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House of Lords

Thursday, 5th July 2001.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Wakefield): The LORD CHANCELLOR on the Woolsack.

EU Information and Consultation Directive

Lord Waddington asked Her Majesty's Government:

    Why they have agreed to the European Union directive on compulsory management-employee consultation.

Lord McIntosh of Haringey: My Lords, the Government have always believed that good companies inform and consult with their employees. During negotiations on the proposed information and consultation directive, our aim has been to avoid a rigid, one-size-fits-all approach, which would be inappropriate for the United Kingdom, given its traditional strength of employee relations, which are built on flexibility, partnership and company-based solutions. The agreement reached in Brussels on 11th June meets those requirements.

Lord Waddington: My Lords, I am grateful to the Minister for his reply, but is it not lamentable that as soon as the general election was over, the Government agreed to a measure that, for months before, the Prime Minister had been saying that he objected to and opposed in principle because it offended against the principle of subsidiarity and because it was wrong to impose EU requirements for consultation on companies operating at a national level? Was not the measure forced on the Government, who gained no more than a delay in implementation for the smallest companies, because of their folly in ending the opt-out from the social chapter? Is not the measure a classic example of the EU interfering in matters that have nothing to do with the requirements of the single market?

Lord McIntosh of Haringey: My Lords, our objection to the directive as originally proposed was as I have said: we objected to a one-size-fits-all approach that was prescriptive in the way in which it operated and applied too much to small businesses. All our objections were sustained in the negotiations that concluded on 11th June. Under those circumstances, it is clear that we were right to opt in again to the social chapter when we came to office in 1997 and we have been right to agree to the presidency compromise that was reached on 11th June.

Lord Lea of Crondall: My Lords, does my noble friend agree that it is significant that the decision was

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reached unanimously, even though it was formally subject to qualified majority voting? That is because all the big countries--Spain, Italy, Germany and France--which collectively constitute a successful European economy, think that, with the rapid changes in Europe, such minimum information and consultation with workers will make a more adaptive and successful European economy.

Lord McIntosh of Haringey: My Lords, we are concerned not only that the measure should be good for the European economy, but that it should be good for business and employment in this country. We believe that the draft directive achieves that. It has to have a Second Reading in the European Parliament, where it could be amended, but we are satisfied with the outcome of the negotiations so far.

Lord Roberts of Conwy: My Lords, how has the position of small businesses been alleviated as a result of the negotiation?

Lord McIntosh of Haringey: My Lords, it is not a question of being alleviated. The directive does not apply to small businesses. In the first place, nothing can happen for three years after the directive completes its passage through the European Parliament, which takes us to the beginning of 2005. Secondly, it will be a further two years before it applies to firms in this country with fewer than 150 employees and another two years again before it applies to firms with fewer than 100 employees. Even after that, it will still apply only to firms with more than 50 employees, which excludes all but 2.5 per cent of businesses in this country.

Lord Razzall: My Lords, does the Minister accept that the events of the past few months, particularly in the manufacturing sector, have demonstrated the need to improve consultation mechanisms between management and workforces? Does he also accept that the implementation of the directive in due course will provide only minimum standards for the sort of consultation that ought to be present in any modern economy?

Lord McIntosh of Haringey: My Lords, I hope that I have made it clear that I agree with both those points. The directive has a delayed implementation date and it excludes a large proportion of businesses in this country, but it has always been our view that businesses in this country should inform their employees and should consult with them on the basis that the noble Lord, Lord Razzall, suggests.

Lord Brookman: My Lords, my noble friend will be aware of the tragic job losses in what was once called British Steel and is now called Corus. The majority of the 10,000 job losses at that firm have been in the United Kingdom. Is he aware that there was no consultation in this country but that there was lengthy consultation in Holland? Does he agree that there is an urgent need for that situation to be put

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right? Does he further agree that the comments from the Conservatives hark to the past and not to the future?

Lord McIntosh of Haringey: My Lords, I certainly agree with my noble friend's last point. The regrettable job losses at Corus are subject to the collective redundancies directive, which has been in force for more than 25 years and requires a consultation period of 90 days. Corus has observed that. I am sure that my noble friend agrees that the important point is to start consulting earlier. That would be one of the beneficial results of the proposed directive.

Lord Waddington: My Lords, is it not apparent that the Minister has not had an opportunity to read the memorandum put out by the Department of Trade and Industry on 21st November last year? It stated categorically:

    "The Government is not persuaded of the need for a directive on information and consultation in companies operating only at a national level".

Lord McIntosh of Haringey: My Lords, of course I have read that. That is exactly why the Government successfully negotiated the result that we achieved on 11th June.

London Underground Proposals: Public Scrutiny

3.8 p.m.

Baroness Hamwee asked Her Majesty's Government:

    When they will disclose the public sector comparator for the purposes of their public/private partnership proposals for London Underground.

The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, the public sector comparators will be released once negotiations with bidders have been completed, allowing full public scrutiny of the value for money achieved for the 21st century Tube programme. London Underground's financial appraisal of the public/private partnerships, including the preparation of the public sector comparators, has already been the subject of a report by the National Audit Office, which made a number of recommendations about using the financial analysis in decision-making. Those recommendations will be followed in full.

Baroness Hamwee: My Lords, I am aware that the Government are seeking the best value for money and want to be convinced on the subject. Does the Minister agree that that conviction should be shared with the public in London, who are literally wilting in the heat and chaos of the shambles that is the capital's Tube system? The Government have failed to have a debate

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about the detail of that value for money programme and what is to be achieved by it. Is that what they call accountability to the people of London?

Lord Falconer of Thoroton: My Lords, I entirely agree with the noble Baroness that what is required is investment and improvement in the Tube as quickly as possible. To publish the comparator before the negotiations were completed would give the bidders a significant advantage in those negotiations to the detriment of the public sector. However, the National Audit Office has considered the public service comparator and said:

    "London Underground has undertaken an exceptionally thorough process in preparing the capital and operating costs of the Comparators and the estimated costs of the bids".

Therefore, we have the comfort of the National Audit Office saying that the comparison is a proper one, and we do not lose ground with the negotiations.

Lord Peyton of Yeovil: My Lords, why on earth do the Government not give Mr Kiley, who really knows what he is talking about, his head?

Lord Falconer of Thoroton: My Lords, our intention is to ensure that proper investment in the Tube takes place. The way to achieve that is by making the contracts with the bidders, thereby levering in £13 billion. It is then for London Underground, with Mr Kiley at its head, to deliver to the people of London.

Lord Bruce of Donington: My Lords, is there any reason why the general public should not be made aware of the same data that were made available to the National Audit Office in order that they might come to a decision?

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