Mr Malcolm Bruce (Shadow Secretary of State for Trade & Industry, Trade & Industry; Gordon, Liberal Democrat)

I beg to move amendment No. 49, in

clause 31, page 27, line 1, at end insert—

'(1A) The Secretary of State shall consult such persons as he considers appropriate on the establishment of works councils as an arrangement suitable for informing and consulting employees and shall publish the responses received pursuant to those consultations before making the regulations referred to in subsection (1).'.

We tabled the amendment because we are concerned that there has been some resistance within the United Kingdom to adopting what we regard as good labour practices that have long been established in continental Europe. The Liberal Democrats and our predecessor party have always been strong advocates of industrial democracy. Although it has improved a great deal over the past few years, we have regretted the concept of there being two sides of industry and an adversarial, confrontational approach, which did much damage to the British economy, particularly in the 1960s and 1970s.

I accept that such an approach has passed substantially, but during Committee proceedings and our debate on Second Reading we have heard examples of bad practice—to be fair, sometimes by unions and sometimes by management. The European directive requires us to make some institutional changes, which, if adopted in a positive spirit, could consolidate much better relations and set the framework for a more constructive relationship between employers and employees.

We accept entirely that the role of works councils is not a catch-all role. It will not serve all companies and institutions in every way and we would not want to impose it on companies, certainly not when employees have no desire for it and find the present arrangements adequate. Works council practice in other countries has a considerable amount to commend it. When the new European legislation comes into effect, in practice, works councils will probably start to appear in the UK and it would be helpful if the Government created a positive climate to encourage the establishment of works councils in appropriate situations, provide examples of good practice and give guidance on how they can be set up better.

In preparing for the debate, I tried to find more information about the implications of the directive and experiences elsewhere. To be honest, I wish to express a little worry that the Government, not their

predecessor Government, have been resistant to highly desirable practices about which many of their supporters would probably have expected them to be more enthusiastic. I wish to quote the Minister's predecessor. I am not saying that he made an unreasonable point; indeed, I have a high regard for him. He said that

''it was futile to try to use the law to force companies to take employees views on board''.

I find that an astonishing statement for a Labour Minister with responsibility for employment to make. He went on to say:

''For workers to be consulted genuinely—ie, we are interested in their views and their views could well influence our decision—you won't do it through regulations. You will only do it through that trust that exists in many UK companies.''

The problem is what we do when that trust does not exist. The argument is that institutions are a mechanism to build that trust. The works council approach is one of those mechanisms that has proved a useful device for bringing management and unions together, as well as employers and employees—unions are not essential for this—to improve the climate of consultation and management.

I said in my opening remarks that we regretted the two sides of industry approach. That is what we got in the reaction to the consultative document: the CBI said that it was deeply disappointed by the agreement in the Government's dossier but the TUC welcomed it, although it wished that it would go further.

See this speech in context