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3.12 pm

Mr. Jonathan Djanogly (Huntingdon) (Con): I first wish to declare my interests in the debate, as registered in the Register of Members' Interests. I also wish to apologise to the Minister for the fact that pressing business means that it is unlikely that I will be present when he winds up the debate.

I fully agree with my hon. Friend the Member for Eddisbury (Mr. O'Brien) that the Bill is unnecessary. However, if we are to review the issue, it needs to be put

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into the context of other employment and industrial relations legislation, because the provisions in the Bill will sit on top of those that preceded it. When set out individually, additional employment rights can seem worthy and of benefit to the work force. But as they mount up in number, the cumulative effect is damaging to the British economy. The great irony is that at a time when our European neighbours look to rationalise their employment regulations and laws and question the impact that they have on business, we in the UK are doing the opposite. We seem to be intent on meeting other European countries halfway by increasing the burden of regulation on our businesses.

Mr. Lindsay Hoyle (Chorley) (Lab): The hon. Gentleman says that Europe is trying to reduce the amount of legislation and worker protection. Does he not understand that workers in the UK have been made redundant because of the weakness of their employment rights? Jobs have been lost here, but have been protected in Europe.

Mr. Djanogly: The hon. Gentleman's view is fundamentally flawed. Regulation does not retain or create jobs. Efficient businesses that create wealth create jobs. I agree that the best and most efficient businesses tend to be those that have the best relationships with their employees, but that is very different from the Government forcing regulation on such companies.

Miss Julie Kirkbride (Bromsgrove) (Con): Perhaps my hon. Friend would care to remind the hon. Member for Chorley (Mr. Hoyle) of the poor unemployment record on the continent where they have adopted many of the regulations of the social chapter? That is adequate testimony of the problems that it can cause.

Mr. Djanogly: My hon. Friend makes an important point. Other European countries have experienced tremendous problems, caused by the mass of regulations they have introduced, but our competitive advantage—hard won in years gone by—is now rapidly disintegrating and we will suffer as a result. The hon. Member for Gordon (Malcolm Bruce) accused the Conservative party of being intrinsically anti-European, but he missed the point. It is not a question of attacking Europe, because we should examine where our jobs are going. They are not going to France or Germany, but to the far east, and we should pay more attention to what is happening in those countries.

My right hon. Friend the Member for South-West Surrey (Virginia Bottomley) said that the DTI had claimed that the Bill would encourage employers and employees to work together to promote a "no surprises" culture at work. While that sentiment is admirable, it does not accord with the reality of the situation. Hundreds of thousands of employees, especially in manufacturing, have indeed been surprised at losing their jobs as manufacturing has been rocked by tough trading conditions. Employers have become so tied up in additional regulations that they close up shop and move their plant to Asia.

When we look at the mass of regulation that the Government have introduced—mainly under cover of the European social chapter, which they proudly claim to have rushed to sign up to—we can understand the

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problem. It includes the working time directive, trade union recognition, industrial action ballots and changes to qualifying periods for unfair dismissal rights, as well as laws on dismissal of strikers, maternity leave, paternity leave, time off to care for dependents, increased employment tribunal awards, disciplinary hearings, part-time working, employment agencies, minimum wage, disability provisions and increasing compensation for unfair dismissal. The list is seemingly endless.

Mr. Tynan: It seems to have ended.

Mr. Djanogly: I shall finish my point. How much effect has all that regulation had on creating a more balanced working environment? In 1997, there were some 80,000 tribunal applications, but by 2001 the figure had risen to 130,000 applications. In 1997, some 250,000 working days were lost to strike action, but by 2002 that had increased to 1.3 million days lost. One might have speculated that the tough economic environment of recent years would have calmed down militancy among workers and caused them to work together with employers, but the figures show that that has not been the case.

Judy Mallaber: Which of the excellent list of provisions that the hon. Gentleman has just read out would he get rid of? Would it be those on the minimum wage, part-time workers, disability rights or maternity leave?

Mr. Djanogly: The hon. Lady has missed my point, which is that each individual provision may have good or bad points—they may sound great in a soundbite, for example—but the overall cumulative impact is the problem.

Mr. John Lyons (Strathkelvin and Bearsden) (Lab): Will the hon. Gentleman give way?

Mr. Djanogly: No, because it would eat into the little time I have left.

The situation on the job front would now certainly look much worse if the Government had not decided to increase the public sector hugely, as my hon. Friend the Member for Eddisbury said earlier. One of the most significant factors in renewed union militancy has been the new laws giving unions the right to be recognised by employers—forcibly, if necessary—through the new Central Arbitration Committee. There can be little doubt that that has dramatically changed the balance of power in industrial relations.

In 2000, there were only 159 voluntary recognition agreements, but in 2001 there were 450. Despite the massive drop in manufacturing employment, union membership has increased by about 150,000 since 1997.

As their powers have increased, unions have increasingly flexed their muscles, not least by pushing through and requesting the gold-plating of every European directive that happens to be sitting on the table. Why should not the unions be good Europeans?

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There is no reason why not, as they have absolutely nothing to lose—except of course until their members start to lose jobs in over-regulated companies which decide to pack up and go to India. Then, they can be consulted as much as they like but it will do them no good; the jobs will be gone—gone from the manufacturers' factories and the service industry's call centres and settlement offices.

The Bill will clarify the bargaining and consultation procedures. I remember the changes that came in as a result of the Employment Relations Act 1999; consultation was required on the sale of a business and staff who transferred under TUPE—the Transfer of Undertakings (Protection of Employment) Regulations. As a company solicitor, I advised on such transactions. At the time, companies saw those regulations as ridiculous and largely they still do. A listed company needs to conduct its negotiations in utmost secrecy and only a few people are in on the transaction until it is announced to the stock exchange. Employee consultation in such a situation is thus normally impossible and currently negotiations normally centre on which, of the buyer or the seller, will indemnify the other for the possible fines involved in non-consultation. In effect, the requirement has become another cost on business and in that regard the Bill will tighten the screws on business just that little bit more.

We have reached the stage where consultation could become such a burden that many more companies will accelerate their move abroad. In effect, if the labour force is not unionised, the management has to create representative bodies. Some managers have told me that they do not want to be labour organisers, so they have encouraged their staff to join a union. That may seem great to the unions—indeed, many Labour Members are nodding in agreement—but it is resented by management. If hon. Members think it will work towards good industrial relations, they have another think coming.

We shall be legislating to create a platform whereby Parliament can introduce regulations for information and additional consultation rights in the workplace. Whether that will relate to the quality of food served in the canteen or the rights of workers to have additional consultation time, we do not yet know, but I suspect that the measure will take the form of whatever additional rights happen to be in vogue on the continent every year or two.

We have a Government who are rapidly losing credibility. The Labour party has been losing members and new Labour's sources of funding are rapidly drying up, as donors increasingly join the mass of the population who feel that Labour has not delivered. That has meant, and will increasingly mean, that Labour will need to rely on funding from its traditional backers, the unions, which will come at a price to industrial relations and British business. For instance, the Bill will stop days lost through lock-out counting as days for the purposes of the recently introduced eight-week protected dismissal period for strikers. Only a couple of weeks ago, I sat on a Statutory Instrument Committee to discuss regulations that ostensibly concerned employment agencies. However, stuck in the middle of those regulations was a short clause banning companies from employing temporary staff during official strikes.

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If we add that ban to the proposed new lock-out provisions, we can see how the unions will grow stronger by the day and how that will move the balance of power.

We must recognise that there will be unofficial implications, too. There was nothing official about the postal workers almost bringing Royal Mail to its knees a few weeks ago, yet the Secretary of State for Trade and Industry sat on the fence, which verged on the useless. The right hon. Lady and her colleagues know well enough where their support lies—now is not the time for the Labour party to be rocking the union boat.

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