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6.13 pm

Mr. David Chidgey (Eastleigh): I shall limit my remarks, because other hon. Members wish to speak.

Governments are often criticised for making pronouncements that are long on rhetoric but short on content. The Queen's Speech is a departure from that norm--it is pretty short on rhetoric, but even shorter on policies that will be successful in tackling trade and industry problems. It makes it clear that the

and that the Government's central economic objectives are

    "high and stable levels of economic growth and employment".

Nobody would disagree with those laudable aims, but what and where are the policies designed to achieve them?

The latest trade figures show that we are now running a trade deficit of £2.5 billion, the largest ever. Our trade gap with both our European Union partners and non-EU nations is widening, and it has little to do with the Asian crisis. Where are the proposals to support British industry and reduce bureaucracy in business? Where are the proposals to maintain inward investment? Although Britain has done incredibly well in attracting inward investment, it is important to continue to attract it.

Most importantly, where are the proposals to provide investment in human capital? We have heard a great deal this afternoon, particularly from the Secretary of State, about the importance of a knowledge-based economy. I could not agree more, but where is the investment in human resources to provide for that? I find such proposals somewhat wanting.

Our manufacturing industry is at its lowest ebb, yet the Secretary of State and the Chancellor complacently stick to the line that the economy is not heading for recession. Nobody said it was, but industry certainly is. Just seven

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days ago, a Treasury survey of 44 independent economic forecasters predicted recession in the manufacturing industry next year. While the Chancellor continues to claim that manufacturing industry will avoid recession next year, the Treasury survey shows that an average drop of 1.1 per cent. in manufacturing output is expected. However, the Treasury still claims that growth in industry will be plus or minus 0.25 per cent.--in other words, zero.

That variance between forecasters and the Treasury is unprecedented, and it is time that the Government faced up to the severe problems confronting industry--particularly the burden of high interest rates and of an unstable and uncompetitive exchange rate. Unless the Government act, as many as 400,000 manufacturing jobs could be lost in the next two years because of the recession in manufacturing industry.

It simply not acceptable for the Government to wash their hands of the crisis in manufacturing and blame it on the collapse of Asian economies and the global market. For a start, that is simply not true. Today's trade figures reveal that exports to the European Union from this country are collapsing. That has nothing remotely to do with Asia. We trade more with the Netherlands than with the whole of south-east Asia, Latin America and Russia put together.

The Government's pre-Budget report clearly showed that the UK's principal export markets are growing. Tables A2 and A5 in the report show growth of 7 per cent., yet UK exports sales to our key markets are growing by only 4 per cent. That has nothing to do with the collapse of the Asian economies or stresses and strains on the global market, but is entirely down to a lack of action by the Government to make UK industry more competitive.

The Queen's Speech should have addressed two key issues: first, what will the Government do to ease the way for British business to compete in the global market; and, secondly, what will the Government do to ensure that our work force is equipped with the training and skills that are vital to a knowledge-based economy?

The Government are still prevaricating on Britain's entry into European monetary union. It would take just one simple declaration of interest and an indicative programme to make interest rates immediately fall and exchange rates stabilise, and industry would be revitalised at a stroke. The Prime Minister knows that. Indeed, he is on record as praising the call by more than 100 leading business people for a firmer commitment to join the single currency. He has presumably read what the chairman of Unilever said:

That is how business thinks, but the Gracious Speech merely continues the line that we will join when it is in Britain's best interest. I asked the Secretary of State whether he could envisage a scenario in which joining would not be in Britain's best interest, and answer came there none.

The Queen's Speech tells us that there will be measures on competition and on investment in improving skills. Why are the Government not taking a lead on competition by introducing proposals to give the Post Office greater commercial freedom? How long must we wait? Unless the Post Office is given the freedom to invest

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internationally and to operate commercially, it will lose its place in the global market. Time is fast running out. The forecasters tell us that, within the next two years, there will be no place in the global market for the Post Office.

If the Government intend to address competition, why have they increased taxes on business at twice the rate of the reductions that they so proudly proclaim? Why have they not made some effort to reduce regulations on business?

On 10 November 1998, at column 201 of Hansard, the Minister for Small Firms, Trade and Industry claimed that the previous Government had introduced 10,000 new regulations. There is a great danger of small and medium-sized enterprises being crippled by bureaucracy, yet the Government's vaunted deregulation unit attached to the Cabinet shows all the symptoms of becoming a farce. It was asked a few weeks ago how many deregulation measures have been introduced. The answer was, "We can't find any." It has been established for a year, and so far it cannot find any deregulation measures--not one.

The Government not only have failed to reduce regulation on business, but are intent on adding Euro-bureaucracy to the burden. Britain enjoys some of the lowest employment costs in Europe, which are, on average, about a third of those of most of our competitors. That helps to offset the disadvantages of low productivity. However, that will all change if the party of European socialists has its way.

Under the Government's presidency of the European Union last year, the document entitled "Economic Reform in the Framework of EMU"--commonly called the new European way--was drafted. The right hon. Member for Wokingham (Mr. Redwood) made the interesting point that, if we follow the philosophy set out in that document, we will be on the road to tax harmonisation.

Europe finds it anti-competitive that Britain has some of the lowest employment costs in the world. I cannot see the logic of following that philosophy, but, on Sunday, along with the other Finance Ministers of Europe, the Chancellor of the Exchequer agreed to that document--he may have signed it. Where does the Secretary of State for Trade and Industry stand if such a measure is at the heart of Government philosophy?

The Queen's Speech should have contained measures for improving skills. It is appalling that there are 7 million people in this country with no formal qualifications. Investment in vocational training is failing to deliver. National vocational qualifications are a good idea, and I support them. They measure skills that people have, as well as the knowledge they are gaining. However, the recent disturbing results show that there is a 40 per cent. drop-out rate at NVQ level 2, which is the threshold to gaining the higher technical skills our economy lacks.

The problem is that, although the Government recognise the distinction between investment and capital and revenue costs, they do not accept that expenditure on human resources and human capital is essential for a knowledge-based society. Instead, such expenditure is seen as a revenue cost, and is continually squeezed. We have inadequate resources for education and for training, yet that is the most important investment that this country can make. My hon. Friend the Member for Bath (Mr. Foster) hopes to have the opportunity to deal with that issue.

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The Queen's Speech does not contain the policies that manufacturing industry needs. It does not contain measures to free business from the strangulation of red tape. It does not do enough to provide investment to achieve the high skills we need for a knowledge-based society. We must go much further down that road before I can be convinced that the Queen's Speech addresses these issues.

6.25 pm

Mr. Jim Fitzpatrick (Poplar and Canning Town): I am grateful, Mr. Deputy Speaker, for being called to speak in the debate. I shall refer specifically to the Government's proposals on fairness at work. That should be no surprise, as I am a member of the Graphical, Paper and Media Union parliamentary group, and as a former senior lay official of the Fire Brigades Union, I would be expected to be interested in trade union law.

There has been much speculation about what will be in and what will be omitted from the forthcoming Bill on fairness at work, which is expected to begin to redress the imbalance created by the legislation introduced by Conservative Governments between 1979 and 1997. It is generally accepted that they moved employment legislation beyond fairness to create a clear bias which could be used to advantage unscrupulous employers.

The main thrust of our legislation will not present problems for reasonable companies that treat their staff with respect and dignity, but may cause difficulties for organisations that disregard their employees and do not consider that staff should be entitled to a view. Such organisations represent but a small minority of employers.

It is important to say that this legislation is not about giving power back to union barons, but about creating a framework of fairness for people in the workplace. The Prime Minister has said:

It is important to bear those words in mind when we consider the efforts that some employer organisations have made to dilute the proposals published in the White Paper, some of which had been agreed.

The Bill will deal with individual employee rights. It is only right that the upper limit on awards for unfair dismissal should be abolished. Contrary to the view of the right hon. Member for Wokingham, I believe that reasonable compensation should be paid if an independent tribunal is persuaded that an individual has been deprived of his livelihood unfairly. The tribunal should decide how much compensation is appropriate. A £12,000 limit is potentially unreasonable and unfair. I am pleased that the Secretary of State nodded his agreement that such a provision will be in the Bill.

To allow employers to pressurise new staff to sign waiver clauses on unfair dismissal and on redundancy protection is wrong and should be outlawed. Employees are usually in a weak position when applying for work, and they can easily be persuaded to sign away basic legal rights when pressed by unscrupulous employers.

There seems to be general acceptance of the Government's proposals to reduce the qualifying period for unfair dismissal from two years to one. I believe that

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there is a strong case for all qualifying periods to be abolished. Workers pay tax and insurance, and are contractually bound from day one of employment. They should also be entitled to full employment protection from day one.

One aspect of the White Paper which did not attract enough attention was the promotion of family-friendly policies. It is a matter of some pride that our Government are proposing policies such as the extension of statutory maternity leave and the introduction of parental leave. Those changes will promote the family in a realistic and practical way. Those rights should be statutory, or we will disadvantage good employers who are keen to look after their staff.

On automatic union recognition, we should be looking for a procedure that is simple and less likely to cause tensions in the workplace. Many complicated formulae have been suggested: 50 per cent. plus one, which isthe most straightforward; 50 per cent. plus one, plus 12 months' employment; 50 per cent. plus one, plus 12 months' employment, plus a ballot; 50 per one, plus 12 months' employment, plus a ballot,plus individually signed forms requesting collective representation. Surely, if 50 per cent. plus one member of a work force are members of trade unions, that should indicate that the majority of staff seek representation, and recognition should therefore be automatic. Any other formula will only give employers who do not want to recognise trade unions in the first place legal loopholes to exploit, to delay and thus to frustrate.

Employers apparently accept that there should be a right to representation in disciplinary cases, but not in regard to grievances. That seems anomalous. The only reason would appear to be the fact that disciplinary action is initiated by the employer, whereas grievance proceedings are initiated by the employee. Extending trade union representation to grievance hearings is hardly radical, given that most workplaces surveyed recently had such procedures, while only a few did not allow individuals to be represented. Surely, if someone has a problem, the company involved will want it to be solved, and a trained trade union official is more likely to be able to assist in the process. Harassment at work--for example, bullying, racism or sexism--is a sensitive issue. Most employers want such matters to be dealt with through acknowledged procedures, by people who know what they are doing. Trained trade union representatives can help in such sensitive situations.

The Government intend to exclude a quarter of the working population from union recognition because they work in firms employing fewer than 20 people. If those employees have no access to trade union advice and grievance representation, that will have a negative impact on them.

As has been stated by Mr. John Monks, general secretary of the Trades Union Congress--I hope that we all share his view; certainly all Labour Members do--many of the proposed measures are designed to minimise disruption in the workplace. Fair, stable and orderly industrial relations are the goal, and the proposed fairness at work legislation will help to achieve it.

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