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ON THE RECORD
ADAIR TURNER AND JOHN MONKS INTERVIEW
RECORDED FROM TRANSMISSION BBC-1 DATE: 31.5.98
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JOHN HUMPHRYS: Britain's bosses have been opposed to a
minimum wage and to changes in trade union laws which give the unions back a
bit of what they lost during the Thatcher years. What the government wants is
a partnership between business and unions. But has it fallen into the trap of
trying to please everybody and ended up satisfying nobody? Well, the final
decisions haven't been taken yet. The minimum wage is only a recommendation and
the trade unions want more than the three pounds sixty on offer. And business
does not like the idea of giving workers more rights. Those cases are being
argued fiercely by Adair Turner, Director General of the CBI and John Monks,
General Secretary of the TUC.
Mr Monks, in your case a long way short
of what you wanted, that three pounds sixty isn't it?
JOHN MONKS: Quite a way short, yes. I mean we were
pitching for more than four pounds and we were also-
HUMPHRYS: Four sixty, in some cases.
MONKS: Well, certainly. I mean there was a long
standing commitment, both in the Labour leadership some time ago and in some
unions, for a particular formula which would have produced four pounds
sixty-one under a particular calculation. In the TUC we always thought that
that was at the top end of what we would ever achieve and we shot for just over
four pounds. So we're disappointed with three pounds sixty, but on the other
hand, we're very pleased to see a minimum wage in place and our main objective
is to make sure now that we can see a route over which it can be raised over
the years.
HUMPHRYS: But not a minimum wage for everybody.
Not for the very youngest workers and an even lower level than three pounds
sixty for those under the age of twenty-one.
MONKS: Yes, I mean we're concerned about that.
The-we always accepted that workers under training should get less than the
rate for the job. But many between eighteen and twenty-one will of course be
doing the full job. And it's going to be very difficult to explain, at a time
when many employers have moved away from any rate that just pays young people
less than older because they're young, it's going to be very difficult indeed
to justify that on the shop floor and on whatever floor it is. A lot of
workers are going to want the full rate.
HUMPHRYS: And now we see the Treasury wanting to
cut it back even further, indeed to have no minimum wage at all for under
twenty-fives, if we are to believe the reports coming out of the Treasury. And
somebody has been briefing.
MONKS: Well somebody has been briefing and
there seems to be some indications that some people in the Treasury are
unhappy, particularly about the three pounds twenty rate for the under
twenty-ones.
HUMPHRYS: You mean the Chancellor?
MONKS: Yeah, well, we hope very much that they
stick by the report that's coming out. I mean we haven't see the report yet.
It's not going to be published until June the eighth. It's four hundred pages
long, there's a lot of analysis, it's a serious piece of work and at the moment
we're just kicking around the headline figures. But we are very keen that even
though we don't like aspects of the report, that there is no cherry-picking;
picking and choosing by the government.
HUMPHRYS: And what if they do. What if they say:
well, we're going to scrap the minimum wage for under twenty-ones, under
twenty-fives, under twenty-sixes rather. What do you do then?
MONKS: Well, we certainly will campaign against
it.
HUMPHRYS: But I thought you were campaigning
against it anyway, against the three pounds sixty.
MONKS: We'll be campaigning for an improvement
as far as the three pounds sixty is concerned. We want to see a route sketched
out whereby we can move towards an elimination of poverty pay, three pounds
sixty isn't much. It's not the elimination of poverty pay.
HUMPHRYS: But you're prepared to accept it. You
are prepared to accept poverty pay.
MONKS: Well, it's not a matter-it's not a
collective agreement but our representatives on the Low Pay Commission have
done a good job and I'm confident-
HUMPHRYS: Well, if you've ended up with poverty
pay?
MONKS: They see the route to a decent pay level
coming in, raising the three sixty to three seventy, in the year 2000 and then
they see the continuation of the Commission to continue to look at the minimum
wage over the years ahead. That's a very important recommendation and I'm very
keen that the Government doesn't mess about with that.
HUMPHRYS: But you will fight hard any notion of
trimming it back more, abolishing it altogether for young people.
MONKS: Yes. I mean we think it's low now. The
three twenty actually does cover over twenty per cent of the age cohort, the
people in that particular range so it will have quite a big impact on wages in
that sector. We would have liked it higher, but we certainly find it very
difficult to contemplate it being lower.
HUMPHRYS: Mr Turner, you'd be glad if the Treasury
wins this particular battle?
ADAIR TURNER: Well, we certainly think that the issue
of the exemption or a lower rate for younger people is one of the ones that
ought to be looked at very carefully. We have not actually supported the idea
of blanket exemptions below the age of twenty-five and if you actually look at
the data, the real difference seems to be between people in sort of
eighteen, nineteen, twenty-one and people twenty-three, twenty-four. I think
it is vitally important that in setting this minimum wage, we don't do anything
which creates youth unemployment. If you look at the data from around the
world, the empirical evidence, a lot of it can be read several different ways,
but the one message that does seem to come out, is that if you set minimum
wages too high for young peeople, you create youth unemployment. And I think,
therefore, the Government is quite right to focus very strongly on making sure
that there's nothing in this which creates further youth unemployment.
HUMPHRYS: Right, but not twenty-five but
twenty-one.
TURNER: Well, as I say, we are going to look
very carefully at this specific issue and I think it is the one that the
Government is quite right to flag that it wants to look at carefully as to
whether that particular recommendation of three twenty, up to twenty-one is
quite right or whether it should be slightly lower or perhaps phased in or
extended maybe a year or so.
HUMPHRYS: So the Treasury should call off the dogs
as far as twenty-five, being a limit is concerned.
TURNER: We have not supported twenty-five and I
think if you look at the data, by the time people are twenty-three,
twenty-four, what the market data says is, they are roughly paid similar
amounts to older people at the moment. Whereas I think when you are dealing
with eighteen, nineteen, twenty, twenty-one year olds, even if they are not in
training, there is a point about experience, there's a point about just having
built up an experience which makes them as valuable as older workers. And if
that lower level of experience, which is less effectiveness in customer
service, less effectiveness in dealing with situations in the workplace, needs
to be reflected in a lower rate in order to make sure that those people are
employed, then we should be willing to consider that.
HUMPHRYS: Its an interesting attitude from the
CBI isn't it, because you were opposed as a matter of principle to the minimum
wage. You've gone back on that.
TURNER: Well let's be clear. Within the CBI
membership within the business community, there were always an array of points
of view.
HUMPHRYS: Yes, but the CBI was opposed to it as a
matter of principle. You were....
TURNER: The majority was against it in principle.
We always had a significant minority who were actuallly in favour of it in
principle provided it was set at a low and sensible level, and therefore after
the election last year, given the fact that it was going to occur, we obviously
had to concentrate on making sure that it is set at a sensible level and at a
level which does not create dangers of inflation or unemployment. That is what
we have been focussing on over the last year.
HUMPHRYS: So, that's one principle as it were out
of the window. Another one is union recognition - enforced union recognition
depending on the percentage of workers who vote for it. Now, you're opposed to
that in principle, you're now saying it's just a matter of percentage, so you
swap principle for percentage there.
TURNER: Well, let's be clear on this one. We
would have preferred to go on with the voluntarist mechanism of British
industrial relations, and we are concerned that any process of enforced
statutory recognition is bringing to the industrial relations two unwilling
parties, both the employer and indeed the group of workers within a bargaining
unit who didn't want to be represented by a trade union. So our preference
would have been to stay with the voluntarist mechanism. Again, it was a clear
manifesto commitment, we've always recognised that. Therefore we are not in
favour of it in principle, but if it's going to occur we have to make it as
workable as possible.
HUMPHRYS: You....
TURNER: We have concentrated on trying to
persuade the Government to introduce a form of it which respects the rights of
those who are not in favour of collective bargaining as well as those who are.
HUMPHRYS: And you've accepted a forty per cent
threshold, or at least reluctantly, but let's ......
TURNER: We would have preferred it to be fifty
per cent...
HUMPHRYS: Sure.
TURNER: But it's closer than zero.
HUMPHRYS: Indeed, but Margaret Beckett on this
programme last week suggested it might end up getting closer to zero. She
said: If it isn't workable, if it shows itself not to be workable over the
coming months or whatever the period happens to be, they'll have another look
at it. What would your attitude be to that?
TURNER: We would be very concerned. Indeed we
would be opposed to any shift away from this forty per cent, and certainly we
are totally opposed to the idea that you can test workability by whether
ballots pass the forty per cent or not. If ballots are brought forward and
they fail to pass the forty per cent, that will be proof that the level of
support was not there in order to justify enforced collective bargaining, and
therefore I think there are real dangers in a approach which suggests that
simply because the forty per cent is not achieved you change the rules.
Let's be clear. We will be very strongly opposed if there are any rules, any
changes, and I think it is important that we create a structure which - it's
not a structure exactly as we want it, it's not a structure exactly as John
wanted it, but once it's fixed I think we need to have some stability in
British industrial relations rather than people feeling that it is continually
subject to ......
HUMPHRYS: Isn't that right Mr Monks. I mean you
would like to see - you have doubts about the workability of it yourself don't
you, and you would like to see the threshold reduced further. What Adair
Turner's saying is not to do that.
MONKS: Well, I mean, the CBI forty per cent
figure has been accepted by the Government. We're fed up about that. We think
it's too high. It may sound if you get forty out of a hundred workers voting
yes, that's actually a reasonably easy test to make, but if you're talking
about workforces, it could be fast foods, it could be part-time workers in
supermarkets coming and going, very dispersed, that's a very high figure, and
of course it's a much higher figure than is applied in any other area...
HUMPHRYS: But if they wanted it, they'd vote for
it.
MONKS: Well, if they've got the opportunity to
do so, if they're not worried about what the employer might think of them, if
they do vote for it, if they think they're under no pressure at all, if the
facilities are there for the union to talk to the people concerned, well that
may be that it's a fair, rather level playing field to coin a phrase. But
often it's going to be the fact that workers do feel rather threatened, are
nervous about voting yes for the union, and employers perhaps showing
displeasure and disfavour towards those who do....
HUMPHRYS: So you .......
MONKS: That's the atmosphere in which some of
these ballots could take place.
HUMPHRYS: So you'll be leaning quite hard on the
Government, on Mrs Beckett to reduce it from forty down?
MONKS: Well, we certainly will, but we're
pleased by the way just with other parts of the White Paper, particularly
another provision which does give a union a right to recognition if it can
recruit a majority of the members, and that was put in the White Paper by the
Government and it's a significant step forward - I know it's not one the CBI
are keen on either.
HUMPHRYS: Hmm. This is the problem isn't it. The
Government talks about a partnership between you lot, and you seem to get on
very well with each other and it's all very nice indeed on the surface, but,
when you talk about workable you have completely different ideas of what
workable actually means - workable in your sense .... in your view it means
something else, so there is - this idea of partnership begins to look a little
bit thin when you've peer beneath the surface doesn't it?
MONKS: Well, I think the area of trade union
recognition was as difficult an issue in which - and we were never going to
agree on trade union recognition even though we did actually narrow the gaps
between us in some talks that the Prime Minister kick-started when he asked us
to look at it. There are other areas like training, health and safety where
there's a considerable area of common ground...
HUMPHRYS: Indeed, but trade union recognition as
you say, is an absolutely key area.
MONKS: Yeah. Well, the Labour Law framework
which governs the world of employment is a key area and one - I mean we've been
on the receiving end of eight acts of parliament which have reduced union power
and increased employer power through the eighties and the nineties. Now we're
getting some of that ground back, and I can understand the CBI not liking it
but we like it.
HUMPHRYS: And indeed not just not liking it. I
mean you may say, well, we accept it, and your past president was very
hugger-mugger with the Government on all of this. Your new president Clive
Thompson had the matter altogether. What was it he said at that dinner on
Wednesday night, the CBI dinner. "The Government's trying to create a
partnership, but then one of the partners is forced to the table". That is the
reality isn't it. Funny kind of partnership when you're being forced - dragged
to the table.
TURNER: Let's be clear, there is a..in principle
a concern about the enforced process of union recognition. But we believe that
what we have ended up with is a not unworkable set of rules and the most
important element of partnership actually, is not the negotiations that we have
about what are bound to be difficult issues, it's actually what happens company
by company, work place by work place. And I think the most important forms of
partnership are occurring between employers and employees, sometimes in
unionised environments, sometimes in non-unionised environments throughout the
country. And there are many areas - for instance in unionised environments -
where management is working far more effectively with unions than it was in the
past, who introduced flexibility of working practices, to pursue training
together, to pursue productivity together and that's the reality of what's
really important about partnership rather than these inevitable debates about
it.
HUMPHRYS: Let me just remind you what Sir Clive
Thompson said, and this is the President, I think he was sitting next to the
Prime Minister wasn't he, statutory recognition is something that should be put
in a hand book to help firms improve their pest control terchniques - whatever
he meant by that it was very clear he didn't like it, so you are going to have
to toughen up a bit under your new president aren't you.
TURNER: Well I think late at night at a dinner
there are a lot of comments, there are a lot of jokes. It was meant in a
jocular fashion...
HUMPHRYS: Was it?
TURNER: Other things were said, I mean, I can
tell you our Prime Minister..our existing President made a jocular joke about
William Hague which I wouldn't want to be taken as proof that our existing
President is opposed to William Hague in any fundamental sense.
HUMPHRYS: Perhaps you better tell us what it is?
TURNER: No, I'm not going to.
HUMPHRYS: Alright. You, we are told, when you
heard about that, didn't see as a joke, you were splitting blood according to
some of your own people, is that right?
MONKS: I read in the papers, I was spitting
blood. I certainly wasn't laughing when the remark was made. I thought it was
a poor joke, in poor taste and when Clive Thompson does take over as CBI
President, which I don't think he has yet, I just hope his scriptwriters get a
bit better and I'm sure Adair and colleagues will try and avoid that kind of
thing.
HUMPHRYS: There is a serious issue here isn't
there. I mean, it might be alright at this stage, it is going to get more
difficult isn't it.
TURNER: Well obviously there are dangers that if
we have a tightening labour market, you have at that stage arguments about
whether there should be higher rates of pay, rapid increases. In a sense we
have had a environment for quite some time, where we haven't had some of the
inflationary pressures we had in the past. But the key thing actually, is to
focus jointly together on the improvement of productivity because if you have
an improvement in productivity, you can actually afford increases in real
wages, which are truly affordable. And that's the mechanism which we have to
jointly achieve in order to have the sort of economy where people can have real
income increases without that being a source of industrial conflict and
inflation.
HUMPHRYS: While we're on the subject of jobs, that
coal story, the thirty last deep mines. What are you saying to the Government,
you've got to do in relation to those mines.
MONKS: Well we're saying support the coal
industry. The coal industry has got a future-
HUMPHRYS: Meaning?
MONKS: In other words give it some special
treatment.
HUMPHRYS: Special treatment?
MONKS: Special treatment - I mean as far as we
are concerned coal has been a special case for a long time-
HUMPHRYS: Force the generators to buy coal?
MONKS: Yeah and give them some extra incentive.
HUMPHRYS: And what do you say to that Adair
Turner?
TURNER: We are not supportive of special
treatment. We are supportive of looking at some of the very odd features of the
way the electricity market works now. There are oddities of the way the pool
prices are set, which it is arguable actually discriminate against coal-
HUMPHRYS: -right but not special treatment.
TURNER: -our argument is: let's deal with those
problems but once we've dealt with those problems we should try and create as
much as possible, a market based solution in this area, because there are jobs
on either side. There are jobs in Rolls Royce's production of Trent turbines
which go into new gas generators. There are jobs in the coal mining industry.
The role of Government is to try and find a fair market, to create a fair
market and there are issues that need to be looked at in the coal-in the
electricity pool to make sure that that's the case. But once that's done, it
should be left broadly speaking to market forces.
HUMPHRYS: Adair Turner, John Monks, thank you both
very much indeed.
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