Pendulum arbitration in monopoly services

David Davis, the Conservative MP for Boothferry, in 'The Power of the Pendulum', a pamphlet published by the Centre for Policy Studies, proposes that all public and private industries and services where a particular supplier enjoys a market share of more than 75 per cent (eg ambulancemen, teachers, railwaymen, etc), should have their disputes resolved by compulsory pendulum arbitration. In this system, an independent arbiter must choose between pay claim and offer, rather than deciding partly in favour of one side, partly of the other; thus encouraging more moderate behaviour by both parties.

'Ambulancemen, teachers, railwaymen, etc, should have their disputes resolved by compulsory pendulum arbitration. In this system, an independent arbiter must choose between pay claim and offer'

There would be two optional variations on the pendulum process (each of which would require agreement on both sides in the negotiation).

The first variation would be a pause for conciliation.

The second variation would allow issue-by-issue pendulum arbitration. Both sides would need not just to agree to use this procedure, but would also have to agree which issues to separate. This would enable them both to minimise their risks in issues where their difference of view was slight.

A critical aspect of such arbitration is the criteria by which the arbitrator makes his judgement. These should favour proposals which would:

(1) Improve the level of service given by the monopoly.

(2) Give the best value for money for the taxpayer.

(3) Enhance the joint interests of the employees and the enterprise.

(4) Reflect local market values and 'going rates' for the enterprise and ensure the proper availability of these skills for the monopoly.

(5) Enhance career prospects and motivation of the employees.

Thus a union's claim based on proposals for improved productivity would have a much better chance of success than a bald demand. On the other hand, the employer who could justify his proposals in terms of better motivation and career prospects, and demonstrate that his pay rates are competitive, would enhance his chances.

'The Power of the Pendulum', L4-95 from the Centre for Policy Studies, 8 Wilfred Street, London SW1E 6PL.

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