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Lord Roberts of Conwy: My Lords, is the Minister aware that one must have sympathy with Virgin Trains? The fact is that it has purchased the new Pendolino fast train but cannot use it for a number of years because no suitable track is available.
Lord McIntosh of Haringey: My Lords, that is one of the reasons why we have had to make a stabilising grant over the next couple of years. Yes, it was expecting to benefit from the renewal and upgrade of the West Coast main line and that has not yet happened. Clearly, as a result, it is losing money and, clearly, to that extent it is not its fault.
Lord Marsh: My Lords, did I understand the Minister to say that in any event in the first stage there will be a negotiation with Virgin Trains and that if it were not satisfactory to the Government, they would be prepared to call in the franchise and reoffer it? Why not do that at this stage when it is clear that things are not going anywhere near how they were expected to go?
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Marsh, rightly recalls what I said. Yes, we would seek to negotiate first before terminating the franchise early, which is the position in which we would find ourselves. As has been pointed out, Virgin Trains has purchased the tilting Pendolino train, so surely it is best to try to reach an agreement first with those who have made an investment. If that does not work to the satisfaction of the Government, the taxpayers and the passengers, we have the power to terminate the agreement. I believe that that is the right way round.
Lord Faulkner of Worcester: My Lords, I want to pick up the point made by the noble Lord, Lord Roberts of Conwy. Will my noble friend confirm that Virgin Trains has fulfilled its franchise in terms of refurbishing its rolling stock and ordering new trains? That is a strong reason why the agreement with the SRA as brokered is one we should welcome and look forward to.
Lord McIntosh of Haringey: My Lords, that is what I was trying to say but, as so often, my noble friend Lord Faulkner has said it better.
Lord Forsyth of Drumlean: My Lords, will the Minister explain why the borrowings by the Strategic Rail Authority, which are after all borrowings in the public sector, will not count as public sector borrowings and are being managed off balance sheet?
Lord McIntosh of Haringey: My Lords, I am afraid that the noble Lord, Lord Forsyth, has been misled by some of the publicity during the weekend. He must be talking about the speech Mr Bowker made on Tuesday. The proposal that Mr Bowker made for securitising fares for the future is only one of a number of options he is putting to the Government for the future financing of the Strategic Rail Authority. No decision has been taken on these financing options.
Lord Campbell-Savours: My Lords, would not extending sympathy to Virgin Trains be treated with complete derision by the hundreds of thousands of passengers who are fed up to the back teeth with its operations on the West Coast main line?
Lord McIntosh of Haringey: My Lords, my noble friend will have noticed that I confined my sympathy to the financial situation in which Virgin Trains finds itself through no fault of its own. I have made no comment on the quality of its service in other ways, in which other people—notably in this House—are more successful than I am.
Temporary Workers: EU Directive
3.16 p.m.
Lord Clinton-Davis asked Her Majesty's Government:
- What are their reasons for refusing to support the European Commission's proposal for a directive on working conditions for temporary workers (7430/02).
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, Her Majesty's Government welcome the Commission's intention to protect temporary agency workers and to promote agency work in the EU. But, by European standards, we have a large number of agency workers in this country and it is important that the directive works in practice in the UK and helps us to deliver full employment. To ensure this, we are seeking to introduce further flexibilities such as a longer derogation from the equal treatment principle.
Lord Clinton-Davis: My Lords, I thank my noble friend for that Answer. Does he dissent from the press reports which appeared during the weekend and recently indicating that the Government are wholly opposed to the draft directive? Does he agree that temporary workers are among the most vulnerable of all workers and that new Labour is firmly on their side?
Lord Sainsbury of Turville: My Lords, I am pleased to confirm that we are not wholly opposed to the directive. However, we believe that it must be amended so that it will work in practice in the UK. Above all, we want to ensure that it will not lead to a situation where outsiders—that is, people entering the labour market for the first time—are penalised by insiders by too strong regulations which could lead to a substantial decline in agency work.
Lord Waddington: My Lords, is it not glaringly obvious that if one makes the employment of temporary workers more burdensome one will reduce the number of temporary work opportunities? Is that what the Government want?
Lord Sainsbury of Turville: My Lords, as I said, we want to introduce more flexibility so that it is not more burdensome. But, clearly, there are cases in which, for example, people are employed for a year and it is difficult to say that they are not in the same position as permanent employees. They are known in the jargon as "permanent temps" and they should have the same protection as people who are employed on a permanent basis.
Lord Lea of Crondall: My Lords, contrary to what has been said from the Benches opposite, does my noble friend agree that the philosophy behind the issue is that so-called atypical workers—that is, temporary, part-time, contract workers and so forth—in the
European labour market become typical workers and that unless we are to have a two-tier labour force, and if we want to encourage such workers to be part of the labour force, we need to ensure that there are pro rata terms, in a broad sense, for them?
Lord Sainsbury of Turville: My Lords, I agree with the noble Lord that part-time and temporary workers are becoming a large part of the labour force. The Government believe that all workers are entitled to decent and fair minimum standards. In the case of part-time and fixed-term work, directives covering those categories have led to those minimum fair standards being put in place. However, particular circumstances apply to agency workers and in giving them fair minimum standards we must be careful that we do not place on them disproportionate burdens, leading to a reduction in the number of agency workers. They perform a valuable service in the economy.
Lord Razzall: My Lords, I appreciate what the Minister said, but does he accept that, particularly during periods of relatively high employment in London and the South East, there is significant exploitation of temporary workers, particularly single-parent women? Should not the Labour Government be seeking to protect such groups?
Lord Sainsbury of Turville: My Lords, I do not think that there is significant exploitation. Our survey clearly shows that agency work suits a large number of people who want agency work rather than permanent employment. Indeed, agency work can help some people to effect a lifestyle choice as it enables them to fit in a job around family commitments. It is therefore by no means clear that people are being exploited. On the contrary, I think that agency work can be a stepping stone for labour market outsiders—the unemployed, starters and other non-participants before beginning agency work—to enter the market.
Lord Davies of Coity: My Lords, does my noble friend agree that although there are many legitimate reasons to employ temporary workers, such as to provide cover during holidays, employers sometimes employ them on a long-term basis, often denying them benefits such as sick pay, holidays and a superannuation scheme? Is there not a good case that such employers are exploiting temporary workers and should be taken to task?
Lord Sainsbury of Turville: My Lords, as I hope I made clear, we think that there are circumstances in which people can be exploited. We are therefore consulting on our relevant domestic legislation to ensure that people cannot be exploited, particularly in matters such as transfer fees. In this particular case, however, we think that a derogation of more than six weeks would be appropriate. Nevertheless, we agree that there is obviously a point at which people become permanent employees and should receive the same
pay. There are situations in which people should be protected, but we think that the six-week time period is too short.
Baroness Wilcox: My Lords, will the Minister confirm that the states that already have stringent national legislation restricting the use of agency labour are experiencing high unemployment and have—in the case of France, and soon in that of Germany—economies that are in serious trouble? Will he confirm that he does not want to take us down that route?
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