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24 July 2007 : Column 224WH—continued

Those matters were outlined to me by individual members of the Teamsters union. I was very taken by the representatives who came to the House of Commons. A lady who was a bus driver on a student bus was, apart from her accent, very much like the sort of person I would meet in my constituency. She was a lone mother, entirely on her own, who had found, in her job, a way to combine earning an income and running her family. She ran a bus journey for students, to and fro twice a day. She was not in any way an extreme or difficult person.
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She was the sort of person one would hope to see forming the cadre of trade union representatives. It is extraordinarily worrying that those workers were subjected to a targeted and consistent programme of something that I will not call persuasion, because it seems to me that persuasion, particularly on the part of management, must be couched in very controlled and considered terms; they were subjected to a very deliberate attempt to persuade them that joining the union or seeking together to create a union in their work place would lead to very direct consequences for them. One threat appears to have been, “We’ll deal with your depot in the way that we dealt with Baltimore,” where, as far as one can see, because the staff voted for trade union representation, they were told that that depot would be shut down—and that is what happened.

We should be quite clear about such matters in this country. If a similar situation arose with a bus company in the UK, I, personally, and, I am sure, many other trade union representatives in this House, as well as those who do not directly belong to trade unions but are concerned about labour relations because of their commitment to fairness, would seek to raise the matter time and again. The UK Government have made it plain that even though they have no intention of interfering with and should not interfere with the commitment of UK companies abroad to the legal systems in which they cease to operate, they nevertheless require those companies to take account of and be responsible to the ILO convention. I have made it clear exactly what that implies. The House of Commons has a direct responsibility to tell such companies, “You may operate in the way you think best in a capitalist system. That is, of course, your responsibility: you are responsible to your shareholders and you have a responsibility to ensure that your performance is acceptable to those who support you. However, because you are a British company, you may not ignore aspects of responsible behaviour that we in this country regard as a norm.” Commitment to the ILO is absolutely essential.

Today, I received from Moir Lockhead a letter that I found rather nowty, as we would say in my part of the country. Let us say that I did not turn up when he wished to talk to a representative of his and independent monitor who

He assures me that, within the UK, the company will comply with its commitments regarding trade union organisations.

The TGWU has made it clear that it finds it difficult to understand how a company that is so responsible in the UK and complies with its agreements with the trade unions could go so far to impede the creation of trade union rights within the United States. When we say that it is impossible to form a trade union within that company, we are talking not about the wilder shores of Saudi Arabia, the jungle regions of Colombia or some of the far-flung pits of Guatemala, but about the United States of America—a country that shares with us a common law system, approximately the same language and a financial system based on the capitalism that is now so fashionable. We have always regarded the United States as having direct roots in its relationship with the UK. I therefore feel more than justified in raising the issue of the anti-union behaviour there, which has been
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aggressive, deliberate, consistent and larded with the sort of threats that I would find wholly unacceptable if they were targeted at members of my constituency.

I finish by making this point. I have in my time—I am only 21, but I have been around for a little while—met trade unionists and seen trade unions being run by people who were venal, inefficient, incompetent, arrogant and unacceptable. I have seen arguments put forward in the name of trade unionism that I found difficult to recognise, but I have also, over a lifetime of commitment to the labour movement, seen trade unions filled with people who were wholly committed to fairness, decency and the improvement of conditions for their fellow workers. I have seen people pay a high price for their trade unionism in this country, and I do not find that acceptable, but we now have a country that accepts the right of workers to organise. It is a very small thing to ask of a successful company in the transport industry that it should comply with the same standards and norms elsewhere, and I am astonished that it has not reached that conclusion of its own volition. The House of Commons would be unwise to ignore the behaviour of such a successful British company, lest it be thought that that is the way in which we operate as soon as we leave UK shores.

12.45 pm

The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) has been in the House for a great many years and has a great deal of experience. Any Minister responding to a case made by her would do so with some care and caution. I know that she cares deeply about this issue, and I shall address the two main issues that she discussed—trade unions and the International Labour Organisation conventions, and the company that she talked about.

Let me start with international labour standards, which are set out in various international treaties. Perhaps the most quoted are those that my hon. Friend mentioned—the ILO conventions and the European convention on human rights. The UK was one of the founding members of the ILO and was among the first to ratify its key conventions, including the central ones relating to trade union rights—conventions 87 and 98. We therefore take our obligations seriously. During the 1980s, our reputation was diminished internationally by the removal of trade union rights at GCHQ, and hon. Members will recall that one of the first acts of the Labour Government when they came to office in 1997 was to restore trade union rights at GCHQ, which signalled both domestically and internationally where we stood on these issues.

The ILO has mechanisms to monitor member state compliance with international standards, and there is often debate about whether member states are conforming with the spirit and letter of the conventions. Even this country has been part of those debates over the years, and I am pleased to say that it has never been formally reprimanded by the ILO’s governing body, although there has been debate about laws in this country and others and the extent to which they comply with the conventions. The conventions often focus on broad principles, which is important, because they need to apply to many different settings around the world, with different labour market conditions, in both developed and developing countries.

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Over the years, we have engaged in an ongoing and constructive dialogue with the ILO about the conventions, and I understand that its advisory committees have not interpreted its trade union conventions as requiring companies to recognise trade unions for collective bargaining purposes. That is subject to national legal systems and the negotiation that takes place between unions and companies.

Mrs. Dunwoody: Is my hon. Friend interpreting the right to freedom of association? I have never said that there is a right of a particular trade union to be recognised or that the UK should insist on it. That would be absurd and unacceptable. However, there is clear commitment to freedom of association, as he will be able to read. That is the point that I have made and will continue to make.

Mr. McFadden: I accept my hon. Friend’s point. The one that I was making is that when it comes to collective bargaining, recognition is subject to national legal systems and to negotiations between specific companies and their employees.

The ILO conventions can raise issues about conflicting human rights and my hon. Friend mentioned ASLEF. I should point out that UK law limits the entitlement of trade unions to exclude or expel individuals on the grounds of political party membership. Until recently, we believed that that law struck a fair balance between the rights of union members to govern their union affairs and the rights of individuals to hold political beliefs. Earlier this year, the European Court of Human Rights issued a decision in a case involving ASLEF that concluded that that balance was wrong, and we intend to act in response to that judgment.

Mrs. Dunwoody: May I just point out that people must have the right to be in a trade union before they can be barred from one, so the point that the Minister made is not relevant?

Mr. McFadden: My hon. Friend referred in much of her speech to the activities of UK-owned companies operating abroad, particularly those of First Group. She compared its employment practices in the UK and in the US. She also referred to the campaign waged by the Teamsters union to obtain recognition at the company’s operations in the US.

I know that the facts about employment relations in the company—my hon. Friend referred to recognition and the approach taken by the parties to recognition ballots—are contested, and I do not intend to become the judge and jury. She referred to several reports into this situation that had been commissioned by the union, and I accept what she says about them. The company has also commissioned its own report, which I understand reaches a different verdict. That makes it somewhat difficult for those of us outside the situation to come to a definitive judgment about a contested situation over union recognition.

Instead of setting myself up as the judge and jury on the particular specific example that my hon. Friend quoted, I should like to focus on the broader issue of how we believe British companies should behave when
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operating abroad and what employment practices they should follow. One basic rule is that companies should always observe the employment law of the country in which they operate. We expect foreign companies operating in Britain to comply with our laws, and in the same way we expect UK companies to comply with the laws of the countries in which they operate. Obviously, the legal systems in those countries are designed to ensure that employment rights are enforced.

When it comes to ILO obligations, the United States is not signed up to every convention that we are signed up to, and, in any case, virtually every ILO member state faces questions as to whether it is interpreting its obligations fully. These are not clear-cut issues, and different interpretations of treaty obligations are possible. This is not always as simple as saying that because these questions are raised, the basic international standards are not being observed.

It should also be expected that the terms and conditions of work forces around the world will vary, as will even those between work forces in developed countries. That is because labour market conditions, tax and social security systems and so on differ from state to state.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): On terms and conditions for workers internationally, First Group could be used as a template for the way that it treats migrant workers coming into this country because it gives them the same terms and conditions. The Minister is right not to be judge and jury, but given the serious accusations that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) has made, would it not be possible for him to act as a honest broker between both parties?

Mr. McFadden: It would not be wise for me to become a mediator between First Group and Teamsters. The issue should be resolved between the unions and the company within the legal framework in which they operate.

Employment practices are a function of each country’s traditions, history and institutional arrangements. My hon. Friend the Member for Crewe and Nantwich referred to the trade union influence on our party and on the legal framework that we operate in the UK. Some European countries have legally enforceable collective agreements whereas this country tends not to have them. We probably would be concerned if a German company operating in the UK were to say that collective agreements must be both legally enforceable and contain peace clauses forbidding strikes, as is the case in Germany. Such an approach comes from its tradition; things do not operate in the same way in our tradition.

We do not expect British companies to operate in an identical manner around the globe, but we hope that British companies operating abroad respect local practices and traditions. Of course that does not mean that companies should systematically exploit their work forces or deliberately flout international labour standards. There are minimum core standards that should be applied worldwide.

Mrs. Dunwoody: It is in the interests of the United Kingdom, is it not, that companies based in the UK but operating elsewhere should be successful, responsible
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and highly respected? Have the Government no view on the responsibility that companies have to comply with basic laws?

Mr. McFadden: My hon. Friend rightly says that it is important that British companies operating abroad have regard to some of the things that she mentions. We would expect those companies to comply with the legal systems in which they operate. Some countries have ensured that basic standards are built into their employment law, although that is not the case in others. We would encourage British companies operating around the world voluntarily to apply the basic minimum standards. We cannot compel our companies to operate in that way in foreign jurisdictions, although we have instituted arrangements in our own corporate law and we are party to monitoring arrangements that provide for greater openness and transparency in this area.

The Companies Act 2006 brings the regulatory framework up to date to reflect what we see as the modern business environment. It enshrines in statute the concept of enlightened shareholder value, which recognises that directors will be more likely to achieve long-term success for the benefit of their shareholders if their companies pay appropriate regard to wider matters such as the environment and their employees.

The Government are committed to improving company reporting and transparency, and wish to encourage full and transparent corporate reporting to shareholders in both financial and narrative reporting. By improving the way in which companies report on their activities and by enhancing that transparency, shareholders will be able to hold directors to account more effectively.

We made good progress in the Companies Act in bringing together this kind of commercial success with the kind of sustainability that we see in this shareholder value. The key instrument is the business review, which is designed to encourage directors to provide strategic and forward-looking information. All companies, other than small companies, must prepare a business review as part of the directors’ annual report. From October, quoted companies must disclose information—to the extent that it is necessary for an understanding of the company’s business—on environmental, employee, social and community matters, as well as on contractual and other arrangements. That is of value in adding to the quality of companies’ narrative reporting and promoting responsible business behaviour.

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Child Support Agency

12.59 pm

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I am grateful to you, Mr. Hood, and to Mr. Speaker for allowing me to raise the Child Support Agency’s extreme shortcomings, and particularly two constituency cases that will more than amplify those. I am also grateful to the Minister for being here this morning. He has the unenviable task of trying to answer for an agency that I believe is completely out of control.

Let me begin with the case of Ms Sonia Poulton, whose story is among the worst cases of officialdom working against the vulnerable and weak that I have witnessed during 15 years in this House. To date, I have written 23 letters and made 14 telephone calls about Ms Poulton and the maintenance of her daughter Shaye. Neither Ms Poulton nor I are satisfied with her treatment by the CSA, and I am staggered by the gross ineptitude that characterises the agency’s dealings with her.

Ms Poulton first approached me on 27 January 2004, three and a half years ago, as her payments from the CSA had ceased owing to a “computer error”. Even three years ago, Ms Poulton characterised her position as “hellish” and stated that

That turned out not to be an isolated occurrence. Throughout 2004, the CSA failed to collect payments because it was told that the father of Ms Poulton’s daughter had left his employment with a London local authority. That turned out not to be the case. The local authority for which he worked had failed to fulfil the deduction of earnings order in his paperwork, and the CSA had not chased a response.

Shortly afterwards Shaye’s father did move job and in October 2004 a consolatory payment was promised when my office telephoned the MPs’ hotline. However, Ms Poulton was informed directly by the CSA a little later that an assessment and a consolatory payment could not be made until a month later in November. The CSA informed us that £110 was sent to Ms Poulton on 27 October, but that was never received. Meanwhile, Sonia Poulton and her daughter were plunged into even greater debt. In December 2004, we saw no ray of hope when the independent case examiner accepted Ms Poulton’s case. That move, of course had no effect on the CSA making a payment of £120 on 20 December. It was fitting, however, that Ms Poulton’s first payment of 2004 should come in December.

The case was investigated, and the CSA was found to be at fault. It was ordered to consider—only consider—a consolatory payment and compensation to Ms Poulton. Despite being brought before the independent case examiner, who identified its faults, the CSA compounded its error by writing to Ms Poulton in November 2005 announcing that her arrears amounted to £1,335.86, despite earlier reports that they amounted to £5,191.18. I wrote to the agency demanding to know why Ms Poulton’s arrears had been reduced by a staggering £3,855.32.

Meanwhile, the independent case examiner recommended that the case should be investigated by the ombudsman, and told the CSA that the arrears occurred only as a
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result of its maladministration, and that the agency should make an advance payment. By December 2006, the CSA said that the arrears had increased to £4,298.30, but in a characteristic sidestep stated that the advance payment was not ready. Ms Poulton was grossly misled by her CSA caseworker, Shaheen Khan, who was based in the Bolton office. Ms Khan claimed that she had spoken to Shaye’s father on 5 January 2007 and established a deduction from earnings order. She claimed that he had submitted the order to his current place of employment and that payments would be forthcoming. Ms Khan verified that both verbally and in writing. Mid February arrived, but maintenance did not. On 21 February, a different CSA employee confirmed that no money had been received by the CSA, and that Shaye’s father had in fact left his employment on 3 October, three months earlier, so it is beyond me how Ms Khan was able to speak to Shaye’s father on 5 January.

On discovering privately that her former partner had left his place of employment, Sonia Poulton raised the issue, and Ms Khan behaved in a deeply inappropriate and impertinent way according to my constituent. The chief executive’s office, no less, subsequently apologised for that behaviour and blamed it on the stress of working in the Bolton office. That particular member of staff’s behaviour, which Ms Poulton reported in writing, is deplorable and worthy of disciplinary action, if it has not already been taken.

On 21 February, Ms Poulton wrote to me to say that she had not received payments since October 2006 because the CSA had told her that the maintenance schedule had expired, and no one had thought to put a new one in place. Although a new schedule was prepared from January 2007, no payments were received. In April this year, I chased the CSA and, believe it or not, it could find no record of those responsible for dealing with Ms Poulton’s case because—you may have guessed, Mr. Hood—the files had gone missing and the computer system had failed.

The CSA admitted that the Hastings office, where Ms Poulton’s case was being handled, was unable to secure a response from the Bolton office, and that if I was unhappy about that, I should write to the independent case examiner. The examiner’s reply in May said that the matter had been referred to the CSA chief executive. One could not have made up this story of incompetence.

Finally, on 11 June, my office was told that Shaye’s father was receiving jobseeker’s allowance, and that no arrears would be collected until his employment recommenced, when a new assessment would be made. Who knows what new and exciting challenges that reassessment will bring. Alison Cox, in the CEO’s office, told us that the Bolton office refused to communicate with the rest of the agency. In fact, when Ms Poulton spoke to Ms Cox, she had more up-to-date information, garnered from her MP’s office, than the CEO of the agency. That of course raises serious questions about the agency’s ability to keep track of cases, and poses serious questions about its internal management.

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