Information and Consultation Directive (Hansard, 12 July 2001)

§ 10. Mr. Desmond Swayne (New Forest, West)
What reasons underlay her decision to agree to the information and consultation directive. [2040]

§ 12. Mr. John Bercow (Buckingham)
What recent discussions she has held with business organisations concerning the proposed European directive on information to and consultation with workers. [2043]

§ The Minister for Employment and the Regions (Alan Johnson)
The Government have always believed that good companies inform and consult their employees. During negotiations on the proposed directive, our concern has been to avoid the rigid "one size fits all" approach. The agreement re ached in Brussels on 11 June meets that requirement. We have maintained a close dialogue with business organisations on the directive. My right hon. Friend the Secretary of State for Trade and Industry has recently discussed it with the CBI.

§ Mr. Swayne
The right hon. Member for Hartlepool (Mr. Mandelson) assured the Select Committee on 4 November 1998 that he would block the directive. However, the hon. Gentleman has paid for it, albeit with a post-dated cheque. What happened to the Government's policy? Did it go to the Back Benches with the right hon. Gentleman?

§ Alan Johnson
The hon. Gentleman should lie down in a darkened room and take a couple of tablets; this is not the end of civilisation as we know it. In 1998, we opposed the directive because of its "one size fits all" approach. Perhaps the Opposition should get information and start consultation because, as my right hon. Friend the Secretary of State mentioned, the European works council model appears to be confused with the directive. The directive does not introduce works councils; we have the flexibility to ensure that it can be moulded to each member state's requirements. There is a seven-year transitional period, which is only slightly shorter than the time that it takes to elect a leader of the Conservative party. We have substantially modified the European directive to benefit UK companies and their work force.

§ Mr. Bercow
That was a pitiful answer. Why can the Minister not see that the directive remains flawed and inappropriate, as the then Secretary of State, the right hon. Member for Tyneside, North (Mr. Byers), said on 18 January? Does the Minister not understand that it is opposed by all major representative business organisations, which fear the £260 million recurring costs? When will he recognise that information to and consultation with workers should be decided either by individual companies or this elected House and are not the proper business of the corporatist dirigistes of the European Union?

§ Alan Johnson
I am glad to announce to the hon. Gentleman that that is what the directive now provides for; our negotiations in Brussels on 11 June provided exactly that outcome. On information and consultation, the hon. Gentleman may be on another march to the left. If I remember rightly, and to personalise this a little, when he came into the House in 1997, he was against the lowering of the age of consent, he was against the minimum wage—

§ Mr. Speaker
Order. Those matters do not concern the House.

§ Alan Johnson
I am only saying that I am sure that the hon. Gentleman is in touch with his feminine side, has read all the recommended books and, very soon, will be a great advocate of information and consultation.

§ Mr. Derek Foster (Bishop Auckland)
Does my hon. Friend agree that the best way to achieve the brain gain posited by the Under-Secretary, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson) is to recognise the truth expressed by the managing director of a global company in my constituency, who said that the company discovered that with every pair of hands it got a free brain? Does that not underline the importance of the information and consultation directive? Will my hon. Friend ensure that nothing like Luton ever happens again?

§ Alan Johnson
My right hon. Friend has raised the crucial issue. I agree that you get a free brain as long as you ensure that you extract talent, imagination and energy from the work force. Some companies are better at that than others. However, the initiative will never work unless we bring employers with us. There have been two attempts at it—Whitleyism and the industrial democracy experiment in the 1970s, which did not work because both sides of industry ensured that they did not. With the directive, we are determined to ensure that there is a genuine change of culture so that workers are genuinely informed and consulted at times when that matters; there is an extraordinarily good business case for that proposition.

§ Mr. Andrew Miller (Ellesmere Port and Neston)
Following the final point in the observations of my right hon. Friend the Member for Bishop Auckland (Mr. Foster), can we be certain that, as a result of the directive, the kind of nonsense that took place at General Motors, when workers on the German works council were apprised of the company's plans while workers in Britain learned of them on British radio, will not happen again?

§ Alan Johnson
My hon. Friend has taken a great interest in this matter over a number of years. My hon. Friends the Members for Luton, North (Mr. Hopkins) and for Luton, South (Margaret Moran) have made that very point. I think we are all determined that what happened to the Vauxhall work force at Luton does not happen to workers anywhere else in the country in future.

§ Mr. David Heathcoat-Amory (Wells)
Rather than trying to rewrite recent history, will the Minister confirm that the Government were opposed to the directive, and said so repeatedly in the House? They were opposed to it on the ground that it breached the subsidiarity principle because it applies only to purely domestic firms and has nothing to do with EU trade or multinational companies. That objection remains valid. However, the Government have been outvoted. That happened when the Germans changed sides on the issue shortly after the British general election.
Why are the Government, when they and this House have recently been out-manoeuvred and outvoted on this matter, signing up in the Nice treaty to another 31 areas of policy that will be decided by majority voting, allowing 925 the will of the House and the Government to be out-manoeuvred and outvoted in new areas and even more often? Where is the logic in that?

§ Alan Johnson
I reiterate that our aim in all the discussions from 1998, when the directive was mooted, was to avoid a rigid and legalistic framework. Our aim was to avoid the works council model that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) mentioned. It was in that sense that we argued about subsidiarity.
On 11 June, that changed as a result of our engaging in dialogue. Incidentally, there was not a vote; it was dialogue that enabled us to join the consensus. As a result of negotiation and discussion, we believe that we have a directive that British companies, even if they do not welcome it immediately, once they have read the details will agree takes us forward. That is in sharp contrast to what happened in relation to the European works council directive, when the Conservative Government opted out. The directive was negotiated and it affected UK companies because it applied to companies that had workers in more than one member state, but they had no input and no influence. There is now a different and far more constructive way of doing things in Europe.

§ Margaret Moran (Luton, South)
As my hon. Friend has acknowledged, this is a matter of deep concern to my constituents, including Vauxhall employees and former employees who experienced sacking over their cereal without being informed by General Motors of their fate. Will he ensure that as part of the directive there is on-going information and consultation involving employees, not simply at the point of their being sacked. which is far too late a stage? Will he recognise, and perhaps advise Conservative Members who are opposed to any extension of workers' rights, that information and consultation, as the research of the Industrial Society has shown, bring increased productivity to businesses as well as benefits to workers?

§ Alan Johnson
My hon. Friend makes an important point. I reiterate that the directive is not only about information and consultation in relation to redundancies. A collective redundancies agreement already covers that. We are talking about information and consultation on all areas where the work force have an interest, such as change of work organisation and future plans for the company.
Every survey shows that if the work force are properly consulted and informed, there is an enormous reward for business. That is the crucial message that we need to get across over the next months and years.