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House of Lords

Monday, 27th July 1998.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Chichester.

Baroness Goudie

Mrs. Mary Teresa Goudie, having been created Baroness Goudie, of Roundwood in the London Borough of Brent, for life--Was, in her robes, introduced between the Lord Sewel and the Baroness Ramsay of Cartvale.

Baroness Thornton

Mrs. Dorothea Glenys Thornton, having been created Baroness Thornton, of Manningham in the County of West Yorkshire, for life--Was, in her robes, introduced between the Baroness Hollis of Heigham and the Baroness Jay of Paddington, and made the solemn Affirmation.

Labour Standards: Overseas Workers

2.49 p.m.

The Earl of Sandwich asked Her Majesty's Government:

    Whether they are satisfied with the progress made by companies in ensuring internationally agreed minimum labour standards for overseas workers.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, the Government encourage companies to conduct their business in a socially responsible way. Some, but still far too few, are adopting corporate codes of conduct relating to their arrangements with overseas suppliers as well as participating in initiatives such as the ethical trading initiative, which aim to develop voluntary standards which can be monitored and independently verified. In my continuing contacts with the CBI and other employer organisations, the TUC, and non-governmental organisations, I shall investigate ways of stimulating further interest in these issues.

The Earl of Sandwich: My Lords, I thank the Minister for that encouraging reply. I hope that it will not be out of order for me to be the first to congratulate England's cricket team on its excellent performance a few minutes ago because our cricketers and footballers are at the forefront of campaigns against exploitative child labour. Following the recent ILO conference in Geneva, can the Minister tell us how those core labour standards will be implemented by British companies-- I do not mean just large companies with good public relations, but all British companies--and how they will be reporting on that implementation?

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Lord Clinton-Davis: My Lords, I shall not respond to the first part of the question. It is all part of the fair play initiative. This matter has to be voluntary. The ILO does not have powers to enforce the standards that it and its members would wish to see applied, but we can set an example. Our companies can set an example not by the way in which they trade ethically but in the way their employees, overseas in particular, behave.

Lord McCarthy: My Lords, does my noble friend agree that it was expected that the Government would be rather more enthusiastic about establishing a link between the advancement of human rights and the removal of trading barriers? So it is surprising that so far they have not accepted and encouraged the joint WTO/ILO working party proposals. Will not the Government recommend and support them as soon as possible?

Lord Clinton-Davis: My Lords, the Government do support them. They have taken initiatives--for example, in relation to the negotiations on the multilateral agreement on investment--to incorporate better standards. The problem--the reality we face, like it or not--is that developing countries do not wish to see enforceable standards applied through the WTO. They are reluctant to deal with it in that way at the ILO. We are using our best endeavours to ensure that those standards are initially applied voluntarily. Let us hope that through the ILO we shall be able to embark on a policy that is truly enforceable, but that will take time.

Lord Hardinge of Penshurst: My Lords, does the Minister agree that it is better that children in developing countries should be working rather than be in, say, prostitution or other such things?

Lord Clinton-Davis: My Lords, certainly working, but not exploited.

Lord Hylton: My Lords, the question I should like to ask concerns illegal acts rather than labour standards. Will the Government ensure that information about penalties for the sexual abuse of children and young people overseas is provided to British citizens, travelling, for instance, to Asia but also elsewhere, as has been done in Australia?

Lord Clinton-Davis: My Lords, that does not fall within my ministerial area of responsibility, but the Government have taken a firm stand on this matter internationally, and will continue to do so. When I replied to the noble Lord, Lord Hardinge, I should have said that when we talk about children I am talking about children of 16 or above. They should be permitted to work if they wish to do so. We must be careful about the sort of exploitation which unfortunately is far too common in the world at large today.

Earl Russell: My Lords, does the Minister agree that while the global market is here to stay, the mobility of capital will be rather easier than the mobility of labour? If the global market is to have an approximately level playing field, some weight on the labouring end of the scale may often be necessary.

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Lord Clinton-Davis: My Lords, I cannot disagree with that. The question is how we do it. It is for that reason that we have chosen to utilise our endeavours primarily through the ILO, where we have a somewhat better chance of achieving decent standards for children than through the WTO at present. I believe that that is a sound judgment, although I do not rule out for all time, if we do not make sufficient progress, moving also in the WTO arena.

Lord Pearson of Rannoch: My Lords, has the Minister heard disturbing reports about labour standards for children within the EU? Portugal and other countries have been mentioned. Can the Minister give the House any assurance about the future efficiency of the EU in that regard?

Lord Clinton-Davis: My Lords, exploitation and abuse of child labour is to be deplored wherever it happens. Unfortunately, we have unscrupulous employers in this country who are prepared to abuse child labour in that way. We need to get our own house in order before we start condemning activities elsewhere. It is necessary to ensure that the EU keeps its eye on that particular ball; I am sure it is doing so.

Lord Monkswell: My Lords, bearing in mind that the US and a number of European countries have a national minimum wage, and that this country will shortly have one, will the Government advise the House as to whether they have plans to put an international minimum wage on the bargaining table of the ILO?

Lord Clinton-Davis: My Lords, it is unlikely that we should be able to garner sufficient strength elsewhere to make that practicable. We have to look sensibly at what is possible, and work hard to achieve it. That is what the Government have been doing in the ILO, with some measure of success.

The Earl of Sandwich: My Lords, can I press the Minister on reporting standards in British companies? Will he take the opportunity to congratulate certain companies on all the reporting they have been doing?

Lord Clinton-Davis: My Lords, certainly. Those who have engaged in the ethical initiative are to be complimented. A system whereby one is able to monitor and invigilate carefully what is happening is part of the process of membership. That is thoroughly to be applauded. I thank the noble Earl for mentioning it.

Car Prices in the UK and Europe

2.56 p.m.

Lord Jacobs asked Her Majesty's Government:

    What steps they propose to take to ensure that consumers in the United Kingdom do not have to pay as much as 20 per cent. more for new cars than consumers in Belgium.

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The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, the European Commission, which enforces EC competition law, decided in January to fine Volkswagen 102 million ecu (some £70 million) for prohibiting its dealers in Italy from selling cars to foreign buyers who wished to benefit from cheaper prices. Manufacturers therefore face serious risks if they break the law.

Officials are discussing with the Commission what the implications of this case are for UK consumers wishing to buy cars at the lowest possible prices here.

Lord Jacobs: My Lords, I thank the Minister for his helpful reply. Perhaps I may draw his attention to the EC's 11th survey of car prices which shows that in the UK we pay the highest car prices of anywhere in Europe, irrespective of where the cars are manufactured. As the survey shows that one UK manufacturer charges UK customers 30 per cent. more than in any other country in Europe, even though one of those countries is Ireland where they also drive on the left, does the Minister agree that such widespread overcharging is clear evidence of an informal cartel? Furthermore, rather than rely upon the lengthy investigations by European institutions, will the Government consider direct negotiations with individual manufacturers to seek to persuade them to lower their prices, at least to the average level of European prices? If one or two manufacturers were to agree, the others would follow.

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