HC Deb 22 October 1990 vol 178 cc150-65

Postponed proceedings resumed.

Question again proposed.

1.21 am
Mr. John Browne (Winchester)

I thank you, Mr. Deputy Speaker, for calling me again after an interregnum of some six hours. Six hours ago I was discussing the exchange rate mechanism and European monetary union. My main point was that we cannot have fair and workable European monetary union or a single European currency until we at least have a single European market, let alone a single European economy.

European monetary union and a single currency can come only after we achieve a single European market and a single European economy. Premature entry to the exchange rate mechanism will result in a stronger currency and, therefore, higher interest rates than we would otherwise have. That in itself would lead to a larger current account deficit than would otherwise be the case, speculation and sudden rather than gradual devaluations.

Premature entry to European monetary union would lead to the much quicker development of a federal state of Europe with little time for the introduction of democratic controls. That would have two main effects. First, it would result in the exposure of the United Kingdom economy to the full gale force of German economic competition before we are truly ready to face it. That would result in vicious and unnecessary damage to British businesses and companies, leading to loss of jobs and damage to the long-term control and wealth-creation ability that we would enjoy if our economy were healthy and more ready to take on more direct competition.

Secondly, it will lead to an increase in impositions such as those in the documents that we are debating—impositions which will have deep social and economic effects. They include the imposition of non-executive directors, of worker participation and of tax reforms. I mentioned them earlier before we broke at seven o'clock, so I will not go over them again. All these impositions are important, and will have a tremendous effect upon our nation. They will be introduced by measures such as that now before us, which are slid through without adequate time for discussion.

I agree with the general aims of these proposals, but they do not allow for evolution, which is what we must achieve. Therefore, I urge the House not to agree to the instrument.

1.25 am
Mr. Bob Cryer (Bradford, South)

The instrument covers a number of important points. The memorandum submitted by the Department of Trade and Industry, signed by the Under-Secretary, says that the European company statute will deal with formation, registration, capital, shares, debentures and the attached rights, boards, general meetings and their rights, accounts and audits, winding up, liquidation, insolvency and suspension of payments. The last four categories are listed under paragraph (f).

With EEC-wide companies, those categories will create enormous problems. We have enough problems with United Kingdom-registered companies without extending the same ease of formation to companies in the 12 member states. I can illustrate that with the example of roofing firms that carry out work, provide a guarantee and then go into liquidation and are wound up. Because of a separate legal identity of a company, the debts go not with the directors but with the company. Often, people who have paid to have their roofs given a specialist treatment are way down on the list of creditors. The document makes no reference to the order of priority of creditors, which is most important.

In our legislation, outstanding wages and salaries and national insurance payments are first on the list of priorities for payment when the assets of the company are realised, but the customers are way down it. Therefore, in this example, people whose roofs have been affected by shoddy workmanship by a cowboy operator are unlikely to get anything at all if the company goes bankrupt. In our constituency work, we have all come across cases of people with a legitimate complaint about a company that they cannot pin down. They write to the liquidator, usually a firm of accountants, and it says that if there is anything left after the assets have been realised and the proceeds distributed, the complainant will hear from the liquidator. In practice, the complainant hears nothing at all. Very often, the company then appears in a different guise—Roof Repairers 1991 Ltd. instead of Roof Repairers 1983 Ltd.

There are some restrictions in company legislation, but, in my view, and I suspect that of many of my hon. Friends, they are not sufficiently well controlled to ensure that there cannot be any exploitation of company legislation. This convenient notion that companies are a separate legal entity, different from the legal identity of the directors, is no help. With the proposed European company statute, that would be repeated EEC-wide over 12 nation states. Shoddy Roof Repairers (Strasbourg) Ltd. would be able to operate in Bradford, Leeds and Halifax, and the problems of chasing it up would be compounded by the fact that it was based in Strasbourg and not in the United Kingdom. That is an important consideration. Although after paragraph (f)—

winding up, liquidation, insolvency and suspension of payments"— there is (g)— relief for tax losses of overseas branches"— and (h), sanctions for infringements", there is no certainty. The fact that there will be a long journey to the EEC member state where the company is registered will be an impossible difficulty for most ordinary people. For example, there would be the air fare to Strasbourg, a city which is on the border between France and Germany. It would not be necessary to travel to the edge of the EEC in my example, but it would cost about £300 to go to the company's headquarters to obtain redress. There would be real problems for ordinary people.

I accept that the problems would not be so great for other companies that were creditors and had assets and income that could be used to pursue recalcitrant companies, but we are dealing with companies that would provide all sorts of goods and services in the manufacturing and service sectors while operating throughout the Common Market.

There are dangers that are not made clear in the documentation. I hope that the Minister will elaborate on them, and I note that he has expressed reservations about the proposal. He has stated in his memorandum that the Government do not see a need for the ECS and believe that a shortcoming is the heavy reliance on national law. It is a confusing position when certain aspects of a company would be based on Common Market legislation while other parts of its operation were based on national member state legislation. That means that there will be a duality of legislation. As company legislation is fraught with difficulties in any event, there would be even greater difficulty for the ordinary person. He would have to consult lawyers with international experience such as my hon. Friend the Member for Middlesbrough (Mr. Bell), who is an international lawyer of great expertise and reputation. He would be of the sort to be consulted. Perhaps a United Kingdom solicitor would be consulted as well. It would be a complicated position which would be unnecessary in my view. I am gratified that the Government share my view.

Ms. Marjorie Mowlam (Redcar)

Hon. Members on both sides of the House have expressed their worries about these matters. Some of them stem from what my hon. Friends and I consider to be Government inefficiency in negotiations. I am sure that my hon. Friend will be interested to know that some of us believe that that is a front to disguise the Government's real position, which is opposition to worker participation.

Mr. Cryer

I am grateful to my hon. Friend for intervening. Worker participation is the last item on the list set out in the memorandum and with which the ECS deals. I have a different view from many others on the issue. I do not think that a seat on the board is especially effective. I think that the right to recall a director or directors by the workers to give them an account of what is happening should be built into any worker participation scheme. The French have the safeguard, for example, of the right of trade union representation in companies with 30 employees or more, and only if there are no trade union representatives are non-trade unionists invited on to a representative board, which is not a company board but a consultative board which a company has to consult. The next Labour Government should seriously consider providing the same right as that which exists in French law, whereby no one can be dismissed for economic reasons without the approval of the French Minister for Employment.

That law was not introduced by a terribly left-wing Government. Indeed, there have not been any terribly left-wing Governments in France. The last left-wing Government had Mr. Delors as finance Minister. He made such a mess of matters by remaining in the exchange rate mechanism, and its predecessor the snake, that rigorous economy measures had to be introduced. He was pushed out of the French Government into the Commission at £100,000 a year, where he has managed to do a great deal of damage. At least in France the elected Government of the day, whether left, right or centre, have the power over the owners of capital to say whether people can be dismissed for economic reasons. Successive French Governments have exercised that power for more than a quarter of a century and the French people do not question it. It means that employers—small, medium and large—accept that if they want to dismiss people they must have sound economic reasons, which they must present to the Government. They cannot arbitrarily dismiss people.

That is an important safeguard for workers. Similar legislation in the United Kingdom would provide a safeguard for ordinary working men and women.

Ms. Mowlam

I thank my hon. Friend for giving way a second time. He might be interested to know that France has again led the way with a recent court ruling that favoured the creation of a European-level works council for the airbus project. France is already setting up the parallel structures that are needed for that sort of legislation in Britain.

Mr. Cryer

Airbus Industrie is a successful combination, but not a Common Market-wide combination. It has thousands of workers in several countries. British Aerospace in Manchester makes components for the airbus, as does Aerospatiale in France "It was necessary to develop some combination for a complicated and highly technical process, and that has been done. It is welcome, but it does not depend on the existence of the Common Market, and neither does the actual production of the airbus. The memorandum supplied by the Department of Trade and Industry states that the ECS would require companies to involve their workers in one of three models of participation … but in the event of a failure to agree the boards would have the final say That shows that, even under this proposal, workers will not have a great deal of power.

The memorandum also states that where negotiations fail a national model would apply. This would have to provide for at least the same information and consultation as would be required if a model were agreed by collective bargaining. I suspect that the Government have reservations about the legislation because of the worker participation aspect. Indeed, the Minister says so in his memorandum. I would favour the right to greater information. The last Labour Government established the Bullock committee, which made a number of recommendations. They were bitterly opposed by the then Conservative Opposition, and, because we were a minority Government, they went no further.

I do not think, however, that we should necessarily rely on the Common Market for suggestions and recommendations—and, indeed, legislation—about worker participation: we can develop our own provisions, and after the next general election, when we have a Labour Government, we shall be able to develop a system that will be the envy not only of the other 11 member states but of the whole continent.

While I share my hon. Friend's view about the Government's attitude, I feel that this country should be prepared—under a Labour Administration—to develop the proposals for worker participation much more radically than is suggested in what is, in fact, a fairly timid document.

I have other reservations. The proposals represent a move towards a federal United States of western Europe, which is the motivating factor in the EEC Assembly in Strasbourg. What if hon. Members were required to declare European company investments and shareholdings, as they are required to declare United Kingdom shareholdings through the Register of Members' Interests? It would be necessary to comb the 11 other member states' registers to check out any complaints, and to ensure that hon. Members were following the rules. It is difficult enough to keep abreast of Members' interests in United Kingdom companies without having to trawl through all that extra material.

The scrutiny of Members' financial interests carried out by the Strasbourg Assembly—some call it a Parliament, but I refuse to grant such a grand title to what is really no more than a consultative body—is shoddy. In Strasbourg itself, the register of Members' interests is, in theory, available to the public; in practice, it is kept in a room to which there is no public access. In the triangular paperchase of the Common Market in Brussels where the committees meet, no such register is available at all; and there is no publication of a printed document like ours, available to members of the public for easy reference. The Assembly has a very indifferent attitude to something that we consider very serious—something that has been debated here for many years, and has been changed on occasion as a result of various developments.

The register is available in Luxembourg but no meetings are ever held there, so it would be necessary to undertake a journey of several hundred miles—counting the return journey—to consult it. Members of the public, who could not see the register in Brussels, would have to make a special journey to Luxembourg; they could not see it in Strasbourg—although in theory it is open to the public—because the public cannot reach the place where it is kept. If that is an example of European concern about the need for public representatives to declare their interests, it is not a very good one; and, if it illustrates the views of the EEC and its appointed Commissioners about public and private company formation, it does not do so very promisingly.

On the whole, I do not think that the measure has much to recommend it. Certainly every Opposition Member wants more worker involvement, and the Common Market always puts forward some proposal intended to tempt people in that regard. The social charter mentions the right to trade union membership, but it has been modified in such a way that it would not permit the workers at GCHQ in Cheltenham to have their rights restored. We still have to depend on this House for such legislation, and the next Labour Government will introduce a Bill to restore the rights so disgracefully removed from those working at GCHQ. We will not rely on the EEC for that.

In the same way, worker participation is a good idea, but it is a sprat to catch a mackerel. The directive does not confer radically important rights. It recognises the existence of workers, gives them a few crumbs, and might tempt some people to conclude that, on balance, the directive is of some benefit. I do not think that it is, not least because of the difficulties that a European statute would create, which I described at the beginning of my speech. On balance, it would create more difficulties than benefits, and worker participation can best be dealt with by national legislation that will set an example to other member states and to the rest of Europe.

It may be argued by some that the EEC could be a way of getting around a Tory Government. I have never subscribed to the view that one can in that way relieve the Labour movement of the obligation to secure a majority in this House and to achieve its aims and objectives through making proper use of this Parliament. We should not rely on outside bodies and organisations to get around the Government. When a Labour Government is elected, exactly the reverse could occur, with the Tory Opposition attempting to get around our legislation by turning to the Community. There are always people in such institutions willing to agree with an opposition party that a country's elected Government should not be taking certain action. Such tactics undermine a democratically elected Government.

No one despises the present Government and their policies more than I, and I want to be shot of them. However, the way to achieve improved workers' rights is not to skirt around the Government and become involved in the shambles that is the Common Market but to work for the election of a Labour Government. Every day that passes brings us nearer to a general election and to the next Labour Government who can implement their own legislation—and demonstrate that we can take the lead in company legislation, workers' rights and trade union law within not only the EEC but the whole of Europe.

1.47 am
Mr. Ian McCartney (Makerfield)

I refer first to the need to strengthen workers' rights in companies that are wound up or go into liquidation. I can cite a practical example relating to the Amalgamated Engineering Union, which concerns the liquidation recently of Parkfields plc in the constituency of the hon. Member for Bolton, West (Mr. Sackville), but many of whose former employees live in my constituency.

The company was formerly owned by British Rail Engineering Ltd. When it was privatised, those members of the work force who remained with the new company were given absolute guarantees on the continuation of their employment rights and the transfer of engagements. They were meant to ensure that people who had been employed by British Rail for anything from 10 to 25 years would, if they worked for Parkfields, continue to enjoy the same rights and conditions as before.

Just over eight weeks ago, Parkfields plc, which has 39 subsidiaries throughout the United Kingdom and the EEC, was wound up. Cork Gully, a subsidiary of a major company in the City, was given the responsibility for trying to secure some resources from the bankrupt company for creditors. Men who had negotiated, through the trade union, several thousand pounds worth of redundancy payments only weeks before the winding up of the company found that when the cheques were presented to the bank they were not met. Employees had been given cast-iron guarantees about transferring their employment engagements from British Rail to Parkfields and giving a commitment to that company. The company asked them to give up their commitment and to accept a financial contribution for their loss of employment, but when they placed the cheques in the bank they were bounced by Cork Gully.

Some members of the Amalgamated Engineering Union lost between £18,000 and £22,000 and were informed that they were unsecured creditors. The remainder of the work force—in excess of 100—had made arrangements with British Rail about their concessionary passes. They were informed by Cork Gully that they must return them within 24 hours or find themselves in legal difficulties.

I approached British Rail about the passes. Mr. Reid, the new chairman, immediately recognised the problems that had arisen because Parkfields plc had failed to keep the promises it gave to the workers on privatisation. He extended their rights to use their passes until the end of this month. Cork Gully has made it clear to British Rail that it will not provide resources from the wind-up fund for the continuation of the passes.

People who worked for British Rail for more than 20 years were given commitments by the then Secretary of State for Transport at the Dispatch Box, and subsequently by the Parliamentary Under-Secretary, that, by agreeing to transfer their engagement to the new, privatised company, they could continue their employment with no loss of years spent with the company, redundancy arrangements, levels of pay and other fringe benefits. But when the company was wound up that was found to be incorrect. The workers merely found that they were unsecured creditors. Surely it cannot be correct for the Government to give to workers commitments which are found to be absolutely worthless when a company is wound up.

I hope that the Under-Secretary of State will have a word with his colleague in the Department of Transport about this sorry state of affairs. People who have given a lifetime of commitment and work to an industry find that when the company is wound up there is no chance of their receiving the benefits that they are entitled to, which were rejected out of hand, disregarded, and discarded by arrangements which give them no protection whatsoever.

I also wish to mention worker participation in relation to the AEU and the Transport and General Workers Union, of which I am a member. Those unions lost a substantial number of members in the Piper Alpha disaster. The second part of the subsequent Cullen inquiry dealt with worker participation and its effects on health, safety, terms and conditions of employment upon rigs and on the development of the rights of workers to be represented on those topics.

There are about 56 companies operating in the North sea, employing 31,000 employees in 43 oil fields and 24 gas fields. During the Cullen inquiry it became clear from the representations of the 36 multinational companies represented by the Offshore Operators Association that they recognised that specific to the sub-contracting arrangements was the fact that worker participation was not allowed, whether it was on health and safety matters, conditions of service or trade union recognition.

The purpose of the EEC legislation to protect worker participation is to take account of what happened on Piper Alpha. That disaster occurred precisely because of the conditions on the rig at the time of the explosion. Trade union participation in health and safety matters was not allowed.

This is one of the most important industries in the United Kingdom. About 36 multinational companies, based in other EEC countries, work in the United Kingdom sector of the North sea. They are not obliged to enter into commitments about worker participation. Due to the Government's intransigence, worker participation is not allowed on North sea oil rigs. That has serious consequences for workers' health and safety and working conditions.

During the next four to six weeks a comprehensive report is expected to be laid before the House. Among the Cullen inquiry findings there is expected to be the finding that because the 36 companies operating in the North sea have deliberately opposed constructive policies for worker participation they have therefore weakened fundamentally the safety regime in the North sea.

I have been involved in discussions this week, on behalf of my trade union, with a number of sub-contractors operating in the North sea. Some of them rely on their contracts with the 36 major oil companies operating in the North sea. Since the Piper Alpha disaster they have recognised the need for worker participation in matters such as health and safety, training and general conditions both onshore and offshore, particularly on the rigs. Their employees work a two-week cycle on the rigs. The sub-contractors are prepared to reach an agreement with the trade unions representing the work force, but some of the major North sea employers have made it clear to them that to reach such agreements with the work force would mean the end of their contracts with them. That gives the green light to North sea operators that Britain, due to the connivance of the Government, is not prepared to countenance worker participation in health and safety and other matters.

One would think that party political differences would be put on one side when considering a report such as that prepared by the Cullen inquiry into the loss of more than 100 lives in some of the most horrific conditions ever envisaged in an industrial accident. It was one of the most detailed inquiries ever held into health and safety. Despite all the evidence given to the inquiry, the basic right of workers in the North sea to participate in matters relating to their health and safety and other issues has been rejected by multinational companies who operate in the British sector of the North sea. They are not prepared to allow their workers to participate in matters that affect their health and safety.

Ms. Mowlam

To reinforce my hon. Friend's point about worker participation, "Business Brief" is one of the sources of information about the detailed discussions that have taken place in Europe on worker participation. It says that worker participation has proved to be a tough problem, because of British intransigence, between this country and German workers who wish to hold on to the advantages that they have gained. The Italians tried to take the initiative in order to break the deadlock on worker participation. However, it failed. That led some observers to conclude: there will be no significant progress on the draft Directive until there is a change of Government or attitude in the United Kingdom.

Mr. McCartney

I thank my hon. Friend for her helpful comments. Significantly, evidence given to the Cullen inquiry showed that among all the companies operating outside the United Kingdom there was legal recognition of workers' rights to participate in training, health and safety and recruitment. If such conditions can operate outside the United Kingdom, I cannot understand why, following Piper Alpha, the Government do not take an active interest in persuading the 36 multinational companies operating in the North sea to adopt a different attitude to worker participation.

I can understand the Government offering the excuse that they were ignorant of the position prior to Piper Alpha. I do not agree with that argument, but, from the Government's point of view, it may be a legitimate excuse for what happened. But no excuse can be given now as the Cullen inquiry is likely to report that two thirds of workers on North sea rigs are employed by sub-contractors. Their negotiating rights, therefore, are not recognised by the main contractor.

That inquiry is likely to report that two thirds of the work force in the oil and gas fields, but particularly the oil fields, are employed by sub-contractors and have been involved in industrial disputes this summer on the need to hold discussions about health and safety. There is nothing to prevent the main contractor from refusing to allow them back on to the rig, even if their employment rights and status have been recognised by the sub-contractor.

These matters are serious because what is at stake is not just the right of an employee to have a say in 'what happens. When a major industry such as oil, with the support of the Government, can deny Parliament the right to recognise workers' ability to defend themselves against unsafe work practices we cannot idly stand by and allow the Government to undermine the major steps that have been taken by the Community to defend those workers.

There is not enough time to go into other issues and other industries, although I should like to do so. For the second time in the past week, I shall attempt to keep on your good side, Mr. Deputy Speaker.

The Government cannot simply turn a blind eye to what is happening in Europe and the wider world. Even in the United States, the so-called cradle of capitalism, there is an awakening about the rights of workers to be involved in their industry and of companies to tap their talents and enthusiasm through an organised trade union or with them individually. The east Europeans attempted to hold back freedom, but the Government cannot hold back the need of the western world to involve workers in the development and maintenance of their industry or in research and development and new ideas.

Workers' rights are here to stay. If the Government do not go along with that—if they do not help in the process—they will be swept aside both in the next general election and by developments in Europe. We are either part of Europe or we are not part of it. We cannot pick and choose. The Government cannot decide to agree with some aspects of the European process and simply ignore others that it considers to be ideologically unsafe.

If we are in Europe and if we want to develop Europe, we must do so for the benefit of all working people. We cannot leave market forces to dictate people's living conditions, their health and safety and their terms and conditions of employment. Workers have an absolute right, in a market economy, to share the negotiating capabilities of their counterparts elsewhere in the EEC. In dangerous industries, such as the North sea oil industry, they must have an absolute right in law to a direct say in the development of health and safety practices. Without that say, workers will not only have their proposals rejected by management; they may lose their lives, as happened at Piper Alpha. Those workers have gone, but their families have to live with the situation. As we discuss legislation dealing with workers' rights, let us keep it in mind that for many in industry the ultimate sacrifice is not the loss of their job but the loss of their life.

2.6 am

Ms. Marjorie Mowlam (Redcar)

rose——

Mr. Deputy Speaker (Mr. Harold Walker)

The hon. Lady has addressed the House once. Does she have the leave of the House to speak again?

Ms. Mowlam

With the leave of the House, Mr. Deputy Speaker, I begin by referring to a comment that the hon. Member for Richmond and Barnes (Mr. Hanley) made much earlier. He said that he thought that Opposition Members had misunderstood the Government's position. We said that the main reason why the Government were not happy with the proposal was that an attempt had been made to include worker participation. The hon. Gentleman said that that was only one of a number of reasons why the Government were not happy.

Let us look at the draft instrument, to which my hon. Friend the Member for Bradford, South (Mr. Cryer) referred on a number of occasions. Under the heading "policy implications", the precise reasons for the Government's opposition to the proposals are set out. Paragraph 19 says: The Government do not see a need for the European company statute. That does not strike me as a strong reason for not being happy with the proposals. Paragraph 21 says: On taxation, the Government agree with the Commission". Paragraph 22 explains: On other issues the Government is not opposed to the ECS in principle". It is in paragraph 20 that we find stated clearly the Government's main reason for objecting to the proposals: The Government are opposed to the compulsory worker participation provisions in the ECS". The hon. Member for Richmond and Barnes said that that was only one of many reasons why the Government were not happy with the proposal. In fact, an analysis of the policy implications shows clearly that it is, in fact, central to their objections.

For once, the Government have been reasonably consistent. Their opposition to worker participation is well known. I see the Parliamentary Under-Secretary of State for Employment in his place. I well remember reading documents on worker participation in the European Parliament in the early 1980s, when the hon. Gentleman's opposition to the concept was both direct and virulent.

The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth)

I hope so.

Ms. Mowlam

The hon. Gentleman puts it on record: he says that he hopes so. Having left. the Department of Trade and Industry for the Department of Employment, he states clearly, in his usual direct and open style, that he is still deeply opposed to worker participation. We argue that it is because the Government oppose the concept that they are unhappy with the proposed European company statute. I am sure that, as the hon. Gentleman is in expansive form, he will remember the opposition in the European Community to the fifth directive, to the Vredeling consultation and to the 13th directive. On all those, the Government's opposition to worker participation has been clearly stated. I am not sure why we should assume that the Government's position in relation to the European company statute would be any different.

The Department of Trade and Industry provided United Kingdom Members of the European Parliament with a briefing on the European company statute. It contains a breakdown of the Government's arguments about the statute. Page 4 refers to three options on worker participation which the Government claim are compulsory and will be forced on European companies that might be based in the United Kingdom. Paragraph (c) states that the third option allows for some flexibility in the participation arrangements, That is a clear acknowledgement that flexibility is possible. However, because the Government believe that worker participation should not be adopted, the paragraph continues: Moreover, it cannot be assumed that this flexibility would be retained in any Statute. It should, for example, be noted that the draft Fifth Directive requires the equivalent option to make provision at least for the participation arrangements set out in option (a) and (b) above. This point is central to the European company statute on worker participation, and it is clear from the Department's brief that it prefers not to have worker participation in any shape or form. I present that evidence to the House because it shows the opposition and it provides ammunition, argument and the details to the European Parliament with which to oppose the directive. This is not a minor or marginal aspect. Instead, the Government's unwillingness to provide greater information or consultation with workers in this country is central to their opposition to the statute.

I have other information to support my argument. The "European Industrial Relations Review No. 179" provides a good synopsis of different parts of European legislation and the different views of different countries on particular statutes. I refer to that document to establish that it is not just the Opposition who can see the Government's dislike of worker participation so clearly and strongly. The briefing shows that the rest of Europe shares our perception. The review states on page 1: Serious differences of opinion are emerging within the EC over worker participation…the UK Government has adopted a hostile attitude towards this kind of provision which seems to render it increasingly isolated in a European context. That is clear evidence of the Government's isolation and hostility towards worker participation, and that is the general view held in Europe.

It is clear that the Italians have tried several initiatives to try to break the deadlock in the British intransigence towards worker participation. The Germans are also opposed to any watering down or half-hearted measures which might replace the present conditions for workers' rights contained in the company statute. It is only because of Germany sticking to its guns on this matter that we have the chance to discuss worker participation on a minimal level. We should like to see a great deal more worker participation. Thanks to other countries in Europe, at least we have the basis.

The British Government's unwillingness to be flexible and to adapt in respect of this statute, as with other directives referring to worker participation, has made it so difficult to make progress on them. Other countries in Europe have tried desperately to shift the Government to a point at which we could have agreement on a statute of this nature with worker participation in it, but that is not to be unless there is a change of Government or a change of attitude in the United Kingdom. Such change will be needed. Ironically, that is what the rest of Europe believes will be necessary if we are to get worker participation.

Our support for workers' rights and the need for information and consultation is entirely consistent with the positions that we have adopted. My hon. Friend the Member for Bradford, South (Mr. Cryer) mentioned the Companies Bill. The amendments to that Bill were the kind of disclosure and publication of company accounts that we feel is necessary so that workers in a company can see information and be consulted on facts. The hon. Member for Chichester (Mr. Nelson) has blinding flashes of common sense and rationality on the topic. He actually said that the second option on offer seemed to make a lot of sense. However, he was soon called back into rank and did not stick to his point. Conservative Members can clearly see that what is in the statute is not terribly radical or terribly extreme—it is a basic right to which workers should be entitled.

The Government talked a lot about wider share ownership and about increasing people's ability to participate. The European company statute refers directly to the rights of shareholders. We have heard Minister after Minister saying that wider share ownership has not worked and that, despite the Government's desires, some individuals have taken one or two shares and not traded them—much like Green Shield stamps—but have held on to them.

Mr. Cryer

I draw my hon. Friend's attention to the resolution about the European company statute. The Government's resolution states that the statute should contain a minimum of regulation consistent with the aim of providing adequate protection for those who may be involved with a company formed under the statute. It does not say anything about workers or the consumers of a company's products. It is a narrow resolution.

Ms. Mowlam

I thank my hon. Friend for pointing that out. As I am sure he is aware, the narrowness of it was dealt with in last week's debate on the single market and financial services. Opposition Members complained bitterly that, whether it be this European company statute, the usage directive, the second banking or the capital adequacy directive—whatever the Government are bringing forward—they do not bring forward a consumers' directive. That has been discussed in the European Parliament and in the Commission. The Commission thinks that the earliest date that a consumers' directive will be in operation is 1991, when many other directives and draft instruments will be in place. I thank my hon. Friend for that intervention. In the narrow definition on the Order Paper today, even the rights of consumers are not taken into account in any meaningful way by the Government.

I do not wish to try your patience, Mr. Deputy Speaker, but, as the debate started six hours ago, it is essential to point out that my hon. Friend the Member for Linlithgow (Mr. Dalyell) mentioned two named individuals. I do not know exactly what he was referring to, but it is clear that hon. Members would regard with dismay and worry the programme on Cambodia. If the Minister sees his way clear to writing the letter for which my hon. Friend asked, Opposition Front-Bench Members would appreciate a copy.

My penultimate point is—[Interruption.] The Parliamentary Under-Secretary of State for Employment might find this debate ridiculous. I am sorry that he does. The debate began earlier this evening. Opposition Members were quite happy to discuss the matter at a sensible hour this evening. Conservative Members caused hon. Members to return to discuss it at 2.19 in the morning. Like him, I should like to be tucked up in bed —[Interruption.] Yes, I do have certain standards—but Opposition Members are not responsible for the timing of this debate.

We had a good discussion earlier in which the Minister asked directly whether the Opposition were asking for a European company law. I said that that was not the essential point and that we should have liked different negotiations which would lead to a different point. However, when I thought about this over dinner, I realised that the takeover directive is, in fact, European law on the statute book, and that it has not negated national law. The two do not have to work in opposition—they can work in parallel. National company law has not been devalued or replaced by European company law. The two systems can work in parallel and need not add to overcumbersome legislation.

My hon. Friend the Member for Bradford, South has outlined his clear desire to see the implementation of the worker participation section of the European company statute. He said that it is essential that progress is made at a national level and that the United Kingdom should take the lead in Europe. It is important to add that, again, the two need not work in opposition; they can work in parallel. We should push hard—a Labour Government would do so—for legally enforceable workers' rights, for rights to which everybody should be entitled, but that does not mean that we should not push the present Government towards making changes in Europe and within the existing legislation.

Mr. Allen McKay (Barnsley, West and Penistone)

I am grateful to my hon. Friend for giving way on that point because I had intended to raise it. I am sure that she will recall that lead used to be used at a workplace in my constituency, but is no longer. I know that she will also recall the fact that the fault lies entirely—or rather mainly—with the Health and Safety Executive. If trade union rights had been adhered to in that place and if there had been worker participation, three of my constituents would not have ended up in hospital with lead poisoning.

Ms. Mowlam

I thank my hon. Friend for that intervention, which fits into much of our discussions earlier this evening. If we have such difficulties on a national level although we have legislation to protect workers' rights, what about the problems that we face when trying to get retribution or a response when there is an accident in France involving a company that is based in Germany, with British workers? Without a proper legal framework to protect workers, we shall be in an untenable position.

The European company statute had been discussed in detail in the European Parliament where much more time was spent on it than we have been able to spend today. A reading of the proceedings of the debate in the European Parliament shows clearly that all other countries voted with a large majority in support of the statute. The vote was 175 to 23 in favour, with two abstentions. That shows the support for the statute in the rest of Europe.

I refer now to two or three of the points that were made in the European Parliament in support of the statute. Stress was placed on the close links between the industrial and social aspects. The structuring of the European company is regarded as an opportunity to give concrete form to the social dimension of the internal market—

Mr. Ivan Lawrence (Burton)

The hon. Lady said that hours ago.

Ms. Mowlam

The hon. and learned Gentleman may remember much of what I said earlier, but I did not talk then about the social dimension of the internal market, and I did not—as I am about to do—mention the difficulties that the Government now face, driven as they are by an ideology that hypnotises them not to see the parallel between the social and industrial dimensions. It is when those two work in unison, which Labour Members and members of other parties in the European Parliament are keen to see happen, that a European company statute will have a meaningful impact for society as a whole. I inform the hon. and learned Member for Burton (Mr. Lawrence) that I did not make that point earlier.

Some other points were made in the European Parliament in support of the European company statute. Labour Members regard the statute as fine in principle but would like to see some changes. Members of the European Parliament see the social dimension as a fundamental component of the internal market, not as a mere adjunct to it. It will be indispensable. We have argued that on numerous pieces of European legislation in the House. We are worried, as with the European company statute, about the distinction between a directive and a regulation. We are fearful that the regulation may go through but that the directive on worker participation will lie on the table and will not be implemented at the same time. That anxiety was expressed clearly by many Members of the European Parliament. Labour Members believe that we are in danger of seeing that fear realised, due to the Government's intransigence in Europe over many years of discussions.

The debate in the European Parliament emphasised clearly that there were several options for worker participation in the European company statute. Many speakers expected it to be incumbent on the management and staff of any undertaking to reach agreement on the model of worker participation to be adopted. They also expected that no European company would not apply any model of worker participation. That has been the crux of our argument on this part of the European company statute. There are three options. Flexibility is built into the statue. By default there could be a reversion to the national option. A European company could negotiate an agreed option beween management and workers in a particular European company. We believe that that would give enough flexibility. The Minister said that that would have to be in the statutory framework. Yes, and a good thing too, because without such legal protection and unless the general principle is agreed, workers' rights will not be protected.

We clearly understand that the detail would have to vary from company to company, country to country and circumstance to circumstance. We readily accept that. We want to see established the principle that it is a legal right of every worker to be provided with information and to be consulted. It is clear that the Government are not only out of date and out of time with British companies, but out of step with the attitude in the rest of Europe.

The European company statute clearly shows that Labour Members are in tune with the rest of Europe. For the Minister, Europe stops at Eastbourne or perhaps the Channel islands, with their offshore implications. For the Prime Minister it is probably the Isle of Wight. We see the need for a European company statute. We happily agree with the Minister that it may not be used much in the early years. It may not be used without some changes to remedy the confusion that exists in parts of it. We readily acknowledge that. If the regulation is not accepted, the next Labour Government will negotiate that detail carefully. But we shall be sure that the worker participation element is included. We believe that that element is the main reason why the Government have blocked the directive.

2.28 am
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood)

The hon. Member for Bradford, South (Mr. Cryer) raised an important point about insolvency and re-formation of companies through their directors. That matter is covered in sections 1(15) to (23) of the draft. We agree with the hon. Gentleman that they are not satisfactory, particularly in relation to national law. It is an area of company law provisions which we shall look at carefully to make sure that there is a satisfactory means for winding up and at least similar precautions and protections to those in current United Kingdom insolvency law.

I agree with the general line taken by my hon. Friend the Member for Winchester (Mr. Browne). I thank my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) for his many good points on company law and accountancy problems, several of which will be taken up by the Government in forthcoming negotiations. I agree with my hon. Friend the Member for Chichester (Mr. Nelson) that the Government wish to encourage on a voluntary basis the many good models of employee share participation and employee participation in general. Britain has much to be proud of, because in recent years many good models have been developed and many schemes pioneered. As my hon. Friend said, the National Freight Consortium is seen by people all over the world as an example of great success.

The hon. Member for Linlithgow (Mr. Dalyell) raised a series of issues that are the responsibility of my hon. Friend the Minister for Trade. I am sorry he is not in the Chamber but I think that the hon. Member for Linlithgow is in touch with my hon. Friend who, I am sure, will read the report of the debate and will contact the hon. Gentleman if he has helpful information.

I should like to rebut three points made by the hon. Member for Redcar (Ms. Mowlam). She said that the Government's position was not clear, but that is far from the case. I made our position quite clear in the debate and it is set out in the explanatory memorandum. I like to hear the views of the House and have noted several useful comments which we shall follow up in the negotiations.

The Government are against several elements in the current proposal. We oppose some of the company law proposals, the taxation proposal, the voting base of the measure and the particular forms of mandatory worker participation in the directive. However, it is not true to say that we are against a particular style of worker participation or against employee participation in general because, as I made clear in the debate, we are against a certain kind of mandatory worker participation.

Secondly, Labour still refuses to come clean on whether it would negotiate a comprehensive framework of European law that would deal with the problems of 12 different types of company. I do not know whether the Opposition cannot say or will not say, but it seems that they have no idea of their policy on the relationship between European and national company law. It is a great pity that they cannot clarify this crucial issue.

The hon. Member for Redcar tried to claim that if a Labour Government were handling these negotiations and had in front of them a more general proposal for a European company statute, they would make rapid progress. The hon. Lady says that that we are unable to do that. When Labour were in government for five years from 1974 until 1979 there was a more general proposition on the table and not an inch of progress was made. That shows that the realism of office made Labour realise that there are all sorts of company law problems in the proposals. I am glad that Labour will not have the chance to find that out again.

Question put:—

The House divided: Ayes 63, Noes 4.

Division No. 330] [2.32 am
AYES
Amess, David Maclean, David
Arbuthnot, James McLoughlin, Patrick
Arnold, Jacques (Gravesham) Malins, Humfrey
Baker, Nicholas (Dorset N) Mans, Keith
Bennett, Nicholas (Pembroke) Mitchell, Andrew (Gedling)
Bevan, David Gilroy Moynihan, Hon Colin
Boswell, Tim Page, Richard
Brazier, Julian Paice, James
Browne, John (Winchester) Patnick, Irvine
Burns, Simon Portillo, Michael
Burt, Alistair Redwood, John
Butcher, John Renton, Rt Hon Tim
Carrington, Matthew Ryder, Richard
Chapman, Sydney Sackville, Hon Tom
Chope, Christopher Shaw, David (Dover)
Clark, Hon Alan (Plym'th S'n) Spicer, Sir Jim (Dorset W)
Conway, Derek Stern, Michael
Coombs, Simon (Swindon) Stevens, Lewis
Day, Stephen Stewart, Andy (Sherwood)
Devlin, Tim Summerson, Hugo
Fallon, Michael Taylor, Ian (Esher)
Forth, Eric Taylor, John M (Solihull)
Freeman, Roger Thompson, D. (Calder Valley)
Gale, Roger Twinn, Dr Ian
Glyn, Dr Sir Alan Waller, Gary
Goodlad, Alastair Widdecombe, Ann
Hague, William Wood, Timothy
Holt, Richard Yeo, Tim
Howarth, G. (Cannock & B'wd) Young, Sir George (Acton)
Jackson, Robert
Kirkhope, Timothy Tellers for the Ayes:
Lawrence, Ivan Mr. Greg Knight and
Lightbown, David Mr. Neil Hamilton.
Lyell, Rt Hon Sir Nicholas
NOES
Barnes, Harry (Derbyshire NE)
McAllion, John Tellers for the Noes:
McKay, Allen (Barnsley West) Mr. Bob Cryer and
Skinner, Dennis Mr. Ian McCartney.

Question accordingly agreed to.

Resolved, That this House takes note of European Community Document No. 8404/89 on the proposal for a European Company Statute; and supports the Government's intention to seek to ensure that if there is to be a European Company Statute, it should contain a minimum of regulation consistent with the aim of providing adequate protection for those who may be involved with a company formed under the statute.