Mr. O'Brien: We are in grave danger of getting into an extraordinarily interesting area, but to do so would mean straying far from the Bill. However, I hope that the hon. Gentleman is not implying that the conditions of the market post-1945, through the late '40s, '50s and '60s, which he called a regulated market, are something to be replicated.
I wonder how much study he has given to understanding the degree to which that market was connected to our going through a world war. Economies have always been very much determined by the occurrence of wars, particularly major conflicts, and that is an important consideration. Before the hon. Gentleman throws such comparisons around, he should think of the benefits enjoyed by my generation, and generations close to us, in living in relative peace. Sometimes those comparisons depended too much on too many lost lives; that is not a good way to proceed.
Gregory Barker: One pertinent comparison with the post-war period, economically speaking, is that although we may have had low unemployment and full employment, we had very low productivity growth, especially compared with our major competitors. That is exactly what is happening now. Although we have a benign economy and have, fortunately, experienced a rise in employment, there are very worrying trends in productivity growth, which has halved under this Government, thereby storing up real problems for the future.
I am conscious that while I have been taking so many interventions, time has moved on, so I want to draw my remarks rapidly to a close. The Secretary of State is impatient for me to finish, so I must be hitting a nerve. I am glad that she is here to hear me.
The constant drip, drip of regulationsthe DTI's trademark brand of water tortureexplains why a recent survey by employment firm Peninsula found that in the past financial year each business in the UK was forced to spend an average of £24,000-odd on red tape in complying with employment regulations. It also found that 61 per cent. of interviewees had considered limiting the growth of their businesses to avoid regulation. That is an important point to consider when putting constraints on growth, as enterprising wealth creators in their late thirties and forties in my constituency have told me.
The CBI has suggested that the "relentless build-up" of employment regulation is eroding UK strengths such as freedoms to change work patterns and work force numbers, and to set wages. That is especially worrying because our key European competitors are simultaneously removing layers of employment regulations: France, Germany, Spain and Holland all recently liberalised in one or more of those fields. The Bill is yet another turn on the UK regulatory ratchet against UK businesses by this Government. Although each of the proposed changes may sound relatively minor, their cumulative effect is significant, not least because in their totalityto use the Prime Minister's favourite wordthey add to all the other employment legislation that is being introduced.
In total, an additional 1,422 staff have been added to the DTI over the past six years. Although 500 staff are to be choppedif the reports of the Chancellor's and the Secretary of State's deal reported in The Times before Christmas are realisedthat still leaves the Department with 922 more staff than it inherited from my party. Given the expansion of its budget to £8 billion since 1997, and its many thousands of staff, why has research for Amicus shown that 71 per cent. of executives described it as "not supportive"? What is the raison d'être of the DTI if it is not to be supportive of business and enterprise?
A clue to the answer lies in this legislationnot in the lines of the Bill itself, which quietly pay heed to the Government's friends in the unions and in Brusselsbut in the absence of any commitment to promote and assist business. It seems that there is a fundamental distinction between what the Government and Her Majesty's official Opposition see as the proper function of the Department of Trade and Industry. I believe that its purpose is to focus on promoting UK businessits competitiveness, profitability, confidence and reputationto be the champion of deregulation, and to practise what I wish it would preach by creating a flexible labour market and a positive and dynamic business environment, upholding fair and open markets, and championing British interests. There is no evidence of any of those ambitions in the Bill.The Bill is simply unnecessary. It is burdensome and costly to UK
David Cairns (Greenock and Inverclyde) (Lab): I am grateful to have been called to speak in this important Second Reading debate. I begin by declaring an interest. Given what the hon. Member for Eddisbury (Mr. O'Brien) said at the start of his speech, I point out to him that my comments are typed on to my notes. I am proud to be a member of ISTC, the Community Union, which makes a financial contribution to my constituency party, though not to me personally.
The Government have a vision of a UK labour market that combines flexibility with fairness. That means that the UK should be a good place to do business, as well as a good place to work. There is no contradiction between an efficient and productive economy and one that treats its greatest assetits workers with decency and dignity. At certain times in our history, that balance has been upset. The Conservative Government systematically eviscerated protection for workers and demonised trade union members, reaching a nadir when they publicly questioned their loyalty to our country by denying people the right to trade union membership at GCHQ. Those same trade unionists, who had fought to save this country, were branded as no better than potential security risks. I am proud that this Government removed that stigma shortly after coming to office.
But there have been times in our history when the balance has tipped too far the other way. As someone who grew up in the 1970s, I gained a picture of some trade union leaders who were all too often seen as destructive and self-indulgent, and who thought that they had the right to topple democratically elected Governments. Although sensible figures such as Mick McGahey and Jimmy Reidand, indeed, my hon. Friend the Member for Hamilton, South (Mr. Tynan)were viewed as nothing short of secular saints in my childhood home, none of us would seek to return to the permanently confrontational atmosphere that pervaded industrial relations, ruined our reputation throughout the world and, sadly, paved the way for Mrs. Thatcher. This Government have sought to achieve a balance in these matters and have, on the whole, achieved it. I therefore welcome the Bill and the provisions that it contains.
Since the passage of the Employment Relations Act 1999, there has been, as my right hon. Friend said in her opening speech, a general consensus that it has worked well, and the dire warnings of a return to 1970s-style turmoil have proved false. Between 2000 and 2002 there was a 32 per cent. reduction in cases taken by trade unions to employment tribunals, reflecting the reduced need to resort to litigation as a result of increased trade union and employer co-operation. In general, although the 1999 Act has worked well, I support the measures in the Bill to clarify some aspects of it and to extend its provisions in certain key areas.
I should like to concentrate my remarks on the part of the Bill that may prove to be the most significant and introduces measures that, as I hope to demonstrate, are sorely neededI am not referring to trade union recognition for the clergy. Clause 31 implements the European Community's directive on information and consultation, which seeks to establish a general framework setting out minimum requirements on the right to information and consultation of employees throughout the European Union. Opponents of the directive claimwe have already heard such predictable claimsthat it will undermine the flexibility of the UK labour market that has been a key element in the creation of 1.7 million new jobs since 1997.
I trust that not for a second would any Labour Member apologise for the creation of a single additional nurse, doctor or police officer. Nevertheless, it is worth reminding the Conservatives, who like to give the impression that all 1.7 million new jobs are in the public sector, that that is not the case. The hon. Member for Eddisbury spoke at great length about the need to disaggregate the figures, and went into great detail about types of jobs in the public sector, but when he was asked directly how many of the new jobs are in the private sector and how many are in the public sector, he waffled. The Government know how many people are employed in the public sector. The majority of the 1.7 million new jobs are in the private sector: that is the fact of the matter. I agree with the hon. Gentleman that we need a thriving, productive and profitable private sector to pay for the expansion of the public sectorthat is what the Chancellor has achieved.
Although flexibility is a key element, it has limits. Many injustices have been committed in the name of flexibility. Some unscrupulous employers have treated their workers shockingly and then hidden behind the mantra of flexibility. We need a flexible labour market, but we need to guard against the labour market that is so flexible that it affords no meaningful protection for workers. A flexible labour marketyes; a casualised labour marketno.
Inverclyde has one of the most flexible local labour markets in the United Kingdom. We are over-dependent on one sector: the electronics industry, which is overwhelmingly target driven. It relies on other businesses, which often hold back on their orders until the end of every financial quarter and it therefore invariably begins each quarter slowly and ends each one frantically trying to meet customer demands.
The industry has made endless attempts to flatten demand and it has offered all sorts of incentives to customers to place their orders more evenlyto no avail. That means that the electronics industry needs to increase and decrease its work force several times in a financial year because it would be financially unsustainable to carry the excess labour costs for the large part of each year when people are not needed. The industry does that by recourse to agencies and manpower companies, and by using short-term and fixed-term contracts. Such agencies can play a valuable part in the economy as they give business the necessary flexibility to trade in a fiercely competitive global environment. Such jobs protect the much larger number of permanent jobs, which would be put at risk if the additional labour were not available.
However, for those who provide the labour, the story can often be different. It is all too easy to become trapped in an endless cycle of short-term contracts, never finding permanent work, never improving skills, never having even the limited modern version of job security that most other workers enjoy. Government programmes such as the new deal, which have been instrumental in drastically cutting unemployment, are not as flexible for those who are laid off and re-employed three or four times a year. Our programmes to assist workers must be as flexible as the workers. We must consider the sort of help that can be given to people on short-term contracts to enable them to improve their skills and move beyond that cycle, should they wish.
It has been a difficult couple of years for the electronics industry. When global recessions hit, businesses cut their IT budgets and make do with older technology. The dotcom boom and bust, a sluggish American economy and continued recession in the far east have combined to squeeze the electronics industry as never before. In an effort to bear down on costs, manufacturing has been out-sourced and moved abroad. Computers that were once built in the UK are now commoditised and assembled for next to nothing in the far east, eastern Europe, Mexico and China. The pressures are real.
However, sometimes the pressures can be used as excuses for treating loyal and hard-working employees badly. Let us consider the case of FCI, which had a factory in Gourock in my constituency. A little more than 12 months ago, the 750-strong work force went on their Christmas break blissfully unaware that they would never set foot in their workplace again. A couple of days into the new year, they learnedvia the pressthat their jobs had gone and that the factory doors had been welded shut. That is a shocking and unacceptable way to treat people. Not only was it arrogant and demeaning, but it meant that the excellent resettlement team from the Scottish Executive could not meet the workers together in their place of work to begin to help them through the redundancy process and offer them advice on finding other jobs.
I sincerely hope that the consultation procedure in the European Community directive on consulting and informing employees, which the Bill enacts, will prevent such an outrage from happening again. When the Secretary of State launched her consultation on the directive, she wrote:
Sadly, I must inform the Secretary of State about a much more recent case in which an employer utterly disregarded those principles. Last week, more than 50 workers in Misco in Greenock were summoned to a meeting where they were told that because of business
Perhaps a fine of £75,000 represents a severe reprimand for some businesses, but for others it will be a drop in the ocean. I hope that, in Committee, the Minister for Employment Relations, Competition and Consumers will consider adopting a sliding scale of fines, perhaps based on a company's annual turnover, so that a fine genuinely hurts companies that treat their loyal workforces so obscenely. If my right hon. Friend the Secretary of State can assure me that the Bill will tackle and defeat such neanderthal business practices by managers who are stuck in an industrial dark age, it will have my enthusiastic support.