Head of CBI urges TUC to curb pay calls: 'Public sector workers should get rises only when justified by productivity'

Howard Davies, director general of the CBI, yesterday became the first employers' leader to speak at a TUC conference and used the opportunity to lecture the unions on the need for pay restraint.

Mr Davies's speech to the Blackpool congress was greeted with walk-outs from Arthur Scargill, president of the National Union of Mineworkers, together with a noisy minority of the National Union of Teachers.

Most of the 900 delegates listened in silence and applauded politely at the end. It seemed as if the TUC and the CBI - both ignored by the Government - were cuddling together for warmth.

Mr Davies declared that public sector workers should receive rises only where they were justified by productivity. To interruptions from activists from government unions, he said there should be tight control on their pay, which should be subject to the same disciplines as in private industry.

Mr Davies, a former civil servant who was once refused membership by the Labour Party because he had left his union, also said that wage increases in many private firms hit by the recession would have to be lower than last year. Costs had to be kept under control. That could happen only if pay rises were contained and productivity enhanced.

Mr Davies earns more than pounds 100,000 a year and took care to tell delegates, to murmurs of approval, that his strictures should apply in equal measure to senior managers. He later declined to tell journalists how he voted in the last general election.

He told the conference that there should be no return to 'corporatism' in which employers, unions and government met at a national level, but he called for co- operation with the TUC on matters of mutual interest. He confimed that the CBI would participate in a European 'social dialogue' between employers and unions despite the Government's decision to opt out of the social chapter of the Maastricht treaty.

Asked later about his reception by delegates, he said that a walk- out by Arthur Scargill was now part of the British way of life: 'Rather like a cricket match being rained off at Lord's' Mr Scargill retorted: 'I am not prepared to take part in this charade - it's disgusting that he has been invited.' Leaders of the NUT later 'disowned' the behaviour of some of their delegates.

An 'outraged' Alan Jinkinson, leader of Nalgo, the local government union, said that Mr Davies's call for productivity really meant job losses. In contrast, Bill Morris, general secretary of the Transport & General Workers' Union, said that he could have made some parts of Mr Davies's speech himself - particularly about the need for increased public sector investment and more backing by government for vocational training.

Gavin Laird, general secretary of the Amalgamated Engineering and Electrical Union and the first union leader to address the CBI conference, said he hoped the visit would be an annual event and that there would be a reciprocal offer to Norman Willis, TUC general secretary.

(Photograph omitted)