Employers' Organisations (Hansard, 14 June 1995)

§ Mr. Denis MacShane (Rotherham)

I beg to move, That leave be given to bring in a Bill to set up a Royal Commission to examine the role and purpose of federations and other organisations representing employers with a view to making recommendations as to the desirability of a more united and representative network of employers' organisations able to discharge more effectively their obligations in economic and labour market policy fields nationally, regionally and in the community. I ask the House to cast its mind back to the great reforms of trade union legislation—I phrase it as neutrally as I can—in the 1980s because, if reforms of trade unions were an issue 15 years ago, I believe that reforms of employer federations and companies are an issue today. If we consider organisations in the United Kingdom that represent or speak for employers in different forms, we see nothing but discord, incoherence and lack of unity. There is an alphabet soup of those organisations—the CBI, the IOD, the EEF, chambers of commerce, the 1M or Institute of Management—and it is difficult to get any clear idea of what any one or all of them stand for. If, for example, the Confederation of British Industry supports EMU, the Institute of Directors naturally must oppose it. If the CBI is hostile to the social chapter inside the United Kingdom, we find it negotiating with the European trade union congress on social chapter questions via UNICE, the European employers federation.

There have been concrete proposals for mergers. Some 25 years ago Lord Devlin proposed that the Association of Chambers of Commerce and the CBI should merge, but his suggestion was brushed aside. Three or four years ago the Engineering Employers Federation and the CBI were involved in merger talks, but the proposed merger was rejected. We have the absurd spectacle of two competing organisations—the EEF and the CBI's National Manufacturing Council—speaking on behalf of the manufacturing sector.

Who belongs to those organisations and what do they do? Compared with trade unions, they are cult-like and secretive. Their directors come from we know not where and they are not accountable in the full public sense of the word. According to the certification office, there are 230 employer federations or associations—that is more than three times the number of trade unions. As a confederation, the CBI is not covered by the same rules as employer associations. Its accounts, internal practices and even its membership are shrouded in secrecy.

The Institute of Directors, which is often in the news, is nothing more than an agreeable Pall Mall club. Half its members live overseas and we know nothing about them. If in the early 1960s it raised eyebrows to state one's occupation as "model" on one's passport, today I think that we should be concerned about the occupation of "company director"—especially in the case of Cabinet Ministers who were former directors of companies such as BMARC.

I have to admire the IOD's chutzpah, but it should be seen for what it is: the extreme end of the industrial wing of the Tory party and a glorious excuse for expense account outings to listen to the musings and the ideology of the admittedly able executives whom it employs. The CBI, on the other hand, is a much more coherent and solid organisation. It patrols the corridors of power and dispenses its chardonnay and chips with flair. But despite 797 the solidity and worth of its publications, it too has failed to keep an equidistance between the different social and political forces in the nation.

There is a state of what one might call permanent column-inch warfare among the different organisations. In that sense, they represent the modern world perfectly—that of press releases without responsibility, the prerogative of spin merchants throughout history. They claim power, but they reject responsibility for delivering effective training, shaping a pay policy that lessens rather than increases inequalities, and developing a patient stakeholder capitalism rather than the short-term greed of our dividend pay-out and share option society.

What are the answers? I can do no better than turn to the book entitled "Where there's a Will", written by a prominent contender for the leadership of the Conservative party—but I shall not enter into that debate now. In his book, the President of the Board of Trade pointed out that every EEC country except for Belgium and Ireland bestows public law status on its chambers of commerce. Each is required to act on behalf of all enterprises within its locality and all companies are required to join. The collective voice of business is thus regionally and sectorally representative and so the more powerful in dealing with government. In return for State funding, through a special tax mechanism, the chambers provide a number of facilities … in such matters as apprentice training, aspects of vocational education, technical counselling, or legal advice". I urge all hon. Members to accept the sound advice of the President of the Board of Trade. The Government should translate his words into policy. I know that he is an old Heath-style tripartite corporatist, a self-confessed Euro-fanatic and almost a closet social democrat in the Cabinet, but he speaks with some wisdom.

If the incoherence is marked at a national level, it is even more so at local level. Earlier, in DTI questions, we heard reference to business links. I support the setting up of the business links, but they compete now with chambers of commerce and with training and enterprise councils. Again, we have confusion and incoherence at local level in representation of employers' interests.

I commend to the House the example set in Rotherham which I hope will be followed. The chamber of commerce and the training and enterprise council are discussing merging in order to form a Chamtec, which can open up new horizons for local representation.

798 The examples from Europe are so much more positive. In Denmark in the past three or four years the number of employers' organisations has been reduced by two thirds. In Germany there are three umbrella organisations—one for chambers of commerce, one for different industrial groupings and one for employers. They are all linked by one co-ordinating organisation. In France, the Conseil National du Patronat Francais represents 80 per cent. of all employing firms in France. It is able to participate as an effective partner, sometimes with the Government and sometimes with unions—not the old tripartite corporatism, but, as needed, to discuss pay, working hours, training and other aspects of the labour market.

Trade unions in Britain have changed dramatically, and for the better, in the past 15 years. Laws on their oversight, the election of their officials and ballots before they declare policy have worked and proved welcome. I think that trade unions would agree that they were wrong to reject those proposals 15 years ago, but they accept the reforms now. A similar package of reforms is overdue in the world of employers' organisations. Employers are ultimately the job creators. I accept that they are wealth providers. They have been left untouched and unreformed for a quarter of a century or more.

Britain needs national renewal. It needs an end to the master-servant relations so typical of our labour market under the Conservative Government and the creation of a post-corporatist partnership society. Employers' organisations should be at the cutting edge, leading that renewal, but they represent, alas, old, divided, and adversarial Britain. My Bill proposes a national debate and a genuine discussion. I commend it to the House.