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Mr. Bill Rammell (Harlow): I am happy to follow the hon. Member for Stone (Mr. Cash). I do so with some astonishment, because--I think that I understood his argument--he said at the beginning of his speech that the social chapter was a deliberate, organised attempt by other European countries to bring our social costs up to European levels. I remind him that we had an opt-out. It is not the other European countries that are arguing for the abolition of that opt-out; it is the British Government. That is an example of the xenophobic rhetoric that I referred to earlier in Committee.
I am looking particularly at the hon. Member for Buckingham (Mr. Bercow) because yesterday, when I could not be here, he said that I did not justify my claims about xenophobic rhetoric. I am happy to do so by referring to the language and policies of the Conservatives. Last week, the hon. Member for North
Essex (Mr. Jenkin) imagined a housewife in Surrey being disconnected from the political process because Members of the European Parliament speak in a foreign language.
Mr. Cash:
I must intervene. The hon. Gentleman cannot be allowed to get away with that. I will not be accused of being xenophobic. The hon. Gentleman must answer a simple question. Does he think that it is xenophobic to produce statistics based on the European Commission's analysis of wage rate differentials? If he does, he is clearly mad.
Mr. Rammell:
I shall not respond to that directly. I do not think that it is wrong to quote European Commission statistics. That is not the issue on which I was accusing the hon. Gentleman of using xenophobic rhetoric. However, he said--I am paraphrasing him--that the social chapter was an organised conspiracy by other European Governments to bring our social costs up to their levels. The proposal to abolish our opt-out does not come from Europe; it comes from Labour.
Mr. Radice:
I know that it is boring to hear the social chapter read out and I know that Conservative Members are not enthusiastic about it because most of them have not read it. However, we have a veto on social security and social protection of workers--the non-wage costs. If those wicked continental Governments are seeking to impose their social costs on us, we can prevent them by using our veto. Have the Conservatives not realised that?
Mr. Rammell:
Some clarity and some facts are welcome in the debate.
The rhetoric used by the Conservatives is important. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said to the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), a couple of years ago:
Mr. Letwin:
I apologise for intervening again so soon, but the point made by the hon. Member for North Durham (Mr. Radice) must be nailed. It is clear in article 137 of the social chapter that we do not have a veto over measures relating to working conditions. The fears that were being expressed by my hon. Friends arise on precisely that point.
Mr. Rammell:
I did not hear those comments from my hon. Friend: I heard him mention social security legislation and, on those issues, we have the veto.
I shall move on to some of the working conditions proposals in the social chapter. I speak on the issue with some knowledge, because I was a senior manager in the public sector for 10 years before 1 May. I understand the practical need for flexibility and adaptability in the workplace. I also understand the frustrations of being unable to get employees to adapt and change.
If we are to compete and succeed economically and industrially, we need change. We need people to work in new and different ways and to show flexibility and adaptability. It is also crucial that employees have enthusiasm and commitment. That will happen only if people have security of employment--insecurity in employment is one of the biggest destabilisers that prevent people from being enthusiastic about and committed to their work--channels of communication so that people feel that they can put their views forward, and a sense of ownership and belonging to the organisation or company for which they work. That is the only way for people to work effectively.
Mr. David Davis:
I have listened to the hon. Gentleman with some sympathy, but does he accept that companies can have good communications and industrial relations without all the regulations? All the best studies carried out in this country and across Europe--for example, in Holland--show that high levels of regulation lead to low levels of growth which lead to high unemployment. That does not help anybody.
Mr. Rammell:
I do not believe that that is so. We can all select examples to prove our case. We should consider the experience of the Dutch which, in the past few years, has been a strong example of social partnership with both sides of industry working together. They have seen a transformation of the economic situation. We can all quote statistics from various countries to support our examples.
I was talking about the criteria needed for successful economies and industries. If those criteria are accepted--there seems to be a broad measure of agreement on both sides of the Committee--we have to make a decision about whether to follow the legislative route. Should the matter be left to employers and employees to negotiate or should the Government legislate for some basic minimum standards of fairness in the workplace? Even Conservative Members agree that some legislation is necessary--for example, health and safety legislation. Once that has been accepted, other legislation is a matter of judgment, including the judgment whether such legislation should be national or through the social chapter and the European Union.
Conservative Members are somewhat disingenuous about the issue. They have argued, in Committee and in European Standing Committees, that the employment protection proposals could be achieved through UK legislation. That is disingenuous because the Conservative party has given no evidence that it would support such legislation.
I support the legislation that comes from the social chapter for several reasons. We should judge the issue case by case. That is important, because one of the illusions that we suffered under the opt-out was that it would protect us. The longer the opt-out went on, the more it became clear that the social chapter was coming in through the back door. Companies were reacting to it, but--this is the key point--we did not have a seat at the negotiating table.
Employment protection legislation should also be achieved through Europe to ensure a level playing field. Some 60 per cent. of our trade is with other European
nations and it is important, so that one country does not gain a competitive edge over another, to have some basic minimum standards and costs.
Mr. Owen Paterson (North Shropshire):
Is the hon. Gentleman saying that the reason why legislation should not be presented in this House is because the Opposition would oppose it? That seems a strange reason.
Mr. Rammell:
That is not what I said. I was drawing attention to the fact that Conservative Members are misleadingly giving the impression that they would support UK legislation in employment protection as an alternative to signing up to the social chapter. There is no evidence to sustain that argument.
The British Government are right to use the social chapter and to judge the issues case by case. I genuinely believe that a balance must be struck between social costs and the burden placed on business. One of the frustrations of our debate is that it is unrealistically polarised. Conservative Members seem to claim that the choice is between total flexibility--with no legislation on any employment situation--and total restriction. That is not the real world and is not the situation that we face. A balance must be struck somewhere in the middle and that is a matter for negotiation in the workplace, in the House of Commons and in the European Union.
We have heard other arguments against the social chapter. The shadow Foreign Secretary, at the start of our debate on the amendments, seemed to say that Britain had the best record in Europe for inward investment and that the social chapter would damage the prospects of inward investment. That argument is fatuous. It was clear to any informed observer, and certainly any international business observer, for two years before 1 May, that it was likely that Labour would win the general election with a commitment to sign up to the social chapter. However, inward investment was not cut. It has not been cut since Labour was elected and signed up to the social chapter.
The argument is also misleading because when we consider the types of companies involved in inward investment we see that their wage costs and terms and conditions are way above anything introduced in the social chapter. It is misleading to suggest the social chapter is a factor in the equation when such companies decide on inward investment locations.
I also take fundamental issue with the view put forward by the shadow Foreign Secretary yesterday when he said that, in a competitive world, all the crucial decisions are taken at the margin. His argument was that marginal differences in price make all the difference. Price and labour costs are important, but the idea that the only route to economic and industrial success is to concentrate wholly on labour costs at the expense of anything else is one reason why the previous Government got it so wrong.
"I hope that my right hon. Friend can influence the Government, so that we British can be proud of the things that are our heritage. That is completely different from spending our time attacking our allies and neighbours for what, allegedly, they are doing, because that is xenophobic."--[Official Report, 7 February 1996; Vol. 271, c. 410.]
He was not talking about the Labour party or the Liberal Democrats: he was talking about the Conservative party and Conservative Members. That is why I made the point.
7.45 pm
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