Examination of Witnesses (Questions 40-59)
MR PAT
MCFADDEN
MP AND MS
JANE WHEWELL
11 JULY 2007
Q40 Richard Younger-Ross: Will this
bring into its remit people who are on temporary contracts, such
as those on temporary contracts for Job Centre Plus, whose terms
and conditions can be fairly appalling?
Mr McFadden: What we are talking
about is agency workers where they are working via an agency but
they then work as—there is a third party here who is a hirer,
and that is what we are talking about. Temporary workers are a
slightly different issue because you can be a temporary worker.
You talked about the Spanish example whereby you are temporary
but you are directly employed by the hirer.
Q41 Richard Younger-Ross: There is
no hope for staff at Job Centre Plus?
Mr McFadden: Whether it would
be covered by this Directive or not depends whether or not they
were supplied to Job Centre Plus or any other body by an employment
agency.
Q42 Mr Cash: It seems to me that
underlying your philosophy, coming from all the questions that
have been asked of you—you are really saying that in terms
of better law-making—and we are going to be considering
the communication on which you have made a report already shortly—that
it is better for it to be done at a European level; but, as a
matter of fact, you also had to concede there were circumstances
in which it might not be the case. Against that background, why
do you make the assumption that Europe is going to be better at
producing the results when the consequence of agreeing it at that
level, with the majority voting that goes with it, is irrespective
of whether or not you have got present objections to parts of
the proposals, you would end up with having it imposed on you
and our constituents would have it imposed upon them, through
the agency of the European Communities Act as a matter of British
law? It does seem rather perverse—do you not agree?
Mr McFadden: I think you could
probably—and perhaps have made that point about European
Union directives in general. We are members of the European Union.
It is part of the functioning of this system that we agree certain
things at a European level. If we agree with them, they are not
imposed.
Q43 Mr Cash: No, that is not true.
Mr McFadden: We are trying to
reach agreement and there are gains in this from the UK outside
our own borders. As I said a couple of times, part of the Directive
is about liberalisation and about opportunities for UK companies
employing agency workers to operate overseas in a way that they
are quite often restricted from doing at the moment.
Q44 Mr Clappison: What we were often
told about Europe is that we should work together in Europe in
areas where we can best work together, and where there are gains
for working in Europe. Are you convinced that there are gains
from working together in Europe or is this something where we
are better suited doing what we want ourselves?
Mr McFadden: In this area? I think
there are gains: liberalisation is a potentially important gain.
We have relatively liberal economy here, and a flexible economy,
which is good for the UK and has resulted in higher employment.
If we can have liberalisation built into this Directive, which
is one of the aims, then I think that is a gain for us.
Q45 Mr Clappison: You conceded a
while ago that there were costs to British businesses, but you
have not quite worked out what they were yet.
Mr McFadden: We were asked about
the admin work, and overall we will always have an eye on that.
We will always try and implement anything that we do in as flexible
and in the least burdensome way as we can with regard to administration.
Q46 Mr Clappison: Is there an admin
burden or not, then?
Mr McFadden: Well, there may be.
Q47 Mr Clappison: There may be! Let
me ask you about that because earlier on in your reply to my colleague
you said you were always trying to persuade the European Union
to take the question of administration costs seriously. How can
you go along to the European Union under the Portuguese presidency
when this is negotiated and ask them to take it seriously when
you do not know the admin burden to this country?
Mr McFadden: This is not the only
thing agreed by the European Union. The targets aim to reduce
admin burdens across the board.
Q48 Mr Clappison: I appreciate that,
but as far as this is concerned.
Mr McFadden: The admin burden
is not, neither in this country nor at a European Union level,
decided on a purely on a law-by-law basis. If it was you might
find you decided never to pass another law again.
Q49 Mr Clappison: Are you going to
have an admin burden by the time you negotiate this?
Mr McFadden: We will explore that
as best we can.
Ms Whewell: We are in the process
of getting up-to-date information at the moment. The last research
we did ourselves was in 1999, and I am not at all sure it would
help the House particularly to use data that is now eight years
old to produce an assessment. We are in the process right now
of getting the data that will provide us with an up-to-date assessment.
The industry has moved incredibly quickly and is growing very
fast, and we need to start on the basis of sensible data or we
will just mislead everybody. As I mentioned before, we are going
to raise one of the areas that could be an issue, which is how
you define a comparable worker, because if that is left unclear
it could indeed cause problems. That is one of the things we are
planning to raise.
Q50 Chairman: There are some of us
who remember at the beginning and were in this Committee when
the Lisbon agenda began and it was supposed to be a liberalised
market with protection for workers who might be exploited. It
may cost some money to prevent that but it would be a much better
outcome if people did not feel that they were being exploited.
British workers were complaining particularly that because when
agency workers were used from other countries, they had had to
join the same agency and ended up feeling exploited also; so the
benefits were not felt.
Mr McFadden: I agree, Mr Chairman.
I think it is important to consider the admin burden across the
board in the European Union.
Q51 Chairman: It is my understanding
that the British Government's contribution to the process of stalling
was that they had set a very high target for the number of months
people had to be in employment before any Directive would cover
them; and it was then 12 months, which seems to be a very, very,
very long time. I remember when I was a teachers' representative
and a teacher that they used to take people on for 11-month contracts
so that they did not have to give them permanency, and then take
them on again for another 11 months. It was seen as exploitative
and it was banned, but it still exists in the logic that the Government
seems to be putting. Is the British Government prepared to reduce
that timetable, and to reduce it as one of the elements in the
negotiations, or does the British Government have a fixed position
to take to these negotiations in the Portuguese presidency?
Mr McFadden: The qualifying period
is an important issue. That is intended to tease out when someone
effectively stops being an agency worker and filling in on a temporary
basis in the way we are discussing; they become pretty much the
same as a permanent member of staff. That is why it is important
to get the qualifying period right. I suppose you want me to define
in absolute terms what our bottom line would be.
Q52 Chairman: I just want to know
whether the Government is going to be more flexible than they
were around four years ago, when it seemed to stall this process.
Mr McFadden: I would prefer that
we left the qualifying period to the negotiations, but there is
an issue for the UK and for some other Member States. I would
not want the Committee to—
Q53 Chairman: Those ministers are
not accountable to this Parliament, nor do they come before this
Committee.
Mr McFadden: We are accountable
and the other Member States are not—no, that is true.
Q54 Chairman: I hope you feel you
are.
Mr McFadden: Of course I am.
Q55 Mr Cash: Even though he comes
from Scotland, Chairman?
Mr McFadden: We will try and negotiate
a qualifying period that we feel is in the interests both of the
agency workers that we are talking about and the wider UK economy;
and the qualifying period is of course an issue.
Q56 Mr Heathcoat-Amory: I would like
to ask about the Working Time Directive. We have a position on
this of course, but the Commission keeps returning to it to try
and erode that under its unemployment harmonisation drive. I wonder
where they have got to on that and how you see the future evolving,
whether we can retain our position or whether you think it is
in danger.
Mr McFadden: It is the position
of the UK Government to retain the position on the Working Time
Directive that we have adopted so far.
Q57 Mr Heathcoat-Amory: That was
not quite my question! Can you tell us whether you think it is
secure? We know that "no" is never taken as final in
the EU; they return to things again and again until they get their
way. Can you tell us if this is likely to be raised again, and
how secure our position is on this?
Mr McFadden: The Chairman reminded
me not to try and speak for other Member States. Perhaps I should
heed his warning! I think we are not the only ones to take the
view we have taken on the Working Time Directive, and that has
not changed in the past. I see no reason why it should. I can
assure you that from the UK Government's point of view, we will
continue to adopt the position we have.
Q58 Mr Heathcoat-Amory: Can I ask
about the cost/benefit analysis? I was very surprised at your
answer to my colleague Mr Clappison, where you appeared to be
completely indifferent as to whether one was needed on the Agency
Directive; it is actually a requirement on the Commission that
they produce these things, let alone your Department, which has
"Regulatory Reform" in its title now. I know your answer
was partly corrected by Ms Whewell but do you have a slightly
firmer position on the Working Time Directive whether any change
should be preceded by a study as to its impact on the British
economy on employment and employer costs?
Mr McFadden: We believe it is
valuable to the British economy to have the opt out. That is one
of the reasons why we want to keep it.
Q59 Mr Cash: With regard to the impact
of the Working Time Directive, not only of course within the United
Kingdom but with respect to what we have already referred to in
terms of liberalisation of the economies, by which in shorthand
we mean globalisation: against that background do you not think
that the fact that the degree of damage/loss that is being anticipated
in gross domestic product from a current figure of about 21 per
cent to 15 per cent for the European Union as compared with even
the United States, which has been running at around 26 per cent
in the light of China and India—in the context of something
like the Working Time Directive, is that a reason in itself for
making certain that we do have a cost-benefit analysis internationally
of the effect of this where you are looking at it from the point
of view of the United Kingdom or for that matter Europe as a whole,
because it is bound, on the face of it, to lead to a lack of competitiveness?
Mr McFadden: That is not an unusual
concept and not a million miles away from the view that the UK
Government has taken. We do believe that flexibility is important
and that giving people that choice is important. I think you are
right to suggest that in a more open, flatter and globalised world,
that is the case. That is why we have taken the position we have
taken until now.
Mr Cash: It may surprise you, Mr McFadden,
to know, because you come from quite near my constituency, that
in our part of the world we believe strongly in the idea of free
trade and have done for at least two centuries, so I am delighted
to hear that at least we have that in common.
Chairman: I think this Government is
led by a Prime Minister who appears to be not only closer in his
home to Adam Smith but also to some of his thinking; but we all
believe in free trade as long as it is constrained by laws that
do not allow exploitation of labour. Thank you for coming along,
Mr McFadden; it has been very good to have you here and it has
been very enlightening. I wish you well in the negotiations. We
hope you bring back the prize. Thank you also, Ms Whewell.
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