Employment Rights

Opposition Day – in the House of Commons at 3:31 pm on 18 March 1996.

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Photo of Michael Meacher Michael Meacher Shadow Minister (Education) 3:32, 18 March 1996

I beg to move, That this House, noting how widespread job insecurity has become in Britain and the damage this has done to economic performance, calls on the Government not to proceed with the removal of the right of appeal to an industrial tribunal for employees in small firms. The background to the debate is quite clear. On 7 March, it became known that the Deputy Prime Minister was proposing the removal of all employment rights from employees of small businesses. A leaked letter from the Secretary of State for Trade and Industry—the right hon. Gentleman did not oppose the proposal as unreasonable or unjust—queried whether it was sensible to proceed before obtaining the Law Officers' advice, presumably because the proposal almost certainly breaches several European directives.

Although it was hastily decided that the Deputy Prime Minister would not include the proposal in a deregulation package for the small business conference in London a week ago, Downing street later confirmed that the move was still under active consideration.

A press report that appeared in The Times on 12 March put the episode in context. One passage reads: But this is the tip of the iceberg. Despite John Major's coyness last week in the Commons and his diplomatic silence yesterday at the small business conference in London, Downing Street policy advisers and senior ministers are studying recommendations for a far wider assault on legislation that dates back to the 1960s and 1970s. The article refers to a recent pamphlet prepared by somebody called Warwick Lightfoot, who was adviser to the Prime Minister when he was Chancellor of the Exchequer. Apparently it has been widely circulated. I obtained a copy of the pamphlet. The introduction reads: The piecemeal changes to legislation made over the last 15 years are not enough. It is time now to remove the over-arching framework of employment protection legislation on redundancy compensation and unfair dismissal. The existing regulations, though lighter than they were, still distort employers' decisions, reduce economic activity and raise unemployment. When the Prime Minister was challenged last week to the effect that the proposal would create a hire-and-fire mentality among employers, he replied: We are encouraging a hire mentality."—[Official Report, 7 March 1996; Vol. 273, c. 450.] That is not what the Lightfoot document states, from which I shall quote again. The relevant passage states: The unfair dismissal and redundancy legislation provides workers with extensive legal protection from routine managerial decisions, making it more complicated and expensive to dismiss workers who are either incompetent or not needed. That is what the Deputy Prime Minister's package is all about.

If there is any doubt, the article in The Times makes the position clear. The article states that the Prime Minister and the Downing street policy unit swiftly concluded … that it would be politically impossible to try to sweep away overnight the vast body of law covering workplace rights. Instead, the Government is understood to be intent on adopting the tactics used by Margaret Thatcher in her assault on trade union rights in the 1980s. This involved five key Acts of Parliament between 1980 and 1990, gradually chipping away at the unions' legal immunities. Mr. Heseltine's suggestion of starting with small firms was the first step. There we have it. Seventeen years of Tory Government have produced a Britain where employees work longer and more unsocial hours than workers in any other country in the European Union.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Does the hon. Gentleman accept that people are at least in work in this country? Is he aware that unemployment has inexorably risen in France and Germany, whereas, apart from the blip in the past month, there has been lower unemployment in this country for the past 29 months, contrary to the European trend? Does he welcome that?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The hon. Gentleman fails to note that what he calls a small blip may turn out to be a very embarrassing rise.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

No, we do not know, but there are good reasons to expect it will be the case. If one considers that there have been 28 changes in the unemployment count, I suspect that the unemployment figure in Britain is probably not 2.5 million but closer to 3 million.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

No, it is going up.

In particular, the hon. Gentleman should consider the fact that, in the past three years, unemployment has decreased in this country only because the Government were forced, kicking and screaming, out of the exchange rate mechanism in 1992, which allowed a reduction—[Interruption.] I am glad that the hon. Member for Mid-Staffordshire (Mr. Fabricant) is nodding his assent; perhaps we have taught him something. That event allowed an interest rate cut, from about 15 per cent. to 6 per cent. If that had not happened, unemployment would still be nudging 3 million, even on the Government's figures; so let us hear no more about that matter.

In our country, after 17 years, employees have less protection—

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

No, no at the moment.

Employees have less protection against unfair dismissal and fewer rights in redundancy than in any other European country.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

I shall in a moment.

Seventeen years of Tory Government have made Britain the only country in Europe without legal pay protection for the poorest workers, without legal limits to working hours and in which discrimination against part-time workers in relation to pay and employment rights is legal. None of that is good enough for today's Tory party: it now wants the systemic destruction of employment rights, to move this country down towards the sweatshop economies of Latin America or the far east—[Interruption.] The hon. Member for Mid-Staffordshire may not like the reference to the direction in which his Government have been taking us for 17 years, but that is the clear implication of their policies. He is rather squeamish. Ministers are much more willing to admit that that is the type of economy they want.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

Is the hon. Gentleman under the impression that none of our European partners provides some exemptions from employment legislation for smaller businesses?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The latest working time directive?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

I am sorry; I was distracted and did not hear what the hon. Gentleman said.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

Is the hon. Gentleman under the impression that none of our European partners provides exemptions for smaller businesses from some obligations under employment law?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

Of course; if one examines the European directives, contrary to the impression Ministers regularly give, one sees that they provide a great range of flexibility and are nowhere near as tight and limiting as is often said. The directives take account of the need for small businesses to succeed and, I suspect, small businesses succeed a great deal better on the continent than they do here. This policy is so objectionable not merely because it is grossly arbitrary and discriminates against up to half the work force, but because it patently does not work.

Our case against the Government is that they are now trying to ram down policies into the economy that have demonstrably failed. Ministers never tire of saying that deregulated labour markets are the only way in which to achieve steady improvements in economic growth, competitiveness and job creation, and the Prime Minister never misses an opportunity to lecture European leaders about the superiority of the Government's deregulation model.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

I note that the hon. Member for Colchester, North (Mr. Jenkin) strongly supports that model, but perhaps he would like to consider its effects. We have had 17 years of deregulated labour markets, flexible and casualised working, deunionisation and the steady chipping away of employment rights—[Interruption.] Conservative Members are falling over themselves to express their support of the policies, but what has been the result? The relevant comparison is with other members of the Group of Seven leading industrialised countries. On that basis, since 1980, we have had the lowest growth of GDP of any of those seven countries. We have had the worst record in competitiveness—indeed, a 9 per cent. loss in competitiveness since 1980 in terms of export volume relative to world trade—and the second biggest increase in unemployment.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

No, I will not give way to the hon. Gentleman.

That is a record of which Ministers should be ashamed. It is certainly not a performance to preach about to other European leaders or to encourage them to copy.

The Deputy Prime Minister—he is always at it—has been banging on again about making Britain the enterprise capital of Europe. It is essentially his policy of deregulation in the past decade that has made Britain the competitive backwater of Europe. [HON. MEMBERS: "Come off it."] Conservative Members simply do not like to take account of the facts. The Government's policies are intended to produce growth, competitiveness and jobs. On the OECD evidence, they have produced none of those things.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

I want to move on.

Ministers constantly claim that the only way to increase jobs is through more flexible labour markets, lower wages, deskilling and cutting employment rights. They have been doing that for 17 years, and what has happened? There are fewer people in employment in Britain today than in 1979. More than 1 million fewer people are in employment in Britain today than the day the Prime Minister entered Downing street.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

What about the rest of Europe?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

We are not talking about Europe. We are talking about Britain. This policy is expected to work in Britain. It has worked in reverse. There is higher unemployment than in 1979 and substantially higher unemployment than in 1990, even after the fall of the past two and a half years.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The hon. Gentleman can keep bouncing up and down if he wishes—perhaps that is where his skill lies—but I shall not give way, given the kind of points that he makes.

There has been a huge switch from full-time to part-time working. If we count two part-time workers as the equivalent of one full-time worker—that is roughly right—the rise in part-time employment since 1979 compensates only for less than a quarter of the loss of full-time jobs. In terms of full-time equivalents—which is probably the fairest comparison to make—the number of people in employment in Britain has dropped by 2 million since 1979. If that is a record of which this deregulating Government are proud, perhaps those who preach flexibility should be made to suffer it.

Photo of Mr Anthony Coombs Mr Anthony Coombs , Wyre Forest

Will the hon. Gentleman answer one question? Which major country in Europe has the greatest proportion of its population of working age in work?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The fact is that if one looks—[Interruption.] Perhaps I could just answer. The work force in employment has fallen by 2 million in full-time equivalents since 1979.I do not believe, although I do not have the figures to hand, that any other major European country has a worse performance than that.

One of the consequences of the deregulated Tory Britain has been that, at the same time as more and more people have no job at all, other people have to work more and more excessive hours. Britain now accounts for half of all the employees in the European Union who regularly work more than 48 hours a week. Not only is it absurd to have so many employees overworked, some dangerously so, while 2.25 million people have no work at all, but it is extremely destructive of jobs.

The excess over 48 hours worked by employees totals almost 1.25 million basic working weeks of 39 hours. That could create up to 1.25 million more full-time jobs. Ministers are now gearing up for another major round of deregulation which has done so much damage in creating the mass unemployment we already have.

Photo of Mr Graham Riddick Mr Graham Riddick , Colne Valley

The hon. Gentleman will be aware of the ruling by the Advocate General last week on the working time directive. Who should take those decisions, the European Court or this House?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The fact is that the Conservative party supported the European Communities Act 1972. The only reason why the matter went to the European Court was that the British Government challenged the view that the Commission was right to advance it under health and safety legislation. The Government wished the matter to be advanced either under article 100 or article 118 so that the veto would operate. As we now know from the Advocate General—I suspect that that view will be followed by the Court—the Commission was perfectly within its rights in advancing the matter under health and safety legislation. Working more than 48 hours a week—sometimes up to 60 hours or even more—is clearly a health and safety issue.

Photo of Denis MacShane Denis MacShane , Rotherham

Does my hon. Friend agree that the 48-hour directive is a tremendous blow for family life? The institution that suffers most from the excessively long hours that men and women are expected to work is the family. More and more, children never see their parents for quality time, or any time at all.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

That is an important issue. There is no doubt—I had not intended to mention this, but it is an important issue—that increasing strains and pressures are imposed on social and family life as a result of deregulation and the requirement, which employees feel that they cannot resist, to work excessive hours of overtime. That is an important issue and although it is not part of the economic calculus, it needs to be taken into account.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

No, because I want to make progress.

The third claim constantly made by Ministers is that social costs are too high in Britain and that burdens on business must be reduced if more jobs are to be created. There are several things wrong with that argument. Britain does not have high social costs. In terms of taxes and social security as a proportion of gross national product, Britain is ninth lowest of the 11 leading industrial countries. From figures produced by the Organisation for Economic Co-operation and Development, it is clearly not the case that the lower the tax take, the lower the level of unemployment; if anything, it is the reverse.

If social expenditure is reduced and private incomes are increased, at least for the highest paid, as has happened in Britain over the past decade, it matters a great deal where that extra private income is spent—whether on yachts or on investment in new technology. All that one can say is that, in Tory Britain, it must have gone predominantly on yachts because it has certainly not gone on investment in new technology or on research and development, which has fallen in real terms under this Government. Manufacturing investment is no higher today at constant prices than it was in 1979.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

Out of kindness to the hon. Gentleman, I should not expose him to a further opportunity to ask questions.

The real irony in the Government's denunciation of the costs falling on businesses is that those burdensome costs do not come, in general, from the employment rights that the Government are now so determined to sweep away—whether health and safety protections, anti-discrimination measures or unfair dismissal rights. The main cost burdens now afflicting small businesses come from a quite different source.

A report to the national small business conference in London last week summarised the views of small business men; they had been collected from a range of regional meetings across the country. The report states: Most of the costs associated with employing somebody are no longer met by the state and retrospective legislation places new burdens on individual employers. This is obviously acting as a disincentive for small businesses to take on an extra person. Things like statutory sick pay, maternity pay and redundancy pay were thought to be a particularly crippling burden on small businesses. The fact is that all the statutory impositions about which small business men are complaining have come from the Government. The Statutory Sick Pay Act 1994 transferred the whole cost of statutory sick pay to employers. In 1987, the administration of statutory maternity pay was transferred to employers. It is true that, at first, those costs were reimbursed in full, but from 1994 that was reduced to 92 per cent. It was the same with redundancy payments—originally employers were able to claim substantial rebates from the redundancy fund, but in 1989 all the rebates were abolished. The problem is not the employees; it is not employment rights; it is Government-imposed burdens. That problem lies with Conservative Members.

It is a bit rich that, at a time when the Government propose to take away protection from employees of small firms—ostensibly to ease the pressures on them—they are also proposing to add to the responsibilities and burdens of small firms under the proposals in the Asylum and Immigration Bill. I do not know whether the Government properly considered the impact of such measures on small businesses. Instead of pointing a finger at employees as the cause of financial and administrative burdens on small businesses, they might consider pointing it at themselves, because that is where the problem lies.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The hon. Gentleman is nothing if not persistent. I doubt whether what he wants to say is relevant, but I shall give way to him.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

The hon. Gentleman is nothing if not always courteous. I do not want to misrepresent him— I do not need to—but is he seriously suggesting that no one should work more than 48 hours a week? Is he seriously trying to tell the House that he does not work more than 48 hours a week? Has he any conception of what self-employed people, who actually provide jobs for employees, will think when they hear that those employees must not be allowed to work more than 48 hours a week, when they will be working 60, 70, 80, 90 or 100 hours a week? Is it not about time that the hon. Gentleman injected some reality into his remarks?

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The hon. Gentleman is losing his touch. A whole range of exclusions are written into the directive—

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

Perhaps that is a great revelation for the hon. Gentleman, although one would have thought that he would actually look up the details of the directive before intervening. I can inform him that it excludes many public service workers such as police, ambulance staff, nurses, doctors, fire fighters and, perhaps surprisingly, lorry drivers. In addition—this is crucial—it does not impose a limit of 48 hours; it says that an employer cannot force an employee to work more than 48 hours. Of course, that employee is perfectly able to work more than 48 hours if he so agrees. That is extremely important. Perhaps we should examine the facts rather than indulge in a great paroxysm based on absolutely nothing.

The tragedy for Britain is that this Government have ruthlessly pursued the wrong model for economic success. That is the essential point that I want to make. Low wages and skills, few or no employment rights, de-unionisation and casualised working do not produce efficiency, productivity or jobs; they produce fear and economic uncertainty, which undermine long-term commitments. That is shown by the damage that has been done to the housing market and to manufacturing investment.

I am glad that the President of the Board of Trade is here, because it was he who recently cynically observed that job insecurity was a state of mind. It is now a plague that affects all regions, all classes of workers and almost all workplaces. Economic success and competitiveness do not come from robbing people of their employment rights and security but from strong motivation, pride in the job, up-to-date skills, high morale and mutual, long-term commitment between employer and employee. All those are undermined by an insecure labour market.

This Government have become the Burger King Government, with their obsessive drive for low wages, no rights and anti-unionism. The Tories have become the party of social devaluation. Ministers cannot see—or perhaps they refuse to see—that any advantage that could be derived from low wages is more than outweighed by poorer education, inadequate infrastructure and lower levels of skills and capital investment. They cannot understand that Britain's low productivity is, in part, the result of long working hours, poor employment conditions, high staff turnover, high absenteeism and poor training.

I remind the President of the Board of Trade of one his predecessors who said: We believe that decent conditions make for industrial efficiency and increase rather than decrease competitive power. He also argued that, without proper regulation, the good employer is undercut by the bad and the bad employer is undercut by the worst. That was Winston Churchill, who must be turning in his grave with revulsion at the dogma of today's Tory party.

Finally, although I suspect that this least concerns the Conservative party, a wholesale removal of employment rights will perpetuate and deepen injustice in the workplace. Cases involving the growing exploitation of part-time and agency workers have flooded into my office, as I am sure they have to that of my hon. Friend the Member for Makerfield (Mr. McCartney). I shall mention some of them.

A low-paid employee was forced to sign away his employment rights in return for a succession of temporary, three-month contracts. A skilled draughtsman was required by his employment agency to accept, in advance, legal liability for anything that he did when on work placement. A citizens advice bureau in the Chilterns reported to me the case of a young man who had been working for his employer for 18 months and who was working seven days a week, with no time off allowed. A citizens advice bureau in the south reported the case of a man who was dismissed when he asked his employer for a written statement of his terms and conditions of employment and raised health and safety conditions in the workplace.

That is not efficient management but Gradgrind economics. It is also dangerous to employees and to the public. In the case of employees, the Department of Health commissioned a stress guide for employers to examine the effects of working excessively long hours in a week. The guide concluded: Working more than 48 hours per week doubles the risk of coronary heart disease. What did the Government do? They suppressed that guide because they found its results embarrassing.

Working excessive hours is also dangerous to the public. Health and safety information bulletin No. 169, which reported on the Clapham rail disaster that killed 34 people, found that, in the three months preceding that accident, a quarter of the work force had worked seven days every week and another third had worked 13 days out of 14. It found that the technician who made the fatal errors had had just one day off in the three months leading up the accident. Such levels of overtime and the mental and emotional stress that they produce are not confined to the railways, but extend to many other areas of work. An act of deliberate policy to extend such long hours to yet more areas of employment would be sheer madness.

The leaked letter from the President of the Board of Trade has revealed what the Government would do if the electorate gave them another chance. The wholesale removal of employment rights would not make Britain competitive or create jobs, it would merely generate even more widespread insecurity and greater injustices. I believe that the House should throw out that cock-eyed plan even before the electorate throw out the obsessional Government who produced it.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale 4:05, 18 March 1996

I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof: 'recognises the vital contributions of small firms to economic and employment growth, and supports the Government's policies to minimise legislative burdens on this sector while maintaining a fair balance with the rights of employees.'. The best that can be said for the speech of the hon. Member for Oldham, West (Mr. Meacher) is that it matched the Opposition's motion for today's debate: it was completely detached from reality. The motion talks of "small firms", "economic performance" and "job insecurity". Let me say something about each of those before talking about industrial tribunals, to which the motion also refers.

First, small firms are an essential part of our economy, and one of the great economic successes of the Government. There are now some 3.7 million firms in this country, of which 97 per cent. employ fewer than 20 people. That is well over a million more than existed under the previous Labour Government, and they are providing many more jobs. In addition, the numbers in self-employment have risen by more than 75 per cent. since 1979, and the small firms sector has grown more rapidly than in any other country. So small business is now very big business.

Unlike the last Labour Government, however, who oppressed and persecuted all businesses, large and small, with high taxes, interference and controls, incompetent management of the economy and appalling industrial relations, the Government are committed to working with small firms to set out a policy framework which will take them into the 21st century in an era of low inflation, low taxes, excellent industrial relations and the prospect of sustainable growth. We are listening to what they say they need, and we are doing things to help them.

Photo of Ian McCartney Ian McCartney , Makerfield

Would the right hon. Gentleman care comment on the fact that, since the general election, 141 small businesses have closed each and every day?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

Of course small businesses close. It has always been difficult to guarantee their survival rate, but the point is that there has been a net expansion in their number. There are now a million more small businesses than there were when the Labour Government were in office.

In recent months, we have undertaken the most extensive consultation exercise with small firms in memory in the "Your Business Matters" conference programme. We have already announced a number of measures to help address the concerns that they have raised. On late payment, we announced measures to improve payment performance in both the public and private sectors, including league tables for Government Departments. We also announced our intention to consult again on whether companies should publish their payment performance as well as policy.

We renewed our commitment to fight red tape with fairer enforcement of good regulation and measures to give businesses a right of appeal against judgments of enforcement officers. We are looking at substantially reducing the bureaucracy surrounding taxation—I might add that taxation is now down from 42p in the pound, as it was under Labour, to 24p. We have the highest VAT threshold in the European Union at £47,000.

Photo of Denis MacShane Denis MacShane , Rotherham

Is the right hon. Gentleman aware that the first schedule in the new self-assessment system that the Government propose to introduce will contain 151 questions for answer, and that the eight succeeding schedules contain more complicated forms than those compiled by any other country? With only 24 hours in the day, how on earth will the small business man keep up with that form filling for the wretched Government?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman has brought me exactly to my next point: at our small business conference last week, we announced our intentions to streamline the taxation and the insurance systems. We announced a major review of all the Government support schemes for business to make them simpler and easier to understand, and we announced a number of further measures of assistance. We are also completing the roll-out of business links.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

One notes that all the answers that the right hon. Gentleman gives are about future prospects. The Government have been in power for 17 years—and it is the consequences of those 17 years that small business men complained about bitterly at last Monday's conference. What are the Government going to do about the matter that concerns small businesses most: transferring the financial and administrative burdens of statutory sick pay, statutory maternity pay and statutory redundancy pay on to their shoulders?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

We announced further measures to that end last week. We have been trying to simplify and to streamline the burdens of handling national insurance, PAYE, VAT and the other administrative burdens that small businesses face. If the hon. Gentleman had come to one of our conferences, he would have been aware that that is happening, and that small businesses are welcoming it.

As I was saying, the Government are also completing the roll-out of business links: the network of one-stop shops providing a range of valuable and relevant advice to small firms—small firms that are now consulting business links at a rate of almost 5,000 a week and expressing a consistently high satisfaction rating in all our early surveys of business links' efficiency. We are now carefully considering a number of further points to emerge from our small firms conferences, and a more detailed Government response will follow in June.

As a result of these policies, a higher proportion of the population is in employment in the United Kingdom than in almost any other European Union country— unemployment is well below the average, and there is much less youth unemployment and long-term unemployment. Employment has been rising for more than two years—rising for men, rising for women, rising for temporary and for permanent jobs, rising for all ages, rising for full-time and for part-time work, and rising in almost all areas of the country.

It is a great pity that the hon. Member for Oldham, West could not recognise and welcome that dramatic fact—it is something that no Labour Government have ever experienced. There are 600,000 more people in work now than at the end of the recession, and it is about time the Opposition parties came into the real world and recognised that fact.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Will my right hon. Friend confirm that, despite what the hon. Member for Oldham, West (Mr. Meacher) said, this country has the lowest rate of corporation tax in Europe? Therefore, does that not show that there is a high correlation between low corporation tax and high employment?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend is absolutely right to draw attention to that fact, and I always discount what the hon. Member for Oldham, West says. After all, in The Times in July 1989, he said: The Government is incapable of cutting inflation without pushing up unemployment. If the hon. Gentleman looks at the figures for the past three or four years, he will see what a dramatic fall there has been both in inflation and in unemployment. At the same time—over the past three or four years—we have seen the longest period of low inflation for 50 years, and the lowest mortgage rates for a generation.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I shall not give way to the hon. Gentleman, because I wish to make some progress.

We are the first choice in Europe for foreign investment, and we are exporting more per head than Japan or the United States. This is good news for all businesses—particularly for small businesses—and for those who work in them. It arises because the Government have taken the hard decisions to create the stable and sustainable economic conditions in which the economy can expand.

One of those conditions is the atmosphere of vastly improved industrial relations and a flexible labour market. In the past, the Government have been too quick to play the part of nanny—and it is quite clear from the hon. Member for Oldham, West's speech today that he is keen to resume that role. We believe that, given the right conditions, employers and employees can be encouraged to make the best decisions themselves, without Government interference.

Since 1980, we have introduced major legislation to free the labour market: employers have freedom to manage their businesses according to their circumstances and their needs; union monopoly power has been reduced and individual choice has been promoted; and there is now greater democracy in trade union affairs. The Government's policies have transformed industrial relations. No longer do we invite ridicule as the sick man of Europe.

Hon. Members will remember the 1979 winter of discontent, when 29.5 million days were lost through strikes. Compare that with what we have now: on average, only 37 working days per 1,000 employees have been lost as a result of strikes in recent years. That is the lowest figure since records began more than a century ago. It has been achieved by managers reclaiming their right to manage, by ordinary workers standing up against union power, and by the Government creating the right conditions.

Photo of Mr Anthony Coombs Mr Anthony Coombs , Wyre Forest

In contrast to the drivel talked by the hon. Member for Oldham, West (Mr. Meacher) about the competitiveness of the United Kingdom, will my right hon. Friend remind the House that the President of the German equivalent of the CBI recently said that the British economy is the best placed in Europe to deal with the challenge of global competitiveness? Does that not illustrate the revolution in competitiveness that has happened under Conservative Governments?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend is right. As the hon. Member for Oldham, West also mentioned Germany, let me quote the chairman of the German equivalent of the CBI: We have too rigid labour laws. We have too high social costs and taxes. We work the shortest working week in Europe. The German government spends 50 per cent. of GDP as opposed to 42 per cent. in Britain. No wonder we have a problem. Employees value their new-found freedom from intimidation. The show of hands at mass meetings is a distant memory. Secondary picketing has been banned. Closed shop practices are unenforceable. We have yet to hear, and we did not hear today, a clear undertaking by the Labour party not to bring back those terrible scourges.

Individual employment rights have also undergone major changes. We have progressively taken steps to reduce the weight of legislation. We have ensured that tribunals take account of an employer's size and administrative resources in deciding whether a dismissal was unfair. We have given employers greater freedom in redundancy dismissals, while ensuring that employees' rights are not compromised.

We have exempted small firms from some onerous requirements in relation to maternity absence, from the new disability discrimination employment provisions, and from the notification of disciplinary procedures. We have abolished the out-dated and onerous wages councils. The consequences of all that have been more jobs and rising real living standards at all levels of the income scale.

Our aim, however, is to produce a fair balance between rights and responsibilities, so at the same time we have increased the protection given to individual employees when it was right for us to do so.

Photo of Andrew MacKinlay Andrew MacKinlay , Thurrock

What does the President of the Board of Trade say to the principle that for every wrong there should be a remedy? There is no remedy for people in small outfits and those who have been employed for less than two years. If there is demonstrably a wrong—an unfair dismissal—how can he look that person in the eye and say, "You have no remedy"? That is the position at present.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

I am saying that we must achieve a balance between rights and responsibilities, in the interests of employers and employees and the interests of creating employment and creating a prosperous economy. We are succeeding in that, but I am drawing attention to the increase in protection that the Government introduced when it was right for us to do so.

The Trade Union Reform and Employment Rights Act 1993 was, I believe, the most significant addition to employment protection for nearly 20 years. It gave all pregnant employees a right to 14 weeks' maternity leave. It ensured protection against dismissal on specified health and safety grounds, or for asserting one's statutory employment rights. It gave employees better rights to information about their terms and conditions of employment. Since then, further significant legislation has ensured freedom of choice whether to work on Sundays for shop workers and for betting workers.

So let no one pretend that the Government have failed to respect individual rights of workers. The best job security is more jobs. We have achieved that, with fairness and balance, and with good sense. That is the right way to proceed—not to have trade unions and other organisations again towering over the industrial scene, staking out their claims in Labour's interfering stakeholder initiative.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

If the Government introduced that string of new rights as recently as 1993, how can they be right to contemplate taking them away from almost half the working population in 1996?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman was speculating on a matter that I shall discuss shortly. I want first to discuss industrial tribunals.

Efficient and straightforward enforcement of rights helps minimise costs to everyone. A major priority of our reforms has therefore been the industrial tribunal system. Dealing with claims can be costly for employers, and especially for small firms. In December 1994, we published the Green Paper, "Resolving Employment Rights Disputes", setting out many proposals for reform of the system, the majority of which were well received by employers' and employees' representatives.

I announced last week that we proposed to publish, for further consultation, a draft Bill designed to implement these measures. It will be published in the summer, and will introduce important reforms to streamline the industrial tribunal system. It will also aim to increase the proportion of employment rights disputes resolved by employees and employers themselves—or through conciliation by ACAS or by other third-party means— so that they need not enter the system at all.

I consider it of the utmost importance for employers and employees to attempt to resolve individual disputes themselves, but I recognise that there are occasions when a third party can help. That is why we value the services of ACAS, and why we shall propose in the draft Bill the extension of its powers to conciliate in individual disputes.

We shall also propose that ACAS be given powers to set up a scheme to enable an employee and employer to opt for voluntary arbitration on a particular complaint as an alternative to a tribunal hearing. That will offer a quicker, simpler, less costly and more private option for resolving individual employment disputes, and we believe that it will be attractive to both employers and individuals.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

In referring to conciliation, did the right hon. Gentleman mean that that would be the end of the line for those employees, or is he saying that he will increase the scope of ACAS by increasing resources under existing legislation? Is he trying to block access to tribunals, or to improve the conciliation service by extending it?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

We are trying to make tribunals the last rather than the first resort, and to emphasise the importance of conciliation. We shall consult on the way in which that should be done, and, when we publish our Bill in the summer on a consultation basis, the hon. Gentleman will have an opportunity to express his views. I believe that consulting on a draft Bill will produce better, not more, legislation. Any contentious issues can be identified and discussed, which will help us to ensure that the changes we propose are beneficial and workable.

That is not removing rights, as the motion suggests; it is building on the improved industrial relations that we have achieved in recent years. It is sound common sense. I believe that the proposed measures will be a major improvement in cutting the legalism, and especially the expenses, incurred by all parties bringing and defending complaints. The Bill has been welcomed by hon. Members on both sides of the House, and our approach shows how the interests of employers and employees can be furthered together.

Photo of Joan Walley Joan Walley , Stoke-on-Trent North

Given the concern that has been expressed, can the right hon. Gentleman give an absolute assurance that, regardless of the number of people employed in a business, their rights will not differ? Will that be the case regardless of whether a firm employs more or fewer than 10 people?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

No, I will not give that assurance. As I have said—and I am about to enlarge on it—there are already different arrangements for firms of different sizes. The matter is worthy of further consideration in this country, as it has been considered in other countries.

We are always vigilant in regard to further steps that should be taken. Reform is a continuing, evolving process, and the proposed tribunals Bill is one of a series of possibilities that we have been examining. Excluding small firms from legislation would clearly be another way of removing significant quantities of red tape from those who are particularly vulnerable to being tangled up in it.

The hon. Member for Oldham, West (Mr. Meacher) has attacked the Government for not doing enough to lighten the burden on small firms. We would not be doing our job if we did not give serious attention to that. Other countries already take such an approach. In Germany—prayed in aid by the Labour party—unfair dismissal requirements apply only to firms with six or more employees; France, too, has a less restrictive regime for small firms.

Obviously, there would be drawbacks in introducing an exemption, not least for the employees concerned. There would be no question of our changing the legislation in this way without taking legal advice on the implications, and carefully weighing the benefits against the disadvantages.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I am grateful to my right hon. Friend for giving way to me a second time.

Further to the point that my right hon. Friend has just made, and the thoughtful point made by the hon. Member for Thurrock (Mr. Mackinlay), does my right hon. Friend agree that we have a duty of care not only in regard to the employed—the hon. Member for Thurrock put it both eloquently and kindly—but in regard to the unemployed? It is all very well considering how we can or cannot protect those who have been employed for only two years: people must be employed in the first place. That is the balance we must get right in red tape.

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

My hon. Friend is absolutely correct: balance is very important. The best employment conditions are to have a job, and the worst employment conditions are to have no job. That is the precise problem that the Government have tackled so successfully, with rising employment in recent years.

The Government do not propose to be rushed into reform on the basis of dogma. How different from the Opposition, who, at the drop of a hat, seem keen to sign up to any number of regulations under the social chapter that would destroy employers' freedoms and employment.

A survey conducted last summer by the European Enterprise Centre found that two thirds of Europe's smaller companies were worried that higher social costs resulting from the social chapter would make them less competitive. The Government's recent White Paper on the intergovernmental conference, which we published last week, says: To accede to the Social Chapter could generate a one-way process in which European employment laws were increasingly imposed on the United Kingdom". That is the same social chapter that the Leader of the Opposition, in his ignorance, thought was just a set of principles from which he could pick and choose what to accept. I suppose that that is an academic point, as it is clear that, in his stakeholder's society, Labour would pick and choose them all—and add to them.

The social chapter gives no option to member states to pick and choose the measures they like and to reject the ones they do not. The whole point of the draft social chapter, which we rejected at Maastricht, is that it would give the Community greatly increased powers to pass social legislation by qualified majority voting. We would have no veto over damaging measures, such as the European works council directive or the draft directive on parental leave which the other member states are likely to adopt soon.

If we were to give up our opt-out now, future proposals could be imposed on us against our will in a whole range of areas, including working conditions, information and consultation, and equal opportunities.

The Government opposed the European works council directive because we believe that companies should be free to decide the arrangements that best fit their own circumstances. The overwhelming advice from British business was that the directive would impose costs without bringing the corresponding benefits.

That advice is now echoed painfully by employer organisations in Europe. British companies were not alone in their opposition: businesses across Europe made their objections known. UNICE—the main organisation representing employers across the European Union—also opposed it, but other member states decided not to heed the views of European industry.

Of course, some British-based companies—a tiny proportion of about a hundred—are affected by the directive because of the size of their work forces in other member states. But they remain free to decide whether to include their United Kingdom workers in their arrangements.

Photo of Gerry Sutcliffe Gerry Sutcliffe , Bradford South

Did the Minister and his colleagues consult employee representatives about the works council directive? He has talked about consultation with employers, but what consultation did he have with employees representatives, notably trade unions?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

We consulted widely before we decided on our stance, which fell in with our own inclinations. As a result, it is clear that there are many more employees now than would have been the case if we had accepted the social chapter.

The social chapter is a blank cheque which, if we had signed up to it, could have imposed unlimited costs on British business and the British economy. It could have been used to pass a whole range of job-destroying measures which the United Kingdom could not block. Our IGC White Paper makes the Government's position on the social chapter quite clear. It states: The United Kingdom will not give up its opt-out and cannot be forced to do so. In the words of my right hon. and learned Friend the Foreign Secretary, our opt-out is "here to stay". But the Opposition would not be satisfied even with the straitjacket of the social chapter.

Photo of Michael Meacher Michael Meacher Shadow Minister (Education)

The right hon. Gentleman has made great play with the risks posed by the social chapter. However, the Government became concerned about the costs of the social chapter only in 1993. In the previous 15 years, Conservative Governments had accepted the Transfer of Undertakings (Protection of Employment) Regulations, equal retirement ages, the application of sex discrimination legislation, the granting of 14 weeks' maternity leave to pregnant women, written particulars of employment to all employees, protection against whistleblowing, the extension of the TUPE regulations to non-commercial ventures and transfers of franchises, the removal of the upper limit on compensation in sex discrimination cases, and a host of other provisions affecting redundancy payments and unfair dismissal. Why did Conservative Governments accept those measures?

Photo of Mr Ian Lang Mr Ian Lang , Galloway and Upper Nithsdale

The hon. Gentleman appears to be making a second speech, but he is wrong. We did not become concerned about the social chapter in 1993. We were concerned about it when it came up for negotiation in the Maastricht treaty. That is why we negotiated our opt-out.

We have accepted other changes in employment conditions where we thought it right and appropriate to do so and where we achieved the balance of which I spoke— between the rights of employers, the rights of employees and the interests of the economy.

The hon. Gentleman spoke about the non-wage social costs, and claimed an extraordinary concept about Britain being disadvantaged. Let me point out that in Britain, for every £100 spent on wages, employers have to pay an extra £18 in non-wage costs. The figure is £32 in Germany, £34 in Spain, £41 in France and £44 in Italy. That is the burden of the social chapter in Europe, and that is why employers in Europe are so jealous.

It is not just the social chapter: the Opposition want further to damage Britain's competitive edge, which has taken us from the bottom of the productivity growth league in the 1970s to the top in the 1980s and 1990s. They would not be satisfied with the social chapter; they want to go further and enforce a national minimum wage. We are told that it would increase pay, eradicate poverty, remove pay inequalities and even reduce the size of the taxpayers' bill for benefit payments. For all I know, it would probably cure the common cold. If that new wonder drug can do so much, why will they not tell us the level at which they will set it? The reason—as any fool will know—is that they know that it will destroy jobs.

The Opposition continually refuse to disclose any details of their proposals. They do not tell us the rate at which it would be introduced, how it would be uprated, how it would be enforced, how many jobs would be lost, and how pay differentials would be resolved.

Let me tell the House the real consequences of a national minimum wage. It would increase employers' wage bills, suppliers would raise the prices of their goods and services to cover their additional costs, and the upward ripple of the restoration of pay differentials would destroy competitiveness and generate inflation.

The CBI estimates that the minimum wage would add some £4.5 billion a year to employers' costs. The university of Cambridge suggests that the figure could be £6.4 billion. In the absence of improved productivity, that would cause a loss of competitiveness. Company profits would fall, inflation would rise and unemployment would increase by up to 1 million if only half the pay differentials were restored. In short, the minimum wage would be a disaster for the country.

The brunt of the job losses would be borne by the very people whom the minimum wage was designed to help— the low-paid, the young, the part-timers and the less skilled. British workers should not be fooled. They need only look at Europe to see the misery, poverty and joblessness that would follow.

In sum, the Government live in the real world. Our policies are fair, balanced and sound and, above all, they are delivering. In contrast, the policies of the Opposition—should they ever have the opportunity to experiment with them in the real world—would spell disaster for economic recovery and for employment growth. I therefore urge the House to throw out the motion and approve the Government's amendment.

Photo of Don Touhig Don Touhig , Islwyn 4:33, 18 March 1996

I have recently spent a lot of time debating and considering the rights of employees, as my Public Interest Disclosure Bill addresses that issue. During the debate on the Bill on 1 March, we had some interesting discussions about employees' rights, companies' productivity and the burdens placed on business and industry. Many of us reached the conclusion that only through a valid partnership between employers and employees can firms prosper.

We noted that, by extending the rights of employees, the Public Interest Disclosure Bill would help employers, as it would encourage employees to bring malpractice, crime and misconduct at work to the attention of those who were in a position to act in such matters and correct them. The Bill hopes to engender a culture of communication in the workplace by requiring that matters are raised internally before any public disclosure, to give the persons responsible time to act.

A climate of communication and trust exists already between many employees and their employers. Widening that spirit of communication can only benefit the economy in general and small companies in particular. Once the individuals accountable know what is going on, they can act—perhaps to stop a fraud that is costing the company money, or a malpractice that could irrevocably damage the firm's reputation if it were made public.

Beth Cawthorne was a young lady employed by a supermarket chain, and worked on a delicatessen counter. She discovered that her manager was changing sell-by dates on dairy products, pates and other items. When Beth was leaving the company, she brought that practice to the attention of her employers, who were pleased and grateful that she did so. The consequences of her not taking that action could have been horrendous for customers, who might have eaten contaminated food, and for the firm's good reputation.

The Bill is not about regulation but about protecting employees' rights. A good employer already does that, and recognises its value. The Bill is not about compliance costs, but is a classic case of self-regulation. It will encourage companies to keep their own house in order.

Public Concern at Work states that one third of the serious concerns raised with that organisation relate predominantly to tax, value added tax frauds, consumer rip-offs and abuse of the vulnerable or of individuals in public care. If such matters are not raised responsibly, damage will be done to this country's vital small business sector, and more bureaucratic rules will be required to be imposed on companies. More to the point, if such malpractices are not deterred and detected, the competitiveness of many companies will be threatened.

Employment rights are the key to good relationships in any company. The right of protection from reprisal if an employee blows the whistle on a serious malpractice is one example. Such employment rights are about respect. By agreeing to such rights, an employer shows respect for his employees. I speak from experience, as someone who ran a small company before entering the House. Good trust is developed between the employer and employee, and that bond leads to increased efficiency and productivity.

If an employee feels threatened, insecure or unhappy at work, he or she will not work well—as anyone who has run a company can tell you. The employee will carry that worry around and be less inclined to be loyal to the company. He or she will not perform to the best of their ability.

Employees who are secure at work, are able to communicate and can raise matters with their employer, feel that there is a safety net, which will catch them if they speak up when something goes wrong. Such employees will be loyal to their companies, happier and more productive. Comprehensive employment rights make not just ethical but economic sense for Britain in the last part of the 20th century.

If the Government remove the right of appeal to an industrial tribunal for employees of small firms, they will prove how out of touch they are with sensible and effective management practices in British business and industry today.

Photo of Sir John Cope Sir John Cope , Northavon 4:39, 18 March 1996

The Opposition motion seems to be worded as if only two parties were involved in this matter—the employer and the employee. Of course, a third party is involved—the unemployed.

The background to this debate is the fact that small firms are at present, and are likely to continue to be, the main generators of new jobs. Large firms are likely to employ ever fewer people, however efficient and successful they are. Several large firms in my constituency have reduced their staff in recent years because of new technology and other developments—at the same time as increasing their turnover, sales and profits. More efficient methods often mean fewer employees. The great national firms that have in the past been the major employers will not produce the new jobs that we need. This is why we need small firms and new firms, and why we need to give them every opportunity to build up their businesses and take on more people.

There is another fundamental misunderstanding in the minds of those who drew up the motion. The Labour party proceeds as if employers have an automatic duty to be employers—to take on and keep on staff, regardless of other conditions. The fact is that neither the Labour party nor anyone else can compel someone to employ someone else. Employment comes from a person deciding to take risks and to set up a business on his or her own— increasingly these days, it is women who are doing this. They must also assume the additional risk and responsibility of taking on staff and providing them with a living.

If we want to continue bringing down unemployment, we must make it easier to employ people, especially for small firms. People need to be persuaded to take the risks of self-employment and starting businesses on their own. That is one of several reasons why it is right to reduce bureaucratic burdens that impose more heavily on small businesses than on larger ones. That is particularly true when it comes to employee rights.

In a small firm, the boss is much closer to the employees, of whom there are only a handful. He or she sees them every day in the course of their work; they know how hard the boss works, and he knows how hard they work. The elaborate mechanisms necessary in giant firms employing thousands of people are not needed.

The hon. Member for Islwyn (Mr. Touhig), whose constituency I find it difficulty to pronounce, spoke of his experience in running a small firm and of the necessity for partnership. I profoundly agree with him on that. It is therefore important that small businesses enjoy good relations between employer and employees. The threat of industrial tribunals hanging over them will not necessarily help.

Photo of Mr Donald Thompson Mr Donald Thompson , Calder Valley

Northavon may be difficult to find but it is not difficult to remember. An international company operating from Northavon has just stated that it is suffering from an inability to employ young people. Its social costs are grindingly high, its taxes are too high, and it cannot modernise or refit because the unions would go on strike. The French franc is also too high, and the company in question—Brittany Ferries—is longing for the freedom that most large British companies enjoy.

Photo of Sir John Cope Sir John Cope , Northavon

Although my hon. Friend has been to Northavon, I think I know what he means about not being able to find it. It is quite a long way from any substantial investment by Brittany Ferries—but I suppose that Northavon is nearer than Yorkshire to the centre of the company's activities.

Small firms face other burdens as well. Anyone running a small company has to keep up with a huge range of regulations—governing employment, health and safety, fire, taxation and local authorities' requirements. The back-up mechanisms enforcing the various regulations are all different and are managed by specialists who can understand complicated regulations in their own fields because they deal with them every day, but the poor chap trying to run a small firm has to understand the whole lot himself if he is to be successful.

It is no use the Labour party saying that it wants to help the unemployed if it is not prepared to help small firms. Nor is it any use the Opposition supporting a motion of this kind while trying to pretend that they are friendly to small firms. The Opposition sometimes claim to be in favour of deregulation, but at the first hint of any possible changes in this area, they flinch. That is unsupportable—

Photo of Ian McCartney Ian McCartney , Makerfield

I understand that the right hon. Gentleman is a former Minister with responsibility for small businesses. Would he care to offer the House any examples of rights that he would like to see removed as part of the Government's review?

Photo of Sir John Cope Sir John Cope , Northavon

The hon. Gentleman is right to say that I have some experience of the matter, both as a Minister and in other ways. I am discussing the total burdens imposed on small businesses, and arguing that the Government are right to take a look at them. They were right to produce their Green Paper; they are right to introduce the Bill about which my right hon. Friend the President of the Board of Trade spoke towards the end of his speech.

On the subject of hours of work, the hon. Member for Oldham, West (Mr. Meacher) complained that some people work too long hours while other people are out of work. To me, that shows that employers are reluctant to take on more staff and prefer instead to get their current staff to work longer hours. If the burdens of employing someone else were smaller, they would be more likely to take on more people and less likely to want their staff to work longer hours. There are many different reasons for overtime—they vary from company to company and from period to period—but the argument advanced by the hon. Member for Oldham, West did not stand up.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

The right hon. Gentleman seems to be arguing in favour of giving employers incentives to remain small employers, since encouraging them to use the same staff to work longer hours discourages them from expanding. At its logical extreme, the point seems to be that employers should dismiss employees so as to stay below whatever threshold is set.

Photo of Sir John Cope Sir John Cope , Northavon

I absolutely accept that providing a small firm with an advantage of any sort may produce difficulties at the threshold below which small firms want to remain—in terms of numbers of employees, or turnover, or profit. Giving small firms a particular benefit does create a threshold problem of the kind that the right hon. Gentleman suggests. At the same time, the highest threshold is between employing nobody and employing somebody. We need to get people to start businesses and take on employees. We would reduce unemployment best if we made it easier, not harder, for small firms to employ people, but I accept the right hon. Gentleman's point about the difficulty of the threshold.

I congratulate my right hon. Friend the President of the Board of Trade and his colleagues on initiating the series of conferences for small businesses. My right hon. and hon. Friends were right to put the management of the conferences in the hands of the Institute of Directors and the other organisations, but it was a good initiative for the Government to start the conferences. I was glad to see the full backing that the conference had from my right hon. Friend the Prime Minister and other Ministers last week.

The hon. Member for Oldham, West read out a paragraph from the report, which was produced not by the Government but by the small firm organisations, presented to that conference. He did not read out the next paragraph, which states: The restrictions on firing employees were also called into question and a lot of people said that they would be much more willing to take people on if they knew that it wasn't going to be expensive to lay them off, if it turned out that they didn't need them any more. Later, it states: Industrial Tribunals were also seen as a problem area and many small business owners said that they resented the fact that they could get landed with a big legal bill over the pettiest dispute with an employee. That is not from the Government but from the small firms, and it shows the problems that the Government have addressed in the Green Paper and propose to address in the draft Bill.

Photo of Denis MacShane Denis MacShane , Rotherham

One would think that employment was fixed and static and that no firm, small or large, had the ability to get rid of anyone. How is it that nearly 9 million people have lost their jobs—have been churned, laid off or dismissed—since the general election? Small businesses are laying off willy-nilly every day of the week.

Photo of Sir John Cope Sir John Cope , Northavon

I do not know where the hon. Gentleman gets his figures. I have the unemployment figures to hand and, since April 1992, unemployment has fallen by 15.8 per cent. It has fallen in Oldham, West by 20.8 per cent., which is not quite as good as in Northavon.

The end of the report given to the small business conference last week shows the results of the statistical survey that was prepared for the conference. On page 20, figure 15 shows the ranking of burdens of government on business. One of the highest—almost the highest—rated burdens is "Employment Regulations". It is rated slightly lower than "Cost of Compliance", and slightly beats "VAT Administration", for which I have also had some responsibility, although we made some improvements and further improvements are coming.

I have no doubt that many small firms are inhibited in taking on staff by the potential problems that they face from employment protection legislation. Over the years, various employers have come to my constituency surgery and told me about employees taking them to industrial tribunals. They face the burden of legal bills, and we heard opinions about lawyers just before the debate began.

The Government are right to consider the whole area, and they have been steered in the right direction by the report of the small business conference. The House will have a duty to study the proposals in the draft Bill and examine the balance of which my right hon. Friend the President of the Board of Trade spoke. It is wrong to suggest that we should throw out the suggestions before they have even been made in the draft Bill. I approve of the system of publishing Green Papers and draft Bills in legislation of this kind. The process of producing new law is helped by the publication of draft Bills for study by all concerned. That improves legislation, and we will be able to minimise the burdens through effective, lasting legislation. I support the amendment moved by my right hon. Friend the President of the Board of Trade.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry) 4:55, 18 March 1996

The President of the Board of Trade was right to stress the importance of the small business sector to the economy. That must be beyond any serious doubt or debate. He and the right hon. Member for Northavon (Sir J. Cope) were also right to stress that none of us would wish small businesses, or any other businesses, to be burdened unnecessarily with regulations; but there is a world of difference between being burdened with regulations and the fundamental issue of people's rights. I shall explore the difference in a minute.

When I talk to small businesses and their representative organisations, I find that they view with healthy scepticism pledges by the Government to do away with regulations. No doubt they remember only too clearly that Lady Thatcher came to power in 1979 committed to doing away with regulations every bit as much as she was committed to doing away with quangos. They know that the numbers of regulations and quangos since then have rocketed. When small businesses hear that the Government have made a commitment to removing the regulatory burden, they reflect that the Government brought in the vast majority of the regulations and have gone to the Council of Ministers and readily agreed to more burdens.

The burden that small businesses most often bring to my attention is the very one that the hon. Member for Oldham, West (Mr. Meacher) mentioned earlier. Despite the fact that small firms continue to pay employers' national insurance contributions, they are now expected to cough up for statutory sick pay and redundancy payments. They do not understand why they should have to pay twice.

It has been said that individuals' rights in the place of work are red tape and burdens on their employers, but why should an individual worker's rights depend on how many other employees work for the same enterprise? People should have the right to feel safe in the workplace, not to be discriminated against, to have equal value put on their work compared with any other employee, to feel confident in employment and to know that an employer cannot turn around and fire them simply because their faces no longer fit. Those are every bit as much fundamental human rights as the right to choose one's religion, the right of freedom of expression and association, or any other right.

The discussion this afternoon about the rights of employees should not be confused with the burdens of regulation. If a case can be made that the enforcement of those rights is placing an unacceptable burden on employers or on small firms, let us by all means look at the methods by which rights are enforced and the procedures for individuals to seek remedies. Perhaps better, more streamlined alternatives could be put in place. That would be sensible, and I welcomed the President of the Board of Trade's comments about the review that the Government are conducting on the ways in which individuals can enforce their rights.

If the services of the Advisory, Conciliation and Arbitration Service or of any other body are to be expanded so that a conciliation service can be used more widely in dealing with individual complaints, that is to be welcomed. If that process goes a step further and those involved in a conciliation service are able directly to arbitrate, that is entirely sensible and is to be welcomed.

Arbitration is already being used in the workplace. It is used when there are collective disputes. Many individual contracts of employment provide for arbitration in some areas of disputes. It would probably be far cheaper, quicker, simpler and sensible for arbitration to be used in dealing with individual employment contracts. If alleged unfair dismissal is examined through the process of arbitration, there is a far better chance of a sensible outcome. Perhaps someone will have visited the workplace. He or she will have heard both sides of the argument. That person will be able to produce a remedy that will facilitate a re-cementing of the working relationship. There will be a far better chance of that re-cementing succeeding in those circumstances than if a judgment is handed down by an industrial tribunal, a process which all too often costs far too much for all concerned and takes far too long to arrive at a conclusion.

Much as the President of the Board of Trade wished to open up a divide between his position and that of the Opposition, he sought to disguise a clash between himself and the Deputy Prime Minister. The only difference of approach is to be found within the Government. That is represented by the letter that the President of the Board of Trade wrote to the Deputy Prime Minister on 5 March, when he warned that employees in small firms being denied employment rights would be controversial and that the Government might appear to be imprudent if they attracted criticism only to retract the proposals later.

In essence, there is a dispute between the President of the Board of Trade and the Deputy Prime Minister. I wish the President every success in prosecuting his side of the dispute. I think that he will have the support of many Members of this place if he can win general support for the approach that he outlined this afternoon, which involves introducing a new arbitration procedure to enable employment rights to be enforced. There is a world of difference between that approach and the Deputy Prime Minister's proposal of considering the "feasibility" of introducing "exclusions" into employment legislation. The difference is whether to reduce rights or provide a different way to enable individuals to enforce rights.

Much is said about the advantages or benefits that stem from having a flexible labour market. It is essential that there is flexibility in the supply side of the labour market. In future, not many people will work throughout a career for one employer or even in one industry or discipline. In selling their labour, people need to be flexible. As we move into a more technological age, it seems likely that many people will have to retrain, perhaps several times, during a career.

We must beware of a flexible labour market being used as an excuse for disguising bad employment practice. Many firms, in the name of the so-called flexible labour market, begin to act in a way that is counterproductive to the economic good of the country and to the best interests of their employees. For example, many people are being given self-employed contracts when they are not self-employed. They are rather surprised when representatives of the Inland Revenue take the view that they are not in self-employment but in what I shall describe as ordinary employment. They find themselves taxed accordingly.

Other moves are short-term contracts and the contracting out of work. In other circumstances, whole jobs are split into bits and taken up by part-time workers. There are firms that lay people off—I have encountered this in my surgery work—after 102 or 103 weeks of employment. They do so to prevent them clocking up two years' employment, when they become entitled to employment rights.

There is a variety of employment practices. The ingenuity of employers to dream them up is almost limitless. The practices of which I am talking are damaging to the labour market and to society generally, not to mention the economy.

Ministers speculate about when the feel-good factor will return. They should be thinking at the same time about employment practices and the effect that they have on people feeling good. If employees are in fear of where their pay packet will come from in the weeks or months to follow because of the unsatisfactory nature of their contracts of employment, it is small wonder that they are not plunging into the housing market, buying cars or doing the various other things that the Government are waiting for them to do so that they can arrive at their much-vaunted feel-good factor.

There must be some flexibility, but it would be better if overall pay levels were slightly lowered and in return employees had more security and confidence in their employment. If the Deputy Prime Minister had his way and employment rights were removed, employees who had given 10, 15 or even 20 years of loyal service to one small company could have their entire career blown away. They could be thrown out without any justification and they would have no remedy. There are some who perceive that approach as part of a so-called flexible labour market. We need some flexibility, but we must be cautious. Flexibility can be used to justify practices that should not be implemented.

Employees' loyalty and motivation are important assets that good employers nurture. Not for nothing has Toyota adopted the motto "Quality goods, quality work force". That has stood the company in good stead. A working environment in which people feel fulfilled and fairly rewarded contributes to improving economic performance and frees people's talents.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor):

The hon. Gentleman has referred to Toyota as an exponent of good practice. I remind him of Land Rover in my constituency, which is rather closer to home. At Land Rover, productivity is very high. A plenitude of good ideas comes up from the shop floor, which leads to best practice. That is a token of job satisfaction. The rate of strikes is the lowest for 100 years. New vehicles are rolling out of the Land Rover factory as fast as they can be made. Is that not a closer-to-home success story?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

It is indeed. I am delighted to pay tribute to the work that is being achieved by Land Rover. I am sure, however, that the Minister is not suggesting that its success is being enjoyed because Land Rover employees have fewer rights than their counterparts elsewhere. If Land Rover has been able to succeed with a work force that has full employment rights, it provides a fine example that other firms should seek to emulate. They should recognise that they, too, can succeed.

Photo of Denis MacShane Denis MacShane , Rotherham

Is it not a tribute to the managements of Land Rover and Toyota that they recognise trade unions and work solidly with them? As the Minister will know, co-operation from the trade union side has revolutionised Land Rover. Nothing positive stems from the pathological hostility to trade union representation that is represented by Conservative Members.

Mr. John M. Taylor:


Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

Many issues would not end up at industrial tribunals if they could be better dealt with in the workplace. It is beginning to emerge from academic research that small firms that have trade union recognition and have devised procedures in the workplace for resolving disputes are beginning to enjoy a great advantage. As a result, fewer disputes end up being dealt with by the costly industrial tribunal process. The issues are dealt with on site.

Mr. Taylor:

Notwithstanding the intervention of the hon. Member for Rotherham (Mr. MacShane), surely the hon. Gentleman accepts that the ultimate liberation of Land Rover was as a result of privatisation? When I first became the Member of Parliament for Solihull, in 1983, there was a communist for a shop steward, appalling industrial relations and spare parts flying over the wall. Privatisation has made Land Rover.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

I certainly will not dispute that point with the Minister. In principle, there is no reason why the car industry should have been in public ownership. If Land Rover is succeeding in the private sector, everyone should be very pleased about it.

Employability, flexibility and employment are underpinned by the creation of a work environment in which people feel fulfilled in jobs that are rewarded fairly and are satisfying. We should have a framework of employment rights that will foster that environment and cause it to spread, and which will provide access to consultation and participation. In time, I hope that the framework will be expanded, giving an ever-increasing number of employees rights to participate in the decisions made at their workplaces, to share in the profits and to become shareholders in the company itself.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The hon. Gentleman will know that Toyota, which he mentioned in the earlier part of his speech, is based only a few miles down the A38 from Lichfield. Some of my constituents work there. Does he accept that Toyota would never have come to Britain if the same conditions of employment operated here as operate in Germany? Toyota is a few miles down the A38 from Lichfield and not a few miles down the road from Bonn because of our conditions of employment.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Trade and Industry)

If Toyota is willing to come to Britain with our current employment rights, the necessity for anyone to take away or water down those rights any further seems to be negated.

The most successful companies know how to involve and motivate their employees by ensuring that they have a real say in decision making, a share in the ownership of the enterprise and a share of the profits that they help to create. We should be creating a climate in which management and employees come to share a common interest in the future of their enterprise and a joint commitment to success. The creation of that climate will require a legal framework that encourages and rewards companies that take a long-term view of their profitability and invest in their work forces as a positive asset, rather than regarding employee rights as a source of red tape or as a burden.

We should be creating an industrial climate in which employees are motivated co-operatively to meet the challenges of competitive markets. The creation of that climate will involve creating the right industrial relations and legal framework, and the provision of ready, easy, cheap and quick access to the means to enforce those rights and to get proper and meaningful remedies.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge 5:12, 18 March 1996

There was a great deal—to our mutual embarrassment, I suspect—in the speech made by the hon. Member for North Devon (Mr. Harvey) with which I could agree. Fortunately, there were some things on which I could draw the line between us, which I am sure will come as a great reassurance.

For many years, I have had the great good fortune to take part in debates, in the Chamber or in Standing Committee, with the hon. Member for Oldham, West (Mr. Meacher). He is a tremendous debater, and combines an engaging charm outside the Chamber with a great degree of brazen, bare-faced cheek inside it. When we hear him talk about job insecurity and the circumstances in which jobs arise or fail, we can forget that he is one of the relatively few Opposition Members who was a Minister in the previous Labour Government.

I know that the old brain cells go down as the years roll by and that we cannot remember what happened but, as a member of that Labour Government, the hon. Gentleman should cast his mind back to job market conditions in 1979. We should remember car-park democracy, Red Robbo, flying pickets being able to impose their will on people, the scenes on the Grunwick and Wapping picket lines, and the inequities and evils of the closed shop. Often, unless people were prepared to sign up to trade union membership, they could not even work. Trade union ballots were unknown or, if they were known, the idea that they should have been secret was unknown.

Where did all those job market features come to pass? They came to pass in the winter of 1979, when a cancer patient who wanted to know their priority on the operating list did not ask the consultant surgeon but the hospital porter, because it was he who worked on the priorities. Cancer patients were queuing up in the snow for ambulances that never arrived. In the streets of the capital city, great heaps of refuse were sprayed with rat poison because public sector unions would simply not shift them. And we had to have temporary mortuaries because it was not possible to cremate or bury the dead.

That extraordinary series of events—which now seems light years away, except that we still have a few former Labour Ministers who have cause to remember it—can be summed up in the marvellous phrase of the Labour Prime Minister who, returning from the sun-blessed shores of the West Indies, asked, "Crisis? What crisis?" Those events were the real crisis in the jobs market.

The incoming Conservative Government had to dismantle all the conditions that made that situation possible, and all the underpinning trade union law that put trade unions above the law. Labour Members voted against every provision and reform that we made: abolition of the closed shop, the provision of secret ballots, and ballots for the election of trade union officials.

The present Leader of the Opposition used a marvellous phrase—which the hon. Member for Oldham, West, to be fair to him, would probably still go along with; he might have the honesty to say so—to describe the idea that there should be ballots for the election of trade officials: "monstrous effrontery". That attitude towards the jobs market and the industrial climate destroyed jobs on a grand scale. No thanks to Labour, all that has been swept away by this Government—in the teeth of opposition from the Labour party. Any debate about job insecurity, especially one that is opened for the Opposition by a member of that deplorable Government, has to start from that point.

The hon. Member for North Devon said—I hope that I paraphrase him without being unfair—that there must be some balance between the types of protection given to people in different types of work. I do not think that anyone would deny that. I am not sure whether it was intentional, but he suggested that, in a sense, it was all or nothing, and that it was possible that, under the Government's proposals—and because of the direction in which they are moving—for certain employment rights to be denied to people who work in small firms. That is not my understanding of the law, and it is certainly not my understanding of the Government's intentions.

Employees have certain rights that are absolute and which apply even when one person is employing another. No matter how few they are, all employees automatically have absolute rights if, for example, there are attempts at discrimination on grounds of race, sex or trade union membership. I cannot imagine for a moment that the Government would make any proposals that would destroy those rights. Beyond that, we are into territory in which it is possible to ask to what extent a growing business can take up, and survive the burden of, particular types of employee rights.

It is extraordinary, but if we listen to Opposition Members it sometimes seems as if employers are people who are guilty of wanting to introduce jobs into the workplace. It seems that, when an employer creates a job, something bad has happened and that we must right away cover the job with all sorts of responsibilities and burdens, almost as a punishment.

To adopt that attitude is to ignore what a job is in the first place. A job arises because the employer or entrepreneur sees an opportunity to create a profit for himself and to create a job for someone else. The job is real if it answers a commercial need. The job is real for the employee who might fill it if it is allowed to flourish. Ultimately, if so many conditions and responsibilities are imposed on a person who is creating a new business that he simply says, "No, I am not going to put up with that," the job will be killed off. Who benefits from that?

We see the problem clearly in the context of minimum wage legislation. If the boss of someone who works part time in a corner shop for what may seem a relatively small amount of money—but who wants the jot)—is told that he cannot pay that person at £3.50 an hour but must pay £4.50, what will happen? The job will certainly disappear. There is nothing unusual or radical about that. It is sheer common sense.

Photo of Denis MacShane Denis MacShane , Rotherham

In the Register of Members' Interests, the hon. Gentleman is listed as having some 10 remunerated employments. Could he perhaps give up one or two of them and take an unemployed person off the register in exchange?

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

Even for the hon. Gentleman, that was a particularly puerile question. All that I will say to him is that, unlike him, when I talk about employment matters, I know what I am talking about, because I have been the senior partner in a firm that creates work for employees who would not have had work otherwise.

I have no idea what the hon. Gentleman has done in his past life, but I hazard a guess that he has never been out there in the marketplace having to take commercial decisions, being prepared to live off his own risks and his own wits and at the same time creating positions for other people. When I look at the hon. Gentleman, it is clear that, in an age when even street cleaning has been mechanised, there is only one job he can be confident of knowing that he can fulfil—that of Labour Member of Parliament for a safe seat.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Would my hon. Friend be surprised to learn that the hon. Member for Rotherham (Mr. MacShane) was a journalist in Switzerland, complete no doubt with a Swiss bank account?

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

I did not realise that he had a Swiss bank account, but there is so much that one does not know about journalism.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. Let us return to the subject of the motion.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

As I was saying before I was so—as you have ruled, Mr. Deputy Speaker—unnecessarily interrupted from the Opposition Benches, as an employer I have some knowledge of what it means to create employment.

We can see the effect that a minimum wage would have on this country when we consider the effect that it has already had on Germany and France. I was talking, recently, to a British business man who is in a small way of business based in France. He had been thinking of taking on a typist. It was not a particularly elevated position, but there was a job there. When he investigated what the total package of social on-costs that he would have to add into the system would be, he found that it was almost £40,000 a year. As a result, he did not create the job. Somewhere out there now there is an unemployed typist who might have been employed.

The idea that the basis of the legislation to restrict working to 48 hours a week is concern about health and safety is nonsense. It has been proposed for a perfectly straightforward reason—Germany is the dominant power in the European Union and it is in the business of trying to impose on Britain the social costs that are making it increasingly uncompetitive.

I asked the hon. Member for Oldham, West where was the logic in saying that, if people work more than 48 hours a week, they run a risk to their health. I pointed out that the hon. Gentleman certainly works more than 48 hours and that self-employed people had to work longer hours. He said, "Oh, there are lots of exceptions." Of course there are lots of exceptions. That, in the end, is what will make the 48-hour rule liveable with to some extent—it is such nonsense because there are so many exceptions to it.

It says something about the Labour party's attitude that its ideal is that someone should work 48 hours and not a jot more. What would be the effect of such a policy? The answer is perfectly straightforward. Some people would lose their job and others would find that the hours for which they could work would be restricted. Far from being able to take home more wages, people would take home less.

Photo of Ian McCartney Ian McCartney , Makerfield

As an employer or former employer, will the hon. Gentleman tell me whether an employee of his, who had already worked 48 hours in a week and decided that he did not want to work additional hours that week, should be protected in law? Does the hon. Gentleman have an absolute right in all circumstances to make employees work more than 48 hours?

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

The contract that I had with employees I might need to work more than 48 hours a week would state that they would work for my firm at a wage or salary to be agreed. The hon. Gentleman might say, "I do not care what crisis you have got on, what orders you have to satisfy or what cases you have to prepare to go to court at short notice, in no circumstances will I work more than 48 hours a week," but, in case he is thinking of writing me a job application, let me tell him that he would not get the job. It is not possible realistically to limit hours as is proposed. It does not begin to make any sense.

There is a fault line running through the argument, made on the Opposition Benches, that low pay is not better than no job. It is. The hon. Member for Oldham, West made the point that the jobs market is not static. If people are on low pay, they are not there for ever. There are circumstances in which people have to work longer hours, but sometimes they have to work shorter hours.

What we need is a climate in which those who offer jobs are able to reach an accommodation with those who may be able to fill them. The idea that it is possible to increase the job security of some of the less able and less well cared for members of the jobs market by restricting the hours that they work is nonsense.

What people in general, the unemployed and the country need is a climate in which jobs can thrive without industrial disruption, in which people can reach sensible arrangements and in which foreign courts do not try to impose social chapters. That is the climate in which jobs thrive. It is not the vision that we find in the Opposition motion before us today.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston 5:26, 18 March 1996

I shall refer in some detail to the remarks made by the President of the Board of Trade about the industrial tribunal system. I agree with one point that he made; that is it not working as well as it could. That point is clear to any hon. Member who has ever conducted an industrial tribunal. The problem is that, as case law has developed, industrial tribunals have by their very nature become more and more legalistic and have involved more lawyers, barristers, appeals to the employment appeals tribunal and so on. There is an underlying problem there, and I grant that the President of the Board of Trade is right to undertake a review of the mechanism in force.

When the tribunals were first set up, it was clear that they should have due regard to the circumstances of the case before them. Against that background, it was proper and possible for the tribunal to take into account factors such as the size and nature of the company. I remember some years ago taking a case against a company which used the defence that it was only a small company, and therefore did not have the expertise to take cognisance of all the facets of the law in the same way as a large corporation could. The tribunal chairman acknowledged that that was a fair point, but when it was pointed out to him that the small company was part of a conglomerate in a large corporation, he took a slightly different view. That was a perfectly proper balance to strike.

The industrial tribunal system, as it is currently constructed, is of importance to employees and employers in small businesses, if it is used properly. It has become over-legalistic. If we could find a mechanism to bring back the informality that existed in its earlier years, we would do a service to both employees and employers in small businesses.

Employees in small businesses obviously do not have the collective power of their fellow workers in larger companies. Reference was made earlier to large companies such as Rover. Clearly, the working environment in such companies is entirely different. It is clear that in small businesses, which may supply companies such as Rover, the employees do not have access to the collective power of the work force of a successful company such as Rover or, in many cases, to the professional advice that trade unions offer. There is a shortage of expert advice.

Small businesses, through some of the employer organisations, have limited access to advice, but they do not have the expertise of the professional personnel departments of the large corporations. As a consequence—they may not even have a personnel officer—their natural inclination is to go to a local law firm. I submit that that is a mistake and that it propagates a system that is creaking at the seams. A number of Conservative Members who are lawyers are rapidly looking at their diaries; perhaps they are looking for cases in which they are involved. However, when matters of common sense need to be examined, it is not helpful to use such a system.

Photo of Sir John Cope Sir John Cope , Northavon

The hon. Gentleman's advice is not sensible or practical for a small firm. If a small employer is taken to an industrial tribunal, he needs proper advice. Where is he to get it? One of the places to get advice is from his solicitor or from another expert. Just to wander into an industrial tribunal is to be taken to the cleaners. Many people—this is my experience and that of others—are told when they go to a solicitor, "Look, you would do much better to settle. Pay them a few thousand pounds now. Don't bother going to the tribunal. Just settle now and clear up the matter."

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

I thank the right hon. Member for Northavon (Sir J. Cope) for that helpful intervention. If he listens to the rest of my contribution, he may understand the basis of my argument. I put it to him that his argument applies to employees as much as it does to the employers, to whom he referred. However, it is often the case that because the system is creaking at the seams, it is not doing justice to the underlying remit of the tribunal which is to try to resolve matters on the basis of common sense.

I will answer the right hon. Gentleman's point specifically, because it is important. I believe that the role of the Advisory, Conciliation and Arbitration ServiceACAS—is breaking down in this area. It is not delivering the kind of service that it should deliver to small businesses that need help and advice. ACAS should be able to advise—"advisory" is the first word in its title. It should have the resources properly to advise small employers who ask, "Am I doing the right thing here? Am I within my legal rights?" The problem is that, with the cuts affecting ACAS, time and again, officers are not available to give the detailed advice that is needed within the time frame. There is an underlying problem.

The President of the Board of Trade referred to conciliation; that is an important service provided by ACAS and it takes place before a case is heard by an industrial tribunal. My experience is that ACAS officials have only limited time at their disposal in which to seek to address the problem between the two parties. When they find the time to bring the two parties together, solutions can often be found through the conciliation process.

Mediation, which is also within the remit of ACAS, is not often used. I have no doubt that when we discuss the Family Law Bill next week, we shall hear cries of derision from one or two hon. Members, such as the hon. Member for Sutton and Cheam (Lady Olga Maitland), about mediation. Let us look at mediation in the context of ACAS, although that function is seldom used because it requires resourcing.

The arbitration function tends to deal more with collective issues and may not be relevant to this debate. However, within the framework of advice, conciliation and mediation, there is an important role for ACAS. That is the kind of resource that the state should provide for employers and employees to help them to get on with their business. It is not a case of saying, "This is the nanny state," to use the phrase of the hon. Member for Teignbridge (Mr. Nicholls). ACAS is an example of the Government providing a service that is available to the parties to enable them to resolve their differences without going to industrial tribunals. That point should be thought about carefully.

The President of the Board of Trade did not respond to Labour interventions by saying that he sought to reduce the formal legal structures within the industrial tribunals, and he did not say that he intended to limit access. However, as is well known from the leaked letter to the Deputy Prime Minister, such a view is circulating inside the Government.

I put it to the Government that, if there is a need to carry out a review of the industrial tribunal system, the way in which to do it is to look at the mechanisms that lead up to tribunal hearings and then to look at the mechanisms during the hearings. Such an attempt could also reduce the heavy burden on the system. The industrial tribunal system has many roles associated with it. Some of them have developed in recent years and others developed long before this Government came to office. It is ludicrous to assume that the industrial tribunal system could operate with an arbitrary cut-off point based on the size of the company involved.

The list of items is so long as to make the Government's suggestions nonsense. I do not believe that any member of the Government is considering removing race relations from the list of items covering all employees. It would be ludicrous to say that small employers were able to discriminate but that larger employers were not. Clearly, there are many areas in which a tribunal must, if pressed, take a view of the claim before it—and this was set out in the original legislation— to have due regard to the circumstances.

One example might be time off for public duties. Clearly, it is difficult for a small employer to give time off to somebody who has become a justice of the peace, whereas it is less difficult for a larger corporation. Society needs to deal with that problem. Given the trend towards smaller and smaller companies, it would be wrong for no justices to come from that background. Inevitably, tribunals need to consider the problem in the way that I have described.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

I am following what the hon. Gentleman is saying. He is making a responsible speech and I agree with a great deal of it. However, is there not a difference between the rights and safeguards that can be given to those working in a small business and those working in a large business? It is a question of where the balance lies, and that needs debate. This Government have started that debate. Therefore, at least on that issue this evening, what is the difference between us?

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

Quite simply, the difference is that the Government are suggesting an arbitrary cut-off, whereas current law requires a tribunal to have due regard to the circumstances. That gives equality across the board, irrespective of the size of the firm. For the sake of argument, let us consider what would happen if the arbitrary cut-off was set at 20 employees and someone was wronged first, in a company of 21 employees, and secondly, in a company of 19 employees. It would be ludicrous to discriminate between the two cases. Indeed, the wrong done to the employee in the firm of 19 might be far greater than that done to the employee in the firm of 21. The key point is that there must be due regard to the circumstances.

Britain is moving towards smaller and smaller employment units. The contracting-out ideology has dominated many large corporations, although it is interesting to note that as they have flattened out and examined their management structures, some have begun to question the logic of contracting out everything just for the sake of it. Nevertheless, the fact is that more and more employees will be working in smaller companies, so we need to ensure that their rights are properly protected.

The small business sector is undoubtedly important. The hon. Member for North Devon (Mr. Harvey) made a pertinent point about the feel-good factor. I intend to refer to the trade union of which I am a member, the Manufacturing, Science and Finance Union. Usually, that would result in an instant response from the hon. Member for Teignbridge, but I notice that he has now left his place.

MSF conducted a survey, published in December 1995, of 366 public and private sector workplaces. It is a regular, systematic and professionally conducted survey, and Ministers have seen the results. It found that 33 per cent. of respondents felt that their jobs were less secure than in the previous quarter. Some 5 per cent. said that their jobs were more secure, while 61 per cent. reported no change. That does not represent the hoped-for feel-good factor. In a separate survey, 58 per cent. of those questioned felt that their jobs were insecure, while 65 per cent. felt that their jobs would not be secure by the year 2000.

That is the real background against which this debate is taking place. There are smaller and smaller employment units, and there is a lack of any feel-good factor among employees.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The lack of a feeling of security is well documented beyond the survey to which the hon. Gentleman referred. Does he agree that the reason for it is that the pace of technological change has resulted in a shift in the nature of employment? Have not the newly emerging countries on the Pacific rim produced a range of new competitors? Unfortunately, whereas people used to expect to go into a job for life, the present reality is that most people starting work now expect to change employment a number of times. That is one of the causal factors behind the figures that the hon. Gentleman cited.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

The hon. Gentleman has been reading my speech. My next line refers to high-tech companies and the change in employment structures. I agree with his points to a certain extent, but just because some of the factors are technologically driven does not mean that there is not a problem that must be addressed. As a nation, we need desperately to restore a feel-good factor, and we should do so by having an early general election.

Photo of Ian McCartney Ian McCartney , Makerfield

The hon. Member for Elmet (Mr. Batiste) referred to technological change, but what he said is also true for many of our competitor countries. In the league table for industrial competitiveness and job creation, Britain comes 20th out of 24. All our major competitors have dealt with technological change, but have still been able to create employment.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

My hon. Friend is absolutely right. We need only look at the extraordinary rate of development of small and medium-sized enterprises in the Stuttgart area, in California and in parts of the Asia-Pacific countries.

My point is that our centres of excellence in research offer tremendous potential benefits, but we are not exploiting them, especially in such areas as information technology, electronics and genetics. We also run the risk of losing our lead in areas where we have been traditionally strong, such as Pharmaceuticals and aerospace. If we are not careful, the employment opportunities in those areas will drift away. Time and again, research and development conducted by some of our household names is being undertaken outside this country.

We need to revive R and D from the bottom up, and the role of small and medium-sized enterprises in that is enormously important. That revival is not happening. That is nothing to do with some arbitrary cut-off in employment rights; it is not happening because of the basis on which those companies exist inside this country. For example, they do not get proper taxation treatment. A recent report by the Select Committee on Science and Technology—the hon. Member for Elmet (Mr. Batiste) was a co-signatory—called for tax breaks for companies conducting R and D at the high-tech end of industry.

Photo of Mr Spencer Batiste Mr Spencer Batiste , Elmet

The hon. Gentleman and I have worked together on two Select Committee reports that have touched on the points that he is making. I should be grateful if he would confirm two points for the benefit of the hon. Member for Makerfield (Mr. McCartney). The first is that biotechnological research has been driven out of Germany almost entirely by over-regulation of the German market. The second is that the average German worker costs his employer 25 per cent. more than the average Japanese worker, and for that he works 25 per cent. fewer hours—yet the Japanese do not regard themselves as competitive.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

On the hon. Gentleman's first point, he knows that he is talking nonsense because there are historical and cultural reasons why the Germans have been slow in investing in biotechnology. It is important to realise that now that there is a greater understanding of the protections and mechanisms, that trend is changing.

On employee costs, the hon. Gentleman will recall that a machine tool company told the British parliamentary delegation that, when it noticed the recession, the first thing it did was to invest in training and in R and D. It is extraordinary that our companies have not responded in the same way. The reason for that has more to do with the Government's attitude to training and to support for investment and tax breaks for R and D, and the lack of structural support for company development than with employment law.

The Government are fond of telling us that countries such as Germany and France are grossly over-regulated in employment law. However, those countries do not have the same problem with the high-tech end of small and medium-sized enterprises. It is not valid to draw a universal comparison and say that all SMEs are the same, but that sector is vital to the growth of our economy and we have a severe problem within it. To tackle those problems, while we need to consider the mechanisms of the tribunal service and the Advisory, Conciliation and Arbitration Service, we should not create an arbitrary cut-off that disadvantages employees in an important sector of the economy.

It is against that background that I urge hon. Members to support the motion, which sets out the argument concisely. Let us go forward in a way that is in the interests of small and medium-sized employers and their employees together.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid 5:51, 18 March 1996

I had not intended to take part in the debate, but I became so incensed by the naive comments of the hon. Member for Oldham, West (Mr. Meacher) on what he thinks creates employment that I felt compelled to speak.

I notice that the only Opposition Member with any business experience is the hon. Member for Islwyn (Mr. Touhig), who I am pleased to see still in his place. The hon. Member for Rotherham (Mr. MacShane) points agitatedly at himself. As I understand it, his only expertise is in choosing in which Swiss bank account to deposit the money that he collected from his journalism when he was employed in Geneva.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I give way to the hon. Member for Rotherham and Geneva.

Photo of Denis MacShane Denis MacShane , Rotherham

I am deeply flattered by the hon. Member for Wig's view that I am a journalist. However, I have not been a paid journalist since 1977. I am grateful for his recognition of my writings but the hon. Gentleman must count me out as a paid, full-time journalist.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I am sad to hear that the hon. Gentleman is one of the few people in this country who is unemployed—or least that he was unemployed before he became a Member of the House of Commons. Certain people are unemployable. The hon. Gentleman's rather puerile comments on my personal appearance—which, I might add, are technically wrong—show why he is unemployable. Unlike the hon. Gentleman, I have never had a Swiss bank account, but I have been in business. I started a small firm, and it grew into one that supplied radio studio equipment to 48 countries worldwide, including radio stations in Geneva, Basle, Lucerne and Zurich. I am sure that he listened to some of those stations.

If my company had had to exist under the regime proposed by the hon. Member for Oldham, West, it would never have got off the ground. Some 200 people employed by my company directly, and several hundred—perhaps several thousand—others who were employed indirectly by my company would be unemployed as a direct consequence of what is being proposed by new Labour. I propose to show that there is no difference between new Labour and old Labour. Plus ça change: it remains exactly the same.

The speech of the hon. Member for Ellesmere Port and Neston (Mr. Miller) was especially interesting, but some of his arguments were unbalanced and lacked logic. Although he recognised—on this there is no difference between the Government and the Opposition—that small businesses have to be treated differently from large businesses, he then said that there should be no arbitrary cut-off. What sort of cut-off should there be? He implicitly said that it should be non-arbitrary. Does that mean that there will be an employment scheme for judges who would decide in every instance whether a business should be treated as small or large?

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

The hon. Gentleman was not listening. I said several times that the original guidance to tribunals, which still stands, was that they should have due regard to the circumstances of the case. That includes—case law from senior courts has supported this—a justifiable defence for a small employer who does not have the same expertise as a large one and who takes a slightly different route in tackling problems. That is perfectly sensible. It is up to the courts to determine whether an employer has acted reasonably in the circumstances.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

As I said, the hon. Gentleman is a woolly thinker without a woolly hat. He would create an employment scheme for judges and those who care for ACAS. The whole point of the debate, Mr. Deputy Chairman

Hon. Members:

Deputy Speaker.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. Let us get the terminology correct.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

Mr. Deputy Speaker, you are correct. You know that I am a new Member who has been here for only three years. At times I forget—unlike other, experienced Members who are present. Perhaps I get it wrong because I am so emotionally involved in the issue. I am concerned about job creation, but Labour Members are concerned only with a political dogma based on no practical experience whatsoever.

Job insecurity does not affect this country alone. The issue has come up time and again in the Republican primaries in the United States of America. It is alive— and, sadly, flourishing—in France, Germany, Spain and elsewhere directly because of the changing industrial scene worldwide, as my hon. Friend the Member for Elmet (Mr. Batiste) said. It would be foolish in the extreme to ignore that.

There is clear evidence that job insecurity is decreasing. The John Lewis department store in Oxford street is much frequented by the Leader of the Opposition, especially as he likes to talk about stakeholding. I am quite familiar with the management of the John Lewis store in Milton Keynes.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

For the record, I should say that I am not a discount taker. I have no interest to declare in the John Lewis Partnership, other than the fact that I am probably one of its bigger customers.

Photo of Ian McCartney Ian McCartney , Makerfield

How can you afford that?

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I know that the hon. Gentleman has been searching nervously through the Register of Members' Interests to find out about me. It is simply because I was able to build up a business and sell it at the right price—I would not have been able to do that had the Labour party been in power in the 1980s—that I am able to be such a good customer of the John Lewis Partnership.

The John Lewis Partnership is a good employer, but for the first time it is experiencing difficulties in recruiting and retaining staff. People are leaving the partnership to go to other jobs, because the job market is picking up. We should be aware of that, and the Labour party should acknowledge it, instead of constantly carping and criticising the Government's record.

The hon. Member for Oldham, West said that Sir Winston Churchill would be turning over in his grave at the thought of the Government's proposals. I dispute that. Sir Winston said that there should be a safety net below which no one should fall. I do not believe anyone in the Opposition or on the Conservative Benches would argue that the welfare state should not protect those least able to protect themselves.

But this debate is all about balance. We know from experience not only in this country but in the United States, which has a far less extensive welfare system than we do, that too much protection acts as a disincentive to work. That part of the balance must be got right.

As I said in an intervention, the House of Commons has a duty of care not only to Members' constituents but to the nation. That duty extends not only to those in employment—the issue we are debating—but to those currently unemployed. Unless the balance is right with regard to ACAS and industrial tribunals, we will find that small businesses will not survive. As a consequence, we would no longer be the nation with the greatest percentage of its people in employment among the large economies of the European Union. We would experience far greater unemployment as a result. I know that no one in the Opposition or in the Conservative party who would want to see that, but such is the consequence of the Opposition motion.

The hon. Member for Oldham, West talked about the OECD, and came up with a series of statistics to try to prove that this country is a non-performer. Yet the OECD has said that the greatest cause of unemployment in continental Europe are the on-costs specifically arising from the social chapter. The Labour party advocates, however, that this country should sign up to that chapter. As my right hon. Friend the President of the Board of Trade has said, not only would the adoption of the social chapter cause unemployment to rise by a further 1 million, but it would be equivalent to a blank cheque.

The terms of the social chapter would mean that we could merely use qualified majority voting to prevent future legislation dreamt up by the unelected wide boys in Brussels, who have probably never had a real job in their lives. Those are the very people who have created unemployment in France, Germany and Spain. Those are the very people who, along with their cohorts in the Labour party, would create unemployment in this country, too. That is the sadness of it, because the will on both sides of the House is to see the unemployment rate fall, but the very policy advocated by the Labour party would cause unemployment to rise.

We cannot divorce the state of the economy from levels of unemployment. Let us now compare and contrast new Labour, as espoused today, with old Labour of a few years ago. The hon. Member for Oldham, West criticised at length our reforms of the trade union movement. He said that we are the guilty party. If we are accused of forcing the unions to adopt a democratic selection of their leaders rather than trade union leaders appointing themselves for life, as Arthur Scargill did, mea culpa—we are guilty. If we are accused of forcing unions to hold secret ballots before commencing a strike rather than adopting the Red Robbo tactics of intimidation, mea culpa—we are guilty. If we are accused of forcing unions to opt for a cooling-off period before calling a strike, mea culpa—we are guilty.

Photo of Denis MacShane Denis MacShane , Rotherham

indicated dissent.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

I note that the hon. Member for Rotherham and Lucerne is shaking his head in disagreement. Does he care to intervene? No. He is emptily shaking his head in disagreement, yet the House notes that he has nothing to say.

Under old Labour, Britain was the sick man of Europe. It lost 29 million working days through strike action in Labour's last year of office. In 1995, thanks to the Government's reform of trade unions—a policy so loathed by the hon. Member for Oldham, West—415,000 working days were lost through strikes. I accept that that is 415,000 too many, but compare that with 29 million working days. Old Labour, new Labour—there is no difference, we learned that today.

Inflation is one of the biggest enemies of small and large businesses alike. The inability to predict future expenditure and to budget for inward purchases destroys employment. Let us compare and contrast what new Labour and old Labour has to say about that.

The hon. Member for Oldham, West seeks to submit the country to the blank cheque of the social chapter and the minimum working wage. The Labour party, however, still cannot admit what that minimum wage should be because, at its heart, it recognises that it costs jobs. The inflation that would be caused by a minimum working wage would be reminiscent of the rate achieved in the days of old Labour.

Under the last Labour Government, the inflation rate averaged 15.5 per cent. and peaked at 27 per cent. In January, under the Conservative Government, the inflation rate was less than 3 per cent. Yes, mea culpa, we are guilty of rejecting the minimum wage to keep jobs in the country. Yes, mea culpa, we are guilty of rejecting that minimum wage and thus attracting firms like Toyota to the United Kingdom. Old Labour, new Labour—there is no difference. Just look at those on the Opposition Front Bench.

In this debate, we have heard the same old arguments from the Labour party—arguments for high inflation, industrial strife, high levels of unemployment and job insecurity. Old Labour, new Labour—there is no difference. I oppose the motion.

Photo of Denis MacShane Denis MacShane , Rotherham 6:08, 18 March 1996

I listened, hoping for some profit, to the text delivered by President of the Board of Trade. He read it at breakneck speed, and, frankly, he did so more quickly than the time it took Mike Tyson to dispose of Frank Bruno yesterday. I had hoped for some guidance.

I apologise to the hon. Member for Mid-Staffordshire (Mr. Fabricant), but because the President of the Board of Trade represents a seat in Wigtownshire, I made a slight mistake in appellation.

I am sorry that the hon. Member for Teignbridge (Mr. Nicholls) has left the Chamber—he certainly entertained us. He took us back to 1979, when the then Prime Minister said, "Crisis, what crisis?" Do hon. Members remember when a newspaper journalist knocked on the door of the hon. Member for Teignbridge to ask about the Register of Members' Interests, and he said, "Consultancy, what consultancy?"

We have had a fairly even-tempered debate this afternoon, but I place on record my passion. Conservative Members—of very great wealth—speaking today have explained to my constituents and to the majority of people of this country why the life they will face in future will be poorer, meaner and deprived of many rights.

The President of the Board of Trade referred to Europe, to small businesses and to employees' rights, and he was wrong on every single issue. He was wrong—of all things—in his boast about employment. If one looks at the most recent Economist, one sees that the employment rate is falling in Austria, in Denmark, in France, in Germany, in Holland, in Sweden and in other European Union member states. I would welcome any fall in the unemployment rate in this country or in any other country—but, according to the latest figures, we are currently faced with an increase in unemployment in Britain.

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

The hon. Gentleman is right to point out that, in one month, unemployment has increased, and, like him, I condemn that fact. For those who are now unemployed but who were employed a month ago, it is unfortunate and devastating. Just as the hon. Gentleman condemns that fact, will he welcome the fact that, for the 29 months before that, unemployment decreased, whereas in France, Germany and Spain it increased?

Photo of Denis MacShane Denis MacShane , Rotherham

According to figures provided by the Library of the House of Commons, between February 1991 and February 1996, unemployment increased by 26 per cent. in the south-east, by 56 per cent. in Greater London, by 17 per cent. in the east midlands, and by 9 per cent. in the west midlands. That was the point of my earlier intervention, which the right hon. Member for Northavon (Sir J. Cope) did not quite understand.

I pointed out that, since 1992, 8.7 million people had lost or exchanged their jobs—obviously, many of those people got new jobs, but all those 8.7 million people spent a period in unemployment. For many of them, the transfer was downwards, to a worse-paying job. I emphasise the point I made: that the laws as they stand have not prevented the small, medium or large firms from laying off, dismissing, making redundant and showing the door to almost 9 million people in recent years.

The President of the Board of Trade also prayed in aid British inflation rates. Inflation in Britain is significantly higher than in most of our European partner competitors. A long-term perspective ensuring a stable value of the pount is simply not available to the small, medium or large enterprises in this country.

The social chapter is an outline document, not a detailed blueprint that has been imposed from Brussels on the employers of Finland, on the employers of Greece, on the cork factories of Portugal, on the new state-of-the-art factories being set up in east Germany. There is a paradox. I remember writing in The Guardian on the very morning—

Photo of Michael Fabricant Michael Fabricant , Staffordshire Mid

For which the hon. Gentleman was paid.

Photo of Denis MacShane Denis MacShane , Rotherham

No, I was not paid for that one.

On the morning that the Prime Minister proclaimed the social chapter opt-out after Maastricht, I wrote that it would make absolutely no difference. I said that, on the contrary, because Britain's voice would not be heard in the Council meetings where these things are decided, the other member states would go ahead without us—as they have done with the European works council directive and indirectly, through the European Court of Justice, on the 48-hour directive. That is why it is in the interests of British business that we again have our voice heard and our vote counted in the shaping of the social policy of Europe.

Photo of Mr James Couchman Mr James Couchman , Gillingham

I should like the hon. Gentleman to clear something up for me about the social chapter. Am I not right in thinking that it is like a skeleton on which flesh is gradually hung—a bit like a Christmas tree on which decorations are added—as burdens are added upon burdens for business? Is it not something that will grow like Topsy? If we are not a part of the Council that is deciding what burdens should be placed on business, that will not be a great disadvantage to our people, because they will not have to take on those burdens.

Photo of Denis MacShane Denis MacShane , Rotherham

The hon. Gentleman referred to Topsy and to Christmas trees—I do not know whether he is the shiny fairy on the top of all this. The assumption that every employer in the rest of Europe—or indeed, the Conservative Governments that govern France and Germany—are somehow left-wing patsies to be pushed over is absolute nonsense. We will get more rulings from Brussels that may affect our business interests negatively if we continue our absurd opt-out.

Photo of Sir John Cope Sir John Cope , Northavon

The hon. Gentleman needs to clarify what he has just said. If the working time directive is held to have been made under health and safety articles, as opposed to the social chapter, we have a voice in it—of course, it is still by majority voting, and we may or may not agree with the particular proposals. In so far as it applies to us—because it is held to apply to health and safety—we shall have a voice in it. The only areas in which we shall not have a voice are those that do not apply to us.

Photo of Denis MacShane Denis MacShane , Rotherham

Given that, in 1876, Benjamin Disraeli—who I think was a Conservative—passed a law introducing the 56-hour week in this country, I find the fuss made over the reduction to a 48-hour week in 1996 absurdly exaggerated. The President of the Board of Trade said that this measure would help small businesses. He is wrong. Since 1979, there have been 450,000 business failures—at the moment, there is one business failure every three minutes of every working day. Since February 1995, 1,000 new statutory instruments have affected small businesses—a new regulatory burden.

The Asylum and Immigration Bill, which was debated recently, obliges small businesses to act as unpaid immigration sneaks—they have to check the immigration status of their employees. Self-assessment, to which I referred during an earlier intervention, will impose a massive new burden on small businesses and will cost them—according to Government figures; I was on the Finance and Services Committee that discussed this issue—£130 million a year. The Government claim to be a friend of small business—there is no small business in the country that would accept that nonsense.

The President of the Board of Trade was also wrong about employee rights. We have to distinguish between the rights that are there to protect small businesses—good small businesses support adequate fire regulation, do not want to produce dirty food and do not want to construct unsafe buildings; those rights need to be enforced and regulated on a partnership basis—and the fundamental rights of citizens that may be taken away.

Frankly, I did not even understand his speech and the dispute that he is currently having with the Deputy Prime Minister. He talked about increasing conciliation processes. We know that that may open the road to any employee—as is the right of every discontented employee—to appeal to ACAS. I fear that, if one removes existing rights, one will open the way to a lawyer's paradise of judicial appeals and judicial reviews, which might impinge far more heavily on small businesses.

I do not have time to report, as I had hoped to, many cases from my surgery of people woefully and badly mistreated in terms of their rights at work. I pay a short tribute to the work of citizens advice bureaux, which now are in the front line of representing so many citizens.

The aspect of workplace rights that most concerns me is race discrimination, on which Britain has a record that other European countries do not. We should be proud of that. Unfortunately, appeals to industrial tribunals on race relations grounds have been increasing. The work of industrial tribunals should be reduced; the number of cases should be reduced as fast as possible. That can be done by moving to a culture of workplace consultation and representation. Rather than causing the return of the feel-good factor, that would create a "feel-fair factor".

While the President of the Board of Trade, the invisible kilt in the Cabinet, continues to represent two-nation Britain—my goodness, we have heard it tonight—the "feel-fair factor" will not return to our workplaces. When it does, such legislation will not need even to be discussed, because I hope that, in a partnership economy, employers and employees will solve their problems and build together the new firms, the new jobs and the new added value we need to make Britain a great, prosperous and full-employment country again.

Photo of Ian McCartney Ian McCartney , Makerfield 6:21, 18 March 1996

Throughout the debate, hon. Members have deployed arguments, some more skilfully than others. My hon. Friends the Members for Islwyn (Mr. Touhig), for Ellesmere Port and Neston (Mr. Miller) and for Rotherham (Mr. MacShane), and the hon. Member for North Devon (Mr. Harvey) have more than adequately put the case about the rights of employees to minimum standards at work.

There is a clash of cultures—of ideology—because, throughout the debate, Conservative Back Benchers have been trenchant on the issue of burdens rather than the issue of rights.

When the President of the Board of Trade wrote a note on 5 March 1996 to the First Secretary of State, which was leaked, was the issue between them that the President of the Board of Trade supported employment rights but the Deputy Prime Minister wanted to withdraw them? There is no disguising the fact that they both want to withdraw the rights.

The President of the Board of Trade simply did not want the British public and the British work force to know that that was the case, because it would cause a great deal of controversy. Indeed, he said that it would be immensely controversial, and that it would be imprudent to attract criticism. There is no disagreement between one member of the Cabinet and another; the disagreement is only about timing—about when the Government will withdraw the rights of up to 10 million workers in the United Kingdom Labour market.

When the President of the Board of Trade spoke to the Confederation of British Industry in November 1995, he commented that job insecurity was no more than "a state of mind". That comment proved what we already knew: that the President is a bungler—incompetent, ineffective, uncritical, unthinking, out of touch, and, as the Scott debacle made clear, unable to distinguish between fact, opinion and Government-inspired gossip.

Three months after the President of the Board of Trade uttered the immortal words Job insecurity is a state of mind", a business run by his cousin, Mr. Graeme Lang, went bust with debts of £420,000, leaving seven workers on the dole. A case of "Out of pocket, out of mind."

The President of the Board of Trade argued that, in the real world, such things are not happening. What kind of real world is he living in? Two days before his speech, it was revealed that 700 jobs were to be lost in MANWEB. Two days after his speech, a survey showed that 9,200 teachers had been made redundant in the summer of 1995. On 24 November, 326 people were made redundant by First Choice Holidays.

On 12 December, a further 350 job losses were announced at MANWEB. On 16 January, 1,600 job redundancies were announced by Scottish and Newcastle Breweries. On the same day, 220 jobs were lost at Marconi in Chelmsford.

On 2 February, Hanson announced the loss of 2,300 jobs, with the closure of almost 2,000 Powerhouse stores throughout the UK.

On 5 February, a further 1,500 jobs were lost. Scottish Widows made 700 people redundant; Amstrad shed 150 jobs; engineering group Suter axed 440 jobs; and Sears announced 300 job losses as it restructured the British Shoe Corporation's control of its retail shopping chain.

On 13 February, worse was to come. The construction industry forecast another 45,000 job losses this year. That adds to the 460,000 construction jobs that have been lost since 1989.

In February, the unemployment benefit count increased by 6,800. The latest figures from the National Association of Citizens Advice Bureaux showed that citizens advice bureaux had dealt with more than 669,000 employment-related problems in the past year, while 91.5 million days were lost in the British economy as a result of stress at work.

Is the Minister suggesting that those job losses did not take place; that those employment problems did not exist? Was it a fantasy league of redundancies, with the Secretary of State at the top of the league? This is the Mystic Meg economy; every one a winner, irrespective of the evidence. The Secretary of State ploughs on, telling us that insecurity is all in the mind.

To have one bungler in the Cabinet could be a mistake, to have two sounds a little careless, but to have a full Cabinet of bunglers is not carelessness but a crisis at the heart of the government. That is what we have—a crisis at the heart of government.

As an economic strategy, for 17 years they have ploughed on with the deregulation of the labour market. Every deregulation caused further job losses. We have had two recessions. Three million jobs have been lost in manufacturing. Forty per cent. of manufacturing capacity has been lost. There are a million fewer jobs than there were in 1990. Still the Government bungle on, repeating that there is no problem—it is all in the minds of British people.

The Government are careless, not only with statistics, but with the responsibility of developing the economy and providing job security for the British public. If job insecurity, deregulation and exploitation are the key to industrial success, why are the majority of third-world countries in massive debt and massive poverty? Insecurity is not the way to create employment opportunities. Securing employment opportunities for the British worker means investing in training, new technology and new markets. In all those factors, the Government have failed the test; we have lost in each.

It is not only the President of the Board of Trade; the Deputy Prime Minister is the high priest of job insecurity. In October 1992, he announced plans to close 31 of the 50 British collieries. In the event, 36 of the 50 ceased production. Thirty thousand jobs were lost directly, and 26,000 were lost in associated industries. Constituencies such as mine, in which mining had been important, were left to get on with the task of reconstruction. They were alienated and left on their own because of the ideology of the deregulation of the electricity and gas industries.

What has happened since the electricity and gas industries were privatised? The number of directors has increased by 21 per cent. and total boardroom pay is up by a staggering 571 per cent. The Government allow that excess, but contend that people on £2.50 an hour or less should not have a national minimum wage. Between them, the gas and electricity industries have sacked 61,000 workers in the period during which they increased boardroom pay by 571 per cent. Boom in the boardroom; bust for the work force.

The Tories claim to be friends of small business— a claim as hollow as their promises to cut tax and reduce crime and to be the party of family values. Since the Conservatives came to power in 1979, 450,253 businesses have failed, including more than 200,000 since the last general election. The Prime Minister said: Vote Tory on Thursday and the recovery begins on Friday. The President of the Board of Trade did not answer the question I asked him, so I ask him again. Will he apologise for the fact that 141 small businesses have failed every day since the Government were re-elected? They are the Government of small businesses. No doubt, since the debate started, 141 small businesses will have gone down, and 141 will do so tomorrow and 141 the day after. That will continue until we have a Government who are better at investing in and developing our economy.

Business failures on such a scale lead not only to joblessness but to homelessness. Since the Prime Minister took office, the homes of a third of a million people have been repossessed; 1,000 homes are repossessed every week. The homes of 325,000 families have been taken from them since the Prime Minister came to power, and more than 420,000 people are currently more than three months in arrears with their mortgages. Under the present Government, people lose not only their jobs but their homes—but, according to the President of the Board of Trade, it is all in the mind.

We have been here before. Rights have been removed to promote an "economic miracle". Regulations covering the working week of women were removed; young workers lost the right to wages council protection before the rest of the nation; laws protecting young people from working long hours were repealed. Did that result in an economic miracle? Hardly: it was followed by the second recession in a decade.

Mr. John M. Taylor:

The hon. Gentleman is right to point out that the rate of closure of small businesses is quite surprising. In the name of fairness, however, let me point out that what is more surprising is the rate of new business starts, which, in net terms, is higher. Moreover, not all closures represent failures; they are often due to amalgamations.

Photo of Ian McCartney Ian McCartney , Makerfield

The Minister will tell us next that losing a job is not a disaster but an opportunity. The Government find phraseology with which to say, in a language that no one else understands, that we are not experiencing a crisis. Suddenly, it appears that 141 businesses did not fail; they amalgamated because they were so successful. In fact, the Government have put small businesses on the rack—and, having been put on the rack, a record number of those businesses have snapped. No Government in history have allowed so many companies to fail, and done nothing about it.

Only in the run-up to the general election are the Government scurrying around to try to protect their base vote in the small business community. Only now are they prepared even to concede that there is a problem in the development of small businesses. The creation of such businesses with medium and long-term strategies does not mean success; ultimately, it means that a huge proportion will fail.

Let me return to the so-called economic miracle. What the Government proposed in the letter from the Deputy Prime Minister is what they did in the 1980s, and they want to do the same in the 1990s. What has the "miracle" given us? Eleven million people have endured at least one spell of unemployment since the Prime Minister took office—one in five households in England. Not a family in England, Scotland, Northern Ireland and Wales does not have a member, friend or acquaintance who has become unemployed under the Government's economic policies.

That is why insecurity is so feared in every part of the land. People know from observation and experience that, under the present Government, they are as likely to lose their jobs as to keep them. More important, those who lose their jobs have only one chance in three of regaining full-time employment. An increasing number of those who are being locked out of the labour market can return to that market only by taking temporary, part-time or low-paid jobs—and the Government wonder why there is no feel-good factor.

Since the last general election in April 1992, 8.7 million people have been unemployed at least once; yet the Government continue to say that it is all in the mind. The evidence against their proposals is overwhelming. Precarious employment has a negative effect on employee commitment, innovation, flexibility and loyalty: the four key factors that would ensure success for small and medium-sized enterprises are being attacked by the Government's attitude to the labour market.

The Tory approach leads to high turnover and an inability to recoup investment in training. The Government are attacking the employment rights of employees in small firms, and their excuse that they are removing burdens from business is revealed as nothing more than a sham. Their real intention is further to undermine fairness at work.

Will the Minister tell us which of the following measures is a burden on business, and which is the right of employees? It is a legitimate question: in his letter to the Deputy Prime Minister, the President of the Board of Trade said that he wanted Law Officers to examine some of the issues involved, and that he had grave doubts about the wisdom of making any announcement. In fact, he had grave doubts about the removal of rights of access to tribunals from individuals working for small companies.

At present, such individuals have the right not to be unfairly dismissed on medical grounds relating to health and safety. Is that at risk? They have the right to receive redundancy payments. Is that at risk? Safety representatives have the right to paid time off. Is that at risk? There is the right to time off for public duties. Will that right be removed?

Will the Government remove the right of shopworkers not to be dismissed or made redundant for refusing to work on Sundays, or the right to receive a written statement of reasons for dismissal? Will the Minister tell us how the right to discriminate against workers who are black, who are women or who are married will increase competitiveness?

Those measures are all covered by industrial tribunals. If the rights that I have listed are not those that the Government plan to withdraw, perhaps the Minister will tell us what the intentions were of the President of the Board of Trade and the Deputy Prime Minister. What were the concerns of the President of the Board of Trade when he went to the Cabinet and the Cabinet decided not to make an announcement at the press conference that was held to assess the state of small businesses?

The leaked proposals of the Deputy Prime Minister caused uproar. An opinion poll of nearly 1,000 people, commissioned from NOP by the TUC, found that 85 per cent. of the British public thought it wrong for the Government to consider abolishing the employment rights of people working in small firms. Even Tory supporters waded in with a barrage of protests: 78 per cent. of those who voted Tory at the last election said that the Government were wrong to consider such plans. It is not all in those people's minds; they know that insecurity at work is a plague that will affect everyone in the labour market if the Government continue in office.

The next Labour Government will give a commitment that all employees—whether full or part-time, permanent, casual or temporary, including those who work at home— will be entitled to basic standards at work from day one of their employment. A major employment right, from the first day in a job, will be the right to earn a national minimum wage. We will build an economy based on partnership, and we will promote the interests of good rather than bad employers. Good employers are fed up with being told to compete through low pay, poor conditions and contempt for their employees.

We will establish a fair framework of rights, to be exercised collectively or individually, to give the work force a strategic involvement in the development of companies. We will work with social partners to promote good practice, and develop methods to allow good employers to prosper in difficult markets. That is a vastly different agenda from the one that the present Government are offering the British people.

The Government have shown tonight, as they have shown for the past two or three years, that they are sleazy, greedy and bungling. The only way in which to restore the feel-good factor is to elect a Labour Government at the next election. Let us start that process this evening, by passing the motion.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor):

It falls to me to reply to the debate, overwhelmed though I am by the presence of no fewer than six Labour Back Benchers.

The hon. Member for Oldham, West (Mr. Meacher) gave the impression of a man looking down the wrong end of a telescope. We have a balanced labour market, the lowest rate of strikes for 100 years and a staggeringly successful rate of inward investment. Just as Jacques Delors predicted, Britain will become a paradise for inward investment. That is possibly the only instance of my agreeing with Jacques Delors, from whom I shall now distance myself by saying that I have personally employed every number of employees between one and 12. I doubt whether Jacques Delors can say that, and I doubt whether the hon. Member for Oldham, West or the hon. Member for Makerfield (Mr. McCartney) can say it, either. Nor, if I may humbly say so, can I have been a bad employer, as my personal secretary is still with me after 25 years— a silver jubilee of which I am very proud.

Photo of Ian McCartney Ian McCartney , Makerfield

For the record, all hon. Members are small employers because we all employ staff—and some of us try to be good small employers. I have also been a company director, with responsibility for employing staff and managing a large budget. I know how industry works—that is why I have this shadow portfolio and why I shall be at the Government Dispatch Box in a few months' time and the hon. Gentleman will be in opposition.

Mr. Taylor:

That interesting intervention does little to advance the debate. My right hon. Friend the President of the Board of Trade covered a wide range of subjects, but in particular he anticipated draft legislation that will introduce greater versatility in industrial disputes, claims and complaints. I invite Labour Members to support the Green Paper—not least the hon. Member for Ellesmere Port and Neston (Mr. Miller), who I am sure has read it— and the draft legislation which the hon. Gentleman, like me, has not yet read.

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston

Does the Minister expect me to support it without looking at it?

Mr. Taylor:

No, I expect the hon. Gentleman to support the Green Paper and I ask him to join me in anticipating the draft legislation.

Listening to the speech by the hon. Member for Islwyn (Mr. Touhig), I felt a sense of deja vu of a Friday not long ago. However, I shall not be drawn into a collateral debate about his private Member's Bill, and I do not think that he seriously expects me to do so.

My right hon. Friend the Member for Northavon (Sir J. Cope) reminded the House that the culture of small businesses is necessarily different from that of large firms, such as Land Rover in my constituency where productivity is at record levels. So far as I can tell, the company's industrial relations are good and the employees on the shop floor suggest many good ideas for best practice.

My right hon. Friend made many good points in his speech, drawing from his considerable experience, particularly as Minister with responsibility for small businesses. He congratulated my right hon. Friend the President of the Board of Trade on his initiative regarding small firm conferences. He said that he approved of introducing draft Bills and releasing Green Papers in the interests of good, well-developed legislation which can be considered in parallel by those who have to work with and under it. Having expressed his approval of draft legislation, he was not quite so approving of lawyers, but I can probably live with that stance for the time being.

The hon. Member for North Devon (Mr. Harvey) picked up the Oldham, West telescope and he, too, looked down the wrong end of it. He maintained that employees' rights should not be confused with burdens on business. He may be confused about the matter, but the Government are clear about seeking to balance fairly the interests of employers and of employees. There is evidence that we have been successful in terms of job satisfaction and the least number of strikes for 100 years.

I was pleasantly surprised to hear the hon. Gentleman concede that he considers privatisation of Land Rover to be a virtue. I thank him for those comments, but I shall develop another point concerning an unsung virtue of privatisation. The hon. Gentleman was perfectly correct in asking what business the Government have in making motor cars, and I agree with him completely. An unsung virtue of privatisation is that, as large numbers of workers in the former nationalised industries move from the public sector into the private sector, the possibility of politically motivated strikes against a Government proprietor no longer exists. I think that that is one of the healthiest developments associated with privatisation, and it has improved industrial relations at Land Rover beyond all recognition.

My hon. Friend the Member for Teignbridge (Mr. Nicholls) reminded the House of the vivid realities of life under the last Labour Government. He also reminded us also that the hon. Member for Oldham, West was collectively responsible for that nightmare of discontent. My hon. Friend correctly pointed out that a range of proper, unnegotiable rights are at work in this country and he gave a litany of them. Drawing from his experience as an employer, he informed the House of the realities of the workplace, including hours of work. He made a very telling speech.

The hon. Member for Ellesmere Port and Neston spoke of his experience of industrial tribunals and he pronounced a role for mediation. He mused about what hon. Members make, or would make, of the word "mediation". I welcome it and I believe that it has a place in matrimonial law—although we are not debating that subject tonight—as well as in industrial law. It is a felicitous word, because it does not imply that the process intends to join things or to part them: it merely suggests that two sides are invited to talk and, if that leads to convergence, so much the better.

Mr. Taylor:

The hon. Gentleman anticipates a point that I shall make shortly in my speech. If he will forgive me, I shall reach it in due course. I noted that point in his speech and I acknowledge that it should be addressed.

The hon. Gentleman talked also about the changing world of employment, but he may have made a false point about the advisory role of AC AS. He said that AC AS should be resourced to provide an advice function to employers about handling disputes. It is important to remember that ACAS's conciliation role requires it to maintain its independence from either side in an industrial rights dispute. That independence would be put at risk if ACAS were given an advisory function in that area. However, ACAS's public inquiry points give information about the law.

The hon. Gentleman spoke also about an opinion survey carried out by his union—which I think that he said is the MFI

Mr. Taylor:

I apologise to the hon. Gentleman if I do not have the correct acronym: I withdraw it.

He referred to the opinion survey that dwelt upon insecurity—a subject that is fashionable these days with Opposition Members. The worst form of insecurity is unemployment and jobs will be created only if British industry is efficient and competitive. Flexibility— including pay flexibility—is an important factor in achieving that. Rigid pay systems take little account of business performance or labour market conditions. Such inflexibility jeopardises competitiveness, investment and jobs. A national minimum wage would be a major destroyer of jobs.

Photo of Denis MacShane Denis MacShane , Rotherham

If a minimum wage destroys jobs, how is it that so many jobs are being created in America, where there is one, or in Taiwan, which is a full employment economy?

Mr. Taylor:

Because it is pitched at a very low level indeed. If the hon. Gentleman and Opposition Front Bench Members would come clean with the House and acknowledge that it is Labour policy to set a national minimum wage—regardless of local variations in the economy—at £4.15 an hour, we could start talking about its effect on employment, the economy and jobs. It will have a very deleterious effect on jobs and particularly on those who are most vulnerable—young people and those still training.

It does not stop there. Fixing a national minimum wage creates a group of people whose earnings are just above it and who wish to have their differentials restored. That is the secondary effect of a national minimum wage and the damage that it would cause to the economy.

Flexible pay has mutual benefits. It can help to improve business performance and it can mean better pay for employees as a result of increased efficiency. It can also help employees to feel properly valued and give them a sense of ownership over their pay.

The DTI booklet "The Rewards of Success", published last month, contains a number of case studies of flexible pay systems in Britain. Employers have increasingly recognised the need for flexible pay systems. For example, a survey of employers just published by the Industrial Society found that nearly all respondents had some flexible pay arrangements. Nearly two thirds operated monetary bonuses or incentives to reward individuals; more than half operated performance-related pay and just under a third had profit-related pay.

My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) abandoned his usual shyness and told us some interesting facts about the building up of his business in the radio and communications world. He drew some American comparisons, but more than once—rightly, in my view—he spoke of balance and the need to recognise an obligation to the unemployed in seeking to strike that balance. He also told us in no mean terms what he thought about the social chapter. He doubted whether there was any difference between old Labour and new Labour. Having heard the closing speech from the Opposition Front Bench, I am disposed absolutely to agree. He despaired of the same old arguments for high inflation, high unemployment and deteriorating industrial relations.

The hon. Member for Rotherham (Mr. MacShane) recalled how the works council directive had been adopted in the rest of the European Union. I have to tell him something about that. The voice of business was opposed to the works council directive throughout the 15 member countries, but only in the United Kingdom did the political and ministerial voice and action follow the business voice. The Government have been faithful to their business interests.

The hon. Gentleman paid tribute to the citizens advice bureaux. Having helped to start a citizens advice bureau in 1973, I join him in that tribute, and it is a source of modest pride to me that, 23 years later, I am still president of that citizens advice bureau.

The hon. Member for Rotherham said that the opt-out from the social chapter makes no difference because European employers will go ahead without us. I find that difficult to understand. Without the opt-out, many more United Kingdom-based companies would have been caught by the works council directive because employees here would have counted towards the directive's thresholds. They are now completely excluded. The opt-out also means that United Kingdom employers will not have to apply provisions on paternity leave, assuming that the social partners agreement is adopted as a directive of 14 member states.

The hon. Member for Makerfield spoke of a clash of ideology between the two sides of the House and returned to the confusion between rights and burdens—or at least the confusion in his mind. It is our view that employers and employees have their considerations, as do the unemployed—a point returned to often by Conservative Members—and that employers, employees and the unemployed need to have their rights taken into account, balanced and recognised. Nor is it a coincidence that we now have the lowest level of strikes for 100 years, which is hardly a symptom of tyranny in the workplace. I should also tell the hon. Gentleman that 50 per cent. of people who lose their jobs are no longer on the unemployment register within three months.

The hon. Member for Makerfield spoke of a national minimum wage. The Labour party—old or new—still will not come clean on that. Do the Opposition intend to leave us at this unfinished stage of the debate with the impression that their national minimum wage will indeed be national and will apply in the north-east the same as in the south-east, the south-west and the midlands?

We have had a lively debate and I have listened carefully to all the points that have been raised. I congratulate my hon. Friends on their thoughtful and constructive contributions. By contrast, Opposition Members have seemingly paid no heed to the speech of my right hon. Friend the President of the Board of Trade and have continued to promote a gross distortion of the Government's policies and intentions.

I repeat that we fully recognise the legitimate entitlement of employees to a minimum level of statutory safeguards against unreasonable treatment by their employers. There exists a comprehensive framework of employment protection legislation designed to secure that entitlement and I can reassure all hon. Members that we have no plans whatever for dismantling that framework. However, it would be of absolutely no benefit to employees—and certainly not to job seekers— if businesses were weighed down with unreasonable legislative restrictions which constrained their competitiveness, damaged their profitability and destroyed job opportunities. That is why, since 1979, we have pursued a policy of appropriate deregulation in those matters.

Photo of Ian McCartney Ian McCartney , Makerfield

Before the Minister sits down, will he tell the House which rights that people have at present they will no longer have under the Government's proposals? He has given us no information whatever other than generalisations. Which specific rights will be lost under the Government's proposals?

Mr. Taylor:

I will not answer the hon. Gentleman in those terms because that is a false question. The Government live in a veritable millrace of ideas, particularly as we have invited small businesses to give us their ideas in conferences, and they are worth considering. It is no use asking firms for their ideas and then dismissing them out of hand. There is no shortage of ideas, and so far as I can tell they have come to us in good faith. All are worth considering, and some may be worthy and require legal advice.

The Government are not ruling anything in or ruling anything out. We are pleased consistently to receive ideas and we evaluate them. Ideas that survive that process and look fruitful can be candidates for further implementation down the line, after the fullest consultation. That is the proper answer to the hon. Gentleman's question.

Mr. Taylor:

I said that I was giving way for the last time. With only a minute or two left, I intend to draw my remarks to a conclusion.

The measures that we have taken include increasing the qualifying conditions. In unfair dismissal cases, we have removed from employers the burden of proof and made the balance neutral between the parties. In deciding such cases, industrial tribunals are now required to take into account the size of a business and its administrative resources. Furthermore, we have extended the scope for costs to be awarded in tribunal cases against parties who act frivolously, vexatiously, abusively, disruptively or otherwise unreasonably. Our current proposals for reform of the industrial tribunal system mentioned by my right hon. Friend will continue the process of sensible improvement. They have been widely welcomed.

A balance must be struck between safeguarding the legitimate interests of employees and placing administrative and other cost burdens on employers. That commitment to a balanced approach has always been and remains at the heart of our policies. I urge the House to resist the Opposition motion and to support the Government amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 237, Noes 284

Division No. 78][7.00 pm
Ainger, NickCampbell, Ronnie (Blyth V)
Ainsworth, Robert (Cov'try NE)Campbell-Savours, D N
Allen, GrahamCanavan, Dennis
Anderson, Donald (Swansea E)Cann, Jamie
Armstrong, HilaryCarlile, Alexander (Montgomery)
Ashton, JoeChidgey, David
Austin-Walker, JohnChisholm, Malcolm
Banks, Tony (Newham NW)Church, Judith
Barron, KevinClapham, Michael
Battle, JohnClark, Dr David (South Shields)
Beckett, Rt Hon MargaretClarke, Eric (Midlothian)
Beith, Rt Hon A JClarke, Tom (Monklands W)
Bennett, Andrew FClwyd, Mrs Ann
Benton, JoeCoffey, Ann
Bermingham, GeraldCohen, Harry
Berry, RogerCook, Frank (Stockton N)
Betts, CliveCorbett, Robin
Blunkett, DavidCorbyn, Jeremy
Boateng, PaulCousins, Jim
Bradley, KeithCunliffe, Lawrence
Bray, Dr JeremyCunningham, Jim (Covy SE)
Brown, N (N'c'tle upon Tyne E)Cunningham, Rt Hon Dr John
Bruce, Malcolm (Gordon)Dafis, Cynog
Burden, RichardDalyell, Tam
Byers, StephenDavidson, Ian
Caborn, RichardDavies, Bryan (Oldham C'tral)
Campbell, Mrs Anne (C'bridge)Davies, Chris (L'Boro & S'worth)
Campbell, Menzies (Fife NE)Davies, Rt Hon Denzil (Llanelli)
Davies, Ron (Caerphilly)McAllion, John
Denham, JohnMcCartney, Ian
Dixon, DonMcCartney, Robert
Dobson, FrankMacdonald, Calum
Donohoe, Brian HMcFall, John
Dowd, JimMcKelvey, William
Dunwoody, Mrs GwynethMackinlay, Andrew
Eagle, Ms AngelaMcLeish, Henry
Eastham, KenMcMaster, Gordon
Etherington, BillMcNamara, Kevin
Evans, John (St Helens N)MacShane, Denis
Fatchett, DerekMcWilliam, John
Faulds, AndrewMadden, Max
Field, Frank (Birkenhead)Maddock, Diana
Fisher, MarkMahon, Alice
Flynn, PaulMandelson, Peter
Foster, Rt Hon DerekMarek, Dr John
Foster, Don (Bath)Marshall, David (Shettleston)
Fyfe, MariaMartin, Michael J (Springburn)
Galbraith, SamMartlew, Eric
Galloway, GeorgeMaxton, John
Gapes, MikeMeacher, Michael
Garrett, JohnMeale, Alan
George, BruceMichael, Alun
Gerrard, NeilMichie, Bill (Sheffield Heeley)
Gilbert, Rt Hon Dr JohnMichie, Mrs Ray (Argyll & Bute)
Godman, Dr Norman AMilburn, Alan
Godsiff, RogerMiller, Andrew
Golding, Mrs LlinMitchell, Austin (Gt Grimsby)
Graham, ThomasMoonie, Dr Lewis
Grant, Bernie (Tottenham)Morgan, Rhodri
Griffiths, Nigel (Edinburgh S)Morley, Elliot
Griffiths, Win (Bridgend)Morris, Rt Hon Alfred (Wy'nshawe)
Gunnell, JohnMorris, Estelle (B'ham Yardley)
Hain, PeterMowlam, Marjorie
Hall, MikeMudie, George
Hanson, DavidMullin, Chris
Harman, Ms HarrietNicholson, Emma (Devon West)
Harvey, NickOakes, Rt Hon Gordon
Hattersley, Rt Hon RoyO'Brien, Mike (N W'kshire)
Heppell, JohnO'Brien, William (Normanton)
Hill, Keith (Streatham)O'Hara, Edward
Hinchliffe, DavidOlner, Bill
Hodge, MargaretO'Neill, Martin
Hoey, KateParry, Robert
Hogg, Norman (Cumbernauld)Pearson, Ian
Home Robertson, JohnPendry, Tom
Hoon, GeoffreyPickthall, Colin
Howarth, Alan (Strat'rd-on-A)Pike, Peter L
Howarth, George (Knowsley North)Pope, Greg
Howells, Dr Kim (Pontypridd)Powell, Ray (Ogmore)
Hoyle, DougPrentice, Bridget (Lew'm E)
Hughes, Robert (Aberdeen N)Prentice, Gordon (Pendle)
Hughes, Roy (Newport E)Primarolo, Dawn
Hughes, Simon (Southwark)Randall, Stuart
Jackson, Glenda (H'stead)Raynsford, Nick
Jackson, Helen (Shef'ld, H)Rendel, David
Jamieson, DavidRobinson, Geoffrey (Co'try NW)
Janner, GrevilleRoche, Mrs Barbara
Jones, Barry (Alyn and D'side)Rogers, Allan
Jones, Ieuan Wyn (Ynys Môn)Ross, William (E Londonderry)
Jones, Jon Owen (Cardiff C)Rowlands, Ted
Jones, Lynne (B'ham S O)Ruddock, Joan
Jowell, TessaSedgemore, Brian
Kaufman, Rt Hon GeraldSheerman, Barry
Keen, AlanSheldon, Rt Hon Robert
Kennedy, Jane (L'pool Br'dg'n)Shore, Rt Hon Peter
Kilfoyle, PeterShort, Clare
Lestor, Joan (Eccles)Simpson, Alan
Liddell, Mrs HelenSkinner, Dennis
Litherland, RobertSmith, Andrew (Oxford E)
Livingstone, KenSmith, Chris (Isl'ton S & F'sbury)
Lloyd, Tony (Stretford)Smith, Llew (Blaenau Gwent)
Llwyd, ElfynSmyth, The Reverend Martin
Loyden, EddieSnape, Peter
Lynne, Ms LizSoley, Clive
Spearing, NigelWalker, Rt Hon Sir Harold
Spellar, JohnWalley, Joan
Squire, Rachel (Dunfermline W)Wardell, Gareth (Gower)
Steinberg, GerryWareing, Robert N
Stott, RogerWatson, Mike
Strang, Dr. GavinWicks, Malcolm
Wigley, Dafydd
Sutcliffe, GerryWilliams, Rt Hon Alan (Sw'n W)
Taylor, Mrs Ann (Dewsbury)Williams, Alan W (Carmarthen)
Taylor, Matthew (Truro)Wise, Audrey
Timms, StephenWorthington, Tony
Tipping, PaddyWray, Jimmy
Touhig, DonWright, Dr Tony
Trickett, Jon
Turner, DennisTellers for the Ayes:
Tyler, PaulMr. John Cummings and
Vaz, KeithMs Janet Anderson.
Ainsworth, Peter (East Surrey)Cope, Rt Hon Sir John
Alexander, RichardCormack, Sir Patrick
Alison, Rt Hon Michael (Selby)Couchman, James
Allason, Rupert (Torbay)Cran, James
Amess, DavidCurry, David (Skipton & Ripon)
Ancram, Rt Hon MichaelDavis, David (Boothferry)
Arbuthnot, JamesDay, Stephen
Arnold, Jacques (Gravesham)Deva, Nirj Joseph
Arnold, Sir Thomas (Hazel Grv)Devlin, Tim
Ashby, DavidDicks, Terry
Atkins, Rt Hon RobertDorrell, Rt Hon Stephen
Atkinson, Peter (Hexham)Douglas-Hamilton, Lord James
Baker, Rt Hon Kenneth (Mole V)Dover, Den
Baker, Nicholas (North Dorset)Duncan-Smith, Iain
Banks, Matthew (Southport)Dunn, Bob
Banks, Robert (Harrogate)Durant, Sir Anthony
Bates, MichaelEggar, Rt Hon Tim
Batiste, SpencerElletson, Harold
Bellingham, HenryEmery, Rt Hon Sir Peter
Bendall, VivianEvans, David (Welwyn Hatfield)
Beresford, Sir PaulEvans, Jonathan (Brecon)
Biffen, Rt Hon JohnEvans, Nigel (Ribble Valley)
Body, Sir RichardEvans, Roger (Monmouth)
Bonsor, Sir NicholasEvennett, David
Booth, HartleyFaber, David
Boswell, TimFabricant, Michael
Bottomley, Peter (Eltham)Fenner, Dame Peggy
Bottomley, Rt Hon VirginiaField, Barry (Isle of Wight)
Bowis, JohnFishburn, Dudley
Boyson, Rt Hon Sir RhodesForman, Nigel
Brandreth, GylesForth, Eric
Brazier, JulianFowler, Rt Hon Sir Norman
Bright, Sir GrahamFox, Dr Liam (Woodspring)
Brooke, Rt Hon PeterFox, Rt Hon Sir Marcus (Shipley)
Brown, M (Brigg & Cl'thorpes)Freeman, Rt Hon Roger
Browning, Mrs AngelaFrench, Douglas
Bruce, Ian (South Dorset)Fry, Sir Peter
Budgen, NicholasGale, Roger
Burns, SimonGallie, Phil
Burt, AlistairGardiner, Sir George
Butcher, JohnGarnier, Edward
Butler, PeterGill, Christopher
Butterfill, JohnGillan, Cheryl
Carlisle, John (Luton North)Goodlad, Rt Hon Alastair
Carlisle, Sir Kenneth (Lincoln)Goodson-Wickes, Dr Charles
Cash, WilliamGorman, Mrs Teresa
Channon, Rt Hon PaulGorst, Sir John
Chapman, Sir SydneyGrant, Sir A (SW Cambs)
Churchill, MrGreenway, Harry (Ealing N)
Clappison, JamesGreenway, John (Ryedale)
Clark, Dr Michael (Rochford)Griffiths, Peter (Portsmouth, N)
Clifton-Brown, GeoffreyGrylls, Sir Michael
Coe, SebastianHague, Rt Hon William
Colvin, MichaelHamilton, Rt Hon Sir Archibald
Congdon, DavidHamilton, Neil (Tatton)
Coombs, Anthony (Wyre For'st)Hampson, Dr Keith
Coombs, Simon (Swindon)Hanley, Rt Hon Jeremy
Hannam, Sir JohnMacGregor, Rt Hon John
Hargreaves, AndrewMacKay, Andrew
Haselhurst, Sir AlanMaclean, Rt Hon David
Hawkins, NickMcLoughlin, Patrick
Hawksley, WarrenMcNair-Wilson, Sir Patrick
Hayes, JerryMalone, Gerald
Heald, OliverMans, Keith
Heathcoat-Amory, Rt Hon DavidMarland, Paul
Hendry, CharlesMarshall, John (Hendon S)
Heseltine, Rt Hon MichaelMartin, David (Portsmouth S)
Hill, James (Southampton Test)Mates, Michael
Hogg, Rt Hon Douglas (G'tham)Mawhinney, Rt Hon Dr Brian
Horam, JohnMayhew, Rt Hon Sir Patrick
Hordern, Rt Hon Sir PeterMellor, Rt Hon David
Howell, Rt Hon David (G'dford)Merchant, Piers
Howell, Sir Ralph (N Norfolk)Mills, Iain
Hughes, Robert G (Harrow W)Mitchell, Andrew (Gedling)
Hunt, Rt Hon David (Wirral W)Mitchell, Sir David (NW Hants)
Hunt, Sir John (Ravensbourne)Moate, Sir Roger
Hunter, AndrewMonro, Rt Hon Sir Hector
Hurd, Rt Hon DouglasMontgomery, Sir Fergus
Jack, MichaelNeedham, Rt Hon Richard
Jackson, Robert (Wantage)Nelson, Anthony
Jenkin, BernardNeubert, Sir Michael
Jessel, TobyNewton, Rt Hon Tony
Johnson Smith, Sir GeoffreyNicholls, Patrick
Jones, Gwilym (Cardiff N)Norris, Steve
Jones, Robert B (W Hertfdshr)Onslow, Rt Hon Sir Cranley
Jopling, Rt Hon MichaelOppenheim, Phillip
Kellett-Bowman, Dame ElaineOttaway, Richard
Key, RobertPage, Richard
King, Rt Hon TomPaice, James
Kirkhope, TimothyPatnick, Sir Irvine
Knapman, RogerPatten, Rt Hon John
Knight, Mrs Angela (Erewash)Pattie, Rt Hon Sir Geoffrey
Knight, Rt Hon Greg (Derby N)Pawsey, James
Knight, Dame Jill (Bir'm E'st'n)Peacock, Mrs Elizabeth
Lait, Mrs JacquiPickles, Eric
Lamont, Rt Hon NormanPorter, Barry (Wirral S)
Lang, Rt Hon IanPorter, David (Waveney)
Lawrence, Sir IvanPortillo, Rt Hon Michael
Legg, BarryPowell, William (Corby)
Leigh, EdwardRathbone, Tim
Lennox-Boyd, Sir MarkRedwood, Rt Hon John
Lester, Sir James (Broxtowe)Richards, Rod
Lidington, DavidRiddick, Graham
Lilley, Rt Hon PeterRifkind, Rt Hon Malcolm
Lloyd, Rt Hon Sir Peter (Fareham)Robathan, Andrew
Lord, MichaelRoberts, Rt Hon Sir Wyn
Luff, PeterRobertson, Raymond (Ab'd'n S)
Lyell, Rt Hon Sir NicholasRobinson, Mark (Somerton)
Roe, Mrs Marion (Broxbourne)Thomason, Roy
Rowe, Andrew (Mid Kent)Thompson, Sir Donald (C'er V)
Rumbold, Rt Hon Dame AngelaThompson, Patrick (Norwich N)
Sackville, TomThornton, Sir Malcolm
Sainsbury, Rt Hon Sir TimothyTownend, John (Bridlington)
Scott, Rt Hon Sir NicholasTownsend, Cyril D (Bexl'yh'th)
Shaw, David (Dover)Tracey, Richard
Shaw, Sir Giles (Pudsey)Trend, Michael
Shephard, Rt Hon GillianTwinn, Dr Ian
Shepherd, Sir Colin (Hereford)Vaughan, Sir Gerard
Shepherd, Richard (Aldridge)Viggers, Peter
Shersby, Sir MichaelWaldegrave, Rt Hon William
Sims, RogerWalden, George
Skeet, Sir TrevorWalker, Bill (N Tayside)
Soames, NicholasWaller, Gary
Speed, Sir KeithWard, John
Spencer, Sir DerekWardle, Charles (Bexhill)
Spicer, Sir James (W Dorset)Waterson, Nigel
Spicer, Sir Michael (S Worcs)Watts, John
Spink, Dr RobertWells, Bowen
Spring, RichardWhitney, Ray
Sproat, IainWhittingdale, John
Squire, Robin (Hornchurch)Widdecombe, Ann
Stanley, Rt Hon Sir JohnWiggin, Sir Jerry
Steen, AnthonyWilkinson, John
Stephen, MichaelWilletts, David
Stern, MichaelWilshire, David
Stewart, AllanWinterton, Mrs Ann (Congleton)
Streeter, GaryWinterton, Nicholas (Macc'f'ld)
Sumberg, DavidWolfson, Mark
Sweeney, WalterYeo, Tim
Sykes, JohnYoung, Rt Hon Sir George
Tapsell, Sir Peter
Taylor, John M (Solihull)Tellers for the Noes:
Taylor, Sir Teddy (Southend, E)Mr. Timothy Wood and Mr. Derek Conway.
Temple-Morris, Peter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.


That this House recognises the vital contributions of small firms to economic and employment growth, and supports the Government's policies to minimise legislative burdens on this sector while maintaining a fair balance with the rights of employees.