HC Deb 29 June 1993 vol 227 cc809-11
3. Mrs. Lait

To ask the Secretary of State for Employment what assessment has been made of the effect on British productivity of the 48-hour working week directive.

Mr. Michael Forsyth

The working time directive will be damaging; not as damaging as in its worst form, but sufficiently damaging and unjustified for us to seek to challenge it in the European Court.

Mrs. Lait

I thank my hon. Friend for that answer and congratulate Ministers on their success in the negotiations. Does my hon. Friend agree that the British Government have guaranteed that there will be no compulsory time limit for working hours, and that that has been welcomed by employers throughout the European Community? [ Laughter.]

Mr. Forsyth

I agree with my hon. Friend. If Opposition Members, who are chuckling, had had their way, while Taiwan and Japan were loading up ships with consumer goods, in Britain we would have been switching off the lights.

Mr. Stevenson

Coming back to switching off the lights, does the Minister accept that an industry in the United Kingdom that has had a productivity record second to none—the coal industry—has had that record thrown in its face by the closure of half the industry? Is not the threat to productivity in the country not the 48-hour week directive but Government policy?

Mr. Forsyth

Manufacturing productivity in Britain has led the way in Europe. The hon. Gentleman should recognise that the coal industry and other industries have to be competitive. Labour costs in Europe grew at a rate of 4 per cent. a year throughout the 1980s. That compares with a growth in Japan of zero per cent. throughout the 1980s. Competitiveness is the name of the game, and I am afraid that the hon. Gentleman and his right hon. and hon. Friends have not always supported the policy changes needed in the coal industry to achieve competitiveness.

Mr. Anthony Coombs

Is my hon. Friend aware that recent figures from the German motor industry association show that manufacturing costs for cars in Britain are some two thirds of those in Germany? That is why many German companies are now sourcing from Great Britain for their components. Does he agree that to adopt any directives, particularly the social chapter, would undermine Britain's competitive position, as it is presently undermining the position of many countries in Europe?

Mr. Forsyth

I could not agree more. The flexible labour policies that we pioneered in the 1980s helped to make our car industry such a success. We are exporting British cars to Japan. I agree with what my hon. Friend said about Japan. When the departing chairman of Mercedes Benz warns that the products will no longer say "Made in West Germany", or "Made in Germany", but "Made by Daimler-Benz" because the costs of manufacturing have risen so high in Germany, alarm bells should be ringing throughout Europe among those socialists who still wish to go ahead with the social chapter, which is making industry uncompetitive.

Ms Quin

Given what the Minister said about competitiveness, how can he explain the fact that, in the 1993 world competitiveness report, the United Kingdom had slipped from 13th place to 19th place? That would seem to be the opposite of what the Minister is saying. Is it not grotesque that, when we have officially 3 million unemployed in Britain today, all the Government can do is go to Europe and suggest that those in work should work even longer hours?

Mr. Forsyth

It is extraordinary to be lectured by the hon. Lady about improving Britain's competitiveness, when on every occasion she has supported those who have argued for measures that would add to our labour costs and reduce our competitiveness.

Mr. Evennett

Does my hon. Friend agree that unemployment is the major economic issue facing the European Community, and that we should be giving business men greater flexibility to export and to create more jobs and not to destroy jobs?

Mr. Forsyth

I entirely agree with my hon. Friend. That is why it is so important that my right hon. Friend the Prime Minister was able to persuade our colleagues in Europe in Copenhagen of the importance of putting the emphasis on competitiveness. Europe is not an island; unless it embraces the arguments that we won in three successive general elections in Britain, jobs will he lost and the numbers of unemployed will increase. That is the lesson of the past few years. Our arguments are now being taken on board by our partners in Europe. Only the Labour party 3 s still stuck in the time-warp of the early 1980s.