is nevertheless very important. While preparing myself for this debate I was impressed by the quality of the literature prepared by the Trades Union Congress Educational Branch for informing those discussion leaders who were in fact, within the trade union movement, going to introduce and initiate discussions on this subject at shop-floor level. The noble Lord, Lord Crook, quoted from one of them, and this is a document which I would commend to noble Lords if they can get their hands upon it. It is filled with common sense and I know will have influence upon those people who are trying to put this message forward at trade union group level.
Turning to various speeches made during the debate, I think we are all grateful to my noble friend, Lord Shackleton, for his introductory speech. He set us a very firm framework within which we could discuss the problem. And, of course, as he rightly pointed out, in a highly complex industry such as armaments production for the defence forces quality control is of the highest importance. The equipment produced for the Armed Forces is of great complexity. It is highly stressed and it is violently used, and for this reason the quality and reliability built into equipment must be of the highest order. Of course, the industries working for the defence forces have gained, over the generations, from their various inspectorates very high standards of knowledge of methods of ensuring high quality and reliability. I personally should like to see a great deal 358 of this knowledge that exists within the defence industries passed on to other industries so that they can benefit from it. One point he made in his speech was the immense cost of the lack of reliability. This is very noticeable indeed in the defence industry.
When one buys goods one must think not only of the first cost of the equipment but of the cost of maintaining it throughout its working life. Those two things are inseparable when one is calculating the value of a certain piece of equipment. As my noble friend pointed out, this reliability can be quantified, and the actual monetary savings that can be made by proper quality control are also capable of calculation, and the savings that can be achieved are surprisingly high, as my noble friend showed. I was glad he brought to your Lordships' attention the new initiative of the Ministry of Technology in introducing a calibration service, which is of course the first step towards accurate measurement and therefore accurate quality control. It was Ford, when starting the mass production of cars, who really introduced to industry use of the Johanssen gauge, the slip gauge of extreme accuracy. What Ford did with Johanssen, I am sure the calibration service will do for British industry as a whole.
Turning to the maiden speech of the noble Lord, Lord Ritchie-Calder, to which I have already referred, I think he is quite right in one important point and that is his statement that big science needs large and steady funds. You may have to impose "Stop-Go" on industry, but one cannot have "Stop-Go" in basic, all-important applied research. The research worker and the research establishment must over the years know what their budget is likely to be and must be able to maintain the key workers in those particular fields properly equipped and fully employed and not starved for lack of funds. I am certain he is right to point out that this country of ours, dependent as we are on our foreign trade, can survive only as a prototype country. Those are the words he used, and I think this is a phrase we should all bear in mind.
The noble Lord, Lord Sieff, of course, really is, or rather his firm is, the parent of quality and reliability. Many speakers in the debate have praised the work done 359 by the firm of Marks and Spencer, and I know it was that firm that really started British industry understanding the true value of quality control at every level of its functions, starting with the raw materials of its suppliers. I once upon a time had the good fortune to listen to Lord Marks speaking on this subject, and it was an illumination to me as a young man. They have been the pathfinders and trail-blazers for quality control in the retail industry, and I am certain that their leadership will be followed by many.
We then had speeches by two noble Baronesses, Lady Burton of Coventry and Lady Elliot of Harwood; and if we include the Introduction to-day of the noble Baroness, Lady Sharp, one might say that to-day is, as it were, a Ladies' day, because I think the two speeches we received from Lady Burton of Coventry and Lady Elliot of Harwood, who spoke from their special fields of experience and knowledge, were of unusual value. Lady Burton of Coventry spoke of the importance of industrial design, of quality; of the fact that, before you can have the right quality, you must have the proper design for the goods to be made. This is something that I know must not be forgotten when we are formulating policy. Her very clear speech reinforced the speech of the noble Lord, Lord Williamson, and I am certain will find echoes beyond this Chamber.
Again the noble Baroness, Lady Elliot of Harwood, speaking as Chairman of the Consumer Council, picked up one point from the speech made by Sir Paul Chambers at the inaugural conference, which I think—I agree with her—was of the first importance. It is that all industry is producing for the sake of the consumer and that the ultimate chief inspector is the consumer himself or herself. Again in that particular speech, which I myself should like to see circulated because I think it was a speech of the first importance, Sir Paul pointed out the importance of competition in ensuring consumer choice and hence high quality. He contrasted his experience in Eastern European countries, where there is no competition, with the experience in, for instance, the British market where we are competing not only between ourselves but with the products of foreign industry. He underlined the point made by the 360 noble Baroness, Lady Elliot of Harwood, that it is consumer choice that imposes high standards upon the manufacturers and retailers.
There was another point he made in relation to this. He said, in talking about competing in export markets, that when we are competing with foreign goods at home we are, in fact, competing in an export market, and this is an export market where the cards are stacked in our favour, so that if we do our work properly we should be able to compete and win. We have got to win export battles here at home as well as trying to fight them abroad.
To pass on to what I thought was a very interesting and helpful speech from the noble Lord, Lord Collison, he spoke of an industry in which I myself have an interest, and I agree with him completely that the work which the quality and reliability teams are trying to do in industry and commerce is of equal importance in agriculture and horticulture. Very important work has been done, of course, in this field. I myself am acquainted with the system of tomato grading, and no doubt Marks and Spencer, having just started in food retailing, will be imposing the same strict standards on their suppliers of agriculture and horticulture as on the suppliers of industrial products.
§ LORD SIEFF
My Lords, I felt a great deal of sympathy with the observations made by the noble Lord, Lord Collison, because there is tremendous movement now in British agriculture; there is no question about that at all.
§ LORD WINTERBOTTOM
My Lords, I think it is a matter of great importance and something that will receive even closer attention than it is receiving at the moment. This again is work started by the Productivity Council, and it is now bearing substantial fruit.
I am glad to say that in his speech the noble Lord, Lord Hankey, introduced a minor element of controversy into our debate. It was hardly true controversy, but he regretted the impact of Government economic policies, particularly on productivity agreements which have been frozen, and expressed the hope that they will be released from the freeze and thawed early next year. This is something upon which I am certain he is not 361 really in disagreement with Her Majesty's Government. We all agree with him that unemployment is not always beneficial; we know that it is not beneficial. I agree with him completely that this temporary rise in unemployment is not a solution but a recognition of failure. That is so. But it is not a failure of this Government; it is the failure of the Governments of both major Parties in the struggle against this intractable problem that we have all met over the years; that is, in this country, the problem that, as production rises and the economy expands we run into balance-of-payments difficulties.
The noble Lord, Lord Hankey, compared our solution of this problem unfavourably with the apparent solutions achieved by Germany and the Scandinavian countries. I would say, in defence of our own people, that we are trying to do a great deal more than those countries are doing. We are facing larger problems than they are facing. We are willing to accept responsibilities greater than they are willing to accept, and that is part of the reason why we have run into difficulties. If we lived for ourselves alone, if we had excluded aid and military expenditure abroad, even during the worst period of imbalance in the balance of payments, we should, in fact, always have been in balance in our strict trading operations. It is due to the fact that we have done our duty to the world as a whole as we saw it that we have from time to time run into these balance-of-payments difficulties. Nevertheless, there is every indication that the policies we are following now, unpleasant as they are, are succeeding, and that in the coming year we shall once again be able to start freeing the country from this particular strait-jacket into which we, with great unwillingness, have been forced to put it.
As I said earlier, we have been playing our part in creating a climate of opinion in this country which will make all of us—the average firm, the average industrialist, the average trade unionist—recognise our responsibilities. Some speakers to-day have referred to profitability and value in monetary terms, and of a better system of quality control. But others have also stressed the moral elements of this: that just to say, "British is best" is not enough—indeed, it is probably not even true; that there is in this 362 country a great deal of complacency, self-satisfaction and plain downright idleness, and that it is necessary, if we are to succeed, that these moral defects should be countered and fought.
I believe it is true to say that the aim of the Government, the aim of the people and the aim of the Conference is the pursuit of excellence. Certainly I think this is the target we should set ourselves. All of us who go into an organisation where the pursuit of excellence is the accepted philosophy find that it is noticeable at once. You see it if you go into a good industrial organisation; you see it if you go into a good service unit. It is immediately obvious because everybody in that organisation, from the top to the bottom, is doing his best, knowing his duties, and trying to carry them out to the best of his capabilities.
This is all part of the struggle that we in this country are having to find a new national role. The American Secretary of State, Mr. Dean Acheson, once said of this country—and among some people it caused resentment—that Great Britain had lost an empire and had not yet found a role. This, I think, is true. In this changing world we should all be trying to find a new role for this country. I would suggest to your Lordships that the first and simple task is to ensure the survival of ourselves as a leading and strong Power, and that is really at the bottom of our balance-of-payments problem. With regard to the balance of payments, unless we can prove the competitiveness, quality and reliability of our products, we shall not succeed in this struggle to continue to play an effective part in the world. But, in addition, while we are trying to find the role that we must play in this world, it is up to us, until history calls upon us once again to take a positive role, to do the best we can with the job under our hand. This is not a particularly ambitious role, but it is one that will fit us to deal with any task that we may be called upon to perform in the future; and I would suggest to your Lordships that the task that we should set ourselves is the pursuit of excellence, within industry and outside.
§ 6.46 p.m.
§ LORD WILLIAMSON
My Lords, this has been an excellent debate. I think that everything that needed saying has been said, and I am most grateful to noble 363 Lords and to the noble Baroness, Lady Burton of Coventry and Lady Elliot of Harwood, for taking part in the debate. The fact that your Lordships' House has at the outset of this campaign debated this project with such lively interest will, I am sure, give enormous encouragement to all those who will be engaged in the project in the months to come; and I sincerely trust that your Lordships will support the Motion.
§ On Question, Motion agreed to.