INDUSTRIAL DEMOCRACY

(WHITE PAPER)

The Prime Minister (Mr. James Callaghan)

With permission, Mr. Speaker, I wish to make a statement on the White Paper on Industrial Democracy to be presented to Parliament this afternoon. Copies of the White Paper are in the Vote Office.

The Government have now completed wide-ranging consultations on the report of Lord Bullock's Committee of Inquiry. It has not been possible to reach agreement between those principally concerned and the Government accordingly submit their own proposals.

The basis of the White Paper is that employees at every level in companies and nationalised industries like their counterparts in some other advanced industrial countries, should have a real share in the decisions within their enterprise which affect their working lives. The objective is positive partnership rather than defensive coexistence. This shared responsibility should bring improved industrial relations and increase the efficiency of British industry.

The Government's intention is that this objective should be secured, wherever possible, by voluntary agreement between employers and representatives of employees. It is not the purpose to impose a standard pattern of participation on industry by law. Employers and employees will be encouraged to devise [column 1336]arrangements best suited to their own circumstances.

However, where agreement proves impossible, employees will be able to claim certain statutory rights and the Government will introduce legislation to that end.

The White Paper proposes that employees in companies employing 500 or more people in the United Kingdom should have a statutory right to have all major proposals of the company affecting them discussed with their representatives before decisions are taken. These discussions would include such matters as investment plans, mergers, takeovers, expansion or contraction of establishments and major organisational changes. This right should be vested in a joint representation committee. The committee would be composed of representatives of trade unions who are employees of the company and discussions will take place with this committee.

The Government's consultations show that in some cases arrangements on these lines will be as far as employees will wish to go in taking part in the affairs of the enterprise.

But in many cases there will be a wish to go further and for representatives of employees to be appointed to company boards. If this cannot be achieved by voluntary agreement, the Government propose that employees in companies employing 2,000 or more people in the United Kingdom should be able, if they wish, to claim a statutory right to appoint, as a reasonable first step, up to one-third of the directors on the policy board of a new two-tier board structure. This right would be initiated by a request to the company from the joint representation committee and would be invoked after a ballot of all the company's employees to decide whether they wanted to be represented on the policy board.

Company law would be amended to provide for the option of a two-tier board system where the company prefers. Where there is agreement, the right to board representation can be on the existing unitary boards. The White Paper proposes that there should be a period of three or four years experience from the date of establishment of the joint representation committee before this statutory right comes into operation. The introduction of industrial democracy will be [column 1337]a developing process and the Government do not exclude parity of representation as an ultimate outcome.

The Government are convinced that trade unionists have an essential role to play in industrial democracy. But the White Paper recognises that the responsibilities to be given to trade unions for the appointment of employee representatives on the boards will need further discussion. The Government will reach a decision on this matter after further consultations.

The Government will continue to encourage the development of industrial democracy at all levels in the nationalised industries. Chairmen of nationalised industries have been asked to consult unions and to put forward proposals by August 1978. When legislation is introduced, it will give employees in nationalised industries the right to representation on boards, where it is desired.

In the public service, accountability of Ministers to Parliament and Parliament to the electorate must not be eroded. Similar considerations apply in local government. But, subject to this principle and the need to safeguard the interests of the community as a whole, the Government want employees and their representatives in the public services to be given all possible opportunities to contribute their views on matters affecting their legitimate interests.

The Bullock Committee proposed the establishment of an industrial democracy commission to provide advice on the implementation of industrial democracy. The Government are disposed to accept this recommendation, but are ready to consult further about it.

The direct involvement in overall company policies will require employee representatives to have a knowledge of business, finance, management and other subjects. Training for board members in these matters will be essential. No doubt much will be undertaken within the organisation itself, but it is also proposed that training should take place in residential or non-residential colleges and other institutions. Public finance will be needed to assist this.

The Government believe that these proposals will enable employees and managements to achieve real co-operation by [column 1338]sharing responsibility for the future prosperity of the companies in which they work. Both our economy and our democracy can benefit greatly. The Government will continue to consult widely so as to achieve the greatest possible agreement on the legislation that will be laid before the House.

Mrs. Thatcher

First, I thank James Callaghanthe Prime Minister for his courtesy in letting me have an advance copy of the White Paper this morning.

Is he aware that the Opposition welcome proposals which will lead to greater involvement by the whole work force and note that these proposals seem to be very different from the Bullock version, and rightly so?

I should like to put four questions to the Prime Minister. First, will all employees, whether trade union members or not, have an equal chance to participate in the processes of consultation? Secondly, will independent unions not affiliated to the TUC be equally treated with those which are? Thirdly, will it be right to assume that any statutory rights to be created will apply equally to the whole work force, or will there be discrimination against those who are not members of unions?

Finally, what provision will be made to cover the special and vital role of those employees in junior and middle management? The Prime Minister will be aware that a number of them have felt demoralised because they are not involved as much as they might be. He will note that in the German scheme they are not bypassed. There is a special place for them. What special provision will be made for junior and middle management in participation?

The Prime Minister

The right hon. Lady is basically concerned with employees who are not members of trade unions. I shall seek to deal with those questions, because this has been a difficult matter. It is our intention and desire that all employees should take part is any ballot to decide whether the scheme for electing directors should take place in other words, whether the scheme should be initiated. That seems important. It is also important that worker director and, indeed, the joint representation committees should be drawn from employee of the company. [column 1339]

I come now to the particular points made by the right hon. Lady. First, all employees can be involved in consultation. Whether the joint representation committee will include them will be a matter for discussion, because clearly the statute will not be able to cover that aspect. [Hon. Members: “Why not?” ] I shall explain that in detail when the legislation comes along. But there will be nothing to prevent the company from setting up parallel discussions with employees who are not members of trade unions if they are unable to get agreement through the joint representation committees. That seems to be the best way of achieving that result.

It is certainly not intended that unions not affiliated to the Trades Union Congress should be excluded from the joint representation committees.

As regards statutory rights, the system of parallel representation can apply. I think that it will have to be parallel representation. Otherwise, we may never get it going.

Finally, there must be further discussion about junior and middle management. There are a number of issues on which we need to have further discussion, because clearly they have as much concern about the future welfare of the companies in which they work as anyone else. To that extent, we should like to see provision made for them.

In conclusion—it is not in conclusion; I hope that it is the start of a long and important debate that could have a profound effect on the efficiency of British industry—one thing which we must have, of which I have been very conscious, is our own system of industrial organisation through trade unions. It is not like that of the Germans or of other countries. Therefore, although we want to make the trade unions in the companies the prior means of consultation and discussion, we do not want to exclude, and certainly no legislation would exclude, employees outside the trade unions. The legislation would have to be framed accordingly.

Mr. David Steel

I also give a general welcome to the White Paper, which at least advances the discussion on industrial democracy beyond the narrow confines of the Bullock recommendations and involves much greater flexibility. [column 1340]

Is the Prime Minister aware that the Liberal Party's main criticism will centre on the fact that the interests of non-union members are not sufficiently safe-guarded in the proposed composition of the joint representation committees?

I should like to ask a specific question about the nationalised industries. The Post Office is cited in the White Paper. But the phrasing does not make it clear that employees representation in the nationalised industries would be by election and that consumer interests would have a statutory right to representation, as we advocated for the Post Office.

The Prime Minister

Some of the nationalised industries will want to exercise any rights which are secured under the legislation. Others up to the present moment will not. For example, that is true of the electrical industry and of the National Union of Mineworkers. Therefore, these proposals will not require people to take part, but it will give them the statutory right to do so.

This legislation is concerned with the rights of employees, not consumers. That matter will have to be taken into account separately.

Mr. Heffer

Will my right hon. Friend assure the House that these proposals will not necessarily be carried out by a future Labour Government, because they are a pale shadow of the proposals made by the Labour Party and even by the Bullock Committee? Will he clearly indicate that, while the proposals may be a basis for discussion, some Labour Members want a system of genuine industrial democracy in which workers have a real say in their industries on the basis of elected representatives to the highest boards of those industries?

The Prime Minister

I know that is my hon. Friend's view. I hope that a future Labour Government will legislate along these lines, because I want to make progress and not see everybody retreating into his trenches. We can have a long fight over this issue for the next decade, a fight in which the directors will go mad and the trade unionists will say “We are having nothing to do with it.” Nothing will happen and we shall remain behind other industrial countries. I understand that I shall not please everybody, and I expect a whole volume of criticism. I am trying not only to carry the debate [column 1341]forward but to get something on the statute book which can be built on in due course as a result of experience.

There is no one view in the trade union movement or in the Labour movement about this matter. I am saying to the Labour movement, to the trade union movement, to company directors and companies that if we can carry through something like this it will mark a very useful beginning to industrial democracy. I beg my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) not to retreat into his trenches and have nothing to do with it.

Mr. Henderson

Is the Prime Minister aware that there will be some welcome for the increased flexibility in the proposals? But it seems that they are so flexible that one has difficulty in understanding what the Government are recommending. Does he accept that it would be a good start if the nationalised industries adopted some of the proposals fairly quickly and acted, as they should, as pace setters to private industry.

The Prime Minister

I am sure that the hon. Member will have no difficulty in understanding the proposals when he reads the White Paper. He will find them clear. It is certainly true that some issues are unresolved, because further discussion should take place.

I understand that the hon. Member probably did not take in all that I said in my statement. But I made it clear that nationalised industries have been asked to submit proposals by August this year so that we can carry forward with them, as we have already done with the Post Office. I am sure that that will satisfy the hon. Member.

Mr. Urwin

May I give my right hon. Friend the assurance that there will be a widespread welcome from this side of the House and from the trade union movement generally for the long-awaited publication of the White Paper? Does he understand that most of us are in difficulty since we have not had the privilege given to the Leader of the Opposition and to the Leader of the Liberal Party of seeing the document? It appears that there is to be a further extensive period of consultation with all interested bodies involved in the legislation. What time scale does the Prime Minister set on the [column 1342]legislative processes? When can we expect the Bill to be introduced and when will it become law?

The Prime Minister

I am obliged to my hon. Friend for what he has said. I recognise the difficulty of asking questions when a document has not been read. Perhaps hon. Members would like to read it first. But it is customary for me to afford White Papers to the Leader of the Opposition and to the Leader of the Liberal Party.

My hon. Friend asked about the next steps. I hope that now we have had the explosions on either side about Bullock there will be a period of serious discussion. The Cabinet thought that it was right that the Government should publish their own proposals. We are prepared to look at any suggestions for amendments. But I do not believe that discussion should continue indefinitely. We should get on with it. As far as I am concerned the period of discussion could last for some months. I should like to see legislation in the next Session of Parliament if it is possible to draft it.

Mr. Baker

Does the Prime Minister accept that many people on both sides of the House and both sides of industry who want to see a move towards codetermination will probably look upon this proposal for joint representation committees as the most effective vehicle for co-operation? The Prime Minister said that the joint representation committees would be composed of representatives of trade unions who were employees of the company. Can the Prime Minister confirm that employees who are not members of trade unions—since trade union members might be in a minority in a company—will not be excluded from serving on the joint representation committees?

The Prime Minister

I cannot give an utterly clear answer to that. It is a difficult matter, as hon. Members will discover when they become involved in negotiations for legislation. Our view is that where a joint representation committee is ready to accept homogeneous groups of non-organised workers they can, by agreement, become members of the joint representation committee which will be made up of trade union nominees. If that were not agreed—and I can think of companies in which it would not be agreed—it would be wrong to try to force this upon them. [column 1343]That would lead to no advance. The best thing would be for the company to consider whether it should set up parallel machinery for those who are not members of trade unions if they and the non-members of trade unions wish to do so. In other words, we are trying to provide an opportunity for the consultation to cover all the employees, but it will not necessarily do so in one place if there are a large number of non-unionists in a particular company.

Most of the large companies are heavily unionised. They are covered to a greater extent than smaller companies. Although this is a problem that might be discussed in the abstract there will be some practical difficulty. I believe that in the large majority of cases the problem will be settled by agreement. That is my hope.

Mr. John Evans

Does my right hon. Friend accept that industrial democracy can mean many different things to many different people? Does he accept that some of us are becoming a little disturbed at the emphasis of non-unionists by the Opposition? Does he accept that the pressure for industrial democracy came from trade unions not from non-unionists? Will he explain to the Opposition that if we were to consult non-unionists we should have to consult every single one of them because they do not have a collective body to represent them? Does my right hon. Friend accept that legislation can be introduced only through the trade union movement?

The Prime Minister

I accept that view. I have come to that view after a long study of the problem. I accept everything that my hon. Friend says. The best way forward is through the organised trade union movement. But we must take account of the Opposition's main concern, which is with non-trade unionists. We must try to take that into account and not rule out discussion on that subject. But I suggest to the Opposition that they should be concerned basically about how we get the system going among the great body of trade unions and their members. I am glad to know that that is agreed.

Mr. Maurice Macmillan

I fully accept what the Prime Minister says about the need to get the trade unions involved. I [column 1344]appreciate that there might be difficulties. May we have an assurance that in firms employing 500 people or more where the members of the committee are to be appointed by unions and where the committees are already operated within a pattern that has been agreed with both non-union and union members, the arrangements will not be disturbed simply to accommodate the particular form of industrial democracy that is set out in the White Paper? Does he agree that it would be wrong to disrupt forms of industrial democracy which have been operating for some years?

The Prime Minister

I can give that assurance. Many companies and unions are already moving along this line. I hope that the legislation will be drafted in such a way as not to interfere with any satisfactory arrangements which are already in operation and which are accepted by the company and the unions. To that extent the legislation will form an umbrella over what they are doing. They will have to satisfy certain criteria in the legislation. provided they do that, it is our strong hope that the legislation will encourage both companies and unions to adopt by agreement their own methods for securing these ends.

Mr. Brooke

Does the Prime Minister recognise that many people will be greatly relieved that the Government are not seeking to impose immediate inflexible regulations on companies? Will be encourage the greatest possible experimentation in the future so that we have institutions which suit us in Britain rather than those that operate in other lands which have a different history from ours.

The Prime Minister

The answer to the last part of the hon. Member's question is “Yes” . The British trade union movement is different from that in a number of other countries, such as Sweden and the Federal Republic of Germany, where this type of system has been in operation for a long time. Indeed, that has caused part of our difficulty and has been one of the reasons for the length of time that we have taken.

We shall not impose inflexible regulations, but there will be certain statutory obligations that must be fulfilled if the [column 1345]two sides cannot come to an agreement. That will be the basis of it. The essence of the proposal is agreement, but we shall not get ourselves into a position where companies can say “We are doing nothing and that is the end of it” . If that were to be the line, the trade unions would be able to invoke the procedures that could, in the end, go to ACAS, an industrial democracy commission or whatever form of organisation we thought right. Employers should not think that, by refusing to do anything, they can escape certain obligations. They will be laid down clearly in the statute.

Mr. Radice

Will my right hon. Friend agree that far from being inflexible and doctrinaire, the White Paper takes into account the legitimate interests of both workers and management and should therefore be warmly welcomed on both sides of industry? Would he also agree that the White Paper offers us an opportunity, which we should be foolish to throw away, of creating a new basis of industrial consent which would be of great value to this country, both economically and socially?

The Prime Minister

I agree with my hon. Friend. That is what has inspired our approach to this matter. For all the imprecations hurled at the Bullock Report, it made people wake up and think about this matter. They discovered that it was not possible for them to agree about the proposals. I am grateful to Lord Bullock and his committee because out of its report we have been able to synthesise a new approach which I believe will commend itself to a great many people—though I recognise that not all trade unions will wish to take advantage of it. They will wish to go their own way. That will be for them to decide because the automatic procedures will have to be initiated by the trade unions.

Mr. Viggers

Is the Prime Minister aware that company directors currently have an obligation to consider the interests of the members of the company and that this means shareholders only? Is he aware that this obligation is completely out of line with current practice and does he agree that legislation should be changed as soon as possible so that company directors also have an obligation to consider their duties to their employees?

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The Prime Minister

I am much obliged to the hon. Gentleman for what he has said. This is becoming industrial practice and it means that the Companies Acts, especially the 1948 Act, are getting out of date. That is why we propose, probably in the industrial democracy legislation itself, to include a reform of the Companies Acts legislation. We might need to have a separate Bill. I am not sure. We shall try to include it in the major legislation if possible.

Mr. Hoyle

I agree that there have been differences in the trade union movement, but can my right hon. Friend say how many trade unions are in favour of the two-tier board, which has been discredited by the German experiment? Is he aware that I hope that he will not take too much notice of the siren voices of the Opposition in relation to sweet-heart unions? Will he remind the Leader of the Opposition that there are white-collar unions that these people can join?

The Prime Minister

My hope, as a trade unionist of some 50 years' standing, is that people will join the trade union movement and make it what I believe it has always been—a movement that will contribute to the country as well as taking something out of the companies and employment in which trade unionists are concerned. I have always believed that trade unionism has a lot to offer. It was originally constituted as an idealistic movement, and that is something of which we on this side of the House should always be proud.

The trade union movement has swung from the two-tier system. It was originally in favour of it but is now officially against it. However, I do not regard that as necessarily the last word, because everyone's opinion on this matter has been developing throughout the last few years, and I would not be surprised to find that a number of trade unions preferred the two-tier board system. However, it will be for the company to decide whether it would prefer to have one-third of the directors on a unitary board or to establish a two-tier board with a management board and a supervisory board.

Mr. David Price

Will the employee directors appointed under the second leg of the Prime Minister's proposals share equal legal responsibility with all the [column 1347]other directors? I think that the Prime Minister recognises that this was one of the weakest points in the majority reports of the Bullock Committee, which suggested that trade union directors should be separate somehow in their responsibilities from the other directors on the board.

The Prime Minister

I see no way out of this problem except that trade union directors should share the same responsibilities, in full measure, with everybody else. It will therefore be for the unions concerned to decide whether they wish to assume this responsibility. If so, they can invoke the legislation that I hope Parliament will pass in due course.

Mr. James Lamond

Will my right hon. Friend bear in mind that for some of us, these modest proposals are only cosmetics on the unacceptable face of capitalism and are no long-term substitute for Socialism?

The Prime Minister

I shall be interested to have a longer discussion with my hon. Friend about this, but as long as the face of capitalism is with us—and I agree with him that it is changing over the years and has certainly changed substantially in my lifetime—we should make sure that people who devote their working lives to a company and whose capital—their working lives and skill—is put into a company, are properly regarded and have a proper share of the decisions when that company takes its own decisions.

Mr. Forman

Will there be a sizeable minimum percentage required in the ballots in companies employing more than 2,000 people before the schemes go ahead?

Mr. Henderson

A 40 per cent. requirement?

Mr. Forman

In regard to the socalled industrial democracy commission, does the Prime Minister accept that this may turn out to be another QUANGO and will merely add unnecessary administrative overheads to the structure?

The Prime Minister

I believe that the Bullock Committee said that this should be a 33⅓ per cent. ballot, but we have put no figure in the White Paper. This is a matter for further discussion and a [column 1348]subject on which I should be happy to consult those who wish to talk about it.

As regard the commission, we started off with the prospect that perhaps ACAS could do this job so that we could avoid setting up another commission, but ACAS has plenty to do and considerable responsibilities. I am not sure that it would be suitable for this purpose. We shall be ready to have discussions.

Having argued it out among ourselves, we think that it would be better to have a commission. It will have to take considerable responsibilities where there is disagreement on the joint representation committees about how the election or nomination of directors is to take place. It will have a job to do there and may also have responsibilities to undertake in connection with education, which I regard as very important in this connection. We should not dismiss the commission as a QUANGO. It will have a real job to do, wherever the responsibilities go.

Mr. Moonman

I welcome the White Paper, but will my right hon. Friend comment on one important omission relating to the type of structure in multinational companies and groups of companies? I recognise that there are obvious problems in the type of structure that other countries have had to deal with, but surely we should be moving toward some type of solution to this problem before me implement anything of his sort.

The Prime Minister

My hon. Friend has raised an important point that caused us a lot of concern. He will find that the matter is discussed in the White Paper. We have not reached a final conclusion on it, though he will find proposals for dealing with multinational companies. There are obvious difficulties that he can see, but perhaps when he and other hon. Members have read the White Paper, there will be a serious discussion about these matters so that we can reach an agreed solution if possible.

Mr. Channon

In very large companies with 2,000 or more employees, which have, perhaps, many employees here and abroad and several unions involved, how does the Prime Minister envisage that the statutory right to one-third of the number of directors will work? The process of appointing those directors could lead to considerable friction on the new board afterwards.

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The Prime Minister

I understand that. Again, I ask the hon. Gentleman to read what we say in the White Paper on this matter. I do not think that we have a final solution to that, and I should be happy to have proposals about it.

Mr. Skinner

Will my right hon. Friend accept that not only are there differing views inside the party on this matter but differing views in parts of the party? Will he accept that this set of proposals probably mirrors the avuncular image of himself and a few more like him inside the Cabinet, though not the views of too many of those inside the Parliamentary Labour Party? Will he acknowledge that as he moves from this rather timid, cautious first base, to the second and third bases, if that is found to be necessary, the best possible example that he could set would be to establish a policy board in this place so that we remove the patronage, and so that Labour Members actually elect their policy board instead of having my right hon. Friend the Prime Minister or someone like him hiring and firing all Ministers?

The Prime Minister

My hon. Friend has put forward his views in his characteristic way, but I say seriously to him——

Mr. Skinner

I am serious.

The Prime Minister

I know. I said that my hon. Friend put his views forward in his characteristic way. He is always serious, if idiosyncratic at times. I think that my hon. Friend will find when he studies this proposal that it is not timid or cautious. I believe that it gets the highest common factor possible, and I believe that it will carry us quite a considerable way forward. That is my genuine view about it. What will follow from it will be determined by experience.

On the second point of my hon. Friend's question concerning the election of people, I can only say to him that I went through, I think, four elections in order to be able to stand at the Dispatch Box this afternoon. That is how we elected a new leader of the Labour Party.

Mr. Rathbone

I welcome any step to improve management-worker relations, but will the Prime Minister accept that some people will be worried that works [column 1350]councils do not feature in his statement? I have not had a chance to read the White Paper, so I do not know whether works councils feature in it. Will the Prime Minister comment on the matter?

The Prime Minister

The White Paper contains no reference to works councils as such, but the White Paper makes clear that existing arrangements that are satisfactory to the employees and trade unions concerned will not be interfered with by this proposed legislation. Such bodies will be able to adapt to the legislation if they wish to do so. But if there is agreement with the existing works councils or any other form of representation that they already have, they may continue with it.

Dr. M.S. Miller

Is my right hon. Friend aware that there will be grave disappointment in some sections of the trade union and Labour movement with these milch cow proposals of Bullock? Is he aware, however, that it is also accepted that this subject raises a very difficult problem? Will he give an assurance that these proposals are merely the first tentative steps towards what we in the Labour movement are aiming at, which is for companies to be controlled to a very great extent by the people whose lives are involved in them? If he will give that assurance he will assuage the fears of many people.

The Prime Minister

These are obvious first steps because we are feeling our way in this matter. In Germany, for example, it took 25 years before the present state of industrial relations and industrial democracy was achieved. I do not know that it will take us 25 years, but I suggest to my hon. Friend that experience of doing something often changes one's view about how it should be done. I believe that when they start to practise industrial democracy in this form people may change their attitudes about what should be either their ultimate objective or the way in which they should achieve it.

But the Government would not rule out, any more than it has been ruled out in Germany, the ultimate objective of parity in these boards. I do not wish to start an argument about that, because if I do I shall frighten away a great many company directors who will look only at the question of parity and will not see that this process must move step by step. It [column 1351]must proceed first to the joint representation committees and then to one-third representation on the board of directors, which is looking five to six years ahead. After that it will be for the House of Commons and the Government of that time to say what they think the next steps should be. This is an evolutionary process, as it has happened in other countries.

Mr. Bulmer

Does the Prime Minister accept that the proposition that the corporate plan should be jointly discussed will give rise to difficult problems of confidentiality and flexibility, not least in the multinationals? How does the Prime Minister propose to tackle that? Does he not feel that there is a danger that the companies may become lumbered with a corporate plan in much the same way as his Government are with their manifesto?

The Prime Minister

I am glad to say that we are not lumbered with that. It has been carried through. On the hon. Gentleman's serious point, of course, corporate plans are confidential, but I hope that he was not attributing to employees of the company who are trade unionists any less responsibility than is felt by the directors of the company. If he was, I disagree with him. I think that the hon. Gentleman, with his experience of trade and industry, will have found, as I have certainly found with my slight experience of it as I go round the country talking to workers and trade unions in particular companies, that they are as concerned about the welfare and the future of their companies, and therefore about the confidentiality of information about their companies, as is any manager or director. If we approach the matter on that basis, I believe that, by agreement, employees in the company who are serving on the joint representation committees will be able to secure in complete confidence information that is available to the directors.

Mr. Norman Atkinson

Contrary to the view that my right hon. Friend has just expressed—that the proposals could possibly be an evolutionary process—will he acknowledge that while there are in the White Paper many progressive proposals which will undoubtedly contribute towards improved participatory methods in industry, there will be widespread disappointment throughout the Labour movement that in the disagree [column 1352]ment shown in the Cabinet, Ministers have turned away from the first principle of establishing a boardroom parity between capital and labour? Does he agree that this surely should be the uppermost policy in the Labour movement? Does my right hon. Friend recognise that it is towards the attainment of that principle that all of us who sit on the Labour side of the House are looking?

The Prime Minister

I am grateful to my hon. Friend for saying that there are progressive proposals in the White Paper. That is true. I do not know whether there will be widespread disappointment in the Labour movement about the failure to achieve boardroom parity. I wonder, for example, whether the union to which my hon. Friend belongs will share that disappointment. I have not heard that his union has been in the forefront of this matter. I say that not to cast stones at him, but to show that there is a real division of opinion on these matters. We are trying to make progress, and I believe that we shall do so.

Several Hon. Members

rose——

Mr. Speaker

Order. We have been discussing this matter for more than three quarters of an hour. I shall call two more hon. Members from each side, and then we must move on.

Mr. Brandon Rhys Williams

I congratulate the Prime Minister on breaking away from the attachment of the majority of the Bullock Committee to the traditional unitary board and making possible a move to two-tier boards. Does the Prime Minister agree that, in preparation for such a big reform, there are aspects of company law which require immediate attention, particularly in regard to the rights and responsibilities of executive and non-executive directors?

The Prime Minister

Yes, I think that in a two-tier board there would have to be a clear delineation of responsibilities between the supervisory board and the executive and management board if that system were adopted. That matter will need considerable discussion. I hope that those concerned in the Opposition, the CBI and elsewhere will now be willing to discuss these matters instead of just throwing them on one side, that they will recognise the determination that has gone [column 1353]into this matter and will come forward with proposals that will best make this scheme work. I shall be happy, with my right hon. Friends, to consider what is said.

Mr. Dalyell

I hark back to the proposals that have been requested from the chairmen of the nationalised industries by August this year. Is my right hon. Friend aware that in the Scottish gas industry there are deep-rooted problems of management and unions? Is the idea that these proposals should be put forward, for example, from the gas industry, to deal with deep-seated problems? Or is what my right hon. Friend said a general statement of principle as to what should be done? What is being asked for by August 1978?

The Prime Minister

Each individual nationalised industry has been asked to put forward its proposals and to state the attitude that would be taken both by the board and by the trade unions concerned. I am not, I fear, directly involved in the Scottish gas industry, and therefore I cannot answer my hon. Friend's particular question. But it would be for the gas industry to put forward its own proposals. If there are difficulties, they will have to be ironed out, if that can be done. But let no one underestimate the difficulties of getting joint representation committees working, of getting agreement on who should serve on them, or, as a next step, of getting agreement on how worker directors should be elected. All this will be very difficult, but I think that it is worth while trying, and if an effort is made to do it I shall be very happy.

Mr. Haselhurst

By what test has the Prime Minister satisfied himself that the proposals put forward in the White Paper are actively sought by workers on the shop floors of industry? Would it not have been better to keep the options wider?

The Prime Minister

I have no test to determine whether these proposals are genuinely being sought by workers in companies of the sort I have described. However, the hon. Gentleman's veiled criticism is met by the fact that it will be for the trade union representatives in a company to decide whether to invoke the procedures. If there is no interest, as he suggests, presumably they will not, [column 1354]therefore, invoke the procedures. If there is interest, they will invoke the procedures.

Mr. Newens

Does my right hon. Friend recognise that at present, and for many years past, the co-operative form of enterprise has usually permitted employees to be elected to the boards of societies? I entirely endorse any steps that are taken towards the democratisation of industry in general, but may I ask whether my right hon. Friend will ensure that the co-operative model is studied carefully in order that the intrinsic merits that it undoubtedly has are not lost in any changes that are introduced?

The Prime Minister

I know my hon. Friend's keen concern about the co-operative movement. I hope that the Cooperative Development Agency—I am very grateful to the House for agreeing to put through that Bill—will indeed have a part to play in all these matters of the development of democracy in industry. It is a counterpart to the democracy that we have in this country, and I should like to see that carried forward. Basically, however, I think that the system in British industry is almost certain to be built on the trade union rock, which is so strong in most of our large companies and on the boards of directors as they exist.

Mr. Michael Morris

On a point of order, Mr. Speaker. May we seek your guidance? In answer to a number of hon. Members, the Prime Minister has referred them to the White Paper. I think that hon. Members would feel that they could ask more poignant questions if they had the opportunity of reading the White Paper before questioning the Prime Minister. Could consideration be given to that matter in the future?

Mr. Speaker

The hon. Member will understand that although he has raised a point of order, it was not addressed to me.

Mr. Fairbairn

On a point of order, Mr. Speaker. I would not wish to make any criticism of the Chair, but in your selection of those who have been called to ask the Prime Minister questions, two Labour Members who represent Scottish seats were selected, and one Scottish National Party Member. I was the only Scottish Conservative Member who stood consistently, and none was called. I feel that this is unfortunate. This matter [column 1355]applies to us and is of as much interest to us as it is to the rest of the country.

Mr. Speaker

I understand the hon. and learned Member's feeling. He has drawn attention to one of the difficulties that I am constantly under in the Chair. It is not that I did not want to call a Scottish Conservative.

Dr. M. S. Miller

I did not know that the hon. and learned Member was a Scot.

Mr. Speaker

Order. The hon. and learned Member has made a fair point. I have tried to get a balance when calling hon. Members to speak. There are eight parties in the House these days. It is difficult. But I am sorry that there was not a Scottish Conservative Member called.