Informing and Consulting Employees

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Mr. Ivan Henderson: The hon. Lady mentioned her time as an MEP for North Essex. As one of her constituents, I remember that period well. Was she aware that during that time, my company voluntarily negotiated a European works council because it recognised the benefit of sharing information? That company was Swedish and had trade unionists on the board of directors.

Miss McIntosh: It was a privilege to represent the hon. Gentleman, and I remember the negotiations that he mentioned.

The hon. Gentleman's intervention made the point forcibly, and perhaps more eloquently than I did, that it is fine for a company to choose to enter into a voluntary negotiation. I applaud such agreements because they demonstrate good employment relations in this country. However, it would be regrettable for a company to be forced by law to meet the excessive costs because, as the Minister will accept, the Government will not be giving any handouts. Such costs could mean that the company might lose market share, suffer financial losses or even close.

Mr. Hesford: What is the difference between a voluntary agreement being negotiated within one company and the same agreement being imposed as a statutory minimum standard on others? The hon. Lady said that it is good practice to negotiate voluntarily. What would be the difference in the efficacy of business practice, if legislation imposed such negotiation?

Miss McIntosh: As the hon. Gentleman will appreciate, that is the fundamental and—one hesitates to use the word—ideological difference between the approaches of the Government and the official Opposition, and it is almost unique for two parties coming from two philosophical backgrounds to agree on such a motion. As was eloquently argued by my hon. Friend the Member for Bognor Regis and Littlehampton, we fervently believe that we must just agree to differ.

I will revert to my story and to the moral that the Minister will have seen in it. In that example, regrettably it was the employer who listed her most prestigious clients and lost her business as a result. However, it would be more tragic, even if it were done inadvertently, if employees found themselves in that position.

Dr. Ladyman: Will the hon. Lady give way?

Miss McIntosh: No, I want to finish.

I am also concerned that the proposal will apply to countries in the European Economic Area and, as I understand, to applicant countries. We have not consulted our businesses directly, but can the Minister report whether discussions have taken place with EEA members and applicant countries on the proposal's implications? The proposal must greatly concern them.

I am alarmed by the pervasiveness of the social agenda in Europe. I am not just concerned about the present Swedish presidency of the EU—Sweden's social model succeeded, but in a country with a much smaller population than Britain—but about the more ambitious Belgian presidency to come, which wants to focus on work, social exclusion and retirement schemes. I congratulate the Minister on his approach and I hope that he will continue to resist such proposals, which are too prescriptive, inflexible and regulatory. I oppose the directive and support the motion before the Committee.

11.49 am

Mr. Darvill: I agree with the Government's point about subsidiarity. There is a clear need for each country to work through the proposals at its own level. However, I am somewhat disappointed by the general approach of the Government because there would be some advantage in setting minimum standards. My way forward would be to codify the broad raft of laws that already provide for employee disclosure.

The hon. Member for Bognor Regis and Littlehampton inferred from my questions that I supported a one-size-fits-all policy for companies. That is not the case because we need flexibility. I was trying to raise the question of cost. The Opposition's argument concerning the matter does not bear examination. The Government's position is that cost is not the crucial issue: what matters is the way in which each company moves towards a culture of greater employee disclosure.

Reform is needed. The argument that the law should not apply in this area implies that the laws that deal with redundancy, business transfers, health and safety, pensions and training—all of which already impose legal and regulatory burdens on employers—would have to be revoked. I presume that the Opposition are not arguing for that. Indeed, I assume that some of those laws were passed by the Opposition when they were in government, and rightly so.

Considerable disclosure is already required of employers, and that obligation already imposes costs on them. That is my point on the cost angle: most of the employers who would be affected by the legislation already have to bear those cost burdens. The draft directive proposes to extend them to the area of disclosure. Although that would add some additional costs, the regulatory impact assessment does not deal with the detail, and its estimate is too high.

I speak from my experience as a former employee of the Port of London Authority and a trade union branch secretary. I worked for the PLA at a time when it was undergoing massive change: the closure of the docks, increased containerisation and the need to change restrictive practices. There was a great deal of industrial unrest and employee difficulties. More than 13,000 people, both white collar and manual workers, lost their jobs. It was a challenge for trade unionists, workers and employers to cope with the changes.

I worked for the PLA from 1963 through to the end of the period of change. During the early stages, industrial relations were generally poor, although there were isolated instances of good relations. There was a diverse range of employers, and the plans that were devised to meet the challenges were not adequately communicated to the employees. Much of the disruption and its negative economic effects on London and on the wider port and transport industry were due to that lack of disclosure. Workers and employers did not get together to discuss the future challenges, such as the impact that the changes in transportation would have on jobs and the ways in which restrictive trade practices might be altered to deal with modern conditions. Even if there had been minimal disclosure, that disruption would not have been nearly as bad as it was.

There were, undoubtedly, bad practices on both sides, but a more progressive approach would have produced benefits. Employers and employees woke up far too late, in the late 1960s and the early 1970s, and a consultative arrangement was put in place across the many sectors of industry. Management and trade unions, and employees who were not represented by trade unions, participated round the table. Information was provided and, in some cases, both sides got together to develop a way forward. I have seen both bad and good practice, and the benefits of the latter. Experience has always convinced me that we should move in that direction. We have not argued about that today, because the Opposition have said that they support best practice.

The problem is whether there is sufficient best practice throughout the UK, and what can be done to increase it. I welcome the Government's helpful initiative on partnership working and the fund that has been set up. However, there may be a need for a minimum standard, which is why some of my questions led in that direction. I would like to see such a standard set in this country, rather than a Europe-wide imposition. We could codify the existing laws of disclosure to provide for a standard best practice that could cope with the different conditions that apply to small and large businesses. For example, the costs that larger businesses can bear should not be imposed on very small businesses. That is a possible way forward, and we could make progress in that direction in the years to come.

Regulation is a theme that runs through many of our debates. The Opposition often refer to the increased financial burden imposed by the Government during the past four years. Much of it has stemmed from the introduction of the minimum wage and other employee benefits, and the Opposition seem to accept those—they are, at least not arguing that the minimum wage legislation should be revoked. There has been some impact from regulation, but it is not as great as the Opposition claim.

If I understood her correctly, the hon. Member for Vale of York argued for additional regulations relating to pensions to benefit employees.

Miss McIntosh: I am arguing for a mechanism to require multinational companies to respect pensions. That could be done intergovernmentally. My husband works for an American company and could be asked to work in Germany. He might then face the problem that his pension could be claimed only in Germany.

Mr. Darvill: The hon. Lady's point is good, and the matter requires investigation. However, such a mechanism would require legislation, a regulatory framework or a directive, as does the protection of any proper interest—that is my point. Whatever party we speak for, we are seeking to improve things, and that often requires regulation.

When a Minister and I addressed a conference of business people in this Room, we received a rough ride about regulation, as one would expect. Strangely, however, while we were mingling with the guests after the meeting, the first business man who approached me said that he would like us to vary rate relief provision—provide an exemption, in other words—to benefit his company. Although he had just argued against regulations, the first thing that he wanted—to protect his own interests, rightly—was more regulation.

I would like to have a more healthy debate about regulation. The question of cost must be balanced against the need for regulation to protect businesses, employees and consumers. We need to develop our laws to provide such protection.

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Prepared 28 February 2001