John Davies – 1972 Statement on a National Coal Strike
The statement made by John Davies, the then Secretary of State for Trade and Industry, in the House of Commons on 18 January 1972.
The issue of a national coal strike, which we are debating today, provokes inevitably depths of feeling and concern that go even beyond the serious industrial facts that are involved.
There are many reasons for this—the character of the industry, with its ruggedness and dangers; the men who work in it and who rightly evoke our sympathy and admiration; the historical place that the industry holds in the whole evolution of British industry; the special links it has with this House; the numbers of people involved and their unity and union membership; the remarkable history of the National Union of Mineworkers; and the impact that the industry has on every section of the community, geographically, industrially, socially and domestically.
This catalogue by no means exhausts the many reasons why the events that have recently occurred elicit a response throughout the country which is perhaps more profound and emotional than the plain industrial issues involved. But even on the level of the plain industrial issues, so much is at stake that we must try to see clearly and understand how those problems have arisen and what are the wider national issues that surround them, how they are likely to affect the life of the country and, perhaps most important of all, what their consequences may be for the industry and those who work in it.
Perhaps it is right to consider first that last question—the consequences for the industry itself. It is necessary to look at the recent history of the industry to do this—at its prospects and problems and how it is surmounting them and at its future outlook.
By any standards, the radical transformation which the industry has undergone in the last decade is a matter for admiration and approval. It has squared up to the realities of its competitive position and has acknowledged the need to modernise and streamline itself. It has done this with there having been a remarkable degree of understanding between management and unions. It has set about this process by making a dramatic reduction in manpower and a vast modernisation effort in plant to reduce the advantage that other newer primary fuels, such as oil and natural gas and even the nuclear generation of electricity, enjoyed.
Successive Governments have supported this transformation by writing off accumulated losses and by affording some degree of protection through the fuel duty and other measures, recognising both the social factors involved and the security ones in comparing an indigenous source of fuel with the need to import.
The combination of these efforts gave rise to a sustained improvement in productivity throughout the ‘sixties, though by 1969, to the dismay of those who wished to see the industry endure and prosper, that effort seemed to be running out of steam, and the last two years regretfully have seen the rate of improvement dwindle and disappear.
After the great write off of accumulated losses in 1965 of £415 million the industry has endured further losses to the tune of £34 million, but the prospects were brighter and, with competitive fuels increasing in cost, there was hope of turning the corner into profitability.
Despite the damaging impact of unofficial action this year, 1970–71 saw a marginal profit of £½ million and hopes were high that 1971–72 would carry that ahead into continuing surplus. Those hopes are now dashed with the expectation that the present strike will be pushing the Board into deficit at the rate of £10 million a week over and above the £20 million already arising from the last two months’ overtime ban.
This damaging turnround in the Board’s prospects arises at a time when some of the surrounding factors are tending to reduce the critical importance of coal production as an element of security in our national fuel picture. Imported oil, it is true, has been getting substantially more expensive and that tendency may well continue, but large reserves of oil have been found round our own shores and the outlook for these secure sources of highly competitive fuel is suddenly looking rather bright.
Gas, too, has been found in substantial quantities and coal-gas is becoming rapidly a thing of the past. Nuclear power, after the inevitable uncertainties of the early days of a revolutionary new process, will now be settling down to sustained and ever more economic power generation. [Interruption.] It will. Hon. Gentlemen opposite may laugh, but they had to be concerned with this issue when they were in office. They therefore know that I am right. This process is settling down to a sustained improvement in performance.
Mr. Alex Eadie (Midlothian)
The right hon. Gentleman sought to praise the miners, but now he is seeking to threaten them.
Mr. Davies
No, I am not.
Mr. Eadie
The right hon. Gentleman is. Can he produce evidence to show that there is an abundance of cheap oil or that nuclear power is not escalating in price, apart from being obsessed with technical difficulties?
Mr. Davies
I assure the hon. Gentleman that I am not in any way threatening the miners. I am simply seeking to establish the realities facing the industry. As for access to oil supplies, the hon. Gentleman will, bearing in mind the area from which he comes, not have failed to note the intention expressed by the B.P. Company not long ago relating to a very large resource of oil in the North Sea. That will be exploited as from now on at a high cost, and this will be available—[Interruption.]—at a very reasonable price.
On the issue of nuclear generation, has not the hon. Gentleman realised that even at present Magnox reactors are able to produce electricity at a price well within supplies available from traditional fuels?
Mr. Eadie
What about A.G.R.?
Mr. Davies
I am referring to the Magnox reactor. The hon. Gentleman must be aware that it is producing economically. In these circumstances the future of coal depends on its ability to regain its productivity record of the ‘sixties and, above all, not to allow self-inflicted wounds to undermine its prospects for the future. It is for this reason that a crippling strike arising at this juncture is a cause of concern not just for the immediate difficulties and hardships it may occasion but for the irremediable damage it may do to all that has been so patiently and constructively achieved by a decade of harmony and collaboration.
To the material losses there is also a risk of adding a legacy of bitterness from the strike itself—and this will increase the longer the strike endures—which will prove to be an obstacle to the resumption of the collaboration which is so essential if a renewal of productivity gain is to be achieved in the future, with all its immense importance for the competitiveness and resilience of the industry. Already we have seen signs of those actions which engender bitterness and leave an after-taste of sourness and distrust.
When, for instance, I read of refusals to comply with the union’s own advice on the maintenance of safety measures, I am deeply distressed, not only by the immediate incident, but by its deeper and more enduring effect on the resumption of the joint endeavours that are so much needed for the future.
Mr. Dennis Skinner (Bolsover)
On this question of safety—
Mr. Davies
In speaking of safety measures I would wish to acknowledge the remarkable and untiring efforts of management, staff and officials in keeping the pits in working order at the present time. They are putting in long hours in an arduous and difficult task, and the capacity of the industry to get back again into production will in due course owe a great debt of gratitude to them.
Mr. Skinner
There has been a lot of clap-trap about so-called safety measures. In my opinion what the Board is really concerned about—and perhaps the Minister will be able to say whether this is true—is that there is £100 million worth of equipment down the pits belonging to the Board and private interests. The difference between 1926 and now is that instead of the equipment down the pits belonging to the men, it belongs to some other people. It is not really a question of safety. What the Board is really asking miners to do is to move the chocks along. It has nothing to do with safety. The object is to safeguard the money of private interests.
Mr. Speaker
Frequently there are complaints about the length of Front Bench speeches. It is interventions which frequently make them longer.
Mr. Davies
The plant to which the hon. Gentleman has referred in the pits is at the basis of the future of the industry, and the work that is involved in safeguarding it is important not just from the point of not suffering an unreasonable degree of waste, but also from the point of ensuring that there is continuing activity within the pits for the men to return to.
With so much at stake, it is necessary to realise fully the events which have brought the industry to this unhappy pass. The union’s claim was presented in mid-September, and called for very large increases in pay ranging up to £9 a week which, if accorded, would have added about one-third to the Board’s wages bill, and would have added about 15 per cent. to existing price levels. Negotiations went on into mid-October, with the board advancing its offers from £1·60 a week for all, to £1·80 a week for the lowest paid surface workers, and £1·75 for other workers. That was rejected by the union which, on 21st October, withdrew from all consultative machinery, called for an overtime ban from 1st November, and in accordance with its rules instituted a ballot of its members with a view to calling a national strike.
That ballot commenced a month later, and on 2nd December the result was announced which gave the executive discretion to call a national strike by a vote of 58·8 per cent. in favour, a proportion which, in parenthesis, I should point out would not have been sufficient before July of last year to give such discretion—[Interruption.] In the intervening period a resolution was passed to reduce the requisite number in favour from 65 per cent. to 55 per cent.
Throughout the remainder of December and early January further efforts were made by the Board to find a formula acceptable to the union, but it failed. Almost on the very eve of the strike the Chairman of the National Coal Board made a last-minute attempt to reach a settlement and met the full executive of the N.U.M. at its headquarters. At that meeting every effort was made to avert the strike which was clearly in nobody’s interest. The Board advanced its offer still further to £2 a week for the lower paid and £1·90 for the others, together with an additional 5 days holidays, and including a special productivity arrangement.
It should be noted that the last offer was never the subject of a ballot, and it is at least open to question whether, with the narrow majority giving the executive discretion to call a strike at the lower level, there would still have been the requisite majority not merely to give discretion but actually to implement a strike at the higher. [HON. MEMBERS:” Rubbish.”] I say that it is at least open to question.
In the face of the rejection of its latest offer and the firm intention of the union’s executive to proceed with the strike, as notified, on 9th January the Board withdrew its offer on the grounds that the financial situation of the Board must inevitably be damaged by the strike, that it could not expect therefore to be in a position to sustain the latest offer from such a worsened position, and that when the parties resumed their contact—as they inevitably must—the situation would have to be approached in the new conditions which would then be prevailing.
The Board estimated that its latest offer amounted to slightly less than 8 per cent. of its wages bill, and that was equivalent to pre-empting a 2 cwt.—almost 5 per cent.—increase in productivity. Before the final rupture came the Board on 5th January proposed to submit the dispute to the National Reference Tribunal, but the N.U.M. would not agree. A similar plea by the Board last week was again rejected. However, I understand that earlier today the T.U.C. approached both sides in an endeavour to bring them together and that the N.C.B. and the N.U.M. have now agreed to take part in a meeting tomorrow. I hope that that initiative will lead to useful results. There was a murmur, why did we not do something? I recall to hon. Gentlemen opposite that my right hon. Friend said earlier at Question Time that an endeavour was made but it was refused by the N.U.M. A few facts are worth establishing about pay levels in the industry.
First, the nearly 8 per cent. final offer of the Board, on top of last year’s 12 per cent. gives an overall increase materially in excess of the movement of living costs over the period involved. Second, the cost of the final offer would have been about £31 million, and that has to be set against an accumulated deficit of £34 million, a break-even in 1970–71, and a hoped-for surplus in 1971–72 already undermined by the overtime ban.
Within the increase the lowest paid workers would have had an 11 per cent. advance to add to the 20 per cent. they received in November 1970. Most face workers would have been on £31·90 had the final offer been accepted, thus exceeding substantially the parity of £30 already attained under the National Power Loading agreement, and involving for about 69,000 workers increases of up to £2.77½ per week, to which the £1.90 of the offer would have been added. The T.U.C.’s target of a £20 minimum wage would have been attained for the industry, lifting mineworkers in this respect from sixteenth to sixth place in the league table of minimum rates and placing them on the same level as dockers.
I have seen and heard references in the Press and elsewhere to cases of individuals taking home as little as £13. The Board has circulated to Members information which shows how misleading those reports are. When cases have been investigated it has often been found that deductions for rent and National Savings were comprised within the figures to arrive at the figure for take-home pay.[HON. MEMBERS: “Rubbish.”] It is absolutely exact. I need not repeat what the House will already have read, but it is worth stressing that the take-home pay of an adult married face worker with no children would have been just under £24 had this offer been accepted.
Mr. Bob Brown (Newcastle-upon-Tyne, West)
Can the right hon. Gentleman deny that there are miners with families qualifying for the Family Income Supplement?
Mr. Davies
I am not able to deny it, but that is because I do not have those facts before me. I will readily and willingly look into that question.
The Board has worked out—[Interruption.] Hon. Members opposite ask for facts. I am seeking simply to state the facts. The Board has worked out that average adult earnings for the week ending 9th October, 1971, were in excess of £30, including allowances in kind amounting to some £2.
Mr. Peter Hardy (Rother Valley)
The right hon. Gentleman has given figures for October. Will he now give figures for a period in November or December when the overtime ban was operating? The wages in the period he has quoted resulted from miners working many hours of overtime.
Mr. Davies
That is all entirely irrelevant to the question of the real pay in the industry. The industry is working to a certain pattern of overtime the suppression of which has caused the industry grievous damage, as I have already said. The fact is that the average earnings in October, when normal working was being pursued, was at this substantial level.
It has been suggested that the Government should step in and by some means compensate the Board to enable it to make a higher settlement than its own financial position and prospects make possible. However, against the facts I have mentioned about the offer and the level of pay in the industry, such a step would have been manifestly irresponsible. The final offer compares favourably with many recent settlements in both public and private sectors, and to subsidise an increase in it would be flying in the face of all the efforts that the Government are making to contain inflation and reduce the damaging rise in prices. [Interruption.] Hon. Members opposite are never hesitant about demanding the containment of prices, yet they are never prepared to meet the requirements for doing so. The efforts that the Government are making have had, and are continuing to have, a considerable measure of success.
Sir Gerald Nabarro (Worcestershire, South)
Will my right hon. Friend make it perfectly clear that, if the miners’ wage demand were conceded in full, it would lead to a very large increase in the retail price of coal, all of which would render the product entirely uncompetitive and cause a large part of the existing market for coal to disappear?
Mr. Davies
I have said that the effect of acceding to the total proposal of the National Union of Mineworkers would have been to increase coal prices by 15 per cent. which, as my hon. Friend rightly says, would have put coal rightly out of the field of competition.
So here we are witnessing a damaging strike liable to cause great inconvenience, and even hardship, to the community and great damage to the industry itself.
Mr. Charles Loughlin (Gloucestershire, West)
Will the right hon. Gentleman give way?
Mr. Davies
No, I will not.
Mr. Loughlin
Then why did the right hon. Gentleman give way to the hon. Member for Worcestershire, South (Sir G. Nabarro)?
Mr. Speaker
Order.
Mr. Loughlin
Will the Secretary of State give way now?
Mr. Davies
No, I am not giving way.
Mr. Loughlin
As the right hon. Gentleman gave way to the hon. Member for Worcestershire, South, he should give way to someone on this side.
Mr. Speaker
Order.
Mr. Loughlin
On a point of order, Mr. Speaker—
Mr. Speaker
Order. I have already said that there is always a great deal of complaint about the length of Front Bench speeches. Continual interventions simply protract Front Bench speeches. I want to be able to call a large number of Opposition Members who wish to speak. I ask the hon. Member for Gloucestershire, West (Mr. Loughlin) not to protract the proceedings.
Mr. Loughlin
On a point of order, Mr. Speaker. I am very sorry that you should think that I am protracting the debate, or at any rate the right hon. Gentleman’s speech. However, if the right hon. Gentleman is prepared to give way to a very favourable intervention from one of his hon. Friends it is abject cowardice on the part of the right hon. Gentleman if he will not give way to what may be a not so favourable intervention.
Mr. Speaker
The hon. Gentleman is on a rather bad and unfair point, because the Secretary of State had already given way to two very hostile interventions.
Mr. Davies
I hate to disappoint the hon. Member for Gloucestershire, West (Mr. Loughlin) but, as you say, Mr. Speaker, I have given way on a number of occasions and not by any means always to amicable interventions either.
So here we are witnessing a damaging strike liable to cause great inconvenience, and even hardship, to the community and great damage to the industry itself, for causes which, on the statement of facts I have listed, do not seem to justify the action which has been taken. At present the impact on the community as a whole is slight and patchy. Stocks are reasonably high throughout the country, but there are bound to be difficulties for some firms and in some places. It would be some weeks before there begins to be real difficulty. The steel industry is likely to be among the first to be hit, with all the damaging effect that that will have on production, exports and employment.
My hon. Friend the Minister for Industry took immediate action to enjoin economy on distributors and fuel users alike the day after the strike started. In case further measures had to be taken, the Government are keeping the situation continually under review.
I earnestly hope, however, that matters will not deteriorate in such a way as to make further action necessary. The very future of the industry and of the employment it provides is at stake. It would be tragic if, with the prospect of a better future for coal in view, irreparable damage were now done, with all the unhappy consequences—industrial, personal and social—that would inescapably ensue.
