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Lord Tebbit: My Lords, the problem with binding arbitration is that if one side does not accept it, it is not binding. You then have to have some further sanction against them—and that is a road down which I would not wish to go.

Lord McNally: My Lords, the noble Lord speaks from experience—experience from which, as he pointed out, the Government have not been hasty to reverse.

It has been demonstrated by the debate that there is an agenda to be discussed. If we can encourage a genuine debate we may be able to head off the solution

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of the militant quick fix and restore the confidence of our public services and our public servants in the deal that they are given by the community at large.

Lord Campbell of Alloway: Before the noble Lord sits down, I go along totally with his concept that there must be mandatory arbitration. That is not something that ought to be discarded.

Lord McNally: My Lords, I certainly do not discard it. I shall be very interested to hear how the Minister's argument develops on this issue. I remember that during the 1980s there were all kinds of pendulum and other arbitration.

The public want to see that the Government are aware that the storm clouds are gathering and that they are not just waiting for the storm to break. They want to see that they are thinking constructively about how we can build a system of industrial relations within our public services which gives the freedom of trade unions but also recognises the rights of the wider community.

8.24 p.m.

The Earl of Northesk: My Lords, I congratulate my noble friend Lord Campbell on initiating the debate and thank him for giving us the chance to explore this matter today. It opens up a further and hugely important strand of the ongoing debate about the state of public services, defined recently by Bruce Anderson in the Independent as,

    "the greatest paradox in modern British politics . . . They spend vast sums of the public's money, yet few of the public feel well served".

The fact is that this stands at the very top of the domestic political agenda—notwithstanding hunting or anything odd like that. Indeed, as we all know, public service reform is the platform upon which the Government came into office. The Labour Party manifesto states:

    "Renewal of our public services is at the centre of new Labour's manifesto".

Against this background and for the avoidance of doubt, I should make one point abundantly clear at the outset. For our part, we on these Benches believe strongly in the ideals of the NHS and other public services. We are wholly and wholeheartedly committed to them. The public have a right to no less. But, under the current Government, we are lurching ever further away from these ideals. It is evident that over the past five years taxes have gone up and public services have become worse.

That is why my noble friend's debate today is so timely and so valuable. It acknowledges not only that the cycle of decline in public service delivery needs to be addressed urgently but also that its context, the social and political climate in which it finds itself, has changed out of all recognition in recent times. It is this upon which I wish to focus in my remarks.

A measure of this is to be found in an interesting, even refreshing, document published recently by the Government. I am sure the Minister will recall the

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reply that he gave last month to a Question for Written Answer from his noble friend Lord Tomlinson seeking an outline of the Government's strategy for reform of the public services. The noble Lord's reply referred to the pamphlet, Reforming our Public Services: Principles into Practice, published by the Prime Minister. That document states on page 8:

    "Public services ... have to be refocused around the needs of the patients, the pupils, the passengers and the general public rather than the problems of those who provide the services".

Hooray to that. On page 11 it suggests:

    "The starting point must be that the public has a right to good quality education, to healthcare, to law and order, to local authority services, to income support, and that it is the duty of the Government to secure these rights on their behalf".

Again, hooray—although I express surprise that there is no mention here of a right to, for example, efficient public transport. Moreover, I also express surprise that this is in stark contrast with the Chancellor's obsessive attachment to statist models of public service delivery.

None the less, the relevance of these statements to my noble friend's proposition is profound. As I said, in recent times there has been a sea change both in the public's perception of and policy attitudes towards the public services. As the pamphlet states:

    "Rising living standards, a more diverse society and a steadily stronger consumer culture have increased the demand for good quality schools, hospitals and other public services, and at the same time brought expectations of greater choice, responsiveness, accessibility and flexibility".

So we have to be drawn to the inevitable conclusion that it is the Government's wish to deliver customer-focused public services as a direct response to public demand, if not, as it were, an inalienable public right. This is the internal logic of the text of the pamphlet.

But, as the Prime Minister's observations about the "dark forces of conservatism", "the scars on his back" and "wreckers" indicate, there is many a slip twixt cup and lip. It is all very well having the best of intentions but these are utterly worthless if they are not translated into reality. As I said, the reality that the long-suffering public have to live with on a daily basis is that services are deteriorating. On top of this, Gordon Brown is dipping ever deeper into people's pockets, demanding that they pay for the Government's failures in public service delivery.

This is the stark legacy of the current Government after five years in office. As Peter Riddell observed earlier this week in The Times:

    "The Government needs not just to extend patient choice (often limited in practice) but to make a reality of its rhetoric that the system is run in the interests of patients rather than NHS staff"—

a remark that could equally well be applied to other public services such as those that are the focus of my noble friend's attention—the transport, post and telecommunication sectors.

As my noble friend Lord Campbell has outlined, these sectors have seen a rising tide of union militancy in recent times. Strike action within Consignia is a running sore accounting for more than half of all the strikes in Britain. As the travelling public know only

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too well, disruption on the railways has risen over the past few months. The trend line of public service disruption is upwards. But the essential point is that such actions cut across the grain of the Government's aims as stated in the Prime Minister's pamphlet. And yet, as my noble friend Lord Tebbit has illustrated, they are also, at least in part, a direct result of the Government's policies.

It is impossible to say which strand of policy the Government have faith in, to which they are wholly committed. But if the Prime Minister's pamphlet is to be more than just soothing rhetoric, we could presume that the Government are not averse to some sort of measure to constrain the rights of public service workers to take industrial action.

In a nutshell, my noble friend is suggesting a method by which that could be achieved. If I may paraphrase his proposal—I hope accurately—the right to strike of those in the public services in the transport, post and telecommunications sectors should be made subject to adjudication of the High Court as to whether the industrial action envisaged would be excessive or disproportionate as the means to resolve the dispute. For example, there may be a legitimate question to be asked; namely, whether the recent strikes by security workers at Manchester airport can, in the wake of the events of 11th September, be deemed proportionate. It is worth remembering that these strikes have taken place against the background of a serious security breach on 8th February, when fake explosives, detonators and genuine firearms were taken on board a British Airways flight to Gatwick. That begs the question as to whether strike action—whether or not by public service workers—can ever be proportionate if it exposes the public to that level of risk?

The Government maintain that public services should be,

    "shaped around the needs of their customers".

In other words, they are increasingly seen to be a legitimate right of the public. Accordingly, it is reasonable to argue that a building-block in securing the climate in which to achieve appropriate reform to this end should be to define in law the relationship between the workforces of the public services concerned and the customers who use them. In this way, the virtue of the Government's stated aim that public services should be made to work more effectively and efficiently to the benefit of their users would be cemented. It would shift the balance away from vested internal interests to the needs of the individual customer.

Here, we should be mindful of a further change in the context in which public services now operate; namely, the Human Rights Act, referred to also by my noble friend Lord Tebbit. If we are to accept, as the Government maintain, that the public have a right to essential services in the transport, post and telecommunications sectors, it is logical that such a right should not be withdrawn "disproportionately" as a result of industrial action. Moreover, if access to services is to be conceived as rights-based, there is logic to the presumption that rulings as to whether

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disruption to them is disproportionate or excessive should fall under the jurisdiction of the High Court. None the less, my noble friend Lord Tebbit—I bow, as I must, to his expertise in this area—makes a further powerful point. As he suggests, we can speculate as to whether the rights-based culture that has necessarily arisen as a result of the Human Rights Act has made it easier for trade unions to resort to industrial action. Nor should the effect of the Government's blithe acceptance of directives from Europe be under-estimated. There is a real sense in which the Government's stated aim is to some degree being undermined by their policy approach in these areas. In reality, as my noble friend Lord Tebbit so astutely points out, there is also the difficulty of potentially creating two classes of workforce.

Viewed realistically, there is no reason why people should not have access to proper delivery of all services, irrespective of whether they are public or private. Indeed, this gets to the heart of the matter. Should not people have access to the same standards of service from the public sector—and by implication a relative freedom from the inconvenience and hardship of disruption—as they have come to experience from the private sector.

Be that as it may, like my noble friend Lord Campbell and the noble Lord, Lord Lea, I acknowledge the antecedents of the proposal. The Green Paper, Industrial Action and Trade Unions, published in 1996 by my noble friend Lord Lang when he was President of the Board of Trade, postulated various options for change in this area. Drawing from their thrust, my noble friend has drafted but one solution to the problem in his Bill, which we shall no doubt debate in due course.

As I say, the important point is that the context and the public perception of public services have changed markedly over the past five or so years. I merely note in passing that, as cited in the Green Paper, most other countries have provisions in law to restrict strikes in essential services. Recent and increasing experience of hardship and inconvenience by the public in the transport, post and telecommunications sectors implies that there is a burgeoning problem in these services, as the noble Lord, Lord McNally, pointed out. And of course the problem is exacerbated both by the Government's consistent failure to address the problem of public service delivery adequately and the increasing levels of disruption to which the public are being exposed.

I conclude by returning to the theme enumerated by Peter Riddell earlier this week in The Times. Again, his remarks apply equally to the transport, post and telecommunications sectors as to the NHS. He said:

    "The NHS can also be made more consumer-friendly . . . That is the heart of the Government's political dilemma. Its emphasis so far has been primarily managerial, on changes such as the new primary care trusts. But this means little to most patients".

I make no judgment as to whether the proposition of my noble friend Lord Campbell, or something like it, would be an appropriate step to take towards establishing more "consumer-friendly" public services. But, as I have tried to explain, the context of the

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problem makes its resolution a matter of urgency. As the Government know only too well—and wholly justifiably—the public's patience is wearing decidedly thin.

So what is really at issue here is whether the Government have the courage of their own convictions—or rather, whether the Prime Minister's or the Chancellor's policy approach is about to hold sway. Will the Government translate the Prime Minister's Office of Public Services Reform pamphlet into reality? Or is the country to be condemned by Gordon Brown to paying through the nose in taxes for ever worse services? On the evidence of yesterday's Budget, I fear that under the current administration the vision of "consumer-friendly" public services is no more than pie in the sky.

8.37 p.m.

The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, I am conscious of the time that I have to address the issues raised by the noble Lord, Lord Campbell of Alloway. He was listened to with great respect, given the way in which he has specialised in industrial relations over the years, and also for the measured way in which he advanced his arguments. I shall not attempt, as he suggests, to pre-empt debate on the details of his Public Services (Disruption) Bill. I merely mention it in passing.

Let us take the issue of strikes first and our approach to the public sector. It is our hope, as I am sure it has been of previous governments, to move forward in partnership with public sector workers—with doctors, nurses, teachers, and the police. We want reform in the public sector; and they tell us that they, too, want reform. We believe that the way to better services is to try to enlist everyone in the pursuit of excellence and to try to move forward in consensus, backed by increased investment.

We have heard a list of the industrial relations problems that might be faced in the near future, but we should also welcome the end to the industrial action in Jobcentre Plus, where there were difficulties over claims regarding staff safety at work in benefit agencies. I hope that those will be resolved in the very near future through patient negotiation. Last week, we heard my noble friend Lord Mackenzie talking about the fears of police officers over their new contracts. He expressed the belief that it would be unthinkable for the police to strike. That view seems to be shared by the great majority of his former colleagues. Progress is being made on the issues in the police dispute through the Police Negotiating Board, and precedent suggests that consensus will be reached. I also welcome the recent decision by head teachers to co-operate with the proposed extension of performance-related pay for teachers.

The noble Lord, Lord Campbell, mentioned statistics, and the noble Earl, Lord Northesk, talked about trend lines, but I think we should look at the comparisons to see how well we have done in recent times compared with the darker days of the 1970s

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mentioned by the noble Lord, Lord McNally, and the troubled times of the 1980s experienced by the noble Lord, Lord Tebbit. The comparisons show that, whereas 1.3 million working days were lost in labour disputes in 1996, in the 12 months to December 2001, the number was reduced to fewer than half a million days lost. Also consider that figure in the context of the 1980s, when an average of 7.2 million days were lost annually in strikes. In contrast, in 1999, only 242,000 working days were lost, the lowest since records began.

The noble Lord, Lord Tebbit, gave a very interesting résumé of his thinking in the 1980s. Although many would think that his cautious approach was uncharacteristic, I thought it was very convincing—although I shall never be convinced by a description of him as "holistic". He rightly drew attention to the problems which could arise in matters such as binding arbitration and the judgments made in trying to define disproportionate action.

As a former trade union shop steward, my mind goes back to some of the lessons we were taught in those days. One of the most striking examples occurred in 1941, when the noble Lord, Lord Campbell, was himself in Colditz. Although it seems almost unimaginable now, there was a very serious strike in the coal mines in 1941, when 4,000 men were idle and an attempt was made to use the law against them. In those terrible times, simply because of the nature of these disputes and the facts of human nature, we ended up with bands marching at the head of striking miners and union officials being put in prison. The officials were rapidly released by the government, who realised that it was all going wrong, but there was an attempt to find enough magistrates to issue warrants against thousands of miners. It was soon realised that they could not put them all in gaol. Ultimately, of the 1,000 men involved, nine unfortunates had to pay their fine and did not receive their money back.

After all that chaos, there was a happy ending when the miners returned to work and coal output trebled. The incident has served ever since as a caution to Ministers and employers to ensure that action is proportionate.

As the noble Lord, Lord McNally, said, the Labour government of the 1970s also suffered. We remember the farce of the dockers being put into Pentonville prison, only to be sprung very rapidly under the government of Ted Heath and with the intervention of the Official Solicitor once it was realised that the situation could get out of hand. We also remember the 1941 Betteshanger disputes in Kent and the 1970s London dockers disputes.

In the recent fuel protests, when serving as Minister of Transport, I realised that it can be very difficult indeed to take legal action against some activities. Although we have emergency powers legislation which has been invoked perhaps a dozen times, it is not something to which one turns lightly. We rely on the good sense of British workers when they see the

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precipice looming in many such cases. It is to the trade unions' credit that strike levels have been so low in recent times.

As I said, I do not want to tread too far into the territory covered in the Bill promoted by the noble Lord, Lord Campbell. However, as my noble friend Lord Lea said, the 1996 Green Paper attempted to introduce certain proposals which were judged ultimately as much by the public as the trade union movement as confused, unworkable and likely to introduce uncertainty to industrial relations. I believe that even the Institute of Directors was very concerned about the implications of those proposals. It was also judged very difficult to achieve a workable test of proportionality.

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