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6.8 pm
Mrs. Maria Fyfe (Glasgow, Maryhill): Listening to the hon. Member for Eastleigh (Mr. Chidgey), I was reminded that, more than 100 years ago, Keir Hardie got fed up with the endless shilly-shallying and ambivalence of the Liberal party, to which he belonged. As a result, he founded the Labour party--and how right he was to do so. Judging from the hon. Gentleman's contribution, not a
lot has changed among Liberal Democrat Members. The speech was pointless, and I have never heard so much waffle. The Bill offers an opportunity to improve industrial relations legislation after what the Conservative Government did in their long period in office.
I welcome the Bill's general tenor and content, but I want to concentrate on a few points. In particular, I very much welcome clause 3, which will put an end to blacklisting. Some hon. Members who have been here a while will remember when an anti-blacklisting campaign was mounted in the House. The campaign had a large, cross-party membership. Members of all parties but one were involved--and there are no prizes for guessing which party could not provide a single member of that campaign.
I want to raise a serious issue. Clause 3 refers to blacklisting being prohibited on grounds of trade union activity, and that is an excellent provision. However, I remember an organisation called the Economic League, which was once a force in the land, with hundreds, if not thousands, of firms contributing to its funds, and, therefore, to the existence of a blacklist. People were blacklisted on grounds that had nothing to do with trade union activity. A constituent of mine was blacklisted for being a member of Anti-Apartheid, for example. The well-known Scottish folk singer, Hamish Imlach, was blacklisted on the grounds that he sang songs against Mrs. Thatcher, grounds that would have had most of Scotland blacklisted.
I shall not embarrass the firms that once supported the Economic League by naming them. Those firms gave up their membership following excellent work by "World in Action" and the investigative reporters of The Guardian. The organisation was embarrassed out of existence, but that does not mean to say that blacklisting may not still happen. That organisation could have been resurrected under another name, and there is nothing to stop firms conducting informal blacklisting within their trades. I have no reason to believe that blacklisting no longer occurs.
At the time of the campaign against the Economic League, the Daily Mirror--as it then was--did an excellent job. Into my hands came the entire list of those blacklisted, including several prominent members of the present Government. The Daily Mirror challenged the right hon. Member for Huntingdon (Mr. Major)--the then Prime Minister--to condemn the Economic League, but he refused to do so.
The newspaper rightly said that the organisation was conducting kangaroo courts and allowed no one to challenge their listing, which was in any event secret. People could have been kept out of employment throughout their working lives because of allegations that they could not challenge. Clause 3 is particularly welcome, and I look forward to seeing it in action.
I want to draw attention to some other aspects of the Bill. Recently, an American organisation that prides itself on union busting said that it would come to Britain to offer employers advice on how to subvert the intentions of the Bill. I am sure that the Minister and his colleagues will not put up with that. If any such action takes place, I hope that he will quickly review the Bill to ensure that no one gets away with it.
I intervened earlier on the shadow Secretary of State, the right hon. Member for Wokingham (Mr. Redwood), to ask about people who work for LSG Skychefs. Were I
not a member of the Transport and General Workers Union, I should not have known about the dispute involving those people, as it has had little coverage in the newspapers--at least where I live. I gather that the workers have jumped through all the hoops of Tory legislation. They have not acted unlawfully in any way. They are engaged in a legal strike. However, when they took one day's action at the end of last year, their employer retaliated by locking them out and dismissing them all. Every effort by their union and by others to take the dispute to ACAS has failed.
When I raised that point with the right hon. Member for Wokingham, he said that he knew nothing about it and would want to hear both sides of the story. I was surprised that the shadow Secretary of State knew nothing about the dispute--surely it is his job to be aware of such matters. There is currently no one on the Conservative Front Bench to answer for the right hon. Gentleman--[Interruption.] I see the hon. Member for Daventry (Mr. Boswell) returning to his seat. Let me put this challenge to him: will he look into the matter, and if the facts are as I have stated--I have no doubt that they are--will he take it up?
The Conservatives live in a dream world, in which all employers would be good if only they could. They do not live in the real world in which some employers do not know that the world has changed, and that employees expect better rights.
Mr. Boswell:
I am grateful to the hon. Lady for giving me the opportunity to emerge from the ethereal darkness behind the Speaker's Chair. I shall study her speech, and if she would care to give me further details of the case, I undertake to look into it objectively and without preconception in favour of either party.
Mrs. Fyfe:
I thank the hon. Gentleman for that assurance and I shall place the information in his hands. I hope that, if he has any critical comment to make about the action of the firm involved, he will do so in public rather than simply in a letter to me.
My final point relates to the size of companies covered by the Bill. It may seem reasonable to argue that, if a firm thinks it needs 21 employees, 21 is the number it should have. Firms will not employ more or fewer employees than they need to deal with their work load. However, it does not take much ingenuity to think of certain types of firm--for example, a small firm in the rag trade--which do not need huge workplaces or elaborate equipment, and which could get round the Bill by creating several small groups of workers under different company names. I hope that the Bill can be framed to prevent any such action to get round its intentions. Those who work in the rag trade have been among the most ill-treated employees.
Years ago, before I came to the House, I taught trade union studies to people sent by the TUC to learn about industrial relations and about how to advance their interests and to negotiate with employers. The rag trade workers tended to be those who had the greatest number of problems and who faced the most outrageously unfair employer practices. Problems are greatest not among the largest firms, but among the type of employers who run small, fly-by-night operations that can easily close down and start up again elsewhere.
I welcome the Bill's family-friendly aspects. It is nonsense to argue that firms may faces losses simply because they treat their employees decently. Ever since
the industrial revolution, it has been clear that, the better employees are treated, the more likely they are to treat the employer well and to be committed people whom employers are pleased to employ. Decent relations between one side and the other are more likely to result in a profitable enterprise than are attempts to get away with treating people as foully as possible.
The Bill is welcome, and I look forward to seeing it further improved in Committee.
Mr. John Bercow (Buckingham):
The Bill is ill-judged and its main effects will flatly contradict earlier statements by Ministers. In April 1997, in the foreword to Labour's business manifesto, the Chancellor of the Exchequer--then shadow Chancellor--stated:
Mr. Ian Stewart:
Will the hon. Gentleman give way?
Mr. Bercow:
Time is limited. I may take the hon. Gentleman's intervention later if time allows.
Why should Ministers care? Through the normal methods of advance briefing and anonymous leaks to the media, we got an indication of their thinking on the matter. The other day, a senior Minister--one of those who wanders in the dark--told a newspaper that, as long as both the CBI and the TUC were brassed off,
I want to focus on two particular aspects of the Bill. The first is the provision relating to trade union recognition. The Secretary of State did not even attempt to
gainsay the overwhelming evidence that most businesses implacably oppose the provisions for trade union recognition. He could not deny that that is true. Those businesses are against the provisions for trade union recognition because they believe that they will have a corrosive effect on company performance and industrial relations.
Specifically, the fear of senior business men, large and small, is that the Bill will stop or weaken labour market flexibility and will militate against multi-skilling. Both of those are crucial preconditions of commercial advantage in a highly competitive world.
Ministers could have done us a favour by at least allowing exemption from the provisions on trade union recognition for firms of fewer than 50 employees. A number of right hon. and hon. Members on the Government Back Benches complain about the Secretary of State for excluding very small firms--micro-businesses and other small businesses--from the legislation. The Minister will attempt to defend the Government's position, no doubt with great eloquence, in his winding-up speech.
My complaint is that businesses of between 21 and 49 employees have not been excluded from the provisions. They will suffer as a result. That is unfortunate because, if the Government had made that concession in accordance with their definition of a small business in different legislation--the Late Payment of Commercial Debts (Interest) Act 1998--that would have freed between 200,000 and 300,000 businesses in the UK from the clutches of this damaging impost. It is a disaster. The Minister should account for the differential treatment by the Government of different sectors in different legislation. Ministers have not explained why that is so.
Secondly, I turn to the Government's so-called family-friendly policies, to which there are two main parts. We understand that parental leave is to be for three months per person, and that that leave is to be unpaid. The Government have made an extremely cautious estimate of the likely cost of the provision. They say in the regulatory impact assessment that they expect it to be about £28.8 million a year, although they concede, for those who bother to study the text, that that is based on what may prove to be a dramatic underestimate of the number of people who are likely, especially in the first year, to claim that entitlement.
The Government reckon that only 0.5 per cent. of those eligible to claim the benefit will do so. The figures could, of course, be much larger than that, but I turn the mind of the House to the proceedings of the Select Committee on Trade and Industry--on which I am privileged to serve under the excellent chairmanship of the hon. Member for Ochil (Mr. O'Neill)--last November.
On 4 November, the then Secretary of State for Trade and Industry, who showed that he was not even aware that his Department had conducted an assessment of the likely costs of the directive, nevertheless brazenly declared that, whatever the cost of the parental leave directive--he was referring to a CBI estimate of the cost--it would be "a tiny fractional amount" of the total employment costs that are borne by business.
With that observation, the former Secretary of State, who, again, has never run or worked in a business, still less owned a business, sought to dismiss the concerns of those who are worried about the Government's intentions.
The problem with his position and that of the new Secretary of State and Minister is twofold. First, although in isolation, any particular measure is of course likely to account for only a tiny fractional amount of the total costs that are borne by business, that does not mean that it is of no significance. It is the cumulative impact of a torrent of regulations and additional taxation from the Government that causes legitimate concern in the business community--£40 billion additional tax and regulatory burden in the course of this Parliament.
My second point is, if anything, even more revealing for what it tells us about the naivety and ignorance of the right hon. Member for Hartlepool. In dismissing the cost as a tiny fractional amount and, to use another word, "marginal", he did not realise that, often, a marginal impact can make a decisive difference--between a business surviving and going under; being able to keep its existing employees and having to get rid of an employee or more than one employee; and staying at its present size and being able to take on more employees.
The Government should not have signed up to the cack-handed folly of the European social chapter, which obliges this country to adopt the parental leave directive. If they had had any foresight, they should have looked across the Atlantic and seen what happens.
In fairness, the Secretary of State conceded to me earlier that the American record on job creation was good. In the United States--I do not know whether the Minister, who is not an obvious fan of the United States economy, has looked at the example--there is provision for unpaid parental leave for three months. It is provided under the terms of the Family and Medical Leave Act 1993, but, in a country with 23 million small businesses, that legislation wisely excludes from its ambit firms of fewer than 50 employees. The British Government should have had the sense and judgment to do the same.
What of time off for domestic incidents? The Government say that time off should be reasonable. I agree. The question is, are there to be limits or no limits? If there are no limits, the measure is open ended and could, potentially, be seriously abused. If there are limits, there is a danger--I do not say that it is an inevitability--that such time off will come to be regarded as a natural part of the holiday entitlement of an existing employee.
What we need is careful consideration by Ministers, and no repetition of the outrageous parliamentary abuse that accompanied the introduction of the working time regulations. We need from the Minister a guarantee that there will a minimum three-month consultation period on the regulations; a guarantee that there will be a parliamentary debate on the regulations before they take effect; and a commitment that companies that will have to implement the regulations and bear the costs will receive at least three months' notice of having to do so, rather than the paltry and insulting six weeks with which they were fobbed off in the context of the working time regulations.
The shadow Secretary of State, my right hon. Friend the Member for Wokingham (Mr. Redwood), rightly highlighted the serious opposition of business to the proposals. The Institute of Directors has said that they would sap the competitiveness of British firms. We know that British Chambers of Commerce thinks that they could slow or stop growth in the small business sector.
The Forum of Private Business has talked about the possibility that the moves could be disastrous for small firms. The Federation of Small Businesses said that the Bill could make it too costly and risky to employ staff. Our reliable old friends, the lawyers, predict an exponential increase in litigation and a massive increase in legal costs. Is a bonanza for lawyers what the Minister wants?
I cavil not only at what the Government are trying to do--partly to buy off the trade unions for the £110 million in today's prices that they contributed to the Labour party's coffers in its 18 years in opposition; partly to assuage the European Union; and partly, I concede, out of a fair-minded concern to develop good employment relations. There is an alternative. If Ministers want to create better employment relations, they should start by fostering a climate that is conducive to the creation of more employment. That would entail a speedy reconsideration of their massive tax and regulatory imposts on British industry and commerce.
6.18 pm
"We will not impose burdensome regulations upon business because we understand that successful businesses must keep costs down."
Nineteen months later, the immediate predecessor of the Secretary of State for Trade and Industry--the right hon. Member for Hartlepool (Mr. Mandelson)--declared:
"we have no intention of introducing any legislation that will present a burden on business and reduce the competitiveness of British firms."--[Official Report, 25 November 1998; Vol. 321, c. 214.]
The tragedy is that the Bill does both: it will raise costs, and it will reduce competitiveness. We have suffered the misfortune of having the Second Reading debate introduced by a Secretary of State--no longer in his place--who showed no evidence of ever having owned, run or even worked in a business of any kind, least of all a small business.
"we won't have a problem."
One might ask--although it will not take long to provide an answer--what the said senior Minister meant by the use of the term "we". What he meant, of course, was that the Government would not have a problem; Ministers would not have a problem. The tragedy is that business will still have a problem, the economy will still have a problem and the country will still have a problem--at a time when company failures are rising for the first time since 1992; when small business start-ups are declining; when we are under increasing pressure; when profit forecasts are being revised downwards; when short-time working is on the increase; when downsizing is commonplace; and, when, at 6.2 per cent., on the Government's preferred measure, unemployment is substantially higher than in the United States. That is the reality of what the Government are doing.
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