§ 11.18 a.m.
§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)
My Lords, I beg to move that this Bill be now read a second time. This is a short Bill of eight clauses and two schedules which seeks to bring the dock labour scheme to an end promptly, but in a measured fashion; which will extend to former registered dock workers and their employers the same employment rights and obligations as apply throughout the rest of British industry; and which makes special statutory provision for redundancy payments for dock workers in the three years following the abolition of the scheme.
These proposals to end the dock labour scheme are timely. There can be no doubt that the scheme and its controls were drawn up in response to employment conditions in a ports industry which was vastly different from the one we see today. There is mounting evidence that British industry and consumers, the ports themselves and their surrounding areas are bearing a costly burden to sustain a unique statutory regime which applies now to about 9,000 registered dock workers; that is, fewer than one in four of all workers in our ports industry. The evidence also indicates that the scheme is no longer necessary to provide dock workers with terms and conditions of employment comparable to those enjoyed by workers in industry generally.
Dock work today is a far cry from the labour-intensive industry, inherently prone to widespread casual work and poor employment conditions, which gave rise to the Dock Workers Regulation Act 1946 and the first dock labour scheme in 1947. In those days 80,000 dock workers handled a smaller volume of cargo than is handled by around 13,000 dock workers in scheme and non-scheme ports today. In scheme ports there were nearly 2,000 poorly organised employers compared with 140 today.
In 1947 the case could be made for a scheme: first, to control and then to reduce reliance on casual labour; secondly, to secure sufficient labour for a labour intensive ports industry following conscription during the war and competition for labour in the period of immediate post war reconstruction; and thirdly, to promote the efficient performance of dock work. Indeed the 1946 Act gives equal weight to all three of these factors as grounds for a scheme. But in the intervening 40 years, a series of developments has invalidated the scheme's claim to serve the objectives originally set for it.
First and foremost, dock work now relies on a skilled, permanent workforce to operate the expensive, complex machinery now required by efficient ports to sustain a competitive service. Containers, roll-on-roll-off ferries and specialised machinery to handle bulk cargoes have replaced manpower with machines and have smoothed the fluctuations in business which were once a feature of the industry. This has been entirely to the benefit of employment conditions for dock workers and 1062 provides the best guarantee that there can be no return to the casualism of old. Employers in scheme ports have acknowledged that times have changed. That is why those who employ 93 per cent. of registered dock workers have given individual written assurances that there will be no return to a system of casual labour.
Ports free from the scheme's restrictions, which barely existed 25 years ago, now employ nearly one in three dock workers. They demonstrate that a combination of high output per worker, good training and broad-based skills, so that dock workers can perform a variety of tasks, provide the basis for secure and well-paid jobs. No-one has challenged that non-scheme ports pay competitive rates, train well, provide decent employment conditions, and employ consistently very little casual labour. Indeed, it would be difficult for the unions concerned to do so, since by and large they negotiate terms and conditions in both scheme and non-scheme ports.
There is no reason why terms and conditions in non-scheme ports should be affected by the ending of the scheme and no reason why dock workers in efficient scheme ports should not negotiate equally good deals locally as their colleagues in non-scheme ports do. Today's good terms and conditions are the product of the technology and economics of a modern ports industry just as much as casualism and poor pay was inherent in yesterday's industry. That is not to say that some tasks in ports, as in any other industry, are not performed most efficiently by part-time or contract labour. But the weight of evidence indicates that today's port business and modern dock work have similar requirements to those of industry in general and no longer merit the special restrictions imposed by the scheme.
The second relevant development is that under successive governments, the rights and obligations of employers and employees generally have become far more extensive than those which existed when the first and subsequent schemes were implemented: these range from the right to written particulars of terms and conditions of employment to procedures for notifying redundancy and redundancy payments, to minimum periods of notice and to the right not to be unfairly dismissed. Under the scheme, registered dock workers and their employers have been excluded from these developing provisions because it was assumed that the monopoly of dock work which it conferred and the joint control over hiring, deployment, and redundancy exercised by unions on dock labour boards achieved the same ends by a different means.
I do not believe that a case can be made in principle for maintaining a significantly different employment regime, based on collective control rather than individual rights, for this small section of industry now that our general employment laws are as extensive as they are. There is evidence that the power that the scheme has given unions, directly or indirectly, to block decisions on recruitment and dismissal has not always been used justly in practice.
The discriminatory recruitment practices sustained under the scheme are well known. In the case of dismissals, there must be grounds for 1063 doubting the basis of a system which has seen local boards reinstate 100 out of 122 dock workers—five in six—whose dismissal was sought by employers between 1980 and 1986 in eight major ports. That is not to say many of those decisions were not justified; but in many cases the outcomes might well have been different had they been subject to independent review. By comparison, of claims against unfair dismissal brought by workers to independent industrial tribunals which apply to the rest of the industry, about one in three is upheld. This degree of difference cannot be explained by a greater tendency for port employers to seek the unwarranted dismissal of their workers. On the contrary, faced with these odds, only a desperate port employer would contemplate seeking the necessary permission from a board to dismiss an employee.
These are among the reasons why the Government consider that at best the scheme is irrelevant to the provision of reasonable employment terms for dock workers and, at worst, sustains practices which are positively unfair. These reasons alone would provide grounds for the scheme's abolition were it not for the weight of evidence of its substantial penalties in terms of lost business, lost jobs, lower efficiency and disruption to trade through strikes.
The seeds of these failings lie in the nature of the scheme itself. Its provisions illustrate perfectly how it gives precedence to control of employment rather than the encouragement of business capable of sustaining efficient jobs in an increasingly competitive industrial climate.
§ Lord Mellish
My Lords, I thank the noble Lord for giving way. In the light of what he has just said about the terrifying impact of this appalling scheme, can the Minister explain why it was that only two months ago, he, the Minister himself, said on the Floor of this House that it is not the intention of the Government to do anything about it? Why is the scheme so terrible now when it was not then?
§ Lord Brabazon of Tara
My Lords, I am not sure that it was I who said it, but I shall come to that point later. I know that a number of questions have been asked about the scheme and we said at the time that we had no plans then to deal with it. I can assure noble Lords that I never attempted to justify the scheme. Perhaps I may continue.
The scheme gives the National Dock Labour Board and its local boards, with equal numbers of union and employer members, wide powers to dictate the numbers of people employed in dock work and influence the way they are employed. The scheme and arrangements linked to it provide for a legal monopoly over dock work. Only employers registered by the boards can do business in dock work defined by the scheme and they face criminal sanctions if, without the board's permission, they use anyone other than a docker registered by the boards to do that work.
A legal definition of what is dock work and where it takes place, the nature of dock work and the areas subject to the scheme's constraints are largely those defined in the original 1947 scheme subject to court 1064 rulings in disputed cases. As regards the control of numbers by local boards, an employer who wishes to recruit a dock worker or reduce the number he employs can do so only with the approval of the local board. In respect of the control of discipline by local boards, as I have said, the scheme's provisions override normal legal requirements and dock workers can be dismissed from employment or disciplined under the scheme only with the approval of a board.
I turn to the subject of a "job for life". In practice, employers, individually or collectively, are responsible for paying a registered dock worker, whatever the state of their finances, until he volunteers for redundancy. That is as close to a guarantee of lifetime employment as any industry could conceivably provide. No other industry is burdened by such a formidable set of statutory constraints and bureaucratic procedures enforced by a system of statutory joint control. The consequences are there for all to see.
First, the legal monopoly has sustained restrictive practices in scheme ports unparalleled in the rest of industry. Because employers have to employ registered dock workers for any task and in any area defined by the scheme, that places the unions in a formidable position to dictate excessive manning levels, and to insist on payment for dock workers whether or not they do a given job. No one has denied that the practices to which this gives rise—"bobbing off" home when there is no work to be done or "ghosting" while someone else does the work—are current and widespread. Some have defended them by calling them protective practices or by claiming that, with the right training from employers, "ghosting" dock workers could have done the job themselves. But the fact that it can pay employers in scheme ports to bring in contractors and pay "ghosts" rather than train their own workers is itself a condemnation of the scheme. This illustrates perfectly how the inefficiencies in the deployment of workers built into the scheme, reduce the incentive to train by reducing the return on investment in skills. Worse still, coupled with the scheme's employment guarantees, the monopoly underpins the belief among dock workers that their jobs do not depend on offering a competitive and reliable service to customers, but rather on the scheme's restrictions.
Secondly, the control of numbers has prevented employment levels from responding to business needs. The performance of scheme ports has been hard hit by the requirement to bear the additional cost of surplus labour, which has amounted to nearly one in five of their labour force at times during this decade and still stands at 10 per cent. Surpluses of this order are unnecessary to deal with fluctuation in port traffic. Scheme ports themselves have operated with surpluses of far less than 10 per cent. in some years, while ports outside the scheme do without them by deploying workers on a wide range of tasks which vary with the volume and nature of business. Employers in scheme ports have no incentive to extend the range of tasks undertaken by registered dock workers because that would risk bringing new activities within the scope of the scheme.
1065 The extent of surplus labour has far more to do with the job guarantees which the industry was obliged to concede under threat of a national strike in 1972. These mean that in practice, even if an employer goes out of business, other employers in that port are required to take on any workers who would otherwise lose their jobs, even if they already have too many workers themselves. The White Paper describes just such an instance in Liverpool. This has happened and continues to happen elsewhere; for example, in London.
The net effects have been that remaining scheme port employers have been unable to reap the full benefit of lower manning levels made possible by technological change over the past 20 years. And the taxpayer has had to step in with support for ever-increasing levels of voluntary redundancy inducements needed to encourage registered workers to leave the industry. At £25,000, the present level is more than twice as high in real terms as that of 1977, and to date the taxpayer has contributed £420 million to voluntary severance alone along with £350 million of support for the docks of London and Liverpool.
At the end of the day, the number of registered dock workers has fallen dramatically from 45,000 in 1970 to about 9,000 today, because no scheme could halt indefinitely the application of new techniques to port work. But there is no doubt that the scheme delayed that process: by enabling unions, through their monopoly of dock work in scheme ports, to block the introduction of containerisation in the late 1960s; by giving them the bargaining power to set a high price for the acceptance of containerisation through a 35 per cent. pay deal in 1967; and by preventing the lower manning levels which containerisation permitted until voluntary severance subsidised by the taxpayer was introduced in 1972.
The tonnage handled by each worker has improved, therefore, because of the revolution in cargo handling techniques. But it has not improved at the pace set by those new techniques or by competitors outside the scheme. It has also required hefty support from the taxpayer. That is why scheme ports have lost most ground to their non-scheme competitors in precisely those markets, notably the container and roll-on-roll-off trade, which has developed most in recent years.
§ Lord Mellish
My Lords, in order to back up his own argument and convince some of his own supporters, will the Minister give some figures? Can he say which ports governed by the scheme have lost money? How much did they lose, and how do they compare with the other ports? Will he give us some detail of losses and profits for the registered ports?
§ Lord Brabazon of Tara
My Lords, I shall come on to many of those points if I may be allowed to. The noble Lord is down to speak in due course. He can make his points at that stage. I shall be delighted to answer those points at the end of the debate.
Thirdly, joint union-employer control has failed to deliver an improvement in industrial relations. In fact, the prerogatives of joint control and expectations they have generated have themselves 1066 become the grounds for disputes. Writing in 1983, the noble Lord, Lord McCarthy, along with his colleagues Mr. Duncan and Mr. Redman, said:In the period 1949–1973 the docks was the most strike prone industry in the United Kingdom".I am glad that we can agree on that. Since then the position has improved, but not markedly. The average number of days lost through disputes per dock worker in scheme ports remains, persistently, many times the national average, and many times the average for transport industries. Scheme ports have averaged three disputes per week over the past 20 years, and have lost more than 4 million days of output through strikes. That is a poor record. To say that the number of days lost through disputes in scheme ports is low now by the standards of the past is no mitigation. Our standards have improved, and the fact is that scheme ports remain far worse than the norm.
The progressive tightening of the scheme's restrictions and job guarantees over time—more often than not under threat of national strikes as in 1967 and 1972—have not brought industrial peace. They have brought new grounds for disputes and requirements which have become increasingly difficult to reconcile with the needs of an industry which has become more open to competition both at home and abroad. By comparison, ports outside the scheme have progressed, and where disputes have arisen they have been resolved locally. They have never given rise to national disputes of the kind fostered by the scheme.
Lastly, there is the impact of the scheme not on the ports themselves but on the areas surrounding them. As employment in dock work has fallen it has become increasingly important for areas nearby to attract job creating investment in port-related work, notably in transport and warehousing. But the scheme's archaic definitions of dock work and the areas to which it applies remain even after the docks have long gone. The scheme's restrictions can still be applied, for example, to all river front activities relating to dock work along the Thames from Teddington to its estuary. Many scheme ports are located in inner city areas—notably Liverpool, Glasgow and Hull—where the Government are committed to lifting all unnecessary barriers to jobs. The scheme's controls are just such a barrier.
There is no doubt that the prospect of those restrictions has deprived those areas of investment and our White Paper provides some examples. There are others. But there is no means of establishing how many investors have simply gone elsewhere. The study by Wharton Associates mentioned briefly in the White Paper estimates that 50,000 jobs might be created in the absence of the scheme's restrictions based on the experience of a sample of non-scheme ports' performance. But such estimates by their very nature must be tentative. What is clear, however, is that any sensible investor, faced with a choice, would be reluctant to accept the scheme's controls, including the prospect of criminal prosecution if the monopoly is broken. That is why our proposals to abolish the scheme have been warmly welcomed by members of the Association of British Chambers of Commerce from scheme port areas, the CBI, and by 1067 associations representing road haulage and warehouse owners. Lifting the scheme's restrictions can only improve the employment prospects of the areas concerned.
To say that ports subject to the scheme's regime, and a prey to its consequences, do not incur a substantial penalty is to ignore reality. Employers have estimated that the scheme adds 20 per cent. to their labour costs and that is entirely plausible given the average scale of surpluses, the constraints and practices sustained by the scheme. The transshipment survey recently published by the Department of Transport shows just how much the scheme places its ports at a competitive disadvantage. It found that Tilbury and Southampton were charging nearly 30 per cent. and 40 per cent. more respectively for container handling than non-scheme Felixstowe. Only Felixstowe comes close to matching competition from the Continent and it has done so without the £770 million of subsidies from the taxpayer which scheme ports have received. Subsidies merely divert resources to underpin inefficiency.
Cost differentials, poor quality of service and proneness to disruption are at the heart of why scheme ports have lost substantial business to non-scheme ports which now account for nearly a third of our trade by volume and more than a half by value. And where the business goes the jobs go too. Employment in scheme ports continues to decline while jobs in non-scheme ports have been created.
The scheme ports of Tilbury and Southampton have lost trade to Felixstowe, Portsmouth and other non-scheme ports on the south and east coast; the scheme port of Aberdeen to non-scheme Montrose and Peterhead; Hull and Goole to non-scheme wharves on the Humber and Trent. Non-scheme ports on the west coast—Heysham and Holyhead—have grown while Liverpool has continued to decline.
Time and again, neighbouring scheme ports have lost out to non-scheme counterparts. That cannot be explained, as the Opposition have sought, by the shifting pattern of trade which has brought more business for south and east coast ports. Existing scheme ports in that area were well placed to benefit from this but have failed to do so: in just 20 years non-scheme ports in the same area have captured about 35 per cent. of such trade, starting without the advantages of existing deep water harbours and investment. Since 1970 those non-scheme ports have achieved a 325 per cent. increase in their business while scheme ports have managed only a 26 per cent. increase in an area where trade has grown hugely. Such striking differences in performance can only be explained by a fundamental inability to respond to change and compete on the part of the scheme ports concerned.
The Government have considered the mounting evidence of the scheme's deficiencies and costs, and the options available in the light of the established positions of the unions and employers. Having done so, the Government decided their plan and published 1068 their proposals on 6th April. The provisions of the Bill which puts those proposals into effect are as follows.
Clause 1 abolishes the current 1967 scheme, repeals the legislation which underpins it and abolishes the 20 local dock labour boards, which administer it locally. However, the National Dock Labour Board will continue to have powers to make provision for the training and welfare of dock workers until its dissolution.
Clause 2 gives the National Dock Labour Board a duty to wind up its affairs promptly, and requires it to comply with directions from the Secretary of State in connection with that duty and its remaining powers. Provision is made for the board to dispose of its assets at less than market value with the permission of the Secretary of State and the Treasury. The purpose of this is to enable the board (composed as now of unions and employers) to influence the industry's future provision—for example, in the fields of training and welfare—by giving it a degree of flexibility over the disposal of relevant assets. Those in the industry who have already paid for the board's assets through levies on their business will have every incentive to take over facilities which meet the industry's needs and those of its work force. The clause also provides the Secretary of State with the necessary powers to dissolve the board.
Clause 3 allows the board to be replaced if it fails to comply with directions from the Secretary of State in connection with the exercise of its duties and powers. Clause 4 writes off all outstanding liabilities of the board for loans they have received from Government and provides for the board's running costs during the transitional period.
The intention to write off any outstanding loans of £44.5 million to meet the cost of dockers' voluntary severance payments was announced by the Government in 1985, in another place following an earlier write-off in 1982. The net liabilities and running costs of the board during the transitional period are expected to be in the region of £6 million. We believe that it is right for scheme ports to be relieved of the levy, which this statutory scheme imposed, from Royal Assent. That means that the Government should meet any outstanding costs incurred by the board, in the course of its wind-up, that are not covered by the sale of its assets—for which employers have already paid through the levy.
Clause 5 provides for any former registered dock worker who becomes redundant within three years of the ending of the scheme to receive redundancy payments on a far more generous scale than those available to most other employees. Initially the maximum payments will be some 40 per cent. higher than those which are available under the existing normal registered dock workers severance arrangements. After only 15 years' service former registered dock workers will be eligible for redundancy payments of £35,000 if they lose their jobs in the 18 months after the scheme is abolished—and £20,000 if they lose their jobs in the subsequent 18 months. The cost of these payments will be shared equally between the Government and 1069 the individual employer concerned. These payments are in addition to any entitlements under the registered dock workers' own occupational pension scheme which makes available substantial early retirement pensions from the age of 50 onwards. Those pensions entitlements are unaffected by the abolition of the scheme. The detailed arrangements for redundancy payments have been set out in draft regulations which will come into effect on Royal Assent.
Clause 6 extends certain provisions of the Employment Protection (Consolidation) Act 1978 to people who were registered dock workers immediately before Royal Assent. Registered dockers will acquire the individual right to receive written particulars of their terms of employment, which the scheme previously denied to them, and will have the whole of their period of registration—whether or not they were working—taken into account for the purposes of establishing their rights under the Act.
Clause 7 and Schedule 1 repeal all legislation connected with the scheme, and in doing so extend to dock workers and their employers individual employment rights and obligations from which they were previously excluded. These include the right not to be dismissed unfairly. The transitional provisions of Schedule 2 pay special attention to the position of workers on the temporarily unattached register, established under the scheme, to ensure that on Royal Assent they acquire the rights and obligations, including access to redundancy payments, that workers in the employment of a permanent employer would have.
Clause 8 provides for the Bill to come into effect on Royal Assent, with the exception of provisions which come into effect on the dissolution of the National Dock Labour Board.
I should also mention that the abolition of the scheme has no bearing on the obligations of employees in scheme ports under the Health and Safety at Work Act 1974. The Docks Regulations 1988, under that Act, introduced by the Government on a proposal from the tripartite Health and Safety Commission, place comprehensive and detailed requirements directly on employers in all ports—in or outside the scheme—for ensuring adequate health, safety and welfare provision. The National Dock Labour Board and local boards are not involved in meeting those requirements and their abolition will have no bearing on health and safety arrangements for which employers will continue to be responsible. As I have indicated, the Bill makes provision for the board to dispose of its own medical and welfare facilities in such a way as to give those involved in the industry every opportunity to make continued provision in accordance with the industry's needs and legal requirements.
I have taken a little time to explain the provisions and consequences of what in another place has been called, unjustly, a one clause Bill, with a provocative intent. Far from bringing the dock labour scheme to a peremptory end, the Bill's provisions illustrate the extent to which the Government have sought an orderly and fair end to a statutory scheme which has 1070 long outlived its usefulness and now serves only to damage the majority of our major ports through the practices it perpetuates.
When this House discussed a Question relating to the dock labour scheme tabled by the noble Lord, Lord McCarthy, on 24th April, he expressed doubts about the substance of the case against the scheme. If I have still failed to convince him, I am glad to say that the case has been widely accepted within British industry and by a range of informed commentators.
The Bill has secured substantial majorities at both Second and Third Readings in another place, including support from Social and Liberal Democrat Members. It has emerged from Committee in another place unamended, after lengthy scrutiny of the first clause which Opposition Members regarded as central to the Bill. All the amendments tabled were debated well within the timetable allowed.
During those Committee proceedings it emerged finally that the Opposition's policy was to seek an extension of a statutory scheme to successful ports like Felixstowe which have flourished outside its grip. I can think of no more transparent admission of the costs imposed by the scheme than to propose that other thriving ports should suffer the same fate. But I can conceive of no more irresponsible a conclusion for our ports' industry, British consumers and the taxpayer who bear the scheme's costs.
The Government's proposals for the abolition of the dock labour scheme, and the extension of normal employment rights and obligations to the ports to which it applies, are no more than a recognition that the ports industry has transformed itself through technical progress. It now has the right to be treated as any other industry of the 1990s, so that all ports can face the sharper competitive challenges of the single European market and other forms of transport, on equal terms. That can only be to the benefit of our economy, scheme ports themselves and the communities they serve.
The Government have been challenged less for the substance of their proposals than for the manner in which they were made. But only Parliament is equipped to revoke a statutory scheme to which it gave rise. In the circumstances of this scheme, where over the years unions and employers have taken up irreconcilable positions and where established union policy, reiterated unequivocally—publicly and privately—has been to oppose its abolition or amendment with a national strike, prior consultation could not have been in the national interest. Faced with the need for overdue change in scheme ports, the Government's duty has been to act decisively through Parliament to abolish the scheme and its statutes promptly in order to minimise disruption.
The Government regret the decision of dock workers in scheme ports to plan strike action. I hope that they will come to realise soon that they are depriving no one but themselves of a decent future. Parliament will not be swayed by their action: only ports outside the scheme will gain at the expense of their pay and jobs, and the nation will cope with any disruption they cause and will emerge with the prize of a more competitive ports industry, released from 1071 the scheme and better able efficiently to serve its needs and those of port workers.
I hope that registered dock workers will look to the experience of ports outside the scheme and ask themselves why they cannot benefit from locally agreed terms and conditions in the same way as those ports. That indeed is already the case for the two-thirds of scheme port employees who are not registered dock workers.
In the publication that I quoted earlier the noble Lord, Lord McCarthy, observed, wisely, in respect of registered dock workers' response to the end of casualism with strikes, that:This may be taken to indicate that in a industry which is as traditionally conflict ridden as the docks virtually all change is likely to be met with hostility because of fear of its consequences".The Government believe that registered dock workers have more to fear from the continuation of the scheme than from its abolition in the prompt but orderly manner proposed by the Bill. Your wholehearted support for the Bill can help to convince them to overcome that irrational fear of change and embrace the new opportunities which a future without the scheme can bring. I beg to move.
Moved, That the Bill be now read a second time—(Lord Brabazon of Tara.)
§ 11.51 a.m.
§ Lord McCarthy
My Lords, the Minister has referred to the fact that I sought to debate this subject with him before. That is true. On that occasion he is quoted in Hansard as saying that he had no intention of making a Second Reading speech. Indeed he did not make a Second Reading speech on that occasion. I congratulate him on the succinct, or relatively succinct, Second Reading speech that he has made today. He made that speech in 33 minutes, whereas the Secretary of State in another place made an almost identical speech—I was following it as the Minister was speaking—using almost the same words and same phrases, only he took 37 minutes, and so we have an improvement. Although the Minister used identical arguments, there were of course the identical gaps in those arguments. Although he said the same thing, he did not attempt to meet any of the objections which were made on Second Reading and subsequently in another place.
The Minister may well say in his defence that he made the same speech because it is the same Bill. He is right. I have looked in great detail at the two Bills, one going into another place and one coming into the House, and they are, as he says, identical in every way. It is not just that the Opposition did not succeed in any amendments, I cannot see that the Government did so, or attempted to do so. It is unprecedented in my experience to have a Bill that is not amended in any way. Of course the Minister may say, and I have no answer to him, that the Bill is unprecedented. It is absolutely unprecedented!
I should like to ask the Minister this question. When before have we ever had—it has not been during my time in the House—a Bill of this importance which is not in a manifesto; not in the 1072 Queen's Speech; not in a Green Paper on the future of labour legislation which was published in March of this year; and denied to be planned or intended by the Prime Minister in January? On 25th February the noble Lord, Lord Young of Graffham, said that he had no idea of introducing it. It was unknown to the Secretary of State on 20th March—16 days before the Government announced it in a White Paper published on 6th April—but it had a Second Reading on 17th April and it is intended to be carried into effect by the end of July. It is totally unprecedented.
I challenge the Government to tell us of another occasion in peacetime when a Bill of this importance was introduced in that way, in this rush, with this urgency, totally unamended and in this form. We are therefore perfectly reasonably asking, as the noble Lord, Lord Mellish, asked, what is so urgent? What is so secret? What is so unprecedented? Why do we have to have the Bill produced at this moment in this way?
I have listened, as I said, to the Minister's arguments, and I have made some preparation because he used the arguments of the Secretary of State. I made it six arguments. I shall not take 37 minutes, or even 34 minutes, to deal with those six arguments, because five of them can be easily disposed of.
The first argument that the Minister put forward is that the cost of the dock work regulation scheme to the taxpayer has been far too excessive. The problem there is that we do not know what the cost has been. New figures have been introduced today. The Secretary of State said (Hansard col. 43 of 6th April) that since 1947 the scheme had cost the taxpayer about £1 billion, or £23 million a year. In the White Paper, the Government say £700 million or £ 16 million a year at today's prices. We do not know whether that is more or less than the £1 billion that the Secretary of State had put forward because we do not know whether he was talking about yesterday's or today's prices. Today the Minister mentioned a figure of £430 million. We are puzzled about what the scheme has cost, who is paying for it and who is receiving the benefits.
The second thing we can say about the scheme is that it is much better and cheaper than the subsidies and severance payments paid in comparable countries on the mainland of Europe to update their own dock work industry. Far greater sums of money have been spent to transform and bring up to date dock work in countries closely associated with this country.
The third point that we can make is that that vast sum of money, whether it be £1 billion, £700 million, £400 million, or something else, has not gone to the dock workers in the form of a golden handshake. The Minister mentioned certain figures. His White Paper tells us that since 1972 the average severance payment for dockers has been £12,400 a year. That is less than a year's pay at the present rate of average earnings. That is worth about 40 weeks' pay to a docker. That is not a golden handshake; it is not a copper handshake; it is a low-cost deal. If we are talking about £1 billion or £700 million, we must 1073 assume that a significant part of those sums went on subsidies to employers, and I do not complain about that. Far larger sums went in investment to modernise the docks in other countries. That is why they are more efficient than the docks in this country. It is not to be said that that sum of money has all gone to the workers.
The second argument—I must say that it is remarkably cheeky of the Government to use it—is, as the Minister said, that the scheme has not created job security. That is right: 90 per cent. of the labour force has gone since 1971; 65 per cent. of the labour force has gone since 1979; and 31 per cent. of the labour force has gone since 1985. The Minister has the sauce to come to us today and talk about a job for life. On present trends, I calculate that 50 per cent. of registered dockers will be out of a job within four years. Some job for life! It has also not resulted in high earnings. The available figures suggest that for dockers the average earnings return is 22.5 per cent. above male manual earnings. That for the degree of skill which, as the Minister said, is now required in dock work, is not an example of golden wages. We are not talking about Fleet Street. We are not talking about the Inns of Court. We are not talking about a labour monopoly which pays off large sums of money. We are talking of reasonable wages for, as the Minister says, highly skilled work.
The third argument is the one about industrial unrest. I am always pleased—from my point of view it does not happen often enough—when Ministers quote me. He said that in a book which I published covering strike statistics from 1945 to 1973 we said that it was a strike-prone industry. Of course we did. It was, until 1973. Kenneth Knowles, in his pathmaking study from 1907 to 1945 (of which ours was merely a carbon copy) said that it was even more of a strike-prone industry from 1907 to 1945. International strike statistics suggest that docks are a strike-prone industry throughout the world. The remarkable thing is the improvement in strike statistics since 1975, and the noble Lord, Lord Young of Graffham, accepted and referred to that in this House a few weeks ago.
What has happened since 1975 is that we have had complete decasualisation, as a result of the decisions of that time. When I attempted a second edition of the book, I discovered not only that I could not put dock workers in as one of the most strike-prone groups, but that there are so few strikes now that the Department of Employment has stopped collecting separate statistics. So there are no detailed figures to tell us whether the industry is strike-prone or not; they are all mixed up in transport.
The fourth argument is that the mere existence of the scheme blights the dock areas. The Minister mentioned that. Of course that is based upon the highly dubious conclusions which the noble Lord mentioned of the notorious Wharton Group study which was part of the decasualisation campaign of the National Association of Port Employers. As has been argued, it is based on unrepresentative samples of small firms in the docks. It assumes an unrealistic growth rate of 4 or 5 per cent. and is based on the subjective assessment of the employers themselves. 1074 Even then, the survey produces the figure of 50,000 new jobs in the dock areas if the national dock scheme were abolished by 1992. That makes 312 jobs a year in each of the registered areas. That is the assessment by the Government and the employers of the employment consequences of abolishing the national dock labour scheme.
The penultimate argument of which the Minister made a great deal was that the scheme as it stands has no defenders, that the Labour Party does not defend it as it stands and that the Labour Opposition want to amend it. However, I do not agree with the noble Lord's interpretation of what they want to do. He said that the only people who defend the scheme and are prepared to go on strike in defence of the scheme are the Transport and General Workers' Union.
Two things could be said about that. In the first place, if the scheme, unamended, has no defenders, why not amend it? There can be very little resistance—apart from that of the Transport and General Workers' Union which I shall come to in a moment—to the reasonable amendment of the scheme. In another place, the Opposition presented a number of reasonable amendments which we shall try to put again in this House. The Government were not prepared to listen to any of them. So it is not very helpful for the Government to say that the scheme, unamended, has no defenders because they are the people who will not amend it.
Secondly, Mr. Todd and Mr. Connolly have stated over and over again—indeed they have stated on oath in the course of the disputes and the injunction hearings—that they have never had formal amendment proposals from the National Association of Port Employers. They have had talks; they have had waffle—although they have not had that for three or four years because during those years the policy of the National Association of Port Employers has been abolition. But not at any time, say Mr. Todd and Mr. Connolly, has the Transport and General Workers' Union received official proposals for amendments to the scheme. But they could be brought forward today. They could be brought forward now, they could be suggested by the National Association of Port Employers, and the employers could be assisted by the Government and do something about the dispute in the docks industry.
So we come to the sole argument of substance which the Minister used to me when he refused to provide me with a Second Reading speech when we debated this subject earlier. As I understand it—and if I get it wrong I am sure that the Minister will tell me—it is that the mere existence of a statutory scheme reduces the efficiency of labour in the docks, and inevitably automatically results in low productivity and high unit labour costs. Therefore the only thing to be done is to remove the statutory restrictions. It automatically follows; it is a matter of principle.
There are many things we could say about this. First, we could point to the curious fact that the figures for productivity, on my calculation—and these are not my figures but those of the Department 1075 of Transport published in the House of Commons reference sheet 89/7—suggest that productivity per worker is actually higher in the registered schemes than in the non-registered schemes. They suggest that, for example, in 1987 in the scheme ports 152,501 tonnes were shifted by 27,950 workers. Only one-third of them, by the way, were actually part of the scheme, but the ports were in the scheme. They produced 5.6 thousand tonnes each. However, in the non-scheme ports 51,737 tonnes were shifted by 12,105 workers, producing 4.2 thousand tonnes each. In other words, in 1987 productivity in terms of output per man seems to have been 33 per cent. higher in the registered ports than in the unregistered ports.
How is this to be explained? It is not to be explained by squeezing profits. We know that last year the largest employers in the ports put their profits up by 46 per cent. The salary of their chairman went up by 26 per cent. to £98,000, not 25 per cent. above average earnings. So it has not been done at the expense of profits. How has it been done, if efficiency is so low in the registered ports?
Further, if productivity is so high, has it been done by putting up earnings? As I said, earnings have only been 22.5 per cent. above average for male manuals. How does it come about that the monopoly power of the union is based on 90 per cent. of the labour being got out of the industry? It is a strange union with this enormous statutory power that puts up with earnings 22.5 per cent. above average and gets rid of 90 per cent. of the labour force. A strange kind of power. Perhaps we should have that kind of monopoly power in some other industries.
How is it that on the Continent (which we are always told about) where they are so much more efficient than we are in this country, they have very similar and in some ways much more extensive systems than the statutorily based decasualisation that we have in this country?
I give another example. The restrictive practices White Paper is quite frankly a disgrace for a great department, the Department of Employment. It is the worst thing they have ever produced. How is it that the restrictive practices White Paper produces examples, almost all of which pre-date 1983? I take it they are virtually all copied from the recent pamphlet produced by the Member for Boothferry, Mr. David Davis, who is an executive director of Tate & Lyle, which are members of the National Association of Port Employers. The pamphlet is called Clear the Docks. This is another precedent for the Minister. I have never known a Government White Paper pinched in this way from a Back-Bencher's pamphlet for the Conservative Political Centre. That is the level to which the Government have reduced our once great Civil Service.
So we come to the fact that the Government base the argument on a priori bigotry. There must be inefficiency; there must be mal-utilisation of labour. Even if productivity is high and prices are reasonable, there must automatically be low productivity. I wish to make four points about that. 1076 The first is that, as any first year student of economics will say, nothing whatever follows in economic terms from the fact that an employer or a group of employers does not have unrestricted access to the external labour market. That is exactly what happens in registered docks. The employers do not have unrestricted access to the external labour market. After all, that occurs in many places. Only doctors can operate on patients; only people with a public service vehicle licence can drive buses; one has to be a member of the majority party before one can become Prime Minister. There are restrictions on access to the external labour market which are bound into the labour market. Whether that is bad or good, and whether it holds up quality or efficiency is not something that can be decided by dogma; it has to be investigated. The Government will not investigate it because they already know the answer.
Further, restrictions on access to the external labour market which are at the heart of the national dock labour scheme have not prevented raging product competition in the docks. To be fair to the Government, I do not think they have suggested that. The registered firms compete fiercely with the non-registered firms. Each registered dock firm competes with dozens of other registered dock firms in individual docks. There is, in fact, more effective competition in the product market in the docks than in large parts of private industry. There is considerably more competition in the docks than exists in the national dailies for example, and very much more than the Government left, or created, or thought was necessary when they denationalised British Gas, British Telecom, the British Airports Authority, or than is the case with the proposed privatisation of water.
So if it is competition that the Government are worried about, I must say that there is now, given the national dock labour scheme, more effective competition in the docks than in large parts of British industry. As I have said, in the docks it is not a case of a monopoly but of certain regulations which affect the terms under which competition is conducted. Those regulations are very similar, although somewhat stronger in some aspects, to the kind of restrictions that operate wherever there is collective bargaining. Perhaps that is the problem. The employers in the registered docks must operate certain common conditions. They must pay into a common pension scheme. They must operate common training provisions. They must pay not identical rates of pay as there is local negotiation, but similar rates of pay. Perhaps it is that to which the Government object.
It is amazing that the point I am about to make has not been made before. If the Transport and General Workers' Union has too much power in the docks, and if it is argued that that power necessarily derives from the statutory provisions of the National Dock Labour Board, I suggest that the Minister goes away and reads the legislation. Listening to the debate, one would never have thought that the Transport and General Workers' Union had direct nominating rights over a relatively small minority of members of the National Dock Labour Board and the local labour boards. However, that is the case. 1077 We are not talking about 2X plus Y. This is not a case of majority Bullock. The Transport and General Workers' Union has four nominees on the National Dock Labour Board.
The majority of members of the National Dock Labour Board are either the nominees of employers, or they are the nominees of the Government. If the Government do not like what the National Dock Labour Board does, they do not have to abolish it. The Government must do what is done everywhere else, and what is done in the BBC and in the health service. All the Government have to do is to ensure that all the Government nominees are "one of us". That option is available to the Government. They do not need to abolish the National Dock Labour Board. All they have to adopt are the normal processes of filtering of nominees through No. 10 Downing Street. It is all perfectly simple. However, the Government will not do that because we are in the grip of a dogma.
No figures are published. The noble Lord, Lord Mellish, has asked for figures. I have never seen any figures. We do not publish figures which show the actual costs of handling the same type of cargo in registered and unregistered docks. We do not publish figures to show the make-up of those costs, and figures to show what percentage of those costs relate to labour costs or any other costs, or historical costs. We are in the grip of a dogma. We know, because the Prime Minister tells us, that all regulations, especially regulations established by previous governments, whether Conservative or Labour, and whether they deal with the environment, public utilities, the education system or the labour market, are bad. However, regulation established by this Government is good. All regulation established by previous governments is bad. What is especially bad—this is the sin of this scheme—is regulation which does anything to help trade unions. That is what the national dock labour scheme does. It gives the TGWU a minority position as regards deciding certain parts of the conditions of employment of its members. Therefore, the TGWU representatives are little more than negotiators. They are, even in a minority position, on both sides of the bargaining table as it were. That is the problem.
Once that comes to the notice of the Prime Minister—presumably she never noticed it before—even if it is immediate, sudden, unprecedented and there are no White Papers, Green Papers or blue papers, the touch papers are lit immediately and we have to go forward with the Bill. That is what this provision is about, and that is what the joint regulation argument is against. If it means that we have to move into a situation where this country could be in the grip of a national dock strike, no one will be more sorry than those of us on this side of the House. If it turns out to be the case that, as a direct result of this Government's legislation, it is absolutely impossible for dockers to have an official lawful strike, what will the Secretary of State propose? I do not say that the Government intend that result. The very worst things they do are not intentional, and they intend some pretty bad things.
1078 What did the Secretary of State propose a week or two ago? He proposed legislation to stop dockers having an unofficial strike. Whether he goes for the unions or whether he goes for the workers, that is what he proposes. He is determined that, one way or another, this Bill will go through. However, there is one sense in which the Prime Minister is a chameleon. She agrees with Shaw when he said that on issues of principle, if a man listens to reason, then he is lost. No man is to be allowed to listen to reason on this issue. We do not agree with that, and we oppose this Bill.
§ 12.17 p.m.
§ Lord Rochester
My Lords, when the Statement announcing the Government's intention to abolish the dock labour scheme was repeated in this House on 6th April last, I made it plain that my noble friends and I considered that in today's conditions the scheme had outlived its usefulness. Again, when on 24th April the noble Lord, Lord McCarthy, asked the Government in his Unstarred Question whether, before proceeding with the Dock Work Bill, they would refer to the Monopolies and Mergers Commission the allegedly restrictive labour practices in the scheme ports, I dissented from that proposal and said that in our view the present arrangements should now be brought to an end. That remains our position.
As the noble Lord, Lord Brabazon of Tara, has reminded us, the dock labour scheme was designed to remedy the ill effects of old style casual working and the chaotic conditions of employment that existed in the ports 40 years ago. However, its effect has been to prolong practices that are both monopolistic and restrictive. Those who enjoy its privileges in regard to discipline and employment protection do so at the expense of others and to the detriment of the country's trade. The chief beneficiaries of the scheme seem to me to be our international competitors.
The scheme's main provision, that only registered dockers can carry out dock work, is enforced, as we have been told, by criminal penalties involving potential imprisonment. That is utterly alien to today's industrial relations climate. Particularly damaging are the customs of "bobbing" or "welting" and "ghosting", to which the noble Lord, Lord Brabazon, has referred. There is no need therefore for me to dwell on them further now.
Perhaps the most harmful of all the restrictive practices is where an employer goes out of business and his employees are transferred automatically to another company, even though that firm will almost certainly lack any work for them to perform. The difficulty of achieving reductions in the number of employees is a disincentive to recruitment and expansion and has produced an unbalanced and ageing labour force.
It seems plain from figures published by the Department of Transport last month that scheme ports such as Tilbury and Southampton are at a competitive disadvantage with, for example, Felixstowe, which handles similar cargo. Admittedly there has recently been some improvement in 1079 productivity in ports covered by the dock labour scheme. However, there is surely no denying that because of the cost differential involved on both the east and west coasts a great deal of trade has been diverted to non-scheme ports.
Frankly, perhaps I may say to the Labour Opposition that I should have been more impressed with the stance they adopted in this matter if, instead of continuing to defend the present arrangements, they had had the courage to acknowledge that those arrangements are now out of date and that in principle the time has come to see that all British ports compete on an equal footing.
Having said that, I must repeat what I said when the Government's initial statement was made. Rather than introducing the Bill the very next day the Government should, in keeping with normal practice, have given other interested parties an opportunity to express their views before arrangements were finalised. It was surely at least possible that, faced with the Government's firm intention to make radical alterations to working arrangements in ports covered by the scheme, the Transport and General Workers' Union might itself have come up with suggestions that could have influenced the Government to make certain modifications in their detailed plans and thus enable the transition to take place on a more generally acceptable basis and without undue disruption. As things now stand it is plain from the events of yesterday that many registered dock workers in a number of the larger ports have proved unwilling to await the outcome of a prolonged legal process before taking unofficial industrial action.
I am aware that the current dispute is sub judice pending the appeal to this House in its judicial capacity. I shall therefore say only that on these Benches we very much hope that there will be no national strike and that in their own long-term interest dockers who are now taking unofficial action will return to work.
More generally, however, I feel bound as a liberal and as a democrat to express my disquiet concerning the extent to which under current legislation employers are now able to obtain injunctions, frequently ex parte, restraining strike action not covered by trade union immunity. People are thus increasingly being denied the collective right to withdraw their labour within the law.
To return to the Bill, I have said enough to indicate that on these Benches we support its underlying principle. However, as I made plain when the noble Lord, Lord McCarthy, introduced his Unstarred Question six weeks ago, it should not be thought that we shall be altogether unsympathetic to the Bill being amended in certain respects in Committee. We shall wish to examine carefully the precise terms of the redundancy compensation arrangements which are to be made available to registered dock workers for a time after the dock labour scheme has been abolished. We are also concerned about the absence of any provision in the Bill for the training and welfare of dockers after expiry of the transitional period between the date of the passing of the Act 1080 and the date on which the National Dock Labour Board is to be dissolved in accordance with Clause 2.
In paragraph 3 of Clause 1 it is stated that although the functions of the National Dock Labour Board relating to training and welfare under the 1967 scheme will no longer apply,the Board shall continue during the transitional period to have power to make provision for the training and welfare of dock workers (within the meaning of the Scheme), including provision for port medical services".However, no statutory provision is made for these matters following that period. The noble Lord, Lord Brabazon, will know that on these Benches we are particularly concerned to improve both the quantity and quality of training generally in the national interest. In this case there seems to be a strong reason for amending the Bill to ensure that adequate arrangements are made for the training of people who continue to be employed as dock workers and for the retraining of those who are made redundant. There are also other matters which we shall wish to consider on their merits in Committee.
In conclusion, it is one thing to do away with the dock labour scheme in its present outdated form. On that point, as I have made plain, we support the Government. But it is quite another thing to put nothing at all in place of the existing scheme. My noble friends and I believe that we need a national strategy for our ports taking account of the impact upon them of the Channel Tunnel. That strategy will not, in some mysterious way, emerge spontaneously from the operation of market forces. In our view it needs to be initiated by the Government. We would give this Bill a much more enthusiastic reception if we could receive some encouragement on that point. However, I fear that we shall look for it in vain.
§ 12.27 p.m.
Viscount St. Davids
My Lords, I wish that I could agree with the noble Lord, Lord McCarthy, on this issue but I find it almost impossible to do so. I do not agree that the legislation will cause damage to the dockers. I believe the contrary. I also believe most strongly that the Dock Labour Acts as they exist are doing a great deal of damage.
Ports do not exist in a vacuum. On the contrary, they are the very sensitive interface between sea-going shipping on the one hand, and inland transport—road, rail and inland waterways—on the other. Any trouble in the docks sends sea-going shipping scurrying to other ports and causes chaos inland. In this House we have always believed that it would be a great advantage if more of our transport could be taken off the roads and transferred to rail or inland waterways. The dock labour Acts have been one of the great kill-pigs that have stopped us.
Perhaps I may explain. There is a map at the beginning of the White Paper which shows where the ports are located. It is totally useless because it does not show their inland connections. If those are added the position becomes clear at once. The scheme ports have excellent rail and inland waterway communications and very short and very good road communications. The non-scheme ports have almost 1081 no inland waterway communications at all. Their rail communications are much longer; their road communications longer and more exiguous still. However, it is on roads that most of their cargo goes. In other words, the Acts have had the effect of swinging the cargo on to the roads.
I want to quote one case. I have the permission of the firm concerned to do so. I want to quote it because I think that it shows so many of the evils that have developed in the latter years of the existence of the Acts which, I continue to say, at one time did good. There is a firm called T&D Murrell of Southall in Middlesex. They are barge owners. They own major seagoing barges trading between our east coast ports and the Continent and smaller inland barges trading westwards from London.
A number of years ago, the barge owners found themselves with a paying trade bringing to London from the Continent half-finished goods that were transferred into their barges and taken out to the factories to the west to be finished. The trade grew quite considerably. Suddenly, after some period of operation, the London Dock Labour Board said that it deemed the work to be port work. Once so deemed, it was illegal for the barge owners to operate unless their work was done by dock labour. All the bargemen were trade unionists. They complained that, although the dock labour board deemed that barge work was port work, if the cargoes were put on to road transport that was not, for some reason or another, port work and could therefore be done legally. The barge workers rushed to their union for protection. The Transport and General Workers' Union refused to protect them and the infuriated bargemen left the union.
The trouble was that the firm had become subject to a fishing expedition. I should explain that. When the dock labour boards found that they had so debilitated their docks that they did not have sufficient work for everyone, they went fishing to see what jobs there were around the periphery of the docks that they could deem to be dock labour. Any firm that found itself so deemed had to cease work or become illegal. It had three alternatives. It could smile sweetly, say, "Yes", and pay up the extra costs if it could afford them; it could close down and move elsewhere; or it could stand up and fight. To stand up and fight was an enormously long and expensive process. The unfortunate firm would have to pay all its own costs and the unfortunate taxpayer the costs of the dock labour board.
On top of that, the dock labour board had a very powerful tool. Knowing that it was unlikely to succeed before the relevant tribunal, it could simply hold up the proceedings until the firm which was not trading but which was incurring mounting costs, simply surrendered. To their honour, the Murrells decided to fight. It took two years for their action to reach the tribunal during which period one wharf owner, with no trade going into his wharf and naturally wanting some revenue, turned the wharf into the bijou restaurant that it now is.
Finally, the Murrells reached the tribunal. The case took four days. I sat through every minute of 1082 it. At intervals I talked to all the principals concerned, their lawyers, witnesses and everyone there, in order to inform myself better so that I should be authoritative when it came to addressing the House. Naturally, the Murrells won. The London Dock Labour Board and the union said that they were wrong. The Murrells sent a barge down to the Port of London to be loaded. It was not loaded. It was blacked, totally illegally. The Murrells complained to the employers, the Port of London Authority. The authority said that it could do nothing because the dock labour board would prevent it from disciplining the dockers.
In the upshot, the only thing that the Murrells could do was to divert their seagoing barges to Colchester. This they did. The barges traded to Colchester where their cargoes were cheaply loaded into road vehicles. That cargo still reaches its destinations out to the west of London but does so in heavy road vehicles travelling along the much over-used roads to the north-east, north, north-west and west of London. That is where all the cargo goes.
I wish that this was a single case. It is not. There are hundreds like it. What has happened is simple. Excellent Acts which once served a purpose have degenerated and are now perverted by bloody-mindedness and sheer illegality. It is time that they went.
§ 12.37 p.m.
§ Lord Boyd-Carpenter
My Lords, I welcome the introduction of the Bill, but I gently come to issue with my noble friend when he said that it was timely. My own view—as I think he knows because I have urged it upon him—is that it should have been introduced years ago. If the Government are to be subject to any criticism, it is for the considerable delay that they have allowed to elapse during which the condition of the industry has, with the continuation of the scheme, become worse and worse. However, I am told that there is more joy in heaven over one sinner who repenteth than over 99 just Back-Benchers who need no repentance. One therefore welcomes the Minister when he comes forward today to propose the Second Reading of this important and interesting Bill.
The reaction of noble Lords opposite was completely predictable. I have always thought that the Labour movement was wholly misnamed because there is nothing more conservative, in the sense of resistance to change, than the Labour Party and the trade union movement that dominates it. There is a great feeling of annoyance on the Benches opposite at the abolition of what is a rather splendid old relic of the extreme and damaging trade unionism of 40 years ago which did so much damage to the competitive economy of this country. I have always thought that the dock labour scheme was a relic of the thought and approach of those days. It is an extreme relic, continuing into extreme old age and preserved for no apparent reason. It is only natural and human that members of the Labour Party and the unions which dominate them should resent it. I am sure that your Lordships will fully understand that.
1083 However, when it comes to talking about a national dock strike, as did the noble Lord, Lord McCarthy, I think it is necessary to introduce a note of realism. There is absolutely no need for a national dock strike. The port employers have offered to conduct local talks with union representatives all over the country but for some reason—and perhaps one can guess what it is—the Transport and General Workers' Union has forbidden local talks and says that it will only have national negotiations. I believe that noble Lords are entitled to hear why that is so from the Front Bench opposite. The obvious suspicion must be that the union wants a national scheme which would recreate on a semi-voluntary basis the scheme which the present Bill proposes to abolish.
Surely from the practical point of view of the very different circumstances pertaining in the different ports, which vary enormously from the great major ports down to the small ones in various parts of these islands, there is everything to be said for trying to reach agreement locally and everything to be said against disrupting the working of those ports and damaging their economies by a wholly pointless strike, whether that strike be, as one might suspect, in reality—
§ Lord Boyd-Carpenter
My Lords, perhaps I may finish the sentence. The noble Lord will understand that sometimes one becomes involved in long sentences. If the country is to be disrupted in that way, why should this be necessary? I shall now give way to the noble Lord.
§ Lord McCarthy
My Lords, the noble Lord asked why the Transport and General Workers' Union wants industry-wide regulation. The answer is that the T&G knows that the only way it can negotiate with employers for minimum standards—minimum standards which will prevent casualisation, minimum standards on piece work, hours and wages—is by negotiating with all the employers through the National Joint Industrial Council. That council has been in existence for 150 years and long before the T&G.
This dispute is because the employers will not give an undertaking to the T&G to discuss all those problems through the established, existing machinery. If they would, there would not be a strike.
§ Lord Boyd-Carpenter
My Lords, the noble Lord has confirmed my suspicions exactly. It is perfectly clear from what he has said—no doubt he speaks for the union—that the union is taking this line and is prepared to subject its members and the places where they work—
§ Lord Boyd-Carpenter
Wait a minute! The noble Lord must restrain himself. The union is prepared to subject the country and its members, who of 1084 course will be the losers, to such a damaging strike simply because it wants to recreate something like the present Dock Labour Board and is not prepared to do as has been done in so many other industries; namely, negotiate with local employers in line with local needs so as to secure that there is a good system working.
The noble Lord has mentioned casualisation. I understand that there is not the slightest risk of that. In fact, I understand that the local bodies of employers concerned have given undertakings in, I believe, at least 90 per cent. of the cases that there will be no casualisation. If the noble Lord now wants to intervene again, no doubt he will.
§ Lord McCarthy
My Lords, the noble Lord cannot really get away with that. It is not that the T&G has decided this matter unilaterally. There has been a ballot—it was regulated by law—on whether the workers should accept the proposals of the national employers' association, and 90 per cent. of the voters said no. So it is not the T&G which has decided; it is the T&G's members.
The problem about casualisation is that what the union wants is an industry-wide agreement that there will not be casualisation, and one cannot get that at local port level.
§ Lord Boyd-Carpenter
My Lords, let us take it calmly and by stages. As I understand it, in the first place, apart from the union's veto there is nothing to prevent its local branches from discussing matters with local bodies of employers. The responsibility for a ban on that and the consequences of that ban lie straight and directly on the union. That should be clearly understood.
§ Lord Boyd-Carpenter
No, my Lords, not until I have finished with the noble Lord's noble friend. I shall then be delighted to give way.
Secondly, no doubt the union wants a nation-wide agreement. It is a perfectly normal demand but if its members—given freedom, which they are not given at the moment—are prepared to negotiate on a local basis with employers who are prepared to negotiate locally, why on earth should it forbid that unless its motives are, as I have suggested, in fact an attempt to reconstruct the dock labour scheme on a so-called voluntary basis? The noble Lord, Lord Mellish, wants, I believe, to come in.
§ Lord Mellish
My Lords, I simply want to say that the noble Lord is making extraordinarily heavy weather of all this. As he seems to know all about it, can he explain to the House why the employers refuse to talk nationally?
§ Lord Boyd-Carpenter
No, my Lords; I do not have that privilege. The noble Lord is proceeding on a false hypothesis. Secondly, because this matter has become public property I simply ask the question: why should the willingness of the employers to negotiate locally be rejected by the central authority of the union which forbids its local branches from entering into local discussions with employers? That is the point.
The noble Lord said that I was making heavy weather of this matter, but this is an enormously important issue. I am perfectly clear that if local negotiations were allowed to take place solutions would be reached, at any rate in a great many places, and a national dock strike would be avoided. On the other hand, if these discussions are not permitted and are vetoed by the authority of the union, we are heading straight for a national strike with the many dreary and damaging consequences to the national economy, the union's members, the ports and everyone concerned. If the noble Lord does not think that that is a matter which it is worth making heavy weather of, then I am afraid I disagree with him.
To continue my comments on the Bill, I should like to cite a very good example of how the present system works. My noble friend the Minister will recall this case because I raised it with him and he dealt with it in his usual charming way. The port of Grimsby is a scheme port. It is also a fishing port of some importance. A few months ago when the fishing boats came in with fish there were no scheme workers available to unload the cargo. The fishermen were quite prepared to unload their own fish but were warned that to do so would not only be illegal but would be committing a criminal offence. That is indeed the present state of the law. It is the law that when registered dock workers are not available the fish either have to be allowed to decay or are taken away to some other port that will deal with them, because those on board the trawlers would be subject to criminal penalties if they unloaded the fish. Surely, that is not a state of affairs which your Lordships are prepared to justify being allowed to continue.
It is indeed a state of affairs which for some considerable time has caused some of us to feel that the need for a Bill of this kind is very real indeed. It is for that reason—and I have given just one small example—that I support very strongly the proposal to do away with the scheme.
I return to the point about casualisation. I fully understand the natural anxiety of people who for a very long time have been in a specially protected position—unusually protected compared with most of their fellow citizens—when they see that system of protection being removed. It is understandable and human to feel alarmed about it. I am quite sure that they and those concerned are right to seek guarantees against a return to the old casual system which was indeed the genesis of this scheme. All the evidence we have at the moment is that there is very little, if any, risk of that, but the matter certainly requires to be handled with tact and humanity. I am quite sure that the Minister will do just that.
§ 12.50 p.m.
§ Lord Mellish
My Lords, I believe that I am entitled to speak on this Bill as it concerns dock workers. I left school at the ripe old age of 14; I left on the Thursday and on the Friday I started work with the dock industry. At the ripe old age of 16 I became a branch secretary—believe it or not, my Lords—again in the dock industry. At the age of 21 I became the youngest trade union official ever appointed by Ernest Bevin, again in the dock industry. Then the war came—over which I had no personal control—and I was called up. Noble Lords will not be surprised to hear that I was drafted into a dock operating company. For six years I was associated with the dock industry even during the war. I started as a sapper and ended up as a major, which shows that I must have known something about the docks, if not a lot. On demob. leave I was selected as the local candidate for a constituency which I then represented for 37 years which primarily concerns dockers.
I therefore start my opening remarks by hoping that the House will at least allow me to say that I have a viewpoint about the dock industry. Perhaps I may also put on record that my father was an 1889 dock worker. I have a medal at home to prove it. He also took part in the events in 1912. I should like to say to the noble Lord, Lord Boyd-Carpenter, that even in those days—1889 and 1912—men had the right to go on strike. I am not so sure that they have a right to withdraw their labour today under the existing legislation. It is a very odd situation. My father withdrew his labour.
I am very glad that the Liberal representative is here. If the noble Lord has not already done so, he ought to read the Second Reading debate of the Dock Workers (Regulation of Employment) Act 1946. There he will read a speech by a very famous Liberal in those days—a man called Clement Davies—a very good speech it was too. Of course the best speech was made by my right honourable friend George Isaacs. It was a speech that was for me, speaking now, full of emotion because it described the dockers of yesteryear and their fight for survival. That was what it was all about. The yesteryear of the dock worker was simply appalling. The noble Lord, Lord Boyd-Carpenter, brushes it aside and speaks about decasualisation and that men can never return to casual work again. I shall come back to that.
That Act came into being in 1946. It had universal party support. The Tories supported it. The noble Lord, Lord Boyd-Carpenter, was in the House of Commons in those days and said nothing against it then. That Act went through all its stages with unanimous support because everyone recognised that the dockers had been treated like cattle. Men were picked out by gangers who decided whether or not their face fitted. That was the background, with thousands of dock workers trying to obtain jobs where only a handful existed. They suffered great hardship.
I shall make no more mention about the past except to say that it was why the original Act came into being. Noble Lords will understand why I—who 1087 have lived a whole life in the dock industry—am absolutely bewildered and horrified that this Government intend to repeal that legislation that was introduced then for the reasons that I have given and will put nothing in its place. I have heard it said that the employers have assured us—it was stated by the noble Lord, Lord Boyd-Carpenter, and the Minister—that there will be no return to casual work. Who are these employers? Why has it not been put in writing? Why is it not in an Act of Parliament? Why does the Minister tear up what his predecessors thought was vital and important? These are very elementary questions, but it is right that they are asked. Why do we ignore the past?
What about training and safety? Why is that not written into an Act of Parliament? The National Dock Labour Board for all its faults—no one suggests that it was perfect—provided schemes that looked after men and ensured that they were capable of doing their job. The trouble with this debate—and I do not mean this personally; I wish to make that abundantly clear—is that it is an economic debate and argument. What are the economics of dockland? What will make profits better? It is almost a Civil Service argument; an economic argument.
This is where I part company with the Conservative Party and the Government because they confine their argument to the economics of it and they are not a bit concerned with people or individuals. They matter nothing to them. I say this to the Liberals. If the Liberals have any tradition at all—and I think that they have on reading the Clement Davies speech—I do not honestly see how the noble Lord and his friends can go into the Lobby and support the abolition of this legislation because nothing will be put in its place.
This is an economic argument. I put this on record. The employers have made no proposals about any amending scheme. I believe that we shall hear from the noble Lord, Lord Crickhowell, who has a long association with the dock industry and is one of the port employers. It is said publicly by the unions that at no time have they ever been approached by employers to amend the scheme. When the noble Lord makes his speech he can give us chapter and verse on the situation. The story has got about that the unions have been very backward and would have nothing whatever to do with any amendment. Let us hear from the employers and the employers' chairman. Let us hear when they made the proposals and what they were. I say specifically that at no time was amendment of the scheme as we now know it suggested by the employers.
The noble Lord, Lord Boyd-Carpenter, made heavy weather (if he will forgive my saying so) about local negotiations, and why the unions are not prepared to do that. I am not here to defend the unions. I am no longer a member of the Transport and General Workers' Union although I was during my time as a Member of the Labour Party. My history on this matter is fairly well known. I shall not go over that except to say that I recognise straightaway the union's argument that there should be national negotiations. The Bill replaces a scheme 1088 that is national. What are we talking about? We are not going to say, "Let any little area decide for itself." Let us do this nationally. That is what a union is for. There is nothing immoral about that. It is simply said to the people at local level, "Do not come to any firm agreements at local level. Let us discuss this nationally." The unions were prepared, anxious and willing to consider an amendment to the scheme.
I have stated that this is an economic argument. I intervened with great respect to ask the Minister whether or not the registered ports had made a financial profit—money. He did not answer. Let us hope that he is obtaining some figures now and will be able to answer. My understanding is that those ports have made a profit. We had this argument that if we did not have the scheme they would make a bigger profit. What kind of argument is that? Once again they do not give a tuppenny damn about the people who work there, live there and have given their lives to the work. They mean nothing. I ask again: will we have some figures to show whether or not these so-called registered ports made a profit?
My noble friend Lord McCarthy made a brilliant speech, especially for somebody who is not a docker. It was brilliant, and he asked relevant questions too. We want figures to argue the case, as it is now poised on the edge of an economic argument. Let us have those figures.
Is it not a fact, for example, that the registered ports employers gave themselves vast increases in personal wages? Did they? Is that true? Is it a fact that the profits in the registered ports were 30 to 40 per cent.? If they were, what more do the employers want; 50, 60, 70, 80 per cent.? One can understand why dock workers are suspicious. If one considers the whole history of the dockworker and then suddenly finds that all that was done in the past is to be abolished for reasons that even the Tories would not oppose and right through Tory governments not one single attempt has been made by the Tory Party to amend that because they recognise the justice of it.
Indeed up to a few months ago—I have the details here. The noble Lord, Lord Young of Graffham—we all know him—was asked by the noble Lord, Lord Boyd-Carpenter, when the Government intend to abolish the dock labour scheme. For a layman and a man who is not associated with the employers, he is very bright. He is always asking the kind of questions that they love. The Secretary of State said:My Lords, the Government are well aware of the views of many Members of your Lordships' House… However, as has been made clear in another place, there are no plans at present to change the operation of the scheme".I asked the Minister:can the Minister give more detail about the alleged irregularity of the unions with regard to the implementation of the scheme? Is it not a fact that unions have not made trouble for employers and developers? If that is so, why do we not leave well alone?The noble Lord, Lord Young replied:it is true that there has been comparatively little action in the ports, but I believe that that has much more to do with the economics of running the ports… However, that is a matter on which those who run the ports are far better qualified to speak than I".The noble Lord, Lord Crickhowell, intervened in that argument. That is how I got to know, apart from 1089 when I knew him in the House of Commons, that he is a very important port employer, and he will be able to refute some of the things, if they need refuting, that I have been saying. One of the most important remarks during that exchange of questions was a question from the noble Baroness, Lady Turner of Camden. She asked a very bright question. She said:I am glad to learn that there are no plans at the present time to change the scheme. May I seek an assurance that if at some time in the future there are plans to make changes these will only be embarked upon after full consultation".—[Official Report, 25/2/1988; cols. 1287–1288].That was a very sensible question, was it not? It was very sensible decent and ordinary; but the Minister's reply was no, sir. That was not very bright, was it? What about that, my Lords? "We shall not even consult". This is about an industry that has been so badly treated down the years. Its whole history stinks.
I end by saying that the Minister's speech today was prepared for him by the civil servants. I do not know whether his heart was in it. I do not think that his department or those responsible wanted this scheme to be abolished to begin with. It is concerned with the whole idea that it is jobs for life. When it was first introduced 60,000 men were affected: today there are 9,000. It is a funny old job for life, is it not? The Government have to show their friends, and mostly their friends who are employers particularly in dockland, and say to them "We are on your side". To the Government the scheme has no relevance and it is being destroyed. The Government have not given the House any figures for profits or losses in any of those ports. I demand that today, because they have to justify what they have done in view of the history of yesteryear.
§ 1.5 p.m.
§ Baroness Phillips
My Lords, perhaps it is not necessary to intervene even briefly after the masterly speeches we have heard from this side of the House. I should, however, like to pick up the noble Lord, Lord Boyd-Carpenter, on one matter. I should hate it if he was not present at any debate. He made a rather curious point that as Socialists we are conservatives and do not like change. I remember the fantastic changes that the Labour Party brought to this country. I remember when the railway workers saw for the first time that the community and the workers owned the industry for which they had slogged so long. That was only one of many. It was the Labour Party which changed the whole system of our national health and education services. We have changed for the better.
This is a negative Bill. All the Government can do is to abolish. They abolished ILEA. They abolished the GLC. They want to change the water industry so that people can make profit from it. They want to change the electricity arrangements so that people will make profit. There is no service. The changes that Socialists bring about are changes to make life better for people. The changes that the Conservatives bring about invariably make life much more untenable.
1090 I intervene because I have the greatest respect for this group of dock workers. Like the noble Lord, Lord Mellish, I must invoke history. I worked in that borough in the 1930s. I have seen men weeping, having stood on the docks from 5 o'clock in the morning, after somebody had appeared and said, "I will have you, and you and you and the rest of you can go home". That is obscene and wrong and cannot be justified by anybody, not even the Members of this Government.
Now we are told that this is irrelevant because what happened then will not happen again. It will happen again because the work will be flung back into the same haphazard situation. When we talk about jobs for life and that certain people have closed shops, I would cite the group mentioned by my noble friend Lord McCarthy, the judges. They certainly have jobs for life, much better paid jobs. Do they have a closed shop? They definitely have a closed shop. One would think, often in this House, that it was only people within certain groups in industry that had closed shops. The professions have had closed shops for centuries and still continue to operate them. Let us forget that as an argument.
This kind of employment is essential. If we were in a difficult situation we could do without judges, funnily enough. We could do without public relations agents and even bankers. But we could not do without the people who unload the necessities of life. I wonder how many of your Lordships have seen what kind of a job this is. When I had the privilege of being a Minister in a Labour Government I remember seeing some of the dreadful jobs that other people have to do. It should be compulsory for everybody to see other jobs that they certainly would not want to undertake themselves. This is one of them. This is an essential group of workers, we must make no mistake about it.
There will always be fluctuation in traffic requiring varying numbers of men and varying kinds of skills. So it will always involve a haphazard and casual form of employment. The employers have made it absolutely clear by their statements and actions that their objective is to reduce the core labour force and just employ the remainder on a casual basis. They have made that clear. I noticed that the noble Lord, Lord Rochester, mentioned that an intake of younger men was necessary. So we are back to my favourite bugbear—what is wrong with older workers? Is there evidence that these workers have not been doing the job? Young workers may not want to come into an industry of this kind where there is an indefinite future, never more indefinite than it is now.
I notice that there has been some reference to competition and the open market in 1992. When I did some research I was interested to discover that most European countries have dock labour schemes. Therefore, far from us being part of the general 1992 pattern, we shall be a one-off.
To what end? I beg the Government to consider, as my noble friend Lord Mellish said, that if they are going to abolish this—and they will because their numbers enable them to do anything however unrational and unfair—they must put something in its place. They must create efficient control of 1091 manpower in the industry. There are the other factors which no one has mentioned; namely, training, medical services and other matters which went with the dock labour scheme. I plead with the Government. This is something about which many people on this side of the House feel very strongly. I think that it is some indication of the indifference of the other side of the House that very few have bothered to attend this debate.
§ Baroness Phillips
My Lords, I feel that this is the time for the Government to show that throughout this Bill they can accept some very practical amendments.
§ 1.11 p.m.
§ Lord Crickhowell
My Lords, as the noble Lord, Lord Mellish, pointed out, I speak to the House today as an employer, although I must say that I am a recent and inexperienced employer. I speak as a director of Associated British Ports, the country's largest port employer and the company with the largest number of ports covered by the scheme. Therefore, I speak with a very obvious interest which I declare. However, I speak with a great deal more direct knowledge than I had when I was in government, and that is a point to which I shall return in a moment.
This has been a very interesting debate so far. Perhaps I may say to the noble Lord, Lord Mellish—and it is probably true to say that there are very few Members of this House who are so widely respected as the noble Lord, not least by those of us who sat with him in another place—that I listened with understanding to the considerable emotion with which he spoke about the world in which he was brought up and the often terrible conditions which undoubtedly existed at the time. I am not in the least surprised that the House voted unanimously for a dock labour scheme when it was introduced. I hope that I should have voted for it at the time. However, the nub of the argument advanced from this side of the House is that the conditions have altered and I intend to say a few words about the changes which have taken place.
The noble Lord, Lord Mellish, asked specifically about the course of negotiations which have gone on. I am not sure that I am qualified to speak because I have not been involved long enough to speak with authority. However, I can say quite openly that we as a company do not believe that the scheme should be replaced and again I say that for reasons which I shall spell out. Therefore I do not wish to disguise that.
The noble Lord spoke about profits. I must say that I am glad that the company of which I am a director, which of course was privatised a few years ago, has now moved into a state of profitability from the parlous condition in which it operated and which I observed in Wales as Secretary of State in the old days. However, I believe that it is perhaps an 1092 indication of the kind of situation which we are addressing in this House that half of the profits of the company today are derived from very substantial property development and investment in the old ports. The need for a good deal of that property investment in the vast empty areas once occupied by the ports, I believe, is at least part explained—and I shall put it no higher than that—by the damaging consequences of the dock labour scheme.
The noble Lord, Lord McCarthy, who spoke from the Opposition Benches, in many ways made an effective speech which was a joy to listen to. He spoke of the damaging potential of a strike. However, the course of action which he advocated that the Government should have pursued would have ensured that any strike which may take place would have had the most damaging potential imaginable for the country. I cannot think of a situation more likely to have led to a prolonged strike and damaging consequences than a prolonged period of discussion and negotiation leading up to the Government's decision. It is not as though there have not been discussions about this issue for many years between the employers and the employees, between government and government organisations and everyone involved. The views of all parties are quite clearly understood and known.
The noble Lord spoke about effective competition. If you have one hand tied behind your back by regulations, you may feel that competition may be effective but not very fair. One of the problems is that the scheme ports have had to compete with one hand tied behind their back not just with non-scheme ports of this country but—and of course this is very damaging to the nation as a whole—with the ports overseas.
I suppose that the core of the noble Lord's argument was that the scheme could be amended. I notice that he did not propose one single amendment and did not have one single positive proposal to put to us. However, perhaps that will come later in Committee.
I listened with a certain amount of embarrassment to the criticism made by my noble friend Lord Boyd-Carpenter, who said that the Government should have done something about this matter before. I could not help feeling that as someone who for nearly eight years was a Minister in the Government, I should accept some measure of responsibility. I must say that as a Minister occupied with other matters, I certainly had not realised the extent to which the dock labour scheme had ceased to serve its original purpose or how damaging it had become.
When I joined ABP, I was appalled to discover just how damaging the scheme had become and not just for my company. I say to the noble Lord, Lord Mellish, that it is also damaging for those who work in the industry, for the nation as a whole and for the towns and communities around the scheme ports which have suffered higher levels of unemployment and urban derelection than they would have incurred if the scheme had been abolished earlier, and, perhaps I may add, for the environment. How many acres of green land have been taken for warehousing 1093 and manufacture while dock buildings and dock land lies empty and derelict, shunned by potential new users like the plague houses of an earlier age?
Coming as I did directly from the task of seeking to encourage new investment and new industry, much of which entailed recruiting young people, it certainly came as a shock to me to discover that the average age of those employed in scheme ports was around 47 or 48 years and that in a good many ports the average age is well over 50 years.
The scheme has created rigid demarcation lines between different categories of work people working in the same ports very often doing similar jobs with consequent inefficiencies, inflexibility and tension between different working groups. Whether or not people fall into a category which is between a scheme is arbitrary and uncertain. The definitions were drawn up port by port on a basis originally established during the war. As a result, the description of what is and what is not dock work differs from port to port. Indeed, it is possible to find categories of work which are included in the definition at one port and specifically excluded at another.
It is nearly half a century since the definitions were agreed and in that period cargo handling technology, ship and equipment design, port layout and architecture have all changed considerably. However, the definitions have not been amended to keep pace with those changes or to reflect the work carried out in a modern port with modern equipment. One need only look, for example, at some of the cases of bulk handling, often with electronically controlled equipment, on the ships themselves—very large ships—to see that. It is in exactly such cases that we find the practice of having ghost workers simply sitting, watching the job being done by others at the control systems. It is in those cases that such practices are most prevalent.
These absurdities create unjustified differences in the pay and conditions of different groups of people, working alongside each other in the same ports. What can be the justification for my company, which employs about 1,700 registered dock workers but which in the very same ports employs far more people who are non-registered dock workers, having to maintain these differences? On examination, there is simply no case for arguing that the 806 non-registered people employed in the South Wales ports—to take the area with which I am most familiar—are treated poorly in comparison with the 406 registered dock workers. I just do not believe it. The end result is that the scheme ports have seen a steady decline in their share of the nation's trade and a serious loss of market share to non-scheme competitors, and most worrying of all, to the continental ports such as Rotterdam.
It is not just a question of ship owners, shippers and receivers of cargo deciding not to use the scheme ports because they are too costly or because they fear the inflexibility of the dock labour scheme. Over the years we have also seen the progressive dereliction of huge areas of traditional docklands because companies which might have been expected to locate their business in such places—such as those involved 1094 in warehousing, transportation, cold storage and the like—have fled the dockland areas in order to avoid what they perceive to be the dangers and high costs of having to employ registered dock workers or to avoid getting into the kind of situation that the noble Viscount, Lord St. Davids, referred to in his speech.
It is a supreme irony to reflect that the Dock Labour Scheme which was set up to preserve and secure employment rights for registered dock workers has, in fact, had the reverse effect. The noble Lord, Lord Mellish, drew attention to the fact that it had not meant jobs for life. No, it has not. The numbers have declined from 80,000 in 1947 to just over 9,000 today. That is the result of a number of changes—the changes in technology to which I have referred—but more significantly because the scheme itself has turned away trade from the scheme ports. Shippers, receivers, and ship owners alike avoid scheme ports if at all possible. Indeed, I observed in the privacy of a private conversation in this House yesterday that if I had still been a Member of Parliament for Pembroke, with Pembroke dock in my constituency, I might have been defending the continuation of the scheme on the ground that it was one way in which non-scheme ports like Pembroke actually get their business!
The reality is that abolition will lead to more job opportunities, not fewer. Perhaps I may take two illustrations. Earlier in my time with Associated British Ports I visited the sheds at the free port at Southampton. I was specifically shown some equipment which had been used in the free port and which was about to be moved out. It was being moved out because people had discovered that whatever they wanted to do in the free port would involve using dock labour and they did not wish to do that. All the evidence we have is that the free port at Southampton has been less of a success than it would otherwise have been because of that inhibition, the perception of the world outside and of the people who want to use that facility.
I refer also to South Wales. With the possible exception of Port Talbot, which is a special port taking coal and iron ore for the South Wales steel works, the ports of South Wales have problems enough in competing for business because of the restrictions imposed by nature—high tidal ranges and the ports' geographical relationship to where trade now is. These problems, which I suppose are unavoidable, are compounded by the fact that the South Wales ports also suffer from the high costs and rigidity imposed by the dock labour scheme. It is a fact that all the deep sea ports in South Wales, from Swansea eastwards, are scheme ports. In my judgment, the South Wales' economy as a whole has therefore been disadvantaged by the Welsh scheme ports having to compete with non-scheme ports in better geographical locations in South and East England.
My noble friend the Minister gave the figures of the relative changes that have occurred in the South-East where non-scheme ports and scheme ports are competing in identical conditions for trade. Of course, if it had not been for the scheme ports one would have expected them to start with a distinct advantage, with all the tradition of trade and the 1095 infrastructure already there; but it has not been so, and one need only go to Hull and Goole to see the trade lost to the wharves on the rivers. Therefore, I have no doubt at all that the existence of the scheme, far from protecting jobs, far from protecting labour and far from protecting local communities is having precisely the reverse effect.
In this debate we have heard a great deal about the return to casual labour. I suppose all that has been said will convince those who are determined to be doubters. I take this opportunity to repeat yet again the pledge repeatedly made by my company—as I said, the largest operator in the scheme—that we have no intention of returning to a system of casual labour. Indeed, we have no possible interest in doing so because casual labour is not an efficient way to handle cargo in bulk, to handle modern trade or to handle the modern systems of containers and roll-on and roll-off. What employers in each port are seeking today is to have a relationship with their dock workers which is broadly the same as their relationship with all the other people employed in the industry.
The truth is—and my noble friend Lord Brabazon of Tara was right to say this—that modern ports cannot work without a permanent, well-trained workforce. That is the greatest single guarantee and defence, over and above anything that we can say specifically by way of promises, that there will not be a return to the conditions so vividly described by the noble Lord, Lord Mellish.
The employers are opposed to any suggestion that the dock labour scheme that will be abolished under this Bill should somehow be reproduced in the form of an industrial agreement at national level covering all the ports currently within the scheme. We believe that this would be a nonsense. It would mean that we ended up where we began with all the rigidities and high costs associated with a totally unnecessary demarcation between dock workers and other employees within the industry. Our position is that there is no case whatever for any form of national umbrella agreement other than that which is necessary to maintain the dock workers' pension scheme. After all, the ports of Felixstowe and Dover—to name the two largest non-scheme ports—operate perfectly well on the basis of local agreements with no recourse to any artificially constructed national agreement.
The National Association of Port Employers has pointed out that the reality is that the dock labour scheme is an anomaly within the industry as a whole. No national bargaining structure exists for the non-scheme ports nor for the thousands of non-registered workers in the scheme ports. Taken together these groups represent 75 per cent. of the total workforce in the industry. We cannot see that it makes any sense to treat these two groups quite differently and to have artificial barriers between them. I agree so strongly with what my noble friend Lord Boyd-Carpenter said. We agree that there really is a prime need now to get on with local discussions about local agreements. The men concerned in the docks are being misled if they really believe that 1096 there is a national agreement to be negotiated. That cannot be the right way forward.
Each port must be entitled to be in total control of its own destiny. I see no other way in which those ports can possibly realise their full potential. It seems to be the greatest possible pity, to put it at its mildest, that the trade union has banned local discussions even though there is a great deal of evidence that many of their members would be happy to enter into discussions to sort matters out with the employers in each port. I hope that common sense will prevail very soon in that regard.
Let us speed up the process of the Bill so that the absurdities, the damage and the uncertainties may be swiftly ended. Let us get on with the task of working out sensible arrangements to make the very best of the opportunities available to all our ports and to those who work in them, bearing in mind the much larger numbers who shall be entitled and enabled to work in them in the future.
§ Lord McCarthy
My Lords, before the noble Lord sits down, perhaps I may point out to him that the Transport and General Workers' Union is not asking for the reproduction of the dock labour scheme by negotiation. All that is required is a framework agreement that sets certain minima. There are 40 ports which vary from London with 27,000 workers to Falmouth with 118 workers. Surely some kind of framework agreement is required. It is the refusal of the employers to consider such a framework agreement that may produce a national dock strike.
§ Lord Crickhowell
My Lords, the noble Lord really said it himself because he described the nature of the industry with the vast variety between the ports. It is precisely for that reason that the proper way to proceed is to discuss at local level. I repeat what I said; namely, that there can be discussions this afternoon. There can certainly be discussions tomorrow in every single port up and down the country if the Transport and General Workers' Union say, "Yes you can go and talk to the employers". Surely the sensible thing would be to discuss and say, "Let us get on with the talks and see how we can work out sensible arrangements for the good of the ports and the people who work in them".
§ 1.35 p.m.
§ Lord Cocks of Hartcliffe
My Lords, when the Minister made reference to "jobs for life", I began rapidly to identify with him because I believe that this Chamber above all others is well versed in that field. When he mentioned "bobbing off home" when there was no work to be done, the sense of identity became even closer. I was somewhat at a loss to find our equivalent of "ghosting" until the noble Lord, Lord Crickhowell, mentioned people sitting about watching other people doing the work. Then I thought that perhaps we had a hat trick after all, or what might be called a full house.
I cannot match the experience of the noble Lord, Lord Mellish, with his record in the dock industry. But for some time I represented in the other place a constituency in Bristol. Among my electorate I had 1097 a very large number of dock workers who obviously dwindled in numbers. Many of them told me of the humiliating conditions at Avonmouth where they congregated in what was known as "the pen", trying to obtain work at the expense of their fellows. They told me how the introduction of this scheme after the war brought them at last a dignified and civilised way of obtaining employment.
The remarks of the noble Lord, Lord Crickhowell, concerning the need for this legislation after the war and the way in which he would have supported it, contrasted rather strongly with the remarks of the noble Lord, Lord Boyd-Carpenter, when he referred to extreme and damaging trade unionism of 40 years ago. He said that he understood the reaction of people whose jobs are threatened. We have had an example of that in this House fairly recently when we had the Friday debate concerning the proposals of the noble and learned Lord the Lord Chancellor for the reform of the Bar. Of about three dozen speakers, over two dozen were barristers. The following week we debated the order uprating the Lord Chancellor's salary. I made a few remarks saying how well deserved the uprating was and that he had earned every penny of it because he had the courage to take on one of the strongest vested interests in the country. Possibly the Government's attitude towards this Bill would have been a little different if there had been two dozen ex-dockers in your Lordships' Chamber.
I know about the changes that have taken place in the dock industry because I served on the committee that considered the Felixstowe Dock and Harbour Bill. I believe that your Lordships will understand when I say that sitting on that committee was the nearest that one could get to a custodial sentence in this House without actually committing an offence. I have also followed the noble Lord, Lord Mellish, by accepting a post with the Docklands Development Corporation in the East End of London. As he will confirm, one of the great problems there is regenerating with a new form of life the areas not only of the former docklands, but also of the great water spaces of the docks themselves. I am fully aware of the changes that have taken place.
I do not believe that this Bill provides the way in which it should be handled. I was rather puzzled by one remark that the Minister made. He said that in the other place this Bill had been called a one-clause Bill with provocative intent. I have looked through the debate on 8th May for this quotation and I found it at col. 563. Your Lordships will know that quotations from the other place are allowed only if they are made by a government Minister. I noticed that the Leader of the House, in moving the guillotine Motion on the Dock Work Bill in the other place, used the phrase:This is a one-clause Bill".Perhaps in his closing remarks the Minister might like to explain just who was trying to provoke whom. I find that slightly baffling.
My noble friend Lord McCarthy referred to the lack of consultation. For a Bill to have its Second Reading in another place on 17th April and for the timetable Motion to be moved on 8th May was pretty fast going.
§ Lord Cocks of Hartcliffe
My Lords, my noble friend says that it was an all-time record. I would have to look closely at my own period in government before I acceded to that completely, although I think he may well be right.
The Minister used another phrase which I found most puzzling and with which he may have delivered a hostage to fortune. He said that prior consultation could not have been in the national interest. I should like a fuller explanation of that remark. When he comes to reply perhaps he will enlighten us a little more.
The Minister also said that the Bill is timely. I agree that from the Government's point of view it is timely. However, I take issue in this respect with my noble friend Lord McCarthy. He said that he did not suspect the Government of any ill intent in this timing. My noble friend comes from Oxford and works there. In Oxford everything is done, or is suspected of being done, for the purest of motives. I understand that and I know that he is protected from the seamier side of life. I have not had that fortune. For the bulk of my time in another place I worked in what is known as the usual channels. Some would say that rather than being channels they were underground. Anyway it was a kind of troglodytic existence where one did not often break surface. However, one developed a nose for things. To me, with its lack of trailing, with the fact that it was not included in the manifesto and with the denials from the Government which lasted almost to the production of the Bill, it looks like stage management. I believe that the Government had this idea in a pigeonhole in the department. They said to themselves, "We will keep that there in case the water becomes a little choppy". Every now and then it would be dusted off, put back and kept for a rainy day.
I am afraid that I can think of no other explanation but that the Government kept this on one side for a time when they felt that electoral support might be sagging and when they would need a booster. Going back to the immediate post-war period, one of the pejorative things which the Conservatives knew would arouse public opinion was an attack on the dockers. It was very much in the same band of things as the "ground nuts". When I began in politics it was not unusual at a political meeting for a band of Young Conservatives at the back to jump up and down and shout "ground nuts". A myth was put about at the time that this was a disaster by the Labour Government. It is true that it was not an economic success but that was because the consultants had given bad advice, something that is not unknown today. In fact it was an attempt on a large scale and in an imaginative way to help the world during an acute shortage of vegetable oils. It became one of these Pavlovian trigger mechanisms.
I fear that the real motive behind the Bill is to generate support for the Government in the run up to the direct elections to Europe. That is why this idea has been kept in a pigeonhole. It has now been dusted off and brought out because the Government are going through a difficult period. Something is 1099 needed as a diversion and to draw attention from the other things that they are doing to our people. I cannot share the rather innocent interpretation which my noble friend Lord McCarthy has put on the Bill.
§ 1.46 p.m.
§ Lord Greenway
My Lords, there has been a lot of recent talk on the radio and in the press about the fate of the dinosaurs. Some say that their extinction was caused by a meteor; others say that it was caused by an excess of their own internal gases. The noble Lord, Lord Crickhowell, whom I am sorry to say has just left his place, said that an awful amount of hot air has been expended over this dinosaur during the course of its existence. I hope that its extinction will be just as swift as that of the dinosaurs. I congratulate the Government, having finally made up their minds, on the dispatch with which they are going about tackling the problem.
The noble Lord, Lord McCarthy, asked why there should be such haste. This may be a rather naive assumption, but to me it seems obvious: 1992 and the internal market loom large on the horizon. It is only right that all our ports should be enabled to compete as effectively as possible with those of our neighbours on the Continent. Several noble Lords referred to the scheme being responsible for the diversion of trade from scheme to non-scheme ports. That is of course true. The Minister and one or two other noble Lords referred to the position on the Humber. Perhaps I may embellish that slightly. Some years ago there was an imaginative scheme involving a new ship carrying barges. Those were sailed out of the ship in the Humber Estuary, and they could then carry on up the rivers Ouse and Trent. That scheme was completely killed by the registered dockers in Hull. As it happened, the trade still managed to get through. It came through in new small coasters, many of them being built especially low so that they could go up the River Rhine and other rivers on the Continent. They have gone to the small wharves that have proliferated all around that part of the world.
The trade did not necessarily go to non-scheme ports. A good deal of it—not many noble Lords have mentioned this point—went abroad. We all know of the threats of the competition from ports such as Rotterdam, Antwerp, Le Havre and Hamburg. They get on with things over there. I was in Rotterdam comparatively recently. I was shown round the port. One of the most impressive things I saw was a new large distribution centre which will be completed in plenty of time for the opening of the Channel Tunnel in 1993.
The noble Lord, Lord McCarthy, tried to make out that the scheme ports are efficient. They are in certain instances especially in regard to container handling. If they are so efficient, why are they so empty? One has only to go to London, Southampton, Liverpool and Hull to see that these ports are empty compared with how they used to be, and certainly compared with Felixstowe which is absolutely booming and which has had to provide port extensions, and so on, to cope with the business. It is worth mentioning that, thanks to this House, 1100 Felixstowe remains outside the scheme. All I can say is thank goodness we have one port that can compete effectively with the continental ports.
What I should really like to talk about are the new opportunities that will exist once the scheme is out of the way. The old ports are natural hubs—if I may borrow a word from the air industry—and are traditionally placed near large population centres. It seems only right that they should be the places where value should be added to imported goods. They should be centres for port-related industry and new trades, and above all for distribution centres which will become increasingly important after 1992. I do not think that there will be any lack of job opportunities. That is one avenue which we can dismiss because I am sure that as these ports are opened up, those parts of industry which the scheme has driven away will return to the ports and we shall see many opportunities arising for new jobs.
My noble friend Lord St. Davids mentioned how much of the traffic has been pushed on to the roads. He put a case, as he has done so many times in the past, for more traffic to be put on our inland waterways. I would certainly go along with him on that aspect. However, I should like to take this opportunity to air an idea which was put forward some years ago by some northern ports. They looked into a possible alternative to anti-social road traffic by proposing a roll-on, roll-off coastal service from the North to the South. I shall not go into details as to why that proposal was not successful or even attempted. But one of the reasons given was that port charges were too expensive, especially those of the scheme ports.
If the scheme is to be done away with—and I hope it will be soon—then perhaps that is another avenue at which we can look again. I say that because I do not think that any of us wish to see the countryside covered in concrete just to cope with the ever increasing amount of road traffic.
I regret the fact that there are some unofficial strikes at the moment; I certainly hope that there will not be a national strike. I have felt for some time that some sort of strike will be inevitable, but I hope that it will not go on for too long. It is, if I may put it this way, and as one port industry spokesman recently said, "a war to end a war". I feel that there is little, if any, public support for a dock strike and I personally hope that it will be over as quickly as possible.
I think that it is time for the official Opposition—although I quite understand their stance—to stop trying to defend the indefensible, to stop looking back and to look forward, as I think the Government are trying to do, to the new opportunities for growth and creation of new jobs in and around our ports in order to face the future and the challenge of 1992.
§ 1.52 p.m.
§ Baroness Turner of Camden
My Lords, this has been a most interesting Second Reading debate on an extremely rushed Bill. I emphasise that the Bill has been rushed; indeed, many of my noble friends have said so. I say that because until very recently—indeed, as recently as 14th March last—the 1101 Government were stating that they had no intention of changing or interfering with the scheme. Yet, as we have heard, a Statement was made in this House on 6th April indicating that the Government intended to introduce a Bill abolishing the scheme. A White Paper was produced on the same day and a Bill was introduced into the other place on the next day. Now we have that Bill before us for Second Reading and I understand that the intention is to push the whole matter through by the end of next month.
We have received no explanation from the Government for the speedy introduction of this measure—we really have not—although they have had plenty of opportunity to explain why this rush is necessary. Indeed, my noble friend Lord McCarthy gave the Government an opportunity for more mature consideration when he put down his Unstarred Question on 24th April asking why the Government would not refer the alleged restricted labour practices associated with the dock labour scheme to the Monopolies and Mergers Commission, since they had made use of those procedures in connection with similar concerns in the television and film making industries.
On that occasion the Minister replying said that the restrictive practices on the docks were there as a result of statute; and because it could not examine restrictive practices which could only be discontinued by changing the law, the MMC was precluded from considering a reference. I think that that is too rigid an interpretation of Section 79 of the Fair Trading Act 1973. But, even so, it would have been possible—as the noble Lord, Lord Rochester, pointed out—to have followed the normal practices. That is, to have issued a White Paper as a basis for consultation with the parties concerned, to have allowed time for the consultation to take place and then to publish a Bill following that consultative period. There has been no adequate explanation of why there has been no consultation. There has only been the statement that the Government already know what the position is of the parties: that the employers want to abolish the scheme and the union does not.
But, unless there has been a genuine opportunity for consultation—and there has not—how do the Government know whether positions have changed during the consultative process? If the Government genuinely believe that the existence of the dock labour scheme is a drag upon the industry and responsible for the continuation of non-profit making ports, then they could have put their views to the test in a genuine consultative process. However, they have not been prepared to do so.
We recently heard in this House that lawyers have complained about the lack of consultation regarding the proposed legal reforms; but they at least had a little more opportunity and a little more time than have the dockers.
We on this side of the House have endeavoured on many occasions in the past to mount a defence of the scheme. I make no apology for that fact. However, that has not met with much favour from the Government; but I still believe that it is necessary 1102 to do so again. The House will be aware of the history of the scheme, because it has been stated on many occasions, and the reasons for which it was found to be necessary.
Many noble Lords on all sides of the House have agreed that years ago the scheme was a necessity. It was needed to bring to an end the degrading system known as casualisation which then existed. Men fought each other at dock gates for poorly paid employment. There was no security, no room for self-respect, little in the way of health and safety regulations and no protection against poor working conditions. The noble Lord, Lord Mellish, gave us a graphic account of those conditions during this debate.
Union organisation in the ports and the dock labour scheme changed the situation. The dock labour scheme does not provide registered dock workers with jobs for life, as has frequently been contended, and I should like to spend some time on this issue. However, it does mean that in this instance manual workers have a similar degree of protection to that in existence for many managerial, non-manual and professional jobs.
When I was a negotiating official for a union consisting mainly of non-manual workers, I can remember negotiating terms of a similar nature. Registered dock workers have the right not to be dismissed without just cause and not to be made redundant without severance payments. They also receive minimum guaranteed daily pay; but so do most non-manual workers. For example, if you turn up to your job in a City office you expect to be paid. It is the job of management to see that there is work to be done. Moreover, if there is a slack period, you still expect to be paid. I do not call that a restrictive practice. However, if it is, then it is widespread in many professions and occupations.
Further, it is not true that the work is particularly highly paid. The average working week is 45 hours, for which the docker will collect about £13,000 per annum. That is not all that much by current standards; indeed, in the City it would be regarded as virtually small change. Dockers can be sacked for justifiable reasons, such as misconduct. Thousands of dockers have left the industry voluntarily under severance terms. In reply to the debate on 24th April the Minister (at col. 1140 of Hansard) stated:However, severances of surplus RDWs from the industry can only be achieved with their voluntary agreement, induced by large cash payments of up to £25,000".One should note the words "up to". That is the maximum payment after years and years in the industry. It is not so very much if one is in one's fifties, 12 years away from state retirement age and likely to have difficulty in obtaining other employment. Moreover, as we have heard, the average payment is around £12,500. Again, is it really a restriction if one cannot get rid of long-serving employees without paying them compensation? I do not believe so.
Reference has been made to other so-called restrictive practices, especially that known as "ghosting". I understand from the union that the correct title for such practices is "standby 1103 agreements". The union agrees that the incidence of standby agreements has increased in recent years. It believes that this is due to the reluctance of port employers to have employees properly trained. In some cases, it is claimed, it is because port operators cannot or will not purchase the mechanical equipment required to undertake certain services required by port users. The union says that it is opposed to those arrangements being used as a substitute for the employment of registered dock workers, and it has continually pressed managements to eliminate the practice. It is clear that the practices are capable of negotiation if the employers have a will to do so.
There is the further argument that scheme ports are somehow less profitable. We have heard that from a number of noble Lords today. It is said that they are less effective than ports not in the scheme. The example of Felixstowe is constantly quoted. But, as I have said before in the House, the geographical position of a port may well have more to do with its profitability than the existence or otherwise of the dock labour scheme. Perhaps I may quote from an interview with one docker employed at Felixstowe who was asked whether the scheme had played a part in the decline of some ports not associated with it. He said:Not particularly. Look at Ipswich, 12 miles up the Orwell. Despite the need for dredging and being a scheme port it's still the fourth largest container port in the UK. That's got everything to do with being close to the Continent, not much to do with the scheme".The truth may well be that the decline of scheme ports, where it has occurred, is an indication of Britain's reduced role in world trade. Continental ports such as Hamburg, Rotterdam and Amsterdam serve the Continent directly, with excellent back-up transport services. Moreover, those ports have had substantial investment and heavy public subsidies over the years. Major ports in Europe also have systems to avoid casualisation. Those include registers and structures similar to our own dock labour scheme. I am told that in Rotterdam, about 15 per cent. of the registered dock workers are not working at any one time. They are still paid of course. That is due to the sporadic nature of the work.
The argument often advanced that the scheme is responsible for our lack of competitiveness does not hold up; nor does the claim that we must do away with it in order to be in line with European practice. Indeed, the United Kingdom is one of the few EC countries not to have ratified ILO Convention 137 which calls for registers of dock workers and opposes casual labour in the docks. If the Government are opposed to casualisation, why do they not ratify the convention?
It is claimed by the employers—we have heard it from the noble Lord, Lord Crickhowell, this morning—that they are against casualisation and that there is no point in it in the present industrial scheme of things because a highly trained workforce is necessary. It must be said however that the union does not believe the employers. Perhaps what is even more important, nor do the rank and file dockers. 1104 It is in any event an industry that lends itself to casualisation unless there is statutory intervention to stop it. We may well see emerging a core of highly skilled workers surrounded by a pool of casual workers.
Dockers fear that the disappearance of the scheme will herald the return to the bad old days. They also fear that the Government are out to prevent them from exercising any influence over the industry. Through their union, they have been able to have a participative role. That the Government do not like. Working people should not have any say in how the industries in which they work are run. That is the Government's dogma. It lies at the heart of the Government's opposition to the social dimension in EC philosophy; the blocking, for example, of the Vredeling Directive and their attitude to ILO conventions are all part of the Government's attitude to employees and employment rights generally.
As many other noble Lords have said, it is surely unacceptable that the scheme should be abolished and that nothing—absolutely nothing—is intended to be put in its place. There is to be no national forum, apparently, for the discussion of terms and conditions and for the consideration of important issues such as health and safety and training; no national bargaining machinery; and no national joint council, and that of course, as the Opposition have said is what concerns the union. Why should it not concern the union? The noble Lord, Lord Mellish, made that point clear in answer to points raised by the noble Lord, Lord Boyd-Carpenter.
Incidentally, the noble Lord referred to a number of issues, which, like Grimsby, were referred to in the Government's White Paper. I draw attention to the fact that when we had the debate on 24th April, I mentioned the fact that the union did not agree with what was said in the White Paper about Grimsby and other alleged cases. I said:At Grimsby there is a history of very flexible working arrangements. Nor is it true, says the union, that trade is shifting from Grimsby to Hull. The whole picture is of a backwards and forwards shift of business between the two ports. In any event, I am informed that trade in fishing ports is determined by a quota system and not by competition between ports".—[Official Report, 24/4/89; col. 1138.]As the Opposition said in that debate, the union had answers to every one of the instances quoted in that White Paper.
When the Minister introduced the debate he said that everyone except the Opposition was in favour of the abolition of the dock labour scheme. That is not the situation. Indeed, I have a quote from Mr. Robert Gill, the Felixstowe Dock and Harbour Company chairman, who recently commented in a moment of lucidity:Abolition of the dock labour scheme is not the panacea it is often put forward to be".Even on the management side of the industry there it not wholehearted support for the abolition of the scheme.
I return to my comments about there being no alternative offered; nothing to take the place of the dock labour scheme. It is merely to be abolished. No framework is to be constructed in its place. There will be no room in future for employee involvement 1105 via their unions; no participation. That will not do. It is neither reasonable nor humane. We shall do our best on this side of the House, by way of amendments when the Bill is in Committee, at least to provide some protection for the workers in the industry.
§ 2.8 p.m.
§ Lord Brabazon of Tara
My Lords, anyone who has followed the passage of this Bill over the past nine weeks and heard today's debate cannot doubt that the issues relevant to the future of the dock labour scheme have been thoroughly examined. But it seems to me that the two central questions are whether special controls are necessary any longer to provide a basis for reasonable terms and conditions of employment for dock workers and whether those controls themselves give rise to unacceptable costs which prevent our ports from performing as they should. We must not forget that at the end of the day pay and jobs depend on the ability of business to compete successfully and to create wealth.
The Government believe that the evidence indicates overwhelmingly that the dock labour scheme fails both these tests because it is unnecessary to provide a sensible basis for determining reasonable terms and conditions for registered dock workers. It costs scheme ports business and jobs by undermining competitiveness. I have heard nothing today which provides grounds to question either of those two judgments.
I shall try to answer as many of the points as possible which noble Lords have raised today. First, I was accused by the noble Lord, Lord Mellish, of having misled the House; my noble friend and other colleagues were also accused of the same thing in having said that we had no plans to abolish the scheme. I believe that Ministers have consistently given a proper account of the Government's position. The Government have long voiced their reservations about the effects of the scheme on business and jobs in the ports to which it applies. In 1982 they rejected an approach from the Transport and General Workers' Union to have the scheme extended to other ports. In 1986 the unions rebuffed an invitation from the then Secretary of State for Transport to the employers and unions to consider voluntary arrangements to replace the scheme.
In debates in another place on the scheme prior to its announcement, the Government continued to voice their doubts. The scheme has been kept under review; once the Government had decided their plans on 6th April those plans were announced immediately and Parliament was the first to be informed. I believe that that was the proper way to proceed. There were no leaks and the Government encouraged no speculation prior to finalising their plans and taking their decisions.
The noble Lord, Lord McCarthy, asked me whether there were any other examples of legislation having been introduced, in his words, "in such haste". I can give one quite good example from the period of the last Labour Government, when they introduced legislation on incomes policy. The White Paper was introduced on Friday 11th July 1975; the Bill concerned with it had a First Reading on 1106 Wednesday 16th July and it received Royal Assent on 1st August.
§ Lord McCarthy
My Lords, will the noble Lord give way? Does he not agree that the Labour Government at that time said—rightly or wrongly—that there was a major economic crisis which required that Bill as a central instrument of their policy? Is that what this Government are saying?
§ Lord Brabazon of Tara
My Lords, we are certainly not saying that there is a major economic crisis at the moment. I was asked to give an example of a Bill which was introduced in such haste and I have just done so.
The noble Lord, Lord McCarthy, also suggested that there was some confusion about the amount of government spending as a result of the scheme. The statement by the Secretary of State mentioning about £1 billion referred to the extra cost to the Government and employers of that £1 billion. The cost to the taxpayer in severance schemes has been £420 million and in extra support to London and Liverpool, £350 million, making a total of £770 million, as set out in the White Paper.
A number of noble Lords, notably the noble Lords Lord McCarthy and Lord Cocks, and the noble Baroness, Lady Turner of Camden, referred to "jobs for life" and mentioned how that phrase had perhaps been misinterpreted. However, a registered dock worker has guaranteed minimum pay and employment until he chooses to leave the industry. Once a docker is on the register, his pay and employment are assured, even if his employer goes out of business. He can only be made redundant if he so chooses, under generous severance terms, supported by the taxpayer with £420 million since 1972.
§ Baroness Turner of Camden
My Lords, will the noble Lord give way? Is he not aware that in non-manual employment there is a whole range of what we might call voluntary redundancy arrangements? In other words, there are arrangements where the employees are not made redundant unless they volunteer to be made redundant.
§ Lord Brabazon of Tara
My Lords, I am sure that there are all sorts of different things but I was referring to the docks business and the so-called "jobs for life". I have just given a reason why the phrase seems to have come up. It is not a phrase which has necessarily been used all that often by the Government. It has been used by everybody, so far as I can see. It is often quoted in the national press. Incidentally, the noble Lord, Lord McCarthy, said that dock workers' earnings were only 22 per cent. above the national average. My figure is that their earnings are 60 per cent. above average earnings at £350 per week. Average earnings are £220 per week for manual workers.
A number of noble Lords made comparisons with the arrangements abroad. They suggested that other countries had similar kinds of schemes. There are 1107 indeed a variety of arrangements; some are statutory and some are not. Some allow casual work while others permit compulsory redundancy. However, what is clear is that a number of countries are looking to reduce the restrictions. The government in Italy, the socialist government in New Zealand, and now France are looking for change.
As we move towards a single European market, unwarranted restrictions cannot be justified if they lead to the need for subsidies to pay for the inefficiencies that they create. In any case, I submit that we do not need to look abroad in this particular instance because we have an example on our own shores of the non-scheme ports which handle 30 per cent. of our trade. I believe the noble Lord, Lord McCarthy, implied that the scheme ports did not have a bad industrial relations record. He will correct me if I am wrong. However, my information is that since 1967 scheme ports have lost over 4 million working days through disputes on an average of three disputes a week. That cannot be described as a good strike record.
I agree that the number of days lost through strikes generally has fallen substantially in recent years, but scheme ports still managed to lose more than four times the average number of days in 1987, and five times more than were lost in other transport industries. The noble Lord suggested that output or productivity was better in scheme ports than in non-scheme ports. I agree that output per worker has grown in the scheme ports, not because of the scheme but despite it. Output has improved dramatically in dock work because cargo handling technology has revolutionised the industry. We would not credit accountants with improved productivity because they now use computers. Equally, the vastly increased tonnage handled by each worker in our ports is a measure of bigger and better machines.
The labour intensive industry which employed 80,000 workers 40 years ago has given way to the capital intensive industry of today where a total of 13,000 dock workers in both scheme and non-scheme ports handle more cargo. That is precisely why the scheme can no longer be justified. However, scheme ports have failed to keep pace with improvements in performance elsewhere. That is why they have lost 30 per cent. of Britain's sea-borne trade to ports outside the scheme, and half of all container traffic. That is why higher productivity in scheme ports has been paid for with fewer jobs, and has not brought more business leading to more jobs. That is why the jobs in scheme ports have been lost at a rate of 8 per cent. a year over the past 20 years. That is almost the same rate as the improvement in output per dock worker produced by the fall in the number of workers in the industry.
The scheme's practices of "bobbing" and "ghosting", disincentives and overmanning can only detract from productivity. The abolition of the scheme can only improve productivity and competitiveness on which jobs depend. To compare the tonnage handled by dock workers in scheme and non-scheme ports ignores entirely the differences in the cargo they handle. Scheme ports handle much 1108 more bulk cargo like iron ore than non-scheme ports, which have captured more than half of all Britain's container traffic from scheme ports. The real measure of performance is price for a given cargo. The transhipment survey shows how much cheaper non-scheme ports can be, and their market share. There is no doubt that non-scheme ports have captured over half of Britain's trade by value from scheme ports in little more than 20 years. Those are real measures of the burden represented by the scheme, not fictitious comparisons of tonnage. I mentioned in my opening remarks the results of the transhipment study which was published by the British Ports Federation and the Department of Transport. That study showed that Tilbury and Southampton were 30 per cent. and 40 per cent. more expensive respectively than non-scheme Felixstowe as regards handling container cargoes.
§ Lord Mellish
My Lords, the Minister is denying what was said by his noble friend Lord Crickhowell. Why is it that, in view of this disaster story that the Minister is giving us as regards output and other matters in the scheme ports, the scheme ports have made a profit?
§ Lord Brabazon of Tara
My Lords, I am coming to the matter of the profitability of the scheme ports and I shall be able to answer the noble Lord, Lord Mellish, in a few moments. I shall move straight to that matter now. I agree that most, but not all, scheme ports are making profits now. However, that is only after huge amounts of public funds have been put into some of them, particularly London, which is the former port of the noble Lord, and Liverpool. As my noble friend Lord Crickhowell pointed out, much of the profit comes from land sales and property development.
There are other examples of where scheme ports have made significant losses recently. There is the example of the Clyde Port Authority in the early 1980s. The noble Lord, Lord Cocks of Hartcliffe, may well be aware of the situation in Bristol, which I am aware is not only due to the scheme but to the construction of the Royal Portbury Dock. It is no secret that both Hull and Southampton have lost money.
Noble Lords have asked why there was no consultation or discussion before our proposals were announced. I repeat that this was because the positions of those involved in the industry are clear and irreconcilable, and the issues have been widely debated both inside and outside the House. The Transport and General Workers' Union has repeatedly stated its attachment to the fundamentals of the scheme and has regularly threatened national strikes in the event of any suggestion that the scheme's damaging restrictions should be reduced. It made it clear that the scheme was not negotiable in any context and that an approach to the Government on the future of the industry was a quite separate matter. The union has refused five approaches from the employers to consider voluntary arrangements to replace the scheme. Only the prospect of the scheme's abolition has caused the TGWU to begin to consider a future without the scheme.
§ Baroness Turner of Camden
My Lords, is the Minister aware that the union has denied categorically, and on oath, that five approaches have been made to it?
§ Lord Brabazon of Tara
My Lords, I was not aware that the union had denied it on oath. Perhaps the best that I could do is to quote one of the most recent remarks of Mr. Connolly. On 24th February 1987 he said:There will be opposition to the amendment or the revision of the Scheme and that opposition will take the form of a national dock strike".I shall not continue to give way, my Lords. I have a number of points to attempt to answer. I have given way far more than is usual. It is not misrepresentation; I quoted directly.
In those circumstances, as my noble friend Lord Crickhowell pointed out, it was the Government's duty to take the necessary action through Parliament to abolish the scheme and its statutes promptly. The past actions of the union demonstrate conclusively that consultation would not have altered its determination to call for strikes in defence of the scheme in accordance with its long-standing policy.
The noble Lord, Lord McCarthy, suggested that the balance of the National Dock Labour Board could have been altered. I understand that the last time it was suggested that the number of local dock labour boards should be reduced this led to a dock strike. The point that I was trying to make related to the effect of the local dock boards: they have to consist of equal numbers of employer and worker representatives.
The noble Lord, Lord Rochester, and a number of other noble Lords, referred to training, which is an essential part of the ports industry. I think that my noble friend Lord Crickhowell made that quite clear in his speech. The National Dock Labour Board is responsible for administering training in the scheme ports. It currently spends about half a million pounds a year on a mobile force of 17 training instructors. Thus the scheme ports spent, through the board, an average of just over £50 per registered dock worker.
By comparison the non-scheme port of Felixstowe alone spent £750,000 last year, an average of £675 per employee. Many other non-scheme ports have full-time training officers. It is therefore clear that the competitiveness of non-scheme ports is not achieved by cutting costs on training. On the contrary, competitiveness in today's capital intensive ports industry benefits from a highly skilled and adaptable labour force. The scheme is not needed to ensure that.
The noble Lord also asked whether we would consider more training for redundant registered dock workers. There is every reason to believe that the abolition of the scheme will attract new jobs to port areas. There is no evidence that the redundancies of dock workers will be higher than under the scheme in recent years when the annual fall in the register of dock workers has been approximately 800 nationally. We believe existing training provision to be adequate, but the Government are always conscious of the need to adapt provisions to local 1110 needs and will consider how best that can be achieved.
My noble friend Lord Boyd-Carpenter and a number of other noble Lords asked why there were no national negotiations with the port employers. The question of whether or not there should be national negotiations is a matter for the employers. They have made their position clear. They have said that they see the future of the industry lying in negotiations at local level. They have made it clear that they wish to settle outstanding issues arising from the repeal of the scheme. They have said that they want to treat all employees equally and fairly, yet the union has placed a ban on local negotiations. What purpose can that possibly serve other than preventing local officials from negotiating new terms for their members? In any event, why should a national agreement for RDWs be felt to be so important when no national bargaining machinery exists for non-scheme ports or for the non-registered workers in scheme ports? Why should the RDWs always be treated as men apart? Why should they be treated differently from the rest—indeed, the majority—of the workforce in the industry?
Furthermore, I should point out that, in 1980, the national minimum pay rate was disbanded. Pay is now negotiated locally. Since that is probably the single most important issue to dockers, the importance of the existing national machinery has declined. The question that should be put is not, "Why do the employers refuse to negotiate on a new national agreement?'", but rather, "Why does the TGWU refuse to start local negotiations? Why does it refuse to negotiate for the registered dock workers in the same way as it does for all its other members in the docks industry?"
Another principal subject of today's debate has been the possible return to casualism. The noble Lord, Lord Mellish, gave us the benefit of his experiences in the docks industry, albeit a good many years ago. There have been claims that abolition of the scheme will inevitably lead to a return to casualism. I understand those fears, but they are totally misfounded. No one wants to see a return to the casualism of the 1930s and 1940s, but no one has yet explained why abolition will mean a return to those days. As my noble friend Lord Crickhowell made clear, the fact is that modern cargo-handling techniques have made casualism a thing of the past. Ports are capital-intensive and depend upon expensive and advanced equipment quite unsuited to casual labour. Employers need a properly trained, well motivated, permanent workforce. One need only look at the experience of non-scheme ports, which currently employ only 6 per cent. of their workforce on a casual basis, to see that the fears of a return to casualism are misplaced.
Individual employers have given specific assurances that there will be no return to a casual system. The managing director of the Mersey Docks and Harbour Company said on 11th April:Whatever challenges and tests may face the Port of Liverpool after abolition, there will be no return to the casual employment from which the Scheme originally sprang".On 6th April, Sir Keith Stuart, Chairman of Associated British Ports, said: 1111ABP does not intend to introduce a casual labour system".On 13th April, the National Association of Port Employers issued a statement saying:we will not be returning to a system of casual employment nor any variety of it".It indicated that employers in 93 per cent. of the industry had given such assurances. It went on to say:Such systems are totally inappropriate and out of place in the modern ports industry. We need committed, highly trained, well motivated and energetic staff to take advantage of all the benefits flowing from the abolition of the Scheme".Those assurances were reiterated by the National Association of Port Employers during its meeting with Mr. Todd on 18th April. Indeed, it went further and promised to arrange for individual employers, covering over 90 per cent. of RDWs, to give him that guarantee in writing. Those written guarantees have now been given. I hope that that demonstrates beyond doubt that the fears expressed are without foundation.
The noble Baroness, Lady Turner of Camden, asked why we have not ratified the ILO convention regarding the registration of dock workers and casual dock labour. We are one of 137 members out of 158 of the ILO who have not ratified that convention. It has never been ratified either by successive British Governments, whether Labour or Conservative, or by several other countries in the EC. The fact is that many countries are unwilling to accept the restrictions of the convention, which was drawn up over 15 years ago before the transformation of dock work. The end of Community trade barriers in 1992 means more business and more competition also. Many other countries are trying to make their ports more efficient, whether it is by reducing their labour force or by removing statutory regulations.
The noble Lord, Lord Cocks, asked why the Leader of the House in another place had described this as a one clause Bill. I understand the reason is that he was quoting some words of the Official Opposition spokesman who had used that phrase in the first session of the Committee stage. I do not know whether the noble Lord has read through the whole of the Committee stage of this Bill, but I would not recommend it—in another place, that is.
The noble Baroness, Lady Turner of Camden, asked about the possible reference to the MMC. I think that I covered that point fairly fully when I answered the Unstarred Question. She queried one or two of the examples given in the White Paper and notably the one about fishing ports. Whatever the restrictions of fishing quotas and so on, it cannot possibly explain why Aberdeen has lost trade to Peterhead, which is only 35 miles away, when one is a scheme port and one is not.
The dock labour scheme has been a feature of employment in most of our major ports for the past 40 years. It was introduced by Parliament to deal with poor employment conditions, casualism and inefficiency in a different era, in an industry which was very different from the one we see today. Nobody so far has suggested that it was not a bad thing at the time.
1112 It is understandable that registered dock workers in scheme ports—now in a minority in the ports industry—should have become attached to a scheme which has offered them unique privileges in British industry. But that, and the fact that the scheme has existed for 40 years, provides no reason for the scheme's continuation. We can no longer afford the damage that the scheme is doing. Worse still, the scheme is demonstrably irrelevant to the provision of reasonable working conditions for dock workers in today's ports industry.
After careful consideration, therefore, the Government have decided to act to bring the dock labour scheme to an end by bringing forward a Bill to revoke its statutory provisions. Given the positions of the parties involved, that can be the only way to proceed in the national interest.
The Bill does not simply abolish the scheme. It brings it to an end in a way which enables employees and employers on the National Dock Labour Board to help shape future provision in the industry for training and welfare. It provides generous compensation for any dock workers who are made redundant in the period following the scheme's abolition. But above all it brings dock workers and their employers within the same framework of rights and obligations under employment law, developed by successive governments, which applies to the rest of industry.
Today's ports deserve nothing less if they are to face the future with confidence. Without the burdens of the scheme, those ports to which it applied will be in a far better position to attract the business and investment needed to provide a secure basis for jobs and decent terms and conditions of employment for their workers.
That is the context in which employees and employers in our ports must now evolve sensible employment frameworks for dock work. Attempting to recreate the past through agreements which ignore the competitive needs of individual ports cannot be the way to go. There can be no reason for strikes which would simply cost scheme ports more business and more jobs.
The early passage of this Bill would signal the determination of this House to bring the dock labour scheme to an end quickly, so that the industry will cease to fight the battles of the past and will instead concentrate on the real issues which will determine business and jobs in our docks in the future.
On Question, Bill read a second time, and committed to a Committee of the Whole House.