EU Information and Consultation Directive

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 18th January 2001.

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Photo of David Kidney David Kidney Labour, Stafford 12:00 am, 18th January 2001

What recent representations he has received on the proposed European directive on information and consultation. [144531]

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

We have received various representations on the proposed European directive. The Government remain opposed to the directive which, we believe, contains a number of weaknesses. However, we believe that the time is right to consider our own United Kingdom arrangements in that area. I have therefore written today to the Trades Union Congress and the Confederation of British Industry, inviting them to take part in a review of existing collective redundancy legislation and, in particular, to consider what more should be done to promote effective consultation.

Photo of David Kidney David Kidney Labour, Stafford

I am grateful for my right hon. Friend's answer, and am very pleased that my question elicited that constructive announcement. However, does he accept that, in the United Kingdom today, when workers' livelihoods are at stake in negotiations involving their employers, they really ought to know and be consulted about that, rather than first hear of their redundancies on the morning news bulletin? Will he give an assurance that the process that he described will result in a law that makes good practices on consultation and information routine everywhere in Britain?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I agree that it is simply unacceptable for hard-working and dedicated workers to be kept in the dark about the future intentions of their employers. We therefore need to engage constructively with both sides of industry, which we are doing by inviting the TUC and CBI to participate. I am confident that they will both respond positively, as it is not in anyone's interest to have a situation in which the work force do not feel that they are part of the undertaking for which they work.

Yesterday evening, I had the pleasure of helping to launch the TUC Partnership Institute, which aims to bring together both sides of business in a constructive way—not as a soft option or a quick fix, but as a way for both sides to work together. That is a different approach to the workplace, which we have tried to create with the legislation that we have put through. It is about moving away from the conflict that the Opposition tried to promote in the workplace; it recognises that we will achieve a lot more if we work together in a real sense of partnership and consensus.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

When the Secretary of State next visits Europe, will he have a word with our continental partners about how they implement directives, and especially this directive? On the continent, people have a healthy, not cynical, attitude to European directives, and believe that they are meant for guidance. For instance, one can go into any marketplace in France and sometimes hear market traders hurling out their wares in pre-revolutionary weights and measurements or livres. Why not? Laissez-faire, laissez-passer.

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. The hon. Gentleman is a bit wide of the question.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I would not have expected anything else of the hon. Gentleman. We have looked carefully at the proposed European directive, which is flawed in several important areas and is not an appropriate vehicle to be imposed directly on the UK System. For example, our whole system of corporate structures is quite different from that on the continent. However, in many respects, the directive reflects the continental system of corporate governance, not that in the United Kingdom. The directive is not appropriate for several reasons, but the issue is important and we should deal with it in our domestic setting.

Photo of Margaret Moran Margaret Moran Labour, Luton South

I thank my right hon. Friend for his announcement of the review of workers' rights to consultation. I hope that the review will prompt fresh legislation, which might be called the Vauxhall workers Bill. Such legislation should ensure that no other workers suffer the agony of being told by telephone or radio that their jobs are to go and that no other employer treats workers as shabbily as General Motors treated the Vauxhall workers at Luton. Does my right hon. Friend agree that we need to ensure that workers have continuing consultation and are provided with adequate information, so that proper partnership and dialogue are in place before closures occur, rather than afterwards?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I was grateful to my hon. Friend for bringing to see me before Christmas a number of people from the Vauxhall work force at Luton who had been affected by General Motors' decision. They made a number of important points, but their main point, which they constantly pushed, concerned the way in which General Motors had treated them. Just over two years ago, they had entered into a partnership agreement, but the company had not honoured it. They felt that they should have been involved in the final decision. Those factors, as well as other incidents of which hon. Members are aware, have been a key driving force in our decision to launch the initiative announced today. It is unacceptable for people to learn about their fate on a local radio news station. That is not the right way to do business at the beginning of the 21st century; there must be a better way. In discussions with the TUC and the CBI, I want to find ways in which we can map out in the real spirit of partnership an approach that is appropriate for the United Kingdom.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

There is, of course, a world of difference between the Government introducing legislation and the European Union poking its oversized nose into the matter. Will the Secretary of State confirm that, in addition to being opposed by the Government, the present form of the directive is also vigorously opposed by the Confederation of British Industry, the Institute of Directors, the Federation of Small Businesses, the Forum of Private Business and the British Chambers of Commerce? Is he aware that his predecessor, the current Secretary of State for Northern Ireland, made a solemn pledge in front of the Select Committee on Trade and Industry on 4 November 1998, when he said that the British Government would prevent the introduction of the directive in this country? Does he understand, therefore, that if the Government now sell out to the German view and accept the directive's application to companies with only 50 employees, it will be the latest example given by them of perfidy and betrayal in respect of corporate business?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I wish that the hon. Gentleman would speak up, so that I can hear him.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I pity the country.

We have made it clear that we share the concerns about the detail of the directive that have been expressed by many of the organisations mentioned. However, engagement by the work force with the decisions that are taken by their company is an important issue that must be addressed. We do not agree with the detail of the directive, but we feel that it relates to an issue that can be dealt with in the United Kingdom setting. If the hon. Member for Buckingham (Mr. Bercow) agrees that such an issue exists, he should welcome the fact that we are dealing with it in domestic legislation. That is what I am announcing today. There is an issue that needs to be addressed and I think it can be dealt with more quickly and effectively in the domestic setting.

Photo of Mr Derek Foster Mr Derek Foster Chair, Employment Sub-committee

Is my right hon. Friend aware that the treatment of the Luton workers caused a great deal of anger among Labour Back Benchers and has given rise to a growing view that the Government should throw their weight behind the European directive, notwithstanding its flaws? I am very pleased to learn from him that the Government are taking the matter seriously. We will want to consider his proposals very closely.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

It is only right that that should happen. Some of the European directives, including the works councils directive, which we have endorsed, contain flaws and are not working as effectively in industry as we would like them to. There are instances of similar problems elsewhere. When General Motors made its announcement about Luton, it also announced the loss of about 2,000 jobs in Germany.

The work force there was not consulted or given information about the decision. The system in continental Europe does not work as effectively as most of us would like. It is therefore more appropriate to consider what is needed in the United Kingdom domestic setting and take suitable action.

Photo of Anne McIntosh Anne McIntosh Conservative, Vale of York

Will the Secretary of State assure the House that no legislation is needed? Will he confirm that the record that successive Governments achieved over 20 years through our flexible labour market was envied in Europe, and that industrial relations should be tackled on the basis of a voluntary agreement between the employer and the employee?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I think there is no problem with a flexible labour market, provided that minimum standards are attached to it to ensure that individuals are not exploited. The Conservative party tried to take us back to the Victorian approach to industrial relations, of master and servant. Conservative Members continue to support that. The right hon. Member for Wells (Mr. Heathcoat-Amory) is open about it, as can be seen if people take the time and trouble to read his writings on such matters. The Conservative party wishes to return to the master-servant relationship.

However, the Labour party believes that minimum standards, such as the rights to paid leave in a family emergency, to paid holidays and to a national minimum wage are basic entitlements in any decent, civilised society at the beginning of the 21st century. We are providing those entitlements; the Conservative party would take them all away.