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21 July 2009 : Column 248WH—continued
I will return to the point about a visit to the constituency of the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith). I congratulate him on securing this debate and on raising this important topic again. I have no quibble with him. As he has rightly said, and as I know from his speeches in the House, he is absolutely committed to ensuring the highest standards for the schools in his constituency. The Government share that ambition. Like him, we believe that all pupils should have access to a truly world-class education in truly world-class schools, and I shall return to the points that he has raised. As he acknowledged, that is why the Government have undertaken an unprecedented
programme of investment in our schools through, for example, Building Schools for the Future, the biggest Government investment in school buildings for five decades. As he has said, one of the schools in his constituency was built during the previous period. We are now trying to catch up after that time of no action.
Last year, tens of thousands of pupils started term in new buildings or new schools. The number of new or refurbished schools is at its highest in at least 30 years. More than 20 of those schools came through Building Schools for the Future. In total, 78 BSF schools are now open. Local authorities have reached a financial close on a further 35 deals covering BSF projects, and contracts have been signed to a value of more than £3.5 billion.
In addition, almost 1,000 secondary schools are developing plans for modernisation, with around 115 new or remodelled schools anticipated to open in 2009-10 and 200 in 2011-12. After decades of under-investment in school buildings, we are saying to children that their learning environment matters and that their future is worth investing in. Over the next 15 to 20 years, BSF will help to improve the life chances of more than 3 million young people. I know that the right hon. Gentleman recognises that it is not just important to make finance available, because it takes time to move through every single school and piece of estate in this country.
The right hon. Gentleman mentioned the Duchess's community high school. It has some temporary classrooms, and many of its buildings date back to the '60s or even before. Suitability data for the school show some shortcomings, to which he has referred, but they also suggest that the classrooms are in fair condition. Maybe they are not in the condition to which all of us would aspire, but they are certainly in fair condition. Likewise, Berwick high school's buildings are generally in fair to good condition, and no significant shortcomings were identified in that school through the suitability study.
Most of the right hon. Gentleman's comments concerned the Duchess's school, which remains strong, has good GCSE results and has successfully introduced post-16 provision. The school was also a pilot for the extended schools programme, which helps place schools at the heart of their communities. Again, as he has said, that is supported by the local community.
Although the previous Minister for Schools and Learners hoped to visit the right hon. Gentleman's constituency, he moved to another post in government before that was possible. However, the new Minister for Schools and Learners is enthusiastically planning a visit as soon as his diary allows. I am sure that the right hon. Gentleman will want to accompany him, so it will be necessary to bring the diaries together. As he has said, the school has enormous strengths. Sadly, it will have to draw on those over the coming months, because it has recently been struck by tragic events.
As the right hon. Gentleman knows, it is for the local authority to set the priorities for BSF funding in Northumberland. The Government cannot and should not dictate those priorities from Whitehall. I know that he is a passionate supporter of such devolved responsibility. Northumberland has revised its expression of interest in BSF funding. Bedlingtonshire community high school, Ashington high school and St. Benet Biscop Roman
Catholic high school were prioritised by the local authority on the basis of local deprivation and educational achievement.
As with all BSF projects, Northumberland's first priority project has been assessed against social and educational need. That is done to prevent the most vulnerable children from falling behind their peers, and I know that the right hon. Gentleman supports that aspiration. Unfortunately, not all schools can benefit at the same time. However, I am pleased to say that three schools in his constituency-Berwick high school, Coquet high school and the Duchess's school-have been chosen to form Northumberland's next BSF project. He will be able to discuss that with those who are responsible locally and with the Minister for Schools and Learners during his visit.
There has already been significant capital investment in Northumberland's schools that is not linked to BSF, and more is being provided. The county will receive more than £65 million in capital grants and supported borrowing between the past financial year and 2010-11. More than £16 million of that money is being invested in the modernisation of school buildings and the primary capital programme. A further £23 million will be invested in the devolved capital formula, which is allocated to schools for investment in their own capital priorities. As an unmodernised secondary school, the Duchess's school will receive £18,500 plus £94 per pupil per year.
The level of per pupil funding in the right hon. Gentleman's constituency should be compared with the national average. The latest figures for this year show that Northumberland receives £3,850 per pupil, which is a significant increase in real terms compared with 1997, although it is slightly below the national average of £4,218. As he has suggested, the main reason for that difference is that finance is targeted at areas with more disadvantaged pupils or a more sparsely distributed population. We must ensure that smaller rural primary schools, which are more expensive to run, are supported. Northumberland receives £3.3 million through that grant allocation.
Sir Alan Beith: Northumberland has both those problems. It has high levels of deprivation, particularly in the south-eastern corner, and as sparse a rural distribution as is possible over the rest of the county. The funding system seems to work in such a way that the county qualifies as neither one nor the other. It does not get the maximum benefit from the funding formula that it would get if it consisted of entirely the one problem or the other. I hope that the Minister will address that point.
Dawn Primarolo:
I understand the right hon. Gentleman's point. In Northumberland, 9.6 per cent. of the dedicated schools grant is for disadvantaged pupils, compared with a national average of 12.1 per cent. He has acknowledged that the pockets of deprivation in Northumberland are fairly small compared with the rest of the country. The Government must decide how to weight such funding. He may wish to discuss that matter with the Minister for Schools and Learners. As the Minister with responsibility for children's centres, I find that deprivation is often felt more strongly within communities than is demonstrated when compared with
deprivation across the country. Such pressure points inevitably emerge when weighted formulas are used.
The right hon. Gentleman asked about the programme date for the next phase of Building Schools for the Future. I cannot give the assurances that he seeks this afternoon, but the Minister for Schools and Learners will discuss those matters with him. I have mentioned the capital moneys that are available to the local community, and I am sure that he is pressing the local authority on further investment in the schools that he has identified.
The right hon. Gentleman went on to discuss the desire for the development of an academy in his constituency and said that strong partners are waiting in the wings until consideration of such a project comes forward. As he knows, the criteria that usually trigger academies are the national challenge and being near the threshold for poor performance, neither of which exist in the schools that he has identified. In one sense, that is a matter for celebration, because the schools have good achievement. However, I understand his frustration, because of the enthusiasm of local parents and partners for an academy programme. He will be able to discuss that matter in detail with the Minister for Schools and Learners during his visit.
Sir Alan Beith: The Minister has mentioned the decisions that the local authority can take. However, the local education authority finds that it has to tick the boxes to qualify for such programmes. In making decisions about the limited capital available to it, it must take account of how a viable project can be unlocked. Such projects depend on precisely the factors that she has described. How can the Prime Minister's pledge be met in areas that do not tick the boxes for academies or Building Schools for the Future?
Dawn Primarolo: The Prime Minister's pledge is being met because the Government are investing. We are starting with the schools that need to make the greatest progress. As the right hon. Gentleman knows, all decisions are accountable locally or nationally and are made against clear, transparent criteria. We must all accept that we should start with the schools that need the greatest investment. None the less, we must not leave other schools behind.
European Court of Justice Judgments
1.30 pm
Colin Burgon (Elmet) (Lab): It is good to see you in the Chair, Mr. Martlew, and to see that the Minister is present. I would like to use our last day before the recess to discuss an issue I have raised in the past: the free movement of labour and the impact of that policy on working people in this country as enshrined in the EU, which, as we all know, is dominated by neo-liberal ideas. More specifically, I want to look at the economic and political infrastructures and the political attitudes that allow and promote the free movement of labour without proper safeguards for working people in their respective countries.
In particular, I would like to talk about the posted workers directive and four European Court of Justice rulings that give clear precedence to freedom for big business in the EU over fundamental collective and trade union rights. I shall discuss the wider impact that those rulings can have on ordinary working people and will, in effect, argue that the four rulings construct serious obstacles to trade unions in exercising their right to freedom of association, collective bargaining and collective action.
As a quick preface, before I talk in some depth about the ECJ cases, I would like to make it crystal clear that my concerns are both for our own workers, who as we have seen are having their already low wages held down by the status quo, and for migrant workers, whose work in this country is often very low paid and is undertaken in what can only be described as disgusting conditions. In short, I do not want any group of workers to be exploited, and I am sure the Minister would agree with me on that.
Everyone talks about the posted workers directive, but no one seems to be analysing it. The directive's preamble makes it clear that it was introduced in contemplation of
"the transnational provision of services, prompting a growing number of undertakings to post employees abroad temporarily to perform work in the territory of a Member State other than the State in which they are habitually employed".
Effectively, that relates to employers moving workers into other countries. In those circumstances, it recognises that
"any such promotion of the transnational provision of services requires a climate of fair competition and measures guaranteeing respect for the rights of workers".
On reading further through the posted workers directive, the tone becomes even more positive. The directive's net effect is to protect workers against what we call social dumping and a race to the bottom, and the requirement that standards should be levelled up rather than levelled down. Unfortunately, the unelected, unaccountable, unreformable European Court of Justice chose to interpret the directive in a different way and, in its view, the PWD provisions had a maximum rather than a minimum standard. So, once again, neo-liberal ideas have permeated the very institutions of the EU.
The posted workers directive has become a politically volatile issue following the well-publicised disputes at the Lindsey oil refinery and other such sites. The directive does not necessarily apply to all terms of employment, but it does apply to pay. Any employer posting or, let us
get the language straight, sending-as someone would post a letter, they would post a worker-workers to the UK must observe at the very least the national minimum wage, although many of us argue that that falls some way short of a living wage, let alone the established collectively bargained wage that might be applicable in any particular sector of the labour market.
It is worth looking at the Lindsey dispute for two reasons: first, we will see more actions of that kind in the future and, secondly, much nonsense was talked about the dispute by many in my own party, who could not face up to the real issues involved and who retreated behind cheap and inaccurate descriptions of the workers being motivated solely by xenophobia. In late January/early February 2009, construction workers walked out in protest at the use of posted workers by the Italian company IREM, which was a subcontractor to a UK company that, in turn, had a broader subcontract to a US company that was the holder of the original primary construction contract.
Workers on that site rightly expected that those working there would be paid in accordance with the national agreement for the engineering construction industry. The unions were concerned that although the posted workers were being paid the minimum wage, it was below the terms of the national agreement. That is an important point, and is absolutely central to this issue. Such a situation gave the Italian company an unfair advantage and also undermined the national agreements in place in that workplace. The concern of the union related to hours of work, travel allowances, auditing of wages and the wage levels themselves. We all know that ACAS was brought in and that a muffled silence ensued. There was confusion among all parties. However, it is worth noting that ACAS was unable to establish in fact what rates were being paid to the posted workers.
The problem of the PWD arises where there are convoluted clauses that allow varying interpretations of whether collective agreements are declared universally applicable. In the United Kingdom's case, there is no system for declaring that collective agreements are universally applicable. That is something we should be looking at. However, it is an option for member states, such as the United Kingdom, to base themselves either on collective agreements that are generally applicable to all similar undertakings in a geographical area or an industry concerned, or on agreements that have been concluded by the most representative employers' organisations and trade unions at national level. It is therefore clear that nation states can act to protect their work force from that undermining of their terms and conditions. However, the UK Government have not done so.
Professor Keith Ewing, an esteemed expert on such matters, recently stated:
"The British government has not taken the power in legislation to use collective agreements for this purpose, even where appropriate agreements do exist".
So in reality, in terms we can all understand, the national minimum wage, which, as we know, is itself very difficult to enforce and is well below a living wage rate, remains the only binding reference point for companies posting-sending-workers to Britain. So the protection and support that could ultimately be offered to workers is not being given by the Government.
The negative interpretations of the PWD are made even worse by the four European Court of Justice rulings that I have referred to and will now look at. Generally, those rulings sanction social dumping-in other words, temporary or transitory movements of labour whereby employers use workers from one country and send them to another country where labour costs are usually more expensive. Doing so undercuts those costs, thus saving money and increasing profits, but it also undermines collective agreements and prevents trade unions from taking industrial action to protect their members' terms and conditions. Any politician worth his salt would also recognise that such a situation creates a toxic mix of racial tensions, as we have seen in this country.
Although unions are restricted, businesses are free to restructure and create a cross-border element, so that they can take advantage of freedom for them to move goods and services, capital and even workers in the EU. I would like to consider the Viking judgment-I am sure you will know about that, Mr. Martlew, but I will go over the facts again. That Finnish company wanted to re-flag its ship and replace its Finnish crew with an Estonian crew, which was, surprisingly, on much lower wages. The Finnish Seamen's Union threatened industrial action in protest at that, so the company went to the European Court of Justice. The Court decided that it can review whether industrial action is justifiable and, in that specific case, it determined that industrial action was not proportionate. Of course, that brings serious uncertainty into what view a court might take of the merits or otherwise of industrial action.
That ruling is a crushing blow to trade unions, in that it holds that the right of business to the freedom of establishment and the freedom to operate must take priority over the right of trade unions to take industrial action to safeguard the interests of their members. It is an explosive judgment. It has also raised the prospect of employers being able to claim for unlimited damages against a union even where industrial action is legal under its own domestic law. To those who know labour history, that is the European equivalent of the Taff Vale judgment.
One week after the Viking case, we got the Laval judgment, which effectively ruled that trade unions could not take industrial action to compel a Latvian company operating in Sweden to observe the terms and conditions of collective agreements in Sweden. Laval involved a Latvian company that posted, or sent, workers into Sweden on Latvian terms and conditions, seriously undercutting Swedish collectively bargained terms and conditions. The Swedish unions responded by taking industrial action that was lawful under Swedish law. Laval claimed, through the ECJ, that the unions' arrangement of a boycott of supplies to the Vaxholm school site restricted their freedom of business. The Court took the view that where the posted workers directive applies, it is unlawful for unions to organise industrial action to agitate for terms and conditions above the legal minimum available in that country.
The Ruffert ruling-I hope that I am pronouncing it right, Mr. Martlew; I will take your guidance on that-concerned a public contract for building a prison, which was awarded to a German company and then subcontracted to a Polish company. The tender required that the relevant companies, including any companies that were
subcontracted to do the work, should pay the rates in the collective agreements for that region on building and public works contracts. The Polish company was paying a lower rate and was fined for doing so. The posted workers directive states that minimum rates may be set by collective agreements that are either universally applicable, or that apply to the whole sector or region. However, the ECJ found that the collective agreement in this case did not meet either of those criteria, and that the directive therefore prevents public contracts from requiring compliance with collective agreements of that kind. In reaching that judgment, the Court interpreted the directive extremely narrowly and ignored the procurement directive, which allows for social clauses.
The Luxembourg case demonstrates another measure that could have only a negative effect on working people. The European Commission took Luxembourg to court for making its own domestic legislation applicable to workers from other member states who were posted there. Nearly 40 per cent. of workers in Luxembourg come from outside the country, but the ECJ ruled in favour of the Commission, and decided that Luxembourg had gone too far in implementing the posted workers directive in relation to requirements for maximum work periods and minimum rest periods. Luxembourg must now change its law to enable the use of foreign workers to undermine the conditions of indigenous workers.
People might be forgiven for thinking that those four cases are detached from or peripheral to us in the UK, but they are not. Those decisions send a clear, green, empowering signal to employers to resist any compulsion to comply with any undertakings other than those relating to the base minimum wage. However, as a story about fruit pickers in last week's Independent showed, even compliance with the minimum wage is undercut by large suppliers to the major supermarkets. In essence, this discussion is about the direction of travel and what our Government are prepared to do to protect some of the most vulnerable workers in our labour markets from exploitation and from the systematic low pay that the machinations I have talked about not only allow but positively encourage. It can be only a matter of time before large employers that post EU workers in the UK attempt to undercut and freeze the lowest possible wage it is legal to pay to British and migrant working people. Too much of what comes out of such rulings allow that to happen.
The Labour Government, who, to the howls of big business and the Conservative party, gave us the national minimum wage as a means of protecting low-paid workers, must reconsider this issue. The ever-changing, flexible labour markets with which some people are so enamoured leave working people vulnerable to exploitation and low pay, so we have to consider what continuing measures we can and must take to offer protection to the people who need us most-those whom we used to describe as our core vote. We must look at the EU and its myriad legislative mechanisms, and check constantly that they are consistent with our values of social justice and rights for workers-at least, I hope we have those values.
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