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Mr. Radice: I shall test the hon. Gentleman on the social chapter. Has he read the last sentence in article 1 or the last sentence in article 2.2?
Mr. Walter: I have indeed, but I do not believe that either article mentions the unemployment rates in Germany, France, Italy or the United Kingdom--which is what I was referring to.
I believe that the best way to help the unemployed is to improve their chances of getting a job. It is no secret that Britain's competitive position in world markets, its attractiveness to foreign investment and its low cost base are due to low social costs. In fact, Britain's social costs are lower than those in most other competitor countries. Thanks to the policies of the previous Government, the United Kingdom has a much lower level of statutory non-wage costs than any of our major competitors. Our hourly labour costs in manufacturing are significantly lower than those in any other G7 country.
For every £100 that is spent on wages in the United Kingdom, an employer must add approximately an extra £15 in non-wage costs. In Germany, the employer must add an extra £31; in Spain, it is an extra £34; in France, an extra £41; and, in Italy, an extra £44. Nevertheless, when the cost of living is taken into account, real take-home pay for manufacturing workers in the United Kingdom is higher than in either France or Italy.
If the social chapter is an empty box, as has been claimed, will those non-wage costs creep into labour costs in the United Kingdom? The European social chapter is the means by which the European social model in labour practices will spread across the channel.
Mr. Radice:
Has the hon. Gentleman read article 2.3 of the social chapter? He will see that there is a British veto if it is a question of
Mr. Walter:
With the greatest respect, I have read the social chapter. My fear is not that the British veto might not exist in such matters but that the Government would be perfectly prepared, in their enthusiasm, to allow those costs to spread across the channel. I have heard nothing in the debate so far to suggest that Labour Members would be anything but enthusiastic about that spread of European social practice.
I referred earlier to the works councils directive. At the time of Amsterdam, it applied to companies with 1,000 or more employees, but the Commission now proposes to reduce that to 50 employees. In Germany, that kind of structure applies to firms with just five employees in some cases. In larger German companies, up to half the seats on the supervisory board must be reserved for employee representatives. The hon. Member for North Durham frowns. I believe that those non-wage costs would creep into the social chapter and come hurtling across the channel.
I do not suggest that any of those practices are currently in the social chapter, but the excellent research paper provided by the House of Commons Library, entitled "The Social Chapter"--this is proof that some of us on the Opposition Benches have read not only the social chapter and the treaty but some of the background material provided by the Library--lists current issues in European social policy: working time, maternity leave and pay, young workers, European works councils, parental leave, part-time and temporary workers, posted workers, transfers of undertakings, consultations with workers, redundancies and transfers, worker information and consultation, onus of proof, equal treatment, positive discrimination, sexual harassment and equal treatment in occupational social security. Then there is a delightful heading, "Further Reading".
In my constituency, just how many new jobs will be created from signing the social chapter? Or--if Ministers have done their research--how many jobs in my constituency will be destroyed as a result of the Government's plan for a statutory minimum wage, which is not even part of this debate but can only compound the problem?
I regard myself as a good European, but I have no problem whatever in opposing the social chapter and the employment chapter as being bad for Britain and bad for Europe.
Mr. David Heath (Somerton and Frome):
New clause 21 stands in my name and that of my hon. and learned Friend the Member for North-East Fife (Mr. Campbell). It is a very modest proposal, simply requiring the Government to do what they should do: consult employers and workers' organisations before making appointments to the Employment Committee. I know that the Government have regular consultations with employers' organisations, and I hope that they also have regular meetings with workers' organisations, so the new clause poses no practical difficulties.
I hope that it will not be misinterpreted when I say that we on the Liberal Democrat Benches are a little cynical about the Employment Committee and do not feel that there is a role for discussing employment opportunities and the creation of jobs with our European partners, because we believe that it is a proper matter for the European Union to discuss. However, the Employment Committee may prove to be--we shall have to wait and see--yet another talking shop that achieves very little. If that happens, it will be regrettable, but if it enables a proper dialogue to take place between the representatives of industry and commerce in this country and those in continental Europe, who may take a slightly different view about the best way to proceed towards job creation, that must be a good thing.
I was interested in the earlier discussion across the Chamber about the contrast between the Anglo-Saxon and continental models. When the Prime Minister and his colleagues spoke about these matters in the various Councils of the European Union, I thought that he suggested that the Government were for flexibility nowadays. I thought that they were for the Anglo-Saxon model of job creation, which is, perhaps, not as untamed as the American model. We have no problems in agreeing with that. We believe that the key elements for job creation are completing the single market, maintaining deregulation and flexibility in the labour market and reducing labour costs. Those should be promoted within the context of the European Union.
There is clearly a dichotomy of thought on these matters between the British position and that of some of our European neighbours. Indeed, it characterises what we do in this country, and the Anglo-Saxon tradition. I know that there are strictures in this place about using foreign languages, so I shall not use the term in the original, but it translates as "hard capitalism" or "savage liberalism". The concept of "savage liberalism" is obviously absurd; nevertheless, the term is used in France and elsewhere. It is important that we engage in the debate. If the Employment Committee can play a part in ensuring that the British point of view is very much to the fore in the debate, that seems to be a worthwhile objective.
I do not need to detain the Committee further.The new clause would simply ensure that the Government consulted before making appointments to the Employment Committee. Not all Governments have always consulted widely before making appointments to the Employment Committee. It is to our advantage to see that this measure is clearly stated in the Bill and is used as a precedent for other appointments that the Government may wish to
make. I hope that the Minister will be able to accept the new clause, or at least accept its spirit, and satisfy us that the Government's intentions on this matter are quite clear and that consultation will take place.
Mr. Brady:
I apologise for having missed the beginning of the debate, and, if I may, I shall recount a small anecdote that relates to European matters. I was detained by a Standing Committee that was considering rather arcane matters of copyright law. That provides a perfect illustration of the dangers of allowing any further extension of qualified majority voting, given that, in the very important matter of preserving and protecting databases--an industry in which the UK has more than 50 per cent. of the European market, and which is far more important to the UK than to any of our partners--the British Government were forced to accept that the database would be protected for only 15 years, rather than 25 as we had first wished. I shall not linger on that. I just thought it an interesting illustration of the dangers of allowing control over our legislative processes to leave our shores.
I am particularly grateful to the hon. Member for Ilford, South (Mr. Gapes)--who has left his place after a splendid speech--because of the clear and frank way in which he set out his objectives and beliefs in higher social costs. It is a legitimate debate which we used to have with the Labour party when language was used in a more straightforward way, in the days when people always used to say what they believed rather than sometimes hiding behind slightly different permutations of language, which seems to be the current fashion.
This point might help the hon. Member for Somerton and Frome (Mr. Heath) to understand some of the rather puzzling differences between the sounds that emerge from the mouth of the Prime Minister and what the Government are doing when they negotiate on our behalf in Brussels. I fear that in European matters, as in matters of domestic interest, words do not always mean what they purport to mean. That is a subject to which I shall return.
The way in which the Government presented the treaty to the Committee--indeed, to the country--was a fascinating illustration of the way in which they seek to present themselves and sometimes present minor achievements in negotiations as great triumphs. They presented the treaty as a triumph for the role of the member state, and as a triumph for business. They held it out as an example of a great new understanding of the way in which markets work. Closer inspection of the treaty and of the Bill shows that none of those claims is true.
Article 127 of the treaty incorporates the goal of high employment levels across European Union countries. The Government would have us believe that they are seeking to provide a business-friendly, less regulated environment that will enable higher levels of employment to be achieved. It will be a new environment that provides flexibility and all the elements of the Anglo-Saxon model to which the hon. Member for Somerton and Frome referred. I fear that that is not strictly reflected in any accurate assessment of the treaty.
One hopes and expects that the Labour party and the other European members states will recognise and understand that the Anglo-Saxon model is more effective in generating employment and in providing an
environment in which business can succeed. The average rate of unemployment in the European Union is about 10.8 per cent., compared with 7 per cent. in the United Kingdom. Other European countries should see the wisdom of following the UK model.
The International Monetary Fund has criticised the lack of flexibility in other European member states and the sclerotic state of continental labour markets. It has called for comprehensive reform of policies and institutions affecting the labour markets in continental economies. On the other side of the equation, it has praised the United Kingdom for the policies that have been so successful in building our economy and our labour market, and have allowed businesses to succeed.
"--social security and social protection of workers;
3 Dec 1997 : Column 405
--protection of workers where their employment contract is terminated;
The terrible fears to which the hon. Gentleman refers may never be realised. He simply has not read the social chapter.
--representation and collective defence of the interests of workers and employers . . .
--conditions of employment for third-country nationals . . .
--financial contributions for promotion of employment".
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