Employment Relations Bill

HC Deb 14 January 2004 vol 416 cc819-928

Order for Second Reading read.

12.32 pm

The Secretary of State for Trade and Industry (Ms Patricia Hewitt)

I beg to move, That the Bill be now read a Second time. [Interruption.]

Mr. Speaker

Order. May I ask hon. Members to leave the Chamber quietly?

Ms Hewitt

Ten years ago, unemployment in our country stood at 3 million. Today it is less than half that number. Long-term youth unemployment, which in 1997 was 121,000, is today just 58,000. In 1997, 476,000 men and women—nearly half a million—had been unemployed for more than two years; today, that number is only 152,000. Those are achievements of which we on the Government side are rightly proud. But that is not all.

At the same time as we were helping thousands of people to find a job, we were acting to make those jobs worth while. The national minimum wage, the working tax credit, the new children's tax credit and record increases in child benefit all help to ensure that work will pay. Over the past six years we have raised standards at the workplace, protecting people at work and ensuring that the standards that are taken for granted by good employers become the norm everywhere. Four weeks' paid holiday, protection for part-time workers, the right to trade union recognition, a year's maternity leave, paid paternity leave for the first time ever and new rights to family-friendly working: all regulations of which Government Members are justly proud.

Throughout we have worked in partnership—partnership between the Government, employers, employees and their unions. We believe in partnership in policy making, just as we believe in partnership in the workplace.

What did the Opposition and our critics say? They said that the national minimum wage would destroy a million jobs, that employment laws would throttle small businesses, and that rights for working parents would make mothers unemployable. That was just not true. We have 1.7 million more people in work than we did seven years ago. As today's labour market figures show, employment has risen and unemployment fallen in every nation and region of the UK.

Women's employment is up, as are part-time employment and self-employment. There are 100,000 more businesses in operation than in 1997, and 170,000 more people in self-employment. Is it surprising that the German Minister for Economics and Labour should have described our employment record as an inspiration for Europe?

Mr. Jonathan Djanogly (Huntingdon) (Con)

When the Secretary of State refers to the increase in employment, does she mean the massive increase in the public sector employment that has taken place under this Government? In the private sector, and especially in manufacturing, jobs have been going very quickly.

Ms Hewitt

I realise that the hon. Gentleman has not the slightest interest in having more doctors, nurses, teachers and language and speech therapists in employment. He is against all of that, and probably does not regard those as real jobs. He refers to the loss of manufacturing jobs: that is a matter of great concern to Labour Members, and the Government are doing something about it. However, I shall take no lectures in industrial policy or manufacturing from a member of a party that presided over the devastation of British manufacturing firms, and over the loss of British manufacturing jobs.

Mr. Patrick McLoughlin (West Derbyshire) (Con)

The Secretary of State says that she is happy to see more people in employment, and that is, of course, commendable. However, does she want more postmasters to be in employment, or fewer?

Ms Hewitt

That matter was debated very fully yesterday. If he was listening, the hon. Gentleman would have heard my hon. Friend the Minister for Energy, E-Commerce and Postal Services make a superb speech, in which he described precisely the problems and challenges—

Mr. Stephen O'Brien (Eddisbury) (Con)

Rubbish.

Mr. Speaker

Order. I do not expect the Opposition Front-Bench spokesman to heckle the Secretary of State.

Ms Hewitt

Thank you, Mr. Speaker. I took great pleasure in reading the Hansard report of that debate, and in seeing that, in an excellent speech, my hon. Friend the Minister for Energy, E-Commerce and Postal Services spelled out precisely the challenges that the Government are facing up to in modernising and reforming our post office network. The reality—

Michael Fabricant (Lichfield) (Con)

On a point of order, Mr. Speaker. As you know, the shadow Leader of the House raised a point of order yesterday. The Secretary of State was not present to open yesterday's debate on post offices. Would she like to take this opportunity to explain where she was, as she was not here?

Mr. Speaker

I seem to recall that I dealt with the shadow Leader of the House's point of order yesterday. The hon. Gentleman should remember that today we are dealing with a Second Reading debate, and that we are not analysing what happened yesterday. Yesterday was another day.

Ms Hewitt

Thank you, Mr. Speaker. I noted the observation in yesterday's debate that no member of the shadow Cabinet was present—even though the debate was on an Opposition motion.

Mr. John Bercow (Buckingham) (Con)

Will the Secretary of State give way?

Ms Hewitt

No, I want to make some progress.

The reality is that, since 1997, employment in small firms—the firms that Opposition Members are fond of saying have borne the brunt of employment regulation—has risen by more than half a million, and employment in the private sector, as well as in the public sector, is increasing. So, instead of having to choose between cutting the numbers of people out of work and raising standards for people in work, we have shown that, with the right policies and careful implementation—and, above all, by working in partnership with business and employees—we can have quantity and quality together. We can have the full employment that was thought to be impossible a decade ago—and it can be fulfilling employment, too.

Mr. Bercow

The national minimum wage was introduced at a modest level in a benign economic climate and has not done great damage; indeed, it has conferred a number of benefits. However. is the Secretary of State insensitive to the growing chorus of opinion in the business community, especially among small and medium-sized businesses, that they are increasingly expected to operate as unpaid tax collectors and benefit distributors? What will she do to address that concern and grievance?

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe)

A very good point—against you.

Ms Hewitt

Unlike my hon. Friend, I think that the hon. Gentleman was apologising for his opposition to the national minimum wage, and I welcome his conversion to our cause on that point.

On the hon. Gentleman's other point, we are of course concerned about levels of regulation and administration, particularly for small businesses. Having run small organisations for most of my working life, I know precisely what is involved. That is why my right hon. Friend the Chancellor of the Exchequer and I have done so much to simplify VAT and payroll administration, and it is why we will ensure that the information that employers and small businesses need is available more simply both in print and on the website. Because of such steps, and much else besides, the Organisation for Economic Co-operation and Development says that the UK is at the forefront of regulatory reform"— and notes that entrepreneurs face a better business and regulatory environment in the UK than in most other OECD countries. We are proud of our record but are not complacent, and we will continue to improve it.

The Bill builds on the foundation of those achievements, and I want to outline five of its key features this afternoon. First and most importantly, it will promote partnership and co-operation in the workplace by creating the power to make regulations to implement the European directive on information and consultation. I am not prepared to have our workers hear on the radio that they will lose their jobs or find that they have already lost their jobs through a text message. We know that the most successful businesses already work with a partnership between management and the work force.

John Robertson (Glasgow, Anniesland) (Lab)

Although workers will welcome the Secretary of State's comments, will she examine the activities of companies such as T-Mobile, which brings in union bashers from America to stop bona fide trade unions trying to increase trade union membership and protecting the workers whom she is discussing?

Ms Hewitt

I am aware of the concerns that my hon. Friend refers to and have discussed them with colleagues from trade unions. We are not prepared to see American-style union-busting practices growing up in our country. I must say that the proposal that we should import from north America laws to address unfair labour practices is not practical. Such laws have not worked in the United States and would not help here. Indeed, they would require massive rewriting of existing industrial relations laws, which have worked well in the vast majority of respects. I understand his concern and we will keep a close eye on the issue.

Malcolm Bruce (Gordon) (LD)

I welcome the Government's implementation of the EU consultation directive, but why have they resisted it for so long? Why are they further delaying full implementation for a few years, particularly for companies that employ between 50 and 150 employees? Now that the Government have converted to the concept, it would be a good idea to implement the directive in full rather than being the last country in Europe to do so.

Ms Hewitt

We have consulted widely, particularly with smaller firms. It makes sense to give smaller firms with between 50 and 150 employees a little bit longer to prepare for the introduction of the requirements under the new regulations. If they have not already done so, we would encourage them to anticipate the laws that they know are coming by adopting better practice, or indeed best practice, in consultation with their work forces.

The best businesses in Britain know that their success comes from their work force. They invest in making their employees feel valued, encourage them to make a contribution, seek their views, treat them fairly, train them properly and reward them well. That is, for instance, what happens at Tesco—one of the largest and most successful firms in Britain—which has a workplace partnership with the Union of Shop, Distributive and Allied Workers.

It happens at Cowley, where the partnership between the Transport and General Workers Union and management ensures that the company produces new Minis at an extraordinary rate. It happens, too, in GMB's highly successful partnership with the Edrington group—the Scotch whisky producers. Such partnerships are happening in thousands of businesses, small as well as large, informal as well as formal.

As I have just indicated, the new minimum standards on information and consultation will apply initially only to our larger firms—those with more than 150 employees—but eventually to all firms with more than 50 employees. By taking that approach we shall ensure that three quarters of our employees are covered by the new rights but that only 3 per cent. of our businesses will be.

Mr. Harry Barnes (North-East Derbyshire) (Lab)

How will the information and consultation process work in cases such as that of Biwater at Clay Cross in my constituency? Biwater was taken over by Saint-Gobain, a multinational, which within 45 minutes announced closure of the company to benefit its other operations in this country. Will the Bill ensure that if such a situation occurs in the future, proper and full consultation will be held prior to any announcement of that kind?

Ms Hewitt

I am happy to reassure my hon. Friend. The information and consultation standards will require that the work force are told about any issue material to the future of the company. There will be minimum standards for consultation, in addition, of course, to the current standards for consultation on large-scale redundancies.

The CBI director, Digby Jones, has welcomed our proposals. He said that they protected good consultation, which matters so much to employers and to employees", and that our approach avoided overly rigid rules and damaging one size fits all solutions". The general secretary of the TUC, Brendan Barber, described our proposals as all about building trust, respect and partnership in the workplace, a crucial ingredient in closing the UK's productivity gap". I take this opportunity to pay tribute to both of them and to thank them for working with us to agree on how we shall implement the new directive and on laws that will be good for our working people and good for British business.

The second key feature of the Bill is that it will improve the statutory procedure for trade union recognition. The recognition arrangements that we put in place in the Employment Relations Act 1999 have been a resounding success. We have not gone back to the legal wrangling and the inter-union disputes that dogged the recognition procedures in force during the 1970s. Far from promoting industrial strife, as our critics were so happy to predict, we have promoted partnership: we have the lowest number of stoppages since the 1920s, and days lost through strikes were below 500,000 in the first 11 months of last year, compared with an average of more than 7 million days lost every year through the 1980s.

Helen Jones (Warrington, North) (Lab)

My right hon. Friend rightly says that successful firms work in partnership with trade unions, so will she look once again at the rules on trade union recognition ballots, as, in effect, they count abstentions as no votes? How many Members would have been elected had such rules applied to us?

Ms Hewitt

My hon. Friend raises an important point. We looked at it during our review of the 1999 Act and we shall be tightening up that aspect of its operation under the current Bill, although, as she is aware, we do not propose to change the 40 per cent. threshold for participation in a ballot.

We wanted to promote voluntary agreements and we have done so. For every statutory declaration of recognition there have been 12 voluntary agreements: more than 1,000 voluntary deals were made during the last five years and at least 200,000 more workers are covered by a trade union recognition agreement.

Mr. Russell Brown (Dumfries) (Lab)

I think that all Labour Members applaud the Government for what they have done on trade union recognition. My right hon. Friend referred to small and medium-sized businesses, which, in areas such as mine and throughout the country, are the very lifeblood of the local economy, yet there is a major anomaly, because the provisions will not provide that recognition for businesses that employ 20 people or less.

Ms Hewitt

I understand my hon. Friend's concern, which I know that many other hon. Friends share. I have been discussing the matter with trade union colleagues for some time, but although I welcome, as my hon. Friend does, the fact that many sole firms do voluntarily recognise trade unions, and there are nationwide agreements—such as those from the print union Graphical, Paper and Media Union—that cover all firms in a sector regardless of size, the Government continue to take the view that it is much better for this to be done on a voluntary basis. I really do not think that it is appropriate or right for Government, through the law, to impose a trade union recognition procedure on a small firm where everybody knows one another and where procedures are necessarily much less formal. However, I also want to stress to my hon. Friend on this point that the right, which we established in the 1999 Act, for any individual employee to be accompanied at a grievance or disciplinary hearing by a trade union colleague applies to everybody, regardless of the size of the firm.

Tony Lloyd (Manchester, Central) (Lab)

My right hon. Friend will know that there is real unease about the small firm cut-off, first because it appears illogical, and secondly because, as she rightly said, proper collective bargaining is very important in improving industrial relations, so many of us want it to be the practice for small firms as well. Even if she will not concede the whole principle, does she recognise that many firms that employ 20 people or fewer are no longer small firms as considered in an historic context, and will she accept that it is time for us to look again at the cut-off point, because it is the wrong one?

Ms Hewitt

My hon. Friend makes an ingenious point and I respect his concern on this issue. I do not think he is right. Only 5 per cent. of applications for union recognition are currently coming from firms with between 21 and 30 employees, who of course are covered by the current union recognition laws. In the private sector there is very low trade union membership among smaller firms and, as I have said, we have already strengthened the rights of the employees in those firms by giving them the right, regardless of whether there is union recognition, to be accompanied by a trade union official or member at a grievance or disciplinary hearing. I think that is the right approach to take in firms that, by virtue of their size—I think that 21 is the right cut-off point—are informal in their procedures and should not have imposed upon them a statutory procedure, although I, like my hon. Friend, hope that more will continue to put in place partnerships with their work force, whether by trade union recognition or some other route.

Mr. Henry Bellingham (North-West Norfolk) (Con)

I strongly agree with what the Minister said about small firms, but before she leaves the information and consultation directive, may I ask her to comment—I doubt she will have time to do so in her winding-up speech—on the maximum fine that can be imposed for breach, which is £75,000? The CBI considers that to be too much, but I gather that the GPMU says that it is derisory. What is her view? Does she think it is at about the right level?

Ms Hewitt

We think it is at the right level, which is why we put it in the Bill.

The statutory recognition procedure has operated very smoothly and has been accepted by both employers and employees. That is why we shall not alter the principles of the original legislation. As I have said in response to interventions, we will not move the small firms threshold nor change the voting threshold. However, what we will do in the Bill is to improve the recognition procedures in practice. For instance, we believe that it makes sense to give unions access to the work force at an earlier stage in the process, once an application has been registered and accepted by the Central Arbitration Committee.

Mr. Ian Davidson (Glasgow, Pollok) (Lab/Co-op)

Are the Minister and her Department monitoring the flow of voluntary agreements? It seems to me and many or my colleagues that those small businesses that were willing to have voluntary agreements have already done so and that the flow of voluntary agreements has virtually ceased. It seems to us that in a large number of small firms, workers are genuinely in difficulty because of bad employers, that those workers are the people who need protection, and that what we are providing for them in the Bill does not give them anything additional to what they had already. Will the Minister give an undertaking that this matter will be kept under review, and that if examples of bad practice come to light, she will be willing to revisit it?

Ms Hewitt

My hon. Friend will be aware that, as I said earlier, over the last six years we have done an enormous amount to strengthen the rights of employees in all firms, regardless of size and regardless of whether there is trade union recognition. I am sure he would agree that, in a sense, the priority for trade unions is to recruit more members, given the inadequate levels of trade union membership in the private sector. But I believe that he is wrong in his suggestion that the growth in voluntary agreements is tailing off. We rely very much on the TUC to monitor those voluntary recognition agreements, but I think I am right in saying that when it publishes its latest survey we shall see a significant increase, even over the 1,000 new voluntary recognition agreements that I mentioned. But as I said, the Bill will strengthen and improve the practical operation of those recognition procedures.

Thirdly, the Bill will improve the law on industrial action. The Bill does not affect the basic structure of the law on strikes but it will make the law on strike ballots and notices much more straightforward, so that the legal obligations on trade unions are well defined and reasonable. We shall also strengthen the law that protects strikers who are taking lawful industrial action from dismissal.

All of us on the Labour Benches were shocked by the treatment of the workers at Friction Dynamics in Caernarfon—T and G members who were sacked after eight weeks on strike by an employer who made no effort whatever to resolve that dispute. Those workers won their case for unfair dismissal, only to find that the employer put the company into administration and promptly reopened the operation under a new name—Dynamex Friction.

I have met Bill Morris, the recently retired general secretary of the TGWU, and some of those Friction Dynamics workers. I know how appalling the effect of that dispute and the treatment of those workers has been on them and their families. I can tell the House today that with their information and help, my Department has been looking closely at the failure of that company and considering whether there are further grounds for action.

The Bill is another opportunity to act. In it we shall remove from the eight-week protected period any days that the employer locks out the work force, as occurred at Friction Dynamics, and we shall table a clause in Committee to improve the minimum obligations on both employers and unions to take reasonable steps during conciliation to try to settle the dispute.

Albert Owen (Ynys Môn) (Lab)

My right hon. Friend is right to take those steps with regard to the lock-out, but does she agree that the very fact that the company now operates under a different name means that the Government grant that it received from the National Assembly for Wales should be given back to the taxpayers, because it is an unfair abuse of that taxpayers' money?

Ms Hewitt

That is of course a matter for the National Assembly and I am sure that it and the Executive are looking at it.

Fourthly, the Bill will clarify various issues around individual employment rights. In particular, we shall spell out the role of the companion at disciplinary and grievance hearings, making it clear that they are allowed to play an active role and not simply a passive one.

Fifthly, the Act will improve and strengthen the law in a number of other ways, bringing United Kingdom legislation up to date following the ruling in the European Court of Human Rights case of Wilson and Palmer, improving trade union regulation and clarifying the certification officer's role.

Finally, I come to a matter of considerable importance to trade unions and to my hon. Friends. For some time we have been discussing with trade unions the very difficult issue of tackling the infiltration of their ranks by racist activists. Many of my hon. Friends have drawn to my attention, and that of my hon. Friend the Minister for Employment Relations, Competition and Consumers, the nauseating content of some British National party journals, which celebrate the fact that if its members take action against a trade union and are successful, they can receive compensation.

I can tell the House today that my hon. Friend will introduce new provisions in Committee, setting out how we will enable unions to tackle that problem, because it is utterly unacceptable that the vital work that unions and others have been doing to eradicate racism from society should be undermined by their inability to root out the political racists who seek to exploit trade unionism for their own purposes.

David Winnick (Walsall, North) (Lab)

Is my right hon. Friend aware that trade unions will certainly welcome what she has just said and what is contained in the measure? Is it not totally unacceptable that a union should be forced to accept in many cases known racist thugs, when many of the union's members are black or Asian, as the case may be, and, moreover, the union will have a consistent anti-racist policy? Why should it accept those racist thugs and be penalised as a result? I much welcome what is being proposed, and I hope that the Opposition will do likewise.

Ms Hewitt

I am very grateful to my hon. Friend for his endorsement. The trade unions, as voluntary associations of workers, play a crucial role, and have done so for many decades, in fighting racism and promoting equality for all in our society. I share his hope that—at least, on this point—the Opposition will welcome what we are doing.

Judy Mallaber (Amber Valley) (Lab)

Does my right hon. Friend also absolutely condemn the fact that members of far-right groups are specifically encouraging their members to join unions and pointing out where they are standing as candidates in elections to try to claim money in compensation, so that it can be put back into the funds of those political parties?

Ms Hewitt

I absolutely condemn that, and I agree with everything that my hon. Friend has just said.

Mr. Bill Tynan (Hamilton, South) (Lab)

One of the major issues that has been omitted or has changed in employment legislation relates to clause 15, where pensions, in particular, are outwith the core negotiating parts of the Bill. Will my right hon. Friend consider reinstating pensions into the negotiating core? She can make a decision to include them. Will she consider tabling an amendment in Committee to ensure that pensions, which are vital as deferred pay, are included in the Bill?

Ms Hewitt

Although I do not think that it would be right to do so just yet, when pensions are only included in a minority of such negotiations, but my hon. Friend will welcome the fact that we are taking powers in the Bill to make regulations to extend the remit of collective bargaining, as he proposes.

In closing, I realise that that the Opposition will complain about more regulation, just as they complained about and opposed the minimum wage, rights for working parents and paid holidays for all, but the costs to employers of most of the measures in the Bill are, frankly, insignificant. Small firms are the least affected, and both the TUC and the CBI have welcomed the Bill. It will promote better jobs and better workplaces. It will help us on our way to build an even stronger economy and a stronger society. I commend the Bill to the House.

1.3 pm

Mr. Stephen O'Brien (Eddisbury) (Con)

I draw the attention of the House to my entry in the Register of Members' Interests. Of course, I fully realise that, under the current dispensation, Labour Members are under no obligation to register their interests in relation to trade unions, but it would always be helpful if they would volunteer such information and say which unions they are members of when dealing with such a Bill. Such information is in the register, but it would be helpful if it were always declared—Conservative Members always do so.

John Mann (Bassetlaw) (Lab)

On a point of order, Mr. Speaker. The hon. Gentleman refers to the Register of Members' Interests and imputes that Labour Members have not registered their interests, despite the fact that, in relation to trade union membership, the House authorities have given specific advice on what should and should not be registered.

Mr. Speaker

The hon. Gentleman has made the point. Every hon. Member is responsible for his or her entry in the Register of Member's Interests, so it is not for any other hon. Member to comment on such matters. Hon. Members are their own masters in that situation, and it is up to them how they fill in the register, with the advice of the registrar.

Mr. O'Brien

Thank you, Mr Speaker. I hope that it was absolutely clear that I was talking about volunteering information. I fully understand the dispensation of the House in relation to trade union membership.

Mr. Davidson

rose—

Mr. O'Brien

I ought to make some progress before I take an intervention.

I am glad to see that today, unlike yesterday, the Secretary of State has deigned to come to the House to present the Bill. Yesterday, in Opposition time, I, as her shadow, led for the Opposition in the debate on the continuing crisis in the post office network, which is under her watch, but she could not be bothered to turn up and take her place to defend her policy to every Labour Member who spoke, as well as to all my hon. Friends, who each criticised the shambles of our postal services, over which she presides and for which she is accountable. But, focusing on today's business, I look forward to the day when the Secretary of State and the Department of Trade and Industry come up with a Bill that promotes trade and strengthens industry and can be said to be good for UK business. That Bill would probably only have to be a one-liner, saying that the DTI and the Government will get out of the way of business and stop their incessant meddling.

In the context of the report in The Times yesterday, which stated that more than half of Britain's biggest manufacturers expect to make job cuts this year amid a continuing decline in traditional industry and that in 2002—the last year for which figures are available— foreign direct business investment halved from £36.5 billion to £18.5 billion", I find the choice of legislation before us today proof, if proof were needed, of the Government's extraordinarily misplaced priorities. Productivity growth has halved under Labour and corporate profitability is at its lowest level since 1993. We now have the biggest trade deficit since 1697 in the reign of William and Mary, and the CBI has warned that the cumulative tax bill faced by UK firms is likely to hit £54 billion by the financial year 2005–06, with the annual total about £7.6 billion higher than when the Government came to office in 1997. It is unfortunate, against that backdrop, that the Department of Trade and Industry believes that its mandate is to promote regulation, rather than innovation, and that it prefers to expend valuable legislative time on a Bill that principally revisits an Act on labour law and trade union rights that is just four years old.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab)

Is the hon. Gentleman aware that most academic studies that have compared trade-unionised and non-trade-unionised units show that those with trade unions on site are more productive? Would he like to comment?

Mr. O'Brien

I am aware of some of those academic studies. Indeed, I have experience of operating in companies in the UK and in 27 countries abroad involved in heavy-side manufacturing, where we had both unionised and non-unionised work forces. Flexibility was the key, and productivity was to do with good management motivation, real commitment to the enterprise from all employees and good conditions in the workplace. Although academic studies can be helpful, they may not give the whole story.

When the DTI should be championing greater labour flexibility, it focuses on rights to greater union recognition in the workplace. Where a lighter touch is needed, the DTI loads businesses with more unnecessary regulations. I make no apology for saying that, despite the fact that Secretary of State tries to dismiss such things lightly, as though we should not be concerned about imposing regulations on business, and says that it is predictable that Conservative Members complain. Of course we complain, because that is exactly what businesses are doing throughout the country.

It is indeed odd that a Government, who like to criticise sanctimoniously the rigidities of the European employment model and Brussels obsessive addiction to burdensome bureaucracy and regulatory red tape, seek to ape that behaviour, rather than to defeat it. Therefore, to say—I hope that the Secretary of State will listen to this—that we do not oppose some measures in the Bill is not the same as saying that we recognise its overall utility relative to other industry priorities and business competitiveness.

That said, it is only fair to join the CBI, British Chambers of Commerce, the Institute of Directors and others in welcoming what the DTI has managed not to include in the Bill.

The decision not to extend trade union recognition to small businesses is especially welcome, despite the TUC's demands for it. However, we do not need a Bill for what is thankfully not in this Bill. Indeed, on that point, I urge the Government to consider raising the exemption on firms with fewer than 21 employees to those with fewer than 50 employees because that would be in line with the very EU information and consultation directive that is incorporated in the Bill. However, again, we do not need a Bill for things that the Government are not proposing, but that might be fertile ground for the Committee if the Bill receives its Second Reading.

With the CBI and the other bodies that I cited, we welcome the fact that the Bill will not extend the core areas of collective bargaining to include pensions, so pay, hours and holidays will thus remain as the only areas covered by such legislation. However, we do not need a Bill to achieve that. I am pleased to note that it will not extend the eight-week time limit on protection for workers against dismissal for taking part in lawful strikes, despite the new exemption of lock-out days from that period, but we do not need a Bill for that either.

The House and I need a cast-iron assurance from the Minister for Employment Relations, Competition and Consumers in his winding-up speech that he and his Secretary of State will ensure that there will be no concessions on those points to unions or Back Benchers of any party while the Bill continues its passage. That does not concern only me, because the Engineering Employers Federation says of the Bill: The bones that have been thrown to the unions might still be turned into a rather more substantial skeleton as it passes through the Parliamentary process.

Mr. Barnes

Lovely.

Mr. O'Brien

I am glad to hear that the hon. Gentleman sees the Bill as the opportunity that Labour Members have craved for to hang all sorts of extra bones on the spine.

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab)

I am somewhat confused by the hon. Gentleman's argument. Does he want to give trade unionists throughout Britain the message that the Conservative party is anti-trade union? If the party is not anti-trade union, why is he adopting such a stance?

Mr. O'Brien

I appreciate the fact that the hon. Gentleman took the opportunity to intervene, but I thought that he had been listening to my argument. I was not expressing any anti-trade union message, but saying how much I welcome the fact that several measures are not in the Bill. We do not need a Bill for what is not in the Bill. I hope that he understands that we are using precious parliamentary time to debate matters that are not under consideration, although he will try to use minor issues as hooks to allow him to discuss his favoured options.

Mr. Djanogly

Despite all the extra rights that unions have been given and the many employment regulations that have been approved, is my hon. Friend aware that today's survey by Pertemps shows that of 500 workers surveyed, one in three were worried about losing their jobs? That worry far exceeds their concerns about pay or long working hours. Is it not the case that all those regulations have done nothing to give people confidence that they will remain in their jobs?

Mr. O'Brien

I am grateful to my hon. Friend for that intervention because he made a key point toward the end of it. The introduction of any number of regulations does not create or preserve jobs because regulations add costs. The key to creating, preserving and sustaining competitive jobs has always been, and always will be, confidence—confidence in our economy, management and products, and in our ability to sustain a low cost base.

Mr. Kelvin Hopkins (Luton, North) (Lab)

The hon. Gentleman might remember that I introduced a private Member's Bill after the Vauxhall closure due to which 5,000 people lost their jobs. Those jobs would not have been lost if British workers had had the same protection as those on the continent of Europe.

Mr. O'Brien

The hon. Gentleman perhaps lives in hope rather than with experience. I say that because the hon. Member for North-East Derbyshire (Mr. Barnes) intervened on the Secretary of State to point out the actions of the French nationalised industry Saint-Gobain, which I know well because I had many relations with it during my earlier business life. The idea that other countries' practices offer greater protection than those that exist here is sometimes not as real as it seems. Countries have different ways of doing things, so the hon. Gentleman needs to be careful not to make an unfair comparison by considering the protection of rights rather than the over-arching need to ensure that ultimate flexibility exists in the economic and commercial workplace for the sustainability of jobs over time.

I referred to the Engineering Employers Federation's views on the Bill, so the fact that the Secretary of State confirmed that the Government expect to add measures to it is important. She mentioned provisions on the exclusion and expulsion of racist activists. If the Bill receives its Second Reading, such provisions will be introduced in Committee, but given that they have been flagged for some time, it might have been helpful if they were included in the Bill—perhaps there was a timing issue. We shall examine the provisions extraordinarily carefully and constructively with the Government.

There has also been an indication, although I did not hear the Secretary of State refer to it, that Government amendments will be tabled on protection for strikers against dismissal that will define more closely the actions that employers and unions should undertake when taking reasonable procedural steps to resolve industrial disputes. We shall have to examine those measures carefully, but it would be wholly inappropriate to prejudge the Government's proposals until we know the detail.

Mr. Russell Brown

The hon. Gentleman referred to the Secretary of State's comments on what I hope will be a robust provision on those who infiltrate the trade union movement to explore their racist attitudes. He said that he and his hon. Friends would examine the provision carefully. Does he support in principle any action that could be taken under the Bill to ensure that trade unions will have the right to deal appropriately with people who infiltrate the trade union movement to spread their vile attitude?

Mr. O'Brien

I hope that the hon. Gentleman realises that it would be grossly irresponsible for any hon. Member to give a cast-iron assurance on any measure without knowing its detail or wording. In terms of the sentiment—[Interruption.] When dealing with such a deeply important and sensitive topic, it is important not to try to pick holes in what was the most appropriate Front-Bench response that anyone could expect from Her Majesty's Opposition in advance of knowing any detail or words of a proposed Government amendment. The hon. Gentleman described the sentiment and mindset that will govern our approach when considering the measure in Committee, so we should be as one in our approach. It will be an important part of the parliamentary process to examine carefully the actual proposal to ensure, above all, that if the intentions behind it are good, it has every hope of being effective. That is our role, and his role, too.

It has been suggested that the TUC will try to secure amendments to the Bill as it progresses through Parliament. We shall have to wait to find out what it will propose, although no doubt several Labour Members will be keen to advance such amendments. Among the key union objectives that have not been included in the Bill are extending the recognition legislation to companies employing fewer than 21 workers, modifying the voting rules so that abstentions do not count as votes against recognition—that point was raised earlier—and abolishing the eight-week time limit on protection against dismissal for workers taking part in a lawful strike.

The Bill is like a Christmas tree. It is amendable, so it could grow upwards and outwards rapidly. At this time of year, we have all just thrown out our Christmas trees, and the House needs cast-iron assurances that the Government will resist point-blank all additional burdens such as those that I have mentioned. Will the Secretary of State assure the House that additional measures will not introduced by Government amendment, or conceded by them, with the exception of those that she has already flagged and on which we have had a constructive exchange.

Mr. Bercow

Given that several important clauses in the Bill provide for order-making powers, and that secondary legislation can significantly add to the level of burden on business, will my hon. Friend assure the House that he will keep a beady eye on the Bill and seek an undertaking from the right hon. Lady the Secretary of State that all secondary legislation throughout the Bill will be subject to the affirmative procedure of the House and not its negative counterpart?

Mr. O'Brien

My hon. Friend makes an important point. I have seen a statement by the Government that they intend to introduce any further orders under the Bill, if it is enacted, by way of affirmative resolution. I hope that the Minister for Employment Relations, Competition and Consumers will be able to confirm that when he winds up the debate.

My hon. Friend will not be at all surprised to find that I am obsessed by the question of regulation on business. All Governments are very relaxed about the amount of regulation that they expect business to be able to bear. Regulations are increasingly damaging British competitiveness in such a way that, if we do not make it a priority for Government to avoid imposing more of them and expecting business to pick up the cost, we will hardly be able to complain if we find that the jobs that are important to us and to each and every one of our constituents are not as sustainable as we thought.

Mr. Frank Doran (Aberdeen, Central) (Lab)

I suppose that it was only a matter of time before the issue of regulation and red tape crept into the Opposition's argument. Is the hon. Gentleman aware that, just this month, the Forum of Private Business published its annual survey of its members, and that red tape is not even among the first three issues of concern to them?

Mr. O'Brien

I have of course had many meetings with the Forum of Private Business, and I think that regulation of business, especially small businesses, is so much of a priority that it comes above the first three categories in a particular survey asking particular questions. In any event, I am in no doubt as to its importance.

Rob Marris (Wolverhampton, South-West) (Lab)

Will the hon. Gentleman give way?

Mr. O'Brien

No, I want to make some progress, although I will happily give way later to my good old friend, who served with me on the Standing Committee on the Finance Bill.

The other provisions that we continue to support, and on which I seek similar assurances, are the three-year moratorium following a ballot and the rule stipulating that at least 40 per cent. of those eligible are required to vote and that there must be majority support if a ballot is ordered, as well as the initial requirement for 10 per cent. union membership for a claim to be valid and evidence of majority support, although we note that the Institute of Directors believes that 20 per cent. is a more reasonable figure.

Actually, we do not need a Bill for any of that either. There are both elements in the Bill and omissions from it that I can welcome, but it would be perfectly possible to introduce those elements by means other than primary legislation, so why do we need the Bill? Well, anyone who passionately wanted to regulate, prescribe, nanny, meddle, intervene, preach, hector or just make work for the Secretary of State and her Department would want the Bill. Those motives characterise the Government and this Secretary of State, and the Bill supinely meets the demand from Brussels that we implement a directive for which even one of the right hon. Lady's Ministers has said there is "no need".

The TUC welcomes the Bill, but for it the Bill does not go nearly far enough, so however much of a sop to the TUC it may be, we do not need a Bill just to help Labour to patch up its fractured relationships with its paymasters in the trade unions. Labour needs this Bill, but we do not, and we certainly do not need what it represents: another increase in the burdens placed on business by this Government.

I have to ask the Secretary of State: how many businesses has she run? In how many businesses has she been responsible for taking the risks, rewarding the risk-takers, delivering the returns on capital invested, managing the human, technological and physical resources, and surviving and succeeding? How many of her Cabinet colleagues have that experience? How many Commons Ministers in her Department, or indeed across the whole Government, have that experience? How many civil servants in her Department, or indeed throughout Whitehall, have that experience? How many of those people with that experience had a hand in drafting and introducing the Bill? If any of those people had remotely had that experience, and if they had truly inhabited the risk-taking, competitive business world before they came to the House, would they honestly have thought it appropriate, timely or worth while to introduce the Bill, which will hinder entrepreneurs, diminish the competitiveness of UK business and raise its costs in an even more competitive global marketplace? I think not, but sadly and unnecessarily here it is. I will now give way to the hon. Member for Wolverhampton, South-West (Rob Marris).

Rob Marris

The hon. Gentleman is generous in giving way. Before I came to the House I helped to run two small businesses, so I have some idea of what I am talking about. Returning to what he said to my hon. Friend the Member for Aberdeen, Central (Mr. Doran), I have to tell him that a survey carried out in the west midlands last year by JBS Computer Services found various factor irking business, but legislation and red tape were identified as a major hassle by only 6 per cent. of respondents.

Mr. O'Brien

On the first point, I can only express deep regret that the hon. Gentleman did not have a hand in drafting the Bill and that he is not on his party's Front Bench, because I dare say that he might have been able to bring some of his experience to bear. No doubt his Front-Bench colleagues will have heard that he hopes one day to be considered. As for any quote that he may have been able to find about any business thinking that red tape or the increasing burden of taxation is not an issue for the future competitiveness of the UK economy, that is the exception that proves the rule, to the extent that it is provable. Every Member to whom I speak is always saying that businesses are concerned about their burdens, the increased cost base for non-operative expenditure and tasks for which they have to create jobs that diminish, rather than increase, the bottom line. Those are the issues about which businesses are concerned and obsessed, and they are right to be so.

Yet again, the Government's interventionist instincts have created a situation in which businesses are suffering under an ever-incoming tide of new taxes and red tape. Before the 1997 election, the Labour party pledged not to impose burdensome regulations on business, because we understand that successful businesses must keep costs down. Fine words, but, oh dear, poor actions in government. The 2001 election saw similar pledges: We will deregulate where desirable, and regulate where necessary with as light a touch as possible. But the Government have been extremely busy. In the five years from 1998 to 2002 there was a total of 19,332 new regulations, an average of 3,866 per annum or 14.8 new regulations every working day. That is 53 per cent. higher than the number under the Conservative Government.

The British Chambers of Commerce estimates that the Government have added an extra £20 billion of extra regulatory costs to UK business. In addition to regulation, 60 tax rises have been imposed on businesses and the people who work in them. Together, those burdens are damaging our economy and stifling enterprise, job creation and economic growth. The Bill will add significantly to those burdens without making any competitive gains. It is unnecessary, but I suppose that the Secretary of State wanted another Bill to notch up on her tally board to justify her massive Department and its burgeoning £8 billion budget of taxpayers' money.

Mr. Michael Jabez Foster (Hastings and Rye) (Lab)

If all that dire history is true and the hon. Gentleman's analysis is right, can he explain why this Government have been so much more successful than previous ones in creating jobs—1.7 million since 1997, as we heard the Prime Minister say today?

Mr. O'Brien

I am glad that the hon. Gentleman notes that my analysis is something to be supported, but before he gets too carried away in his fulsome attempts to curry favour with his Front-Bench colleagues he ought to think carefully about disaggregating those figures. Although there are, not least because of the changing conditions of the world economy, extra jobs in new industries and there has been an influx of people into self-employment and small businesses—that is a good thing—there are also more jobs in the public sector. Some of those jobs are in the delivery of front-line public services, and there is of course no difference between the parties in our welcome for new nurses, doctors and so forth, but we do not welcome non-productive public sector jobs.

If the hon. Gentleman looked at the disaggregated figures, he might be shocked to see how much public sector employment is not in the delivery of front-line services or added value for all the extra taxpayers' money being spent. He may also want to consider the serious decline in the number of jobs in manufacturing, traditional industries and those industries that have had to rationalise because of severe world economic conditions. Disaggregation would be a good study for the hon. Gentleman, and I hope that after that he will be able to say that my analysis is not flawed.

David Cairns (Greenock and Inverclyde) (Lab)

Given his in-depth study of the figures and the location of those 1.7 million new jobs, can the hon. Gentleman tell us in percentage or numerical terms how many of those jobs are in the private sector and how many are in the public sector?

Mr. O'Brien

As the hon. Gentleman can imagine, we have been trying to get precise figures for that. We tabled various questions to the Government, in the hope that we might get a full response on that disaggregation. It would be helpful to see whether the Government agree with the CBI figures, on which the hon. Gentleman has no doubt been briefed as much as all other hon. Members. Rather than playing games across the Chamber, let us wait and see what the Government say in answer to our questions. What matters is to have it on the record from the Government, who are so quick to claim that they have secured resounding successes, but slow to give definitive answers when we ask direct questions.

Having made clear the background to what I consider to be an unnecessary Bill, we must none the less humour the Secretary of State and consider it carefully, examining it for the ways in which it will make UK business more competitive and reduce its costs. That is what she is responsible for in Government, and it is against that set of criteria that she and the Bill should be judged. Surely we and she can and should leave the issues of the workplace to the Secretary of State for Work arid Pensions and his colleagues, because he has primary responsibility in Government for those matters. I look to the right hon. Lady to be the champion of what helps UK business to be more competitive, not to load more costs and regulations on it.

The Bill must be assessed for the value to the taxpayer that the Secretary of State and her Government give from that serious £8 billion budget of hers for business—and I mean for business, not against business. She relishes presiding over the Department that, contrarily, is simultaneously the regulator-in-chief against business. In Committee, we, led by my hon. Friend the Member for North-West Norfolk (Mr. Bellingham), will hold her to account for what the Bill does for UK business.

The cumulative impact of the series of minor amendments contained in the Bill to the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Relations Act 1999 will be prejudicial to the interests of employers, while strengthening the hand of the unions. To coin a famous Government phrase, the amendments may look to them like merely a tidying-up exercise, but looking at them in their totality—another famous phrase—they represent an understated but concerted shift in the balance of power between employers and unions achieved in the previous legislation.

To highlight a few examples, it is proposed in the Bill that unions should give an entitlement to vote in an industrial action ballot only to those members whom they believe may be "induced by the union" to take part in the action. Protective rights against disciplinary action will encompass "workers", instead of just "employees". Will the Minister clarify in his winding-up speech whether the wider definition will include agency workers and subcontractors? The distinction between workers and employees will be a serious issue. In response to the European Court of Human Rights ruling in July 2002 on the Wilson and Palmer cases, employers will no longer be able to offer inducement to workers not to join a union, punishable with a fine of up to £2,500. We wait to examine that in detail in Committee.

Clause 30 ensures that businesses will face further restrictions on employment flexibility. Previously, employees could claim flexible working after 28 weeks of employment, but were unprotected against unfair dismissal until they had completed 12 months' employment. That provision is being scrapped under proposals in the Bill.

The second main aspect of the Bill emanates from the DTI's twin regulator-in-chief, the European Union. It has been argued that there is "no need" for the information and consultation directive establishing a general framework for informing and consulting employees in the European Community, which is difficult to reconcile with subsidiarity and would cut across member state traditions to no benefit."—[Official Report. House of Lords, 5 March 2001; Vol. 623, c. WA 14.] Those words are eloquent and I wish they were mine, but they are from a written answer in the other place from one of the Secretary of State's own Ministers. Lord Sainsbury of Turville, in March 2001.

The directive, developed, as the Secretary of State said, in consultation with the Government, the TUC and the CBI, seeks to establish a framework giving employees the chance to be informed and consulted on management decisions affecting their future. The measure sounds well meaning enough, but it is of dubious necessity. A study conducted by the Institute of Directors in 1998 found that 85 per cent. of directors already had in place communications arrangements with their staff.

The cost of implementing the directive looks damaging, particularly for medium-sized businesses. The best-case scenario presented in the consultation document for the non-recurring costs and the present value of recurring costs over a 10-year period for medium-sized businesses would amount to £258 million. The IOD have said that the total cost to business over the same period will be an even more eye-watering £430 million. That is backed up by a survey by the Birmingham chamber of commerce and industry, which found that 76 per cent. of respondents were concerned about the increased costs for their businesses as a result of implementing the regulations. I am sure that the hon. Member for Wolverhampton, South-West pays close attention to that organisation, given the points that he made earlier, and he may well want to follow its survey through. [Interruption.] The hon. Gentleman says he hopes I am always happy to listen to what he says. Indeed I am.

I agree with the Secretary of State's colleague and fellow Minister, Lord Sainsbury. The implementation of the directive through the Bill is simply the imposition of new European work rules that dictate how UK bosses should run their businesses. The directive would interfere with business decision making and introduce over-the-top rules in the workplace. I shall give an example from experience that all of us have been through and which I went through it particularly when I was in business.

When the question of consultation on European works councils came up, there was a massive amount for everyone to think about. Firms such as the one in which I was involved had to qualify. What mattered was the meaning of the word "consultation". It does not matter whether it is in French or any other language. The question is what people mean by consultation. We know from yesterday's debate that the Government and the Post Office mean "consultation, so long as we make sure that you, the public, buy into what we have already decided, and you can have no opportunity to countermand what is going on." We also know that there has always been a demand from the trade unions in this country and many other groups for the right to be part of the decision-making process and to recognise their input when a decision is made.

Interestingly, the European model, which everyone thinks is the great Jerusalem in terms of what consultation means, is the opposite in practice. The word is widely used in Europe and there are the most convoluted structures for co-determination, but, there, consultation is understood to mean—this is why European works councils were perfectly satisfactory—"We want a forum for an exchange of views, but we recognise management's right to decide". That has not characterised the word in this country. It has always been a demand for much greater sharing than has ever been the case on the European continent.

The word has been so widely misunderstood that I had to put that on the record. When the information and consultation directive is mentioned, the word "consultation" carries so much more hope and expectation for people who make the argument in this country than has been the case in the European model from which it derives. We all live in the same competitive marketplace. Jobs are not sustainable unless we win those orders and keep those jobs. That is why we must understand the comparison.

Jim Sheridan (West Renfrewshire) (Lab)

Can the hon. Gentleman define in more detail his difficulties with consultation? Is it wrong for British workers to be consulted on where the company is going and how it should be performing? What is the difference between that and his party's constant criticism of the lack of consultation by the Government?

Mr. O'Brien

We need to be careful not to go too far down highways and byways. I shall give a serious answer to the question. If the word "consultation" is used to provide a comfort blanket for decisions that have already been made, whereas the real demand is for a share in decision making, that takes away the responsibility of those who are charged with making decisions. That is the big difference, and why we must be careful about the way we approach the matter. In any relationship, including employer and employee relationships across the spectrum, the key is trust and common purpose. That is the same with all relationships, and it is achieved through respect and communication. Consultation is a word that is intended to increase involvement. We must be extraordinarily careful to scrutinise what is truly meant. The best and most successful companies already have excellent communication schemes, which is where the trust is built up.

Mr. Tynan

The hon. Gentleman may find it difficult to accept, but I agree with some of those comments. However, trust and understanding are a two-way street. If there are genuine problems in a company and the work force—people who have dedicated their lives to the company—are involved, there is a chance of making real progress and avoiding the pitfalls faced by companies that simply take decisions with no regard to their employees, and then have to close. That is a better way of doing business.

Mr. O'Brien

All of us genuinely believe in the sentiment expressed by the hon. Gentleman, but the issue is how to apply it. A job cannot be sustained unless the business has a fundamental future and an ability to make a return on the capital invested. The only thing that matters—as the hon. Gentleman is right to say—is that in having good communications and building trust, and all the respect that comes from that being a two-way street, there must be a recognition of those who have the right and responsibility to make the decisions and those who want to be part of the common enterprise. Usually, the best thing is to ensure that people do not try to effect decisions that are unsustainable, because that creates higher expectations, which makes the fall from hope and expectation even greater. We could enter into a deep academic discussion, but the hon. Gentleman made a serious point and I am happy to try to give a serious answer, with some of the benefit of my own background and experience.

Tony Lloyd

I am trying to listen carefully to the hon. Gentleman's words, but so far they are only words. He was asked earlier about the situation at Vauxhall when it told its work force, not directly but through the local radio, that they were to lose their jobs. It is that sort of background that shows that a large company that claims to be responsible needs a legal framework to empower its workers to access the rights that the hon. Gentleman says that he wants them to have. As the Government have worked hard with the CBI and the TUC to obtain a framework agreement, why can he not have the good grace to accept that that agreement is a model of co-operation between both sides of industry? It is consistent with the language that he has used.

Mr. O'Brien

On the last point, we must be careful about what the House is required to do in primary legislation. It is because of everything that is not in the Bill that the CBI has welcomed it in principle, as do I, on that basis. I have not taken issue with the CBI's involvement in the process, but I do not believe that what is in the Bill needs to be dealt with in primary legislation. I agree with the hon. Gentleman that what Vauxhall did was an example of the most extraordinarily bad practice, and a cavalier way of dealing with a deep commercial crisis—but it is not necessary to introduce legislation to cover everybody because of one exception. Others may be able to cite one or two other exceptions, but it is dangerous for hon. Members and Governments always to think, as Edward VIII did, that as soon as something goes wrong, as soon as our postbags reveal a problem, "something must be done", and that we are here only to pass laws and place burdens on business.

We must recognise that our role is not to get in the way of business, and a primary legislative framework is not the right way to encourage the kind of behaviour that the hon. Gentleman seeks. The best way to encourage such behaviour is to establish a benchmark and to obtain best practice through good communication. Clearly, what Vauxhall did on that occasion was the very worst example of bad communication and I do not endorse it, but we do not need this Bill to deal with that mischief. That is my answer to the hon. Gentleman's question.

Gregory Barker (Bexhill and Battle) (Con)

Does my hon. Friend agree that if one believes in free markets and freedom for business, an inevitable consequence will be that from time to time there will be bad practice, and however deplorable that may be, it is infinitely better to have a system that encourages and nurtures free enterprise than a system that strikes at its roots and is informed by the command economy model? We have seen where that ends.

Mr. O'Brien

All hon. Members have the benefit of living in a free democratic society, coupled to a free market. I listened carefully to what my hon. Friend said, but one thing that has characterised the Government's mindset in introducing legislation, particularly in this area, is that somehow we can have all the benefits of free markets and free democracies without the risks. However much people might wish it, there is no such thing in life as a risk-free reward. In order to have the benefits of a higher quality of life, to have what competitiveness and good business brings us by being a country that can compete in the world, which gives people the chance to aspire to a higher quality of life, people must take risks. It is not possible for people to have no risk in their lives. It is a question of balance.

I am not making some fundamental point that will divide all Members of the House against each other—far from it. I simply say that in a world where politicians believe that their role is to pass laws and regulations, it is becoming too easy to think that we can continually prescribe best practice. Efficiency usually comes because the winners are the best at what they do, and also the best communicators and the best at looking after their work force. That is precisely what the Secretary of State said earlier: the best succeed. It is better not to think that by legislating we will cause people to do the right thing. It is far better that people wish to be winners and successful, and they will achieve that by following the best practices of other winners.

The Bill, if enacted, could force British firms to consult staff on menial issues, and will impose more costs on business and undermine the UK's competitiveness. That will come on top of what this Labour Government have already allowed Brussels to impose. No less than 40 per cent. of the employment regulations applicable now in the UK derive from Brussels. It is absurd to think that companies should be forced by bureaucrats in Brussels to consult staff on the smallest of issues. It is not their role to tell us or those businesses what to do. The directive is therefore unnecessary, just as Lord Sainsbury said, and yet again imposes a one-size-fits-all approach to employee relations, which, as the Engineering Employers Federation says, helps neither those working in the business nor the business owners, and further erodes Britain's competitive position.

The Government are yet again choosing to adopt the job-destroying EU employment model that undermines labour flexibility. Compelling companies to consult and inform their work force on everyday issues will be burdensome, and is not the best way to achieve best practice. As I have said, most well run companies already keep their work force fully informed about relevant decisions, so why do we need to regulate? The essence of good communications is flexibility, as almost all companies know. A one-size-fits-all blueprint fails to recognise the diversity of companies and will mean rigidity and formality where diversity and flexibility are essential.

EU regulations are already driving down business productivity and eroding this country's ability to compete abroad. Under this Government, it is staggering that as many major EU directives have been implemented in the UK as in the whole of the preceding quarter of a century of our EU membership. For that, the DTI must take the lion's share of the blame. It is for that reason that on the Secretary of State's watch, the Department has become known as the stifling regulator-in-chief against business.

Mr. Hopkins

Does the hon. Gentleman agree that the best example of the free market unconstrained by trade unions was in the 19th century, which saw mass unemployment in Europe and mass emigration to America, and the best example of a regulated market was in the post-war era from 1945, when there were the highest levels of growth and full employment across the developed world?

Mr. O'Brien

We are in grave danger of getting into an extraordinarily interesting area, but to do so would mean straying far from the Bill. However, I hope that the hon. Gentleman is not implying that the conditions of the market post-1945, through the late '40s, '50s and '60s, which he called a regulated market, are something to be replicated.

I wonder how much study he has given to understanding the degree to which that market was connected to our going through a world war. Economies have always been very much determined by the occurrence of wars, particularly major conflicts, and that is an important consideration. Before the hon. Gentleman throws such comparisons around, he should think of the benefits enjoyed by my generation, and generations close to us, in living in relative peace. Sometimes those comparisons depended too much on too many lost lives; that is not a good way to proceed.

Gregory Barker

One pertinent comparison with the post-war period, economically speaking, is that although we may have had low unemployment and full employment, we had very low productivity growth, especially compared with our major competitors. That is exactly what is happening now. Although we have a benign economy and have, fortunately, experienced a rise in employment, there are very worrying trends in productivity growth, which has halved under this Government, thereby storing up real problems for the future.

Mr. O'Brien

My hon. Friend makes an important point; I hope that the Secretary of State will reflect carefully on it.

I am conscious that while I have been taking so many interventions, time has moved on, so I want to draw my remarks rapidly to a close. The Secretary of State is impatient for me to finish, so I must be hitting a nerve. I am glad that she is here to hear me.

The constant drip, drip of regulations—the DTI's trademark brand of water torture—explains why a recent survey by employment firm Peninsula found that in the past financial year each business in the UK was forced to spend an average of £24,000-odd on red tape in complying with employment regulations. It also found that 61 per cent. of interviewees had considered limiting the growth of their businesses to avoid regulation. That is an important point to consider when putting constraints on growth, as enterprising wealth creators in their late thirties and forties in my constituency have told me.

The CBI has suggested that the "relentless build-up" of employment regulation is eroding UK strengths such as freedoms to change work patterns and work force numbers, and to set wages. That is especially worrying because our key European competitors are simultaneously removing layers of employment regulations: France, Germany, Spain and Holland all recently liberalised in one or more of those fields. The Bill is yet another turn on the UK regulatory ratchet against UK businesses by this Government. Although each of the proposed changes may sound relatively minor, their cumulative effect is significant, not least because in their totality—to use the Prime Minister's favourite word—they add to all the other employment legislation that is being introduced.

In total, an additional 1,422 staff have been added to the DTI over the past six years. Although 500 staff are to be chopped—if the reports of the Chancellor's and the Secretary of State's deal reported in The Times before Christmas are realised—that still leaves the Department with 922 more staff than it inherited from my party. Given the expansion of its budget to £8 billion since 1997, and its many thousands of staff, why has research for Amicus shown that 71 per cent. of executives described it as "not supportive"? What is the raison d'être of the DTI if it is not to be supportive of business and enterprise?

A clue to the answer lies in this legislation—not in the lines of the Bill itself, which quietly pay heed to the Government's friends in the unions and in Brussels—but in the absence of any commitment to promote and assist business. It seems that there is a fundamental distinction between what the Government and Her Majesty's official Opposition see as the proper function of the Department of Trade and Industry. I believe that its purpose is to focus on promoting UK business—its competitiveness, profitability, confidence and reputation—to be the champion of deregulation, and to practise what I wish it would preach by creating a flexible labour market and a positive and dynamic business environment, upholding fair and open markets, and championing British interests. There is no evidence of any of those ambitions in the Bill. The Bill is simply unnecessary. It is burdensome and costly to UK business, and an inappropriate use of precious parliamentary time. We shall oppose its Second Reading.

Mr. Deputy Speaker (Sir Alan Haselhurst)

I remind the House at this point that a 12-minute limit on Back-Bench speeches operates from now on.

1.54 pm

David Cairns (Greenock and Inverclyde) (Lab)

I am grateful to have been called to speak in this important Second Reading debate. I begin by declaring an interest. Given what the hon. Member for Eddisbury (Mr. O'Brien) said at the start of his speech, I point out to him that my comments are typed on to my notes. I am proud to be a member of ISTC, the Community Union, which makes a financial contribution to my constituency party, though not to me personally.

The Government have a vision of a UK labour market that combines flexibility with fairness. That means that the UK should be a good place to do business, as well as a good place to work. There is no contradiction between an efficient and productive economy and one that treats its greatest asset—its workers—with decency and dignity. At certain times in our history, that balance has been upset. The Conservative Government systematically eviscerated protection for workers and demonised trade union members, reaching a nadir when they publicly questioned their loyalty to our country by denying people the right to trade union membership at GCHQ. Those same trade unionists, who had fought to save this country, were branded as no better than potential security risks. I am proud that this Government removed that stigma shortly after coming to office.

But there have been times in our history when the balance has tipped too far the other way. As someone who grew up in the 1970s, I gained a picture of some trade union leaders who were all too often seen as destructive and self-indulgent, and who thought that they had the right to topple democratically elected Governments. Although sensible figures such as Mick McGahey and Jimmy Reid—and, indeed, my hon. Friend the Member for Hamilton, South (Mr. Tynan)—were viewed as nothing short of secular saints in my childhood home, none of us would seek to return to the permanently confrontational atmosphere that pervaded industrial relations, ruined our reputation throughout the world and, sadly, paved the way for Mrs. Thatcher. This Government have sought to achieve a balance in these matters and have, on the whole, achieved it. I therefore welcome the Bill and the provisions that it contains.

Since the passage of the Employment Relations Act 1999, there has been, as my right hon. Friend said in her opening speech, a general consensus that it has worked well, and the dire warnings of a return to 1970s-style turmoil have proved false. Between 2000 and 2002 there was a 32 per cent. reduction in cases taken by trade unions to employment tribunals, reflecting the reduced need to resort to litigation as a result of increased trade union and employer co-operation. In general, although the 1999 Act has worked well, I support the measures in the Bill to clarify some aspects of it and to extend its provisions in certain key areas.

I should like to concentrate my remarks on the part of the Bill that may prove to be the most significant and introduces measures that, as I hope to demonstrate, are sorely needed—I am not referring to trade union recognition for the clergy. Clause 31 implements the European Community's directive on information and consultation, which seeks to establish a general framework setting out minimum requirements on the right to information and consultation of employees throughout the European Union. Opponents of the directive claim—we have already heard such predictable claims—that it will undermine the flexibility of the UK labour market that has been a key element in the creation of 1.7 million new jobs since 1997.

I trust that not for a second would any Labour Member apologise for the creation of a single additional nurse, doctor or police officer. Nevertheless, it is worth reminding the Conservatives, who like to give the impression that all 1.7 million new jobs are in the public sector, that that is not the case. The hon. Member for Eddisbury spoke at great length about the need to disaggregate the figures, and went into great detail about types of jobs in the public sector, but when he was asked directly how many of the new jobs are in the private sector and how many are in the public sector, he waffled. The Government know how many people are employed in the public sector. The majority of the 1.7 million new jobs are in the private sector: that is the fact of the matter. I agree with the hon. Gentleman that we need a thriving, productive and profitable private sector to pay for the expansion of the public sector—that is what the Chancellor has achieved.

Although flexibility is a key element, it has limits. Many injustices have been committed in the name of flexibility. Some unscrupulous employers have treated their workers shockingly and then hidden behind the mantra of flexibility. We need a flexible labour market, but we need to guard against the labour market that is so flexible that it affords no meaningful protection for workers. A flexible labour market—yes; a casualised labour market—no.

Inverclyde has one of the most flexible local labour markets in the United Kingdom. We are over-dependent on one sector: the electronics industry, which is overwhelmingly target driven. It relies on other businesses, which often hold back on their orders until the end of every financial quarter and it therefore invariably begins each quarter slowly and ends each one frantically trying to meet customer demands.

The industry has made endless attempts to flatten demand and it has offered all sorts of incentives to customers to place their orders more evenly—to no avail. That means that the electronics industry needs to increase and decrease its work force several times in a financial year because it would be financially unsustainable to carry the excess labour costs for the large part of each year when people are not needed. The industry does that by recourse to agencies and manpower companies, and by using short-term and fixed-term contracts. Such agencies can play a valuable part in the economy as they give business the necessary flexibility to trade in a fiercely competitive global environment. Such jobs protect the much larger number of permanent jobs, which would be put at risk if the additional labour were not available.

However, for those who provide the labour, the story can often be different. It is all too easy to become trapped in an endless cycle of short-term contracts, never finding permanent work, never improving skills, never having even the limited modern version of job security that most other workers enjoy. Government programmes such as the new deal, which have been instrumental in drastically cutting unemployment, are not as flexible for those who are laid off and re-employed three or four times a year. Our programmes to assist workers must be as flexible as the workers. We must consider the sort of help that can be given to people on short-term contracts to enable them to improve their skills and move beyond that cycle, should they wish.

It has been a difficult couple of years for the electronics industry. When global recessions hit, businesses cut their IT budgets and make do with older technology. The dotcom boom and bust, a sluggish American economy and continued recession in the far east have combined to squeeze the electronics industry as never before. In an effort to bear down on costs, manufacturing has been out-sourced and moved abroad. Computers that were once built in the UK are now commoditised and assembled for next to nothing in the far east, eastern Europe, Mexico and China. The pressures are real.

However, sometimes the pressures can be used as excuses for treating loyal and hard-working employees badly. Let us consider the case of FCI, which had a factory in Gourock in my constituency. A little more than 12 months ago, the 750-strong work force went on their Christmas break blissfully unaware that they would never set foot in their workplace again. A couple of days into the new year, they learned—via the press—that their jobs had gone and that the factory doors had been welded shut. That is a shocking and unacceptable way to treat people. Not only was it arrogant and demeaning, but it meant that the excellent resettlement team from the Scottish Executive could not meet the workers together in their place of work to begin to help them through the redundancy process and offer them advice on finding other jobs.

I sincerely hope that the consultation procedure in the European Community directive on consulting and informing employees, which the Bill enacts, will prevent such an outrage from happening again. When the Secretary of State launched her consultation on the directive, she wrote: A modern forward-looking business does not keep its workers in the dark about important decisions affecting them. It trusts them and involves them and strives for leadership at all levels. 'Command and control' is no longer a sufficient model. A more open and collaborative framework will harness the talents of all employees. The draft regulations propose a sensible and progressive reform, which allows workers to be consulted and informed, without a power of veto, about decisions that have a direct effect on them and the lives of their families.

Sadly, I must inform the Secretary of State about a much more recent case in which an employer utterly disregarded those principles. Last week, more than 50 workers in Misco in Greenock were summoned to a meeting where they were told that because of business restructuring, they had 20 minutes to clear their desks and get out. There was no suggestion of impropriety, but they were given 20 minutes. I am told that when the shell-shocked workers left the meeting, security personnel were already clearing their desks for them. Some people had worked for the company for seven years, yet they were given 20 minutes to get out. That is not flexibility but an obscenity. The Bill must outlaw such practices once and for all.

Perhaps a fine of £75,000 represents a severe reprimand for some businesses, but for others it will be a drop in the ocean. I hope that, in Committee, the Minister for Employment Relations, Competition and Consumers will consider adopting a sliding scale of fines, perhaps based on a company's annual turnover, so that a fine genuinely hurts companies that treat their loyal workforces so obscenely. If my right hon. Friend the Secretary of State can assure me that the Bill will tackle and defeat such neanderthal business practices by managers who are stuck in an industrial dark age, it will have my enthusiastic support.

2.6 pm

Malcolm Bruce (Gordon) (LD)

As the hon. Member for Greenock and Inverclyde (David Cairns) rightly said, the ebb and flow of industrial relations law has been severe in the past 20 years. At times, abuses of union power needed to be tackled and at others, workers' rights were trampled in the dust. There is no doubt that the judgment must be about achieving balance. We shall support the Bill because although we have some reservations and there are omissions, across the piece, it shows evidence of balance. Consultation with employers' and union representatives showed that both groups are happy and unhappy. That suggests that the Government have probably got the balance right.

I have been a Member of Parliament for 20 years and I voted for many of the trade union reforms that the Conservative Government introduced and that I believed were necessary at the time. I make no apology for that. However, I have also stood up and fought for workers' rights. All my life, I have campaigned for works councils and consultation rights, which the Bill introduces. I shall revert to that shortly.

I am puzzled by the Conservative party's position. First, I was intrigued by the statement of the hon. Member for Eddisbury (Mr. O'Brien), who said that the Bill was unnecessary but took 50 minutes to explain why. His argument was characterised by sophistry. He had decided to vote against the measure and was desperately trying to find reasons to justify that, rather than allowing analysis to lead him to his conclusion. Indeed, he constantly referred to issues that Conservative Members would like to tackle in Committee, should the Bill get a Second Reading. The provisions on, for example, implementing the European directive, certainly require legislation.

We believe that the Bill has merit and we shall be happy to support aspects of it. The hon. Member for Hamilton, South (Mr. Tynan) referred to pensions. The Government said that they will give themselves the power to include pensions in the general bargaining rights. However, I agree with him that the experience of the past two or three years has been shocking for many workers and that most people regard their employment package to be pay plus pension rights, including the amount that they contribute, the type of scheme and its benefits. It is difficult to separate pensions from pay and conditions. I hope that the Government acknowledge that. In the current climate, it is hardly surprising that employers resist that, but people have been frozen out of pension funds to which they have subscribed, and there have been differentials so that those who are in a scheme are allowed to continue with it but new employees are given a second-rate benefit.

It is difficult to resist the case that pensions should ultimately be seen as part and parcel of the whole employee package. None the less, I am pleased that the Government acknowledge the case for considering the introduction of legislation in that field.

My party and I take very seriously the cost of implementation and the level and range of regulation. The House, and certainly Ministers, will know that my party believes that there is a prima facie case for abolishing the Department of Trade and Industry. It is an over-large Department with a huge budget, much of which we think could be either deployed elsewhere or taken out of the calculation.

We must take business seriously when it complains about the cost of regulation and bureaucracy, but I am interested that the Conservative party is appealing to a wider public to help it in its efforts to cut public expenditure. My hon. Friend the Member for Weston-super-Mare (Brian Cotter) and I take seriously the representations that have been made, but when one actually asks business representatives which particular regulations they want us to get rid of, they are not very clear or forthcoming—[Interruption.] It is all very well to refer to the cumulative effect; I am genuinely happy to sit down with business representatives to discuss in detail how we can simplify or abolish existing regulations. My predecessor in this job, my hon. Friend the Member for Twickenham (Dr. Cable), made some recommendations on that. However, it is interesting that when one engages in discussion with businesses, their complaint boils down to a much bigger criticism of the Treasury than of the DTI. It involves the over-complexity of the tax system that the Chancellor has introduced and the costs of administering that, as well as administering the working tax credit, which keeps changing its name and which has collapsed because its administration is too complicated for not only the business community but the public sector to deliver.

There are real issues there but, as has been said, we have to deal with red tape practically. If there is too much red tape, let us identify it and get rid of it. I certainly pledge my party's support for any measures that could achieve that—[Interruption.] It is all very well for the hon. Member for Eddisbury to refer to being against red tape, but if we were to go back to the wonderful days of the free market economy, we would find the freedom to exploit without health and safety rights, workers' rights or holiday rights. The reality is that old-fashioned employers wanted to take work and not have to bargain on sharing the deal. That is why this debate has ebbed and flowed according to where the balance lies. The Conservative party had better think carefully, because its position seems characterised by a return to two simple points: bashing the trade unions and bashing the European Union. If those are to characterise Conservative party campaigning during the next two years, it will go down very well in the Daily Mail, but might not go down as well as the party thinks that it will in constituencies, even Conservative ones.

I turn to the European directive and the need to consult. All my life, I have taken the view that we should get away from the characteristic of having two sides to industry, and build partnerships. That is why my party was in favour of employee share ownership and has always been in favour of works councils and consultation. We therefore welcome the Government's introduction of regulation on that in clause 31. I do not want to be churlish, but I intervened on the Secretary of State to say that we would like the directive to be implemented in full, as early as possible. She gave her explanation, and I have no doubt that getting the balance right there is part and parcel of her consultation with employers, but my party would have liked the UK to adopt that policy many years ago. The reality is that only two countries in the European Union do not have the established practices of works councils and consultation: the UK and Ireland, for which a derogation has been provided.

The CBI has specifically said that that is the part of the Bill that it likes the least, although it must acknowledge that the directive exists and that as members of the European Union—which most of us accept is the long-term future of the United Kingdom, even if the Conservative party does not—we will ultimately have to adopt it because it has been agreed and voted on. The only questions are how and when we do that. It is perfectly reasonable for the business community to say that that will cost it money, and we should not ignore its concerns on that front. However, the record shows that employers who consult and include their employees generally have a better score on productivity and performance and far fewer disputes. Consulting is a positive virtue. Business must consider that, although there will be a cost in setting up such a mechanism, whether a works council or another system, there will also be a benefit that should substantially outweigh the costs and bureaucracy involved. At the end of the day, that will produce a better informed, better motivated and more constructive work force who will often be able to inform and advise management and help to achieve common and shared objectives.

That is one reason why I support the Secretary of State's judgment on the small business threshold. For consultation, that threshold is 50; for other aspects it is 21. It is not that bad practices exist among small businesses. I know, for example, that members of the union representing the textile industry say that most members of their work force are in companies that employ fewer than 21 people. However, the danger of legislating for such companies is that there are many other sectors in which that would place an excessive burden on small businesses, many of which have, by definition, much better consultation. The theory is that where an employer has 50, or certainly 21, workers, if they do not communicate with those people—it should be possible to talk to every worker every day—they are a pretty bad employer anyway. In general, those small businesses have shorter lines of communication and much better understanding. It is far harder for management to keep the work force in the dark because there are many things that they cannot help but know. The Government are right to take the position that they have taken on that. Although the CBI does not like the consultation, it likes that decision, and we must recognise that the Government had to strike a balance.

Jim Sheridan

On the point about small businesses, if someone is being bullied and harassed in a major company, and has the opportunity to go to the trade union to assist him or her on that, why should someone whose company has fewer than 21 employees and who is also being bullied and harassed not have the same right?

Malcolm Bruce

That is a fair point, but we are trying to strike a balance over the mechanism, and over the cost and bureaucracy involved in setting up quite mechanistic procedures. No one is condoning what the hon. Gentleman suggests, and workers have some rights through tribunals, certainly over unfair dismissal. They also have rights over bullying and harassment, but the difficulty can be in proving that that is happening and getting evidence. It is unfair to characterise the situation as people in small businesses having no rights; they simply will not have the structures that are being imposed here. The justification for that is that the larger the organisation, the greater the danger that the communication channels do not automatically exist and there is not more reasonable redress.

Whatever people might argue about the relative economic performance of the continental economies and our offshore economies, few would argue that, for example, Germany's long-term economic success was not partly founded on the strong consultative mechanisms that we established in post-war Germany, which were part of the driving force behind the German economic miracle. It is a cheap shot for the Conservatives to attribute the difficulties facing the German economy to that, rather than to the consequences and terms of reunification—[Interruption.] I am not saying that they are doing that, but there is nevertheless a danger of not acknowledging that we should have absorbed that very positive development in this country.

I have heard many speeches in this House and elsewhere in which people have pointed out that the occupying forces led by the United Kingdom imposed on post-war Germany a federal constitution, proportional representation and worker inclusion in management decisions. Those are three good liberal principles that we would like to adopt in the United Kingdom and which have helped to generate the success of the German economy. The difficulties facing Germany now are completely unrelated.

Mr. Stephen O'Brien

As someone who has actually sat on a supervisory board and management committee of a German company turning over 1 billion Deutschmarks a year, I can tell the hon. Gentleman that the co-determination structures were not precisely those that were bequeathed post-war but were, on the contrary, developed by the enterprising German people themselves through the hard years of the late 1940s and 1950s as they rebuilt their country. The real issue is the ability to have good communication flowing up and down, which is different, as I said earlier, from consultation. That is what I was arguing, and it would be disingenuous of the hon. Gentleman to try to claim that I was arguing something else.

Malcolm Bruce

I am happy for that to have been corrected on the record, and I take no issue with the hon. Gentleman. I still maintain that some people try to attribute the current continental difficulties to what they call European practices, which I think is an unfair misrepresentation of the reasons for the sluggishness of the economy—and there are those who follow the Conservative line of thinking and argue precisely that. They argue that the European way is dragging down the continental economies, and that if we follow suit we will be similarly dragged down.

All I am saying is that I, along with my party, reject that. We should do things in our own way, yes, but a single market cannot be built without commonality, and commonality is not possible without regulation. The real argument is about what constitutes the appropriate level of regulation and how it should be applied. It would help if the Conservative party engaged in that debate constructively rather than giving the impression that they want nothing to do with the European Union—without having the guts to go out and campaign for Britain's removal from that club, and explain the consequences. Theirs is a duplicitous and dishonourable argument, and my party wants nothing to do with it.

Let me say a little about the operation of works councils in practice. A colleague of mine in the House of Lords, Lord Sharman—

Gregory Barker

He's not a Lib Dem, he's a Tory.

Malcolm Bruce

He certainly is a Liberal Democrat. Indeed, every week he attends meetings of the Liberal Democrat trade and industry team, where he makes valid and constructive contributions. This very morning he told us that he was a member of the boards of a British and a Dutch company. The experience was instructive, he said. He gave two specific examples. First, he said that the British company's annual general meeting took an average of 40 minutes, and that virtually no questions were asked. The Dutch company's AGM took four to five hours, and he was vigorously questioned on all aspects of his responsibility. Secondly, he said that Dutch works councils were an important avenue for communication both upwards and downwards. Interestingly, he said that works councils there were not creatures of the trade unions, although most companies were unionised and the unions were certainly involved. They were very much creatures of the employees, and trade union officials would participate in whatever capacity their fellow employees had intended. That is a healthy development that could teach us something here.

What I regret is that the Bill does not deliver all that. All it really does is acknowledge the directive and give powers to the Secretary of State. It leaves open what will actually be done, apart from the establishment of a consultation process at a later date. I welcome that information, but I wish we were further down the track.

In a paper provided by the Library, Warwick university claims that once the directive is implemented industrial relations in the UK look set to change beyond recognition". In my view at least, they will change for the better. Warwick also says: only a minority of UK companies 'even remotely' begin to match the Directive's requirements"— that may be the justification for the phasing recommended by the Secretary of State—and that it could lead to the establishment of works councils. I hope that it will. It is said that there was "no mention" of whether consultation should be before or after decisions were made. I sincerely hope that when we reach the clarification stage we will be assured that it will take place before rather than after. Corus, Ford and Vauxhall have been cited today. We all know that consultation may not prevent job losses or closures, but it does ensure a proper, timeous process and at least an opportunity for the exploration of alternative routes, and it enables people to come to terms with what is to happen. As was pointed out by the hon. Member for Greenock and Inverclyde (David Cairns), it is amoral and unjustified to expect people to leave their desks after seven years of service at 20 minutes' notice except in the most dire circumstances, such as the total economic collapse of the business. That clearly did not apply in the case that he mentioned.

We look forward to the legislation. I think that the Government can assume that we shall not just encourage them, but pressurise them. However, I want to mention one more omission. My colleagues and I are concerned about the growth of unofficial action in certain areas, which has proved both frustrating and damaging. We see a danger of legislative lacunae. I do not claim to have a definitive or prescriptive answer, but I can give an example which, I freely admit, triggered my thinking on this.

Several things concerned me about the Post Office workers' dispute in London, Oxford and one or two other places before Christmas. For instance, the union had conducted a ballot for strike action and had lost. It was therefore not authorised to promote the strike, and could not be exempt from its responsibilities if it did so. Strikes then took place. The evidence is anecdotal and subjective, but it seems ironic that the final settlement was negotiated in the wee small hours between union and management, while the unofficial strikers had no representation.

The union might argue that it was so appalled by the taking of unofficial action against its wishes that it wanted to help the management resolve the matter. It might equally be argued that there are occasions on which militant unions can exploit the lacunae in the law and effectively allow—or discreetly encourage, or certainly not discourage—unofficial action to strengthen their bargaining position, while disowning the strike and as a consequence disowning their own liability.

I appreciate that there are legal difficulties in tying the two elements together. However, it seems to me that requiring those who are on strike to go to arbitration will put them in a difficult position if they have no representation—they will have to organise it themselves, which may discourage people from embarking on spontaneous unofficial strikes—and also that there will be problems if penalties short of dismissal can be imposed on individual strikers. The existing law allows for dismissal: management have the right to dismiss unofficial strikers. That, however, sometimes only aggravates management's difficulties. For example, if half the postal workers in London had been sacked because they had been on unofficial strike their employers would have had some difficulty in delivering the Christmas post. A fine or other penalty imposed on individuals might just give pause.

I am merely saying that there is a danger that such practices could develop as a way of getting round existing legislation, and the Government will surely accept that if that happened we would have to deal with it. I am registering my concern that some union leaders operate in that way. I think that what I have said demonstrates that my party will approach industrial-relations issues in an objective and balanced manner. When we believe that union power is being abused, we will stand up for either the consumers of the services involved or the employers of whom advantage is being taken. Likewise, when workers' rights are trampled on by arrogant managements who do not wish to consult or participate, we will stand up for the unions' rights.

We do not agree with the Conservatives. We do not consider the Bill contentious, and we think it provides a useful framework for discussion. We will support not just the Bill but the programme motion—although, as I have told the Government Whip, with the one proviso that we would like to discuss unofficial strikes at an appropriate time.

The Conservatives should consider the position that they have taken. I, certainly, feel able to characterise them not only as anti-EU but as old-fashioned union bashers. I trust that if they take part in the Committee stage—which presumably they will, if the Bill is given a Second Reading—they will do so in a way that ensures that all parts of the Bill are discussed fully and fairly. That is one reason why I will support the programme motion: an agreed programme ensures that every section of a Bill is debated adequately.

I have been in the House long enough to know what Bills without a programme can suffer from. My argument against guillotines has been against guillotines introduced during a Bill's passage, after a long delay, as a result of which major sections of the Bill go undebated. I need no lectures on opposition from the Conservatives, who are only just coming to terms with it. Once they have been in opposition for 20 years, they will understand the difficulties associated with it.

Judy Mallaber

Is the hon. Gentleman aware that, as I recall, it took eight sittings to get through clause 1 of the National Minimum Wage Bill because of the opposition of Tory Members who had no interest in discussing its other clauses?

Malcolm Bruce

I am aware of that. As I have been accused of being sanctimonious—the comment was made from a sedentary position—let me say that I am perfectly happy to debate on their merits the arguments of the hon. Member for Eddisbury, many of which were fair and constructive. We are entitled to say, however, "Where does that leave his strategy?" It seems to me that he has not made a case as to why the Conservative party is opposed to this Bill. Interruption.] The hon. Gentleman says that we do not need a Bill, but we do. He says that because, according to his party, we do not need the European Union. If we are in the European Union, however, we need legislation to implement the directive—[Interruption.] He says that he has never said that, but the reality is that if we need legislation to comply with a directive, we need a Bill. If he votes against the Bill, we cannot have legislation to comply with the directive that has been voted and agreed, and that applies to the United Kingdom—

Mr. Stephen O'Brien

Lord Sainsbury says it.

Malcolm Bruce

He didn't; he does now. That is the difference.

I have already made it clear that my criticism of the Government is that they have delayed and stalled too long. They have been too dilatory. They are moving in the right direction, not far enough, and not fast enough, but they will have our wholehearted support.

2.31 pm

Mr. Frank Doran (Aberdeen, Central) (Lab)

The hon. Member for Eddisbury (Mr. O'Brien) asked Members to declare their interests. I am delighted to declare that I am a member of the GMB union, secretary of the GMB parliamentary group, and secretary of the trade union group of Labour MPs.

I welcome this Bill, because it is important. Despite the comments by Conservative Front-Bench Members, it is a necessary Bill. It is important to look at the context of any legislation. It is always instructive to listen to what Opposition Front Benchers say. Their approach was much gentler today, but their opposition is still clear. One of the difficulties that we have had with employment legislation over the decades—the hon. Member for Gordon (Mr. Bruce) raised the issue when he talked about the ebb and flow—and part of the history of this legislation is that the previous Conservative Government legislated against the trade union movement virtually throughout their 18 years in office. The situation was so bad that they refused even to meet trade union movement representatives. When I spoke to the TUC general secretary in 1996, he told me that he was about to meet for the first time since his appointment the Secretary of State for Trade and Industry, who was responsible for employment. That is a completely blinkered approach.

We suffered from the Conservatives' one-sided approach to industrial relations. As to the legislation passed by this Government, I am firmly of the view that the great majority of it was absolutely necessary, but most of it was simply best practice—it is what should happen in the workplace. Because of the previous Government's neglect and other factors, such as the attitude of employers, we have been forced to introduce good practice into the workplace.

When the 1999 legislation was being developed, I was fortunate enough to be working as Parliamentary Private Secretary to the right hon. Member for Makerfield (Mr. McCartney), who was then Employment Minister. I was involved at every stage in that legislation. I well recall the reaction when the CBI and the TUC came to a meeting with the then Secretary of State to advise on the results of their negotiations on the Government's legislative proposals. The Government had set out certain parameters and told the CBI and TUC to work out what they could agree on, what they could not agree on but could negotiate on, and what they positively could not agree on. They came back and agreed on far more than anyone had expected. Those negotiations were the basis of the "Fairness at Work" White Paper, which eventually became the Employment Relations Act 1999.

It is important to mark the fact that that process resulted in substantial legislation, which I believe will stand the test of time. Its basic objective was twofold. First, it was to recognise that we wanted a flexible work force, but not flexibility in the sense that the management decide and the work force just accept those decisions. We wanted the work force to be fully taken into account, and we wanted flexibility to be coupled with minimum standards in the workplace. Secondly, it was to provide a process for dispute resolution. Rather than the old system in which either the balance was tipped so far in one direction that the other side felt weakened, or we were in and out of the courts, with industrial disputes and an appalling industrial relations record, we should have a mechanism that can deal sensibly with matters in an adult and mature way. That is what the 1999 Act did. The Government brought a partnership approach to the workplace. I was pleased to hear the Secretary of State say in her introductory remarks that the information and consultation aspects of the Bill resulted from such a partnership approach. My belief is that we should have that approach in every piece of legislation that affects the workplace. We have not been consistent in that respect, but it is important that we are.

As I said, the Bill is extremely important. It is a tidying-up measure in some respects and a process of learning the benefits of the experience of the 1999 legislation in the work force. However, a number of issues should be highlighted. I have mentioned the information and consultation legislation, and colleagues have mentioned the huge disparity between the rights of workers in this country and in the rest of the EU. It is important that that gap is closed.

I welcome the improvements to the position of trade union officials, who are entitled under the 1999 legislation to accompany a union member in certain circumstances to meetings with management. I am pleased that that will be extended in this legislation to give such officials the right to speak. I never fully appreciated that clear gap in the legislation, so I am pleased to see it addressed. The reversing of the Wilson and Palmer decision led to a situation in which it was open to employers simply to bribe their employees to leave their union and to undermine union work. If those sorts of employers were to spend half that time and half that money sitting down, talking things through, and working in partnership with trade unions, their businesses would be much more effective and better than they are.

Some issues remain to be addressed in the Bill. I was pleased that the Secretary of State confirmed that the Bill will be amended to deal with the issue of far right infiltration. That is extremely welcome. A substantial issue still needs to be addressed in connection with unfair labour practices. I have been appalled recently by the lengths to which some employers will go to prevent trade unions from organising in their workplaces and gaining recognition. A battlefront exists, which is not the one that existed in the 1960s and 1970, but it is still there, with employers who take a blinkered view of how their businesses should be run and do not want to work in partnership. I was most appalled by the recognition case at BSkyB in Livingston, Scotland, which is not in my constituency, where the company simply blackmailed the work force by threatening to uproot the whole factory and take hundreds of jobs out of the area. That is an appalling way to deal with the work force. We will never get trust and confidence in workplace relationships if that is the way in which management decide that they want to run their business.

I want to raise several other issues, one of which is a long-standing concern of mine. One of the issues in the minimum wage legislation and in the 1999 Act was the definition of "worker".

I am a lawyer by background, and I have had a great deal of experience of industrial and appeals tribunals. I am conscious that previous legislation talked about "employees". The courts always applied a common law definition of "employee", which in essence meant that the employer had the right to hire and to fire. In many cases, the rights of the employee were undermined. Huge sums were spent on lawyers and accountants in order to find devices to undermine the legislation.

When we drafted the minimum wage and employment relations legislation in 1999, we wanted to close some of those loopholes. Clause 24(2) of the Bill will replace the definition of "a worker", as used in section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992. I shall be interested to learn what the impact of that change will be in practice. There are various definitions of "worker" in the minimum wage and employment relations legislation, but much of the old legislation still retains the old definition. We need some clarity and consistency. I know that the Government are undertaking an employment status review, and it would be helpful if the Minister could tell us where we stand. Indeed, I became even more confused when I read clause 24(5), which states: This section does not apply where…the worker is an employee". I should like an explanation of that subsection.

My final point has nothing to do with the Bill. I know that the Government have been reviewing the Transfer of Undertakings (Protection of Employment) Regulations 1981 for some time. I hope that, in the not too distant future, they will introduce draft legislation in that regard. The North sea oil and gas industry, which is the main employer in my constituency, has experienced major problems.

Mr. Sutcliffe

I know.

Mr. Doran

I know that the Minister knows, because I have told him often enough. But I want to put on record the fact that virtually all onshore employment legislation applies offshore, but that for some reason the existing TUPE regulations do not. That creates major difficulties. Will the Minister, in introducing the relevant legislation, recognise that the offshore oil and gas industry needs consistency, and that it needs such legislation to be implemented?

2.42 pm

Virginia Bottomley (South-West Surrey) (Con)

I appreciate the opportunity to speak in this debate, and I want to begin by commenting on what the hon. Member for Aberdeen, Central (Mr. Doran) has just said about the nature of the relationship between the previous Conservative Government and the trade union movement. I understand that selective or distorted memory is par for the course in this place, but in my time in government I remember having a great many meetings with the health unions in my offices and elsewhere. Indeed, I remember going to the Trades Union Congress with he with whom I live closely, my hon. Friend the Member for Worthing, West (Peter Bottomley), the former MP for Eltham. That he chose to meet the TUC representatives in their offices, rather than their coming to visit him—as is usually the wont with Ministers—caused some consternation among his civil service staff.

Mr. Doran

I accept the point that the right hon. Lady is making in respect of the hon. Member for Worthing, West (Peter Bottomley). I know that he is a longstanding member of the Transport and General Workers Union; indeed, he is the only Tory Member who is a member of the union. However, my point concerned not individual unions but official contact between the trade union negotiating body, which is the TUC, and the Government.

Virginia Bottomley

I accept the hon. Gentleman's point.

I declare an interest, as listed in the Register of Members' Interests: I am a partner of an executive search firm, a member of the supervisory board of a Dutch multinational, and a board member of the Prince of Wales International Business Leaders Forum. I want to make it clear at the outset that I am second to none in believing that enlightened employment practices, good communication and treating people fairly are essential to business success. That goes without saying, but I should point out that the Bill constitutes an entirely inappropriate use of parliamentary time, and in that regard I cannot endorse strongly enough the speech of my hon. Friend the Member for Eddisbury (Mr. O'Brien).

I am concerned about the Government's choosing this issue as a legislative priority. The welcome for the Bill, such as it was, seems to have come from those with an interest, who are delighted that it did not go further and that it is as restricted and restrained as it is. Although I am not saying that the Bill is gravely damaging, it does send the signal that the Government want to tilt the balance of power towards the trade union movement once again, making it more difficult for people to be entrepreneurial and to create the wealth that is essential if we are to deliver the welfare services that matter so much to us all.

In many ways, for me the Bill constitutes a trip down memory lane. In my first job, working for the right hon. Member for Birkenhead (Mr. Field) at the Child Poverty Action Group, I began a campaign to try to save the family allowance. The great issue was that we should try to persuade the Transport and General Workers Union to support our campaign, by pointing out that family allowance, which was paid to the woman, was an essential element in relieving poverty. Of course, we could not secure its support at that stage, because the trade unions were dominated by the principle of helping their members, which at that time were almost exclusively white men in work. So a benefit payment made to women at home, who were outside the union movement, was certainly not part of their agenda.

I recognise that a great deal has changed since then. I heard the Secretary of State say that the Government want to make it clear that work pays, but back in those days, a previous Member of this place, Sir Keith Joseph, introduced the family income supplement for precisely that purpose—to make work pay. So in a sense, there is no exclusivity of commitment to finding a way to treat people fairly, while at the same time making working worth their while. But in introducing a second Bill on employment and trade unions, the Government seem to be trying to satisfy those people who were described by a former General Secretary as "unacceptable family relations". The size of the Chamber's population today suggests that for many Labour Members, their relationship with the trade union—whatever it may be, and in whatever way it may help to fund the constituency party or to control the nomination, selection or de-selection of the Member concerned—is extremely important.

I am disappointed that the Government did not see that the need for mental health legislation is a much more pressing priority. If Labour Members are concerned about what unions are facing, I am only sorry that they could not give priority to a civil service Bill. Many in the civil service are now under a great deal of pressure thanks to a Government dominated by spin, and the degree of bullying of public sector workers is entirely unacceptable. A civil service Bill would certainly have enjoyed my wholehearted support, as would a mental health Bill.

It is very sad to see the Government consistently giving away the competitive advantage for which my colleagues argued so effectively for many years. The Government's immediately conceding the social chapter opt-out in 1997 has of course opened the floodgates to regulation and red tape, and to a Brussels-dominated approach. I am certainly not one of those Members who think that we should leave the EU, but I passionately believe, on the basis of my constituency work, that this centralisation and avalanche of red tape is inappropriate, ineffective and costly.

In his excellent speech, my hon. Friend the Member for Eddisbury pointed out that more than 14 new regulations have come into force every working day since this Government came to power, thereby adding £20 billion to UK business costs. In keeping with the point made by my hon. Friend the Member for Buckingham (Mr. Bercow), in addition to the problems of red tape and regulation, firms in my constituency complain to me time and again about being treated as an unpaid tax collector and social security payment office. Such work costs them a great deal of additional time and effort.

That is often fine for big businesses, but very difficult indeed for small businesses.

The Government are deluded about how they are perceived. On Friday I shall attend my business forum in Farnham with local entrepreneurs and business men and women. When I have an open discussion with them, the key issues are always red tape, regulation and centralisation. They wonder why the Department of Trade and Industry cannot help to create enterprise, innovation, wealth and jobs. They ask why the Department is always trying to turn the clock back, impose the rule book and centralise again. It is extraordinary that there is such a misperception about how many people in business view the Government.

I know how difficult it is to resist much of the regulation. I recall a time when I had the unenviable task of saying that we would not introduce compulsory paternity leave. As a family-friendly person, I think that fathers being with their children is an excellent idea when their partner has had a baby, but should it be a matter on which the Government instruct people?

I have done some difficult radio interviews, and I visited a factory in my constituency that made do-it-yourself wallpaper-stripping machines. [Interruption.] I talked through the issues with the managing director and he said, "Absolutely right. In my firm, when the orders are coming in, I don't mind if people have had quins: nobody can have paternity leave, because we have to get the orders out on time." However, he said that when there were no orders coming in, the staff could all have paternity leave, irrespective of whether they were men or women or whether they had children. He said that the reality was that, if people wanted to keep their jobs, there had to be flexible labour markets so that business could deliver.

Mr. Michael Jabez Foster

Did the right hon. Lady have the opportunity to ask the managing director whether he took time off when his wife had children?

Virginia Bottomley

The point on which we agreed—and on which I felt strongly in my role with the health service—is that good employment practice and treating people fairly are essential. The crucial issue is whether it should be coercive or best practice. Where the Government dictate, it changes the culture. In the International Business Leaders Forum, the work is all about promoting best practice.

I have some advice, if I may humbly put it, for the Secretary of State. She identified many of the key issues in leadership, management and motivating people, so why do the Government fail to apply them across the public sector? Why is there such a bullying, centralising lack of communication to people in the public sector? Why are there all the think-tanks, taskforces and tsars imposing targets willy-nilly on people who feel that they have no ownership, no participation and no contribution to make?

Mr. David Atkinson (Bournemouth, East) (Con)

I noticed that Labour Members jeered my right hon. Friend when she referred to her local business that makes do-it-yourself wallpaper-stripping machines, but some of them should realise that the reason why that factory is still in operation in her constituency is that it meets orders on time when they are required. Hon. Members with similar businesses in their constituencies know that many of them have disappeared to China, which has more flexible working.

Virginia Bottomley

My hon. Friend could not have given me a better lead-in to my subsequent point. In the introduction to the Bill, the Department of Trade and Industry talks of wanting to encourage employers and employees to work together to produce a "no surprises culture" at work, but that is incredibly naïve in the present business environment. Having recently returned from Singapore and Hong Kong—on the other side of the world—I am talking a great deal about the move to offshoring. We are seeing many aspects of business going that way—in India and eastern Europe, for example. The competition now comes not just from the European Union or the United States, but from the whole world. The reason why companies invest in the UK has always been our flexible labour market and low labour costs.

I hope that my hon. Friend the Member for Bromsgrove (Miss Kirkbride) will be in her place later because her responsibilities for culture, media and sport mean that she talks to people in the creative and film industries. They all say that the precise reason for avoiding working in the UK for many years was the lack of labour flexibility, which is essential if we are to win the jobs, win the work and be a magnet for inward investment. A recent report worryingly showed that foreign investors are not choosing the UK. We have gone from third to 14th as the choice for inward investment, so it is not just a question of how we want people to be treated or what we would like to happen. We have to be hard-headed as well, and create a climate in which people will want to make Britain their destination of choice for investment.

Jim Sheridan

The right hon. Lady spoke earlier about when she conducted negotiations with the health service unions. I have to say, having spoken to the people who had to deal with her at that time, that they regarded her as a very difficult Minister to deal with. Given her earlier denial of women's rights, it is hardly surprising that they drew that conclusion.

Virginia Bottomley

I suggest that the hon. Gentleman take some advice on that point. If he does, he will find that he is completely wrong. I still see many of the trade union leaders with whom I worked then, and I continue to have harmonious relations with them. Forgive me: former Ministers always talk about what they did years ago, but I was greatly involved in ensuring that the Department was part of Opportunity 2000 and I did a great deal to ensure that black and ethnic minorities were better treated in the health service. If the hon. Gentleman has contrary advice or opinion, will he please write and let me know? He may be surprised on that particular matter.

The Bill gives the wrong message about the priorities for this country at this moment. They may be the Government's priorities, but they are not ours. We must look with a broader perspective at the reasons for investing in Britain. Britain must have a flexible labour market, and it must be a good place to do business if we want to create the welfare and services that are important to us all. I have no hesitation in opposing the Bill.

2.57 pm

Tony Lloyd (Manchester, Central)(Lab)

First, I find it astonishing to hear the right hon. Lady say that good labour relations are not the business of Government. That is essentially what the legislation is all about. I shall comment on its deficiencies—

Virginia Bottomley

Will the hon. Gentleman give way?

Tony Lloyd

Yes, but let me make this point. I shall not ignore the deficiencies, but I have no doubt that it is hugely important to bring a Bill before the House that deals with good labour relations. That subject should unite us, even if we disagree about the mechanics.

Virginia Bottomley

Simply, I hope that I made it clear that I view good relations between people working in an enterprise as essential. However, I believe that it should be a matter of best practice, not coercion, and nor should it be dominated by the Government or Brussels.

Tony Lloyd

The right hon. Lady is a gentle soul, and I am not unkind enough to pursue that matter further.

The debate today seems almost surreal; I think of the debates on labour relations that used to rock this Chamber, and the class warriors who used to inhabit the Front Bench when the Conservatives were in government—people such as the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), the present leader of the Conservative party. He was a man who had a good eye for the jugular and a good lawyer's voice to make the case. He was the man who came out with the phrase to the trade unions that one man's pay increase is another man's job loss. That was the hallmark of employment relations in the Howard period, yet I hear no echo of that today.

I listened for nearly an hour to the hon. Member for Eddisbury (Mr. O'Brien), the Conservative Front-Bench spokesman, but I cannot tell what he is for or against on employment issues. I cannot even tell what he is for or against in the Bill, and I cannot tell what he believes about labour practices in Britain. I know that he is against regulation and red tape and in favour of flexible markets, but I cannot tell what that means for the Bill or what it says about employment policies when the Conservatives were in power.

The new Opposition Front-Bench team has made no statement about labour relations. When the new leader of the Conservative party was Secretary of State for Employment, he chided Labour plans for the minimum wage. I remember that he used to ratchet up the going rate for the number of jobs that would be lost by the minimum wage. It started at half a million, then rose to a million, and his final bid was that the minimum wage would destroy 2 million jobs.

Opposition Members are quiescent on that subject now because they know that the Labour Government have achieved a more harmonious climate in labour

relations, and that jobs have grown at a much faster rate than was the case in even the best period under the previous Conservative Government. Overall, in the period of deregulation, that Conservative Government destroyed job after job after job.

Gregory Barker

Has the hon. Gentleman forgotten the extraordinary transformation in labour relations that took place in the 18 years of the previous Conservative Government? In 1979, the number of strike days was colossal, and the Conservative Government cut that number massively. Relations between labour and management improved tremendously, and productivity rose too.

Tony Lloyd

The hon. Gentleman needs to consider the real tests in this matter. For example, the rate of job formation has been better under this Government than at any period under a Conservative Government. The previous Conservative Government were mainly a job-cutting Government. The hon. Member for Eddisbury tried to pretend that public sector employment had become overblown, but that is a myth. This Government can be proud of the number of private sector jobs that have been created. Under the previous Conservative Government, my constituency was made into a black spot for mass unemployment, but that problem has been eased. As a result, some of the social pressures have been lifted, although problems still remain.

The hon. Member for Eddisbury did not talk about the Bill. but that is what I intend to do now. Like other Labour Members, I am pleased with a number of the measures that it contains. There is no doubt that the Bill is important when it comes to tidying up existing practices, and it also deals with other matters that require legislation.

It is not an example of onerous regulation to require companies to talk to their work force. For instance, Vauxhall destroyed many jobs in the constituency of my hon. Friend the Member for Luton, North (Mr. Hopkins), and made the announcement over the public radio system. Companies have a duty to talk to workers, and communicate directly. That is what the best practice is all about. It is not ridiculous that companies should consult their employees on a regular basis. Conservative Members want to promulgate the myth that information and consultation lead only to job destruction. There have been periods of job destruction in this country but, fortunately, they are not the norm. Consultation should be conducted every day: that is what good managers do.

Although I welcome the framework agreement negotiated between the TUC and the CBI, which the Government sponsored, it does not go far enough, as the cut-off points that it contains do not relate to the need for information and consultation. I can think of no reason why employees and managers in much smaller firms should not talk to each other and consult properly, as that would improve the climate of industrial relations. I hope that, over time, we can persuade my Front-Bench colleagues to extend the provisions of the Bill more rapidly than is currently foreseen, or even into areas that are not planned at present.

I very much welcome the announcement by my right hon. Friend the Secretary of State today that measures will be introduced to deal with the growing problem of infiltration of trade unions by members of the Nazi and neo-fascist movements. That is an insidious and very unpleasant process. There are not many such people, but they do massive damage to our democratic institutions, such as trade unions, which exist to represent ordinary people. I am very pleased that the Bill will allow people who abuse our trades unions to be disciplined. That is a very important step forward.

I also welcome the enforcement of the national minimum wage. It is important that we make every effort to ensure that employers who refuse to co-operate with the law—let alone to observe their moral obligations—are brought to book. The minimum wage is the basic decency threshold, and all employers must play a part in applying it. Those who cheat the system and their employees are not engaged in a great competitive attack on red tape: they are simply people who rob others of their entitlement. If we can bring such employers to book, that will be an excellent achievement.

My colleagues on the Front Bench have heard already today about unfair labour practices. There has been a serious and dangerous growth in abuse of the codes of practice and legal framework for union recognition. Many unions attest to experiencing problems, and hon. Members will be familiar with the big and celebrated cases such as those involving BskyB, T-Mobile and Culina Logistics. However, the same problems crop up in small and unrecognised companies. Workers are bribed to refuse the balloting process, and in that way frustrate colleagues who want to be represented by trade unions.

Under the law, companies have to offer unions the opportunity to communicate with the work force. However, they often increase pay rates to those employees who do not attend those sessions. That is another example of how the democratic process is being frustrated. We should put an end to such practices.

I wish to bring to the House's attention the case of Mission Foods in Coventry. The company is based in the US—[Interruption.] I shall ensure that the hon. Member for North-West Norfolk (Mr. Bellingham) gets the exact details, so that he is able to communicate with the union busters. Mission Foods employs about 190 people in Coventry. The employees made a move to secure recognition under the statutory process, but the company spent a lot of time trying to prevent that. The company brought two people over from the US, whom they employed full time to work on the employees and halt the recognition process.

During the 20-day open period, when the trade union involved—the ISTC—was able to consult with employees, the company employed seven people to work on employees. The company sent employees a video tape urging them to vote no in the ballot. The video was libellous, and will be considered by the courts to determine whether it was legally defamatory. The company also accused the union of having no right to speak for the workers, and of being involved in the closure of sites where it had represented workers in the past. All those accusations were ridiculous and unfair, but I am sorry to say that they succeeded: the ballot was lost by 77 votes to 74.

That result brings no credit to Mission Foods. The union-busting tactics imported with their employees from the US frustrated the spirit of the union-recognition legislation introduced by this Government. I urge my Front-Bench colleagues to accept that, unless such practices are stopped now, they will become increasingly common.

My right hon. Friend the Secretary of State made some important remarks about her concerns with regard to union-busting activities. However, we will regret it if we do not nip such practices in the bud now. I hope that, as the Bill proceeds through the House, she will consider whether it would not be sensible to introduce a clause dealing with unfair labour practices; otherwise, I fear that it may be some considerable time before we have another opportunity to bear down on such operators.

I want to return to the still vexed question of the 40 per cent. limit in respect of the number of people who must vote for union recognition before that recognition is granted, and of the so-called small-firm cut off of 20 employees or fewer.

Those tests are unfair to trade unions. The 40 per cent. threshold has no basis in any other sort of election. My hon. Friend the Member for Warrington, North (Helen Jones) asked earlier how many of us would have been elected if we had had to have the support of 40 per cent. of those eligible to vote. These Benches would be denuded if we had to meet such a high and unfair test. I urge Ministers to think again, because those tests frustrate the rights of individuals. It is not an issue of trade union rights, but of the right of employees to be represented by trade unions—a fundamental difference, and one that the Conservative party has never understood. Individuals have rights and when a majority of employees vote to be represented by a trade union, it should be accepted under the common norms of any democratic system.

I hope that my hon. Friend the Minister will also hear the message that we need to reconsider the 20-employee cut-off. It is grossly unfair and discriminatory as a matter of principle. It is not reasonable or logical that an employee in one firm should not have the same rights as an employee in another firm. It is not only a matter of principle, but of practicality. We know that small firms lag behind large firms on issues such as equal pay and health and safety. We also know that trade unions make a difference in those areas. Women are predominantly employed in small firms. My right hon. Friend the Secretary of State has an exemplary record on family-friendly policies and enhancing the rights of women in the workplace, so I ask her to look again at those provisions, which will be counterproductive and work against the very results she wants to achieve, which are better rights for the most vulnerable people in our work force—women employed in small firms.

3.12 pm

Mr. Jonathan Djanogly (Huntingdon)(Con)

I first wish to declare my interests in the debate, as registered in the Register of Members' Interests. I also wish to apologise to the Minister for the fact that pressing business means that it is unlikely that I will be present when he winds up the debate.

I fully agree with my hon. Friend the Member for Eddisbury (Mr. O'Brien) that the Bill is unnecessary. However, if we are to review the issue, it needs to be put into the context of other employment and industrial relations legislation, because the provisions in the Bill will sit on top of those that preceded it. When set out individually, additional employment rights can seem worthy and of benefit to the work force. But as they mount up in number, the cumulative effect is damaging to the British economy. The great irony is that at a time when our European neighbours look to rationalise their employment regulations and laws and question the impact that they have on business, we in the UK are doing the opposite. We seem to be intent on meeting other European countries halfway by increasing the burden of regulation on our businesses.

Mr. Lindsay Hoyle (Chorley)(Lab)

The hon. Gentleman says that Europe is trying to reduce the amount of legislation and worker protection. Does he not understand that workers in the UK have been made redundant because of the weakness of their employment rights? Jobs have been lost here, but have been protected in Europe.

Mr. Djanogly

The hon. Gentleman's view is fundamentally flawed. Regulation does not retain or create jobs. Efficient businesses that create wealth create jobs. I agree that the best and most efficient businesses tend to be those that have the best relationships with their employees, but that is very different from the Government forcing regulation on such companies.

Miss Julie Kirkbride (Bromsgrove)(Con)

Perhaps my hon. Friend would care to remind the hon. Member for Chorley (Mr. Hoyle) of the poor unemployment record on the continent where they have adopted many of the regulations of the social chapter? That is adequate testimony of the problems that it can cause.

Mr. Djanogly

My hon. Friend makes an important point. Other European countries have experienced tremendous problems, caused by the mass of regulations they have introduced, but our competitive advantage—hard won in years gone by—is now rapidly disintegrating and we will suffer as a result. The hon. Member for Gordon (Malcolm Bruce) accused the Conservative party of being intrinsically anti-European, but he missed the point. It is not a question of attacking Europe, because we should examine where our jobs are going. They are not going to France or Germany, but to the far east, and we should pay more attention to what is happening in those countries.

My right hon. Friend the Member for South-West Surrey (Virginia Bottomley) said that the DTI had claimed that the Bill would encourage employers and employees to work together to promote a "no surprises" culture at work. While that sentiment is admirable, it does not accord with the reality of the situation. Hundreds of thousands of employees, especially in manufacturing, have indeed been surprised at losing their jobs as manufacturing has been rocked by tough trading conditions. Employers have become so tied up in additional regulations that they close up shop and move their plant to Asia.

When we look at the mass of regulation that the Government have introduced—mainly under cover of the European social chapter, which they proudly claim to have rushed to sign up to—we can understand the problem. It includes the working time directive, trade union recognition, industrial action ballots and changes to qualifying periods for unfair dismissal rights, as well as laws on dismissal of strikers, maternity leave, paternity leave, time off to care for dependents, increased employment tribunal awards, disciplinary hearings, part-time working, employment agencies, minimum wage, disability provisions and increasing compensation for unfair dismissal. The list is seemingly endless.

Mr. Tynan

It seems to have ended.

Mr. Djanogly

I shall finish my point. How much effect has all that regulation had on creating a more balanced working environment? In 1997, there were some 80,000 tribunal applications, but by 2001 the figure had risen to 130,000 applications. In 1997, some 250,000 working days were lost to strike action, but by 2002 that had increased to 1.3 million days lost. One might have speculated that the tough economic environment of recent years would have calmed down militancy among workers and caused them to work together with employers, but the figures show that that has not been the case.

Judy Mallaber

Which of the excellent list of provisions that the hon. Gentleman has just read out would he get rid of? Would it be those on the minimum wage, part-time workers, disability rights or maternity leave?

Mr. Djanogly

The hon. Lady has missed my point, which is that each individual provision may have good or bad points—they may sound great in a soundbite, for example—but the overall cumulative impact is the problem.

Mr. John Lyons (Strathkelvin and Bearsden)(Lab)

Will the hon. Gentleman give way?

Mr. Djanogly

No, because it would eat into the little time I have left.

The situation on the job front would now certainly look much worse if the Government had not decided to increase the public sector hugely, as my hon. Friend the Member for Eddisbury said earlier. One of the most significant factors in renewed union militancy has been the new laws giving unions the right to be recognised by employers—forcibly, if necessary—through the new Central Arbitration Committee. There can be little doubt that that has dramatically changed the balance of power in industrial relations.

In 2000, there were only 159 voluntary recognition agreements, but in 2001 there were 450. Despite the massive drop in manufacturing employment, union membership has increased by about 150,000 since 1997.

As their powers have increased, unions have increasingly flexed their muscles, not least by pushing through and requesting the gold-plating of every European directive that happens to be sitting on the table. Why should not the unions be good Europeans?

There is no reason why not, as they have absolutely nothing to lose—except of course until their members start to lose jobs in over-regulated companies which decide to pack up and go to India. Then, they can be consulted as much as they like but it will do them no good; the jobs will be gone—gone from the manufacturers' factories and the service industry's call centres and settlement offices.

The Bill will clarify the bargaining and consultation procedures. I remember the changes that came in as a result of the Employment Relations Act 1999; consultation was required on the sale of a business and staff who transferred under TUPE—the Transfer of Undertakings (Protection of Employment) Regulations. As a company solicitor, I advised on such transactions. At the time, companies saw those regulations as ridiculous and largely they still do. A listed company needs to conduct its negotiations in utmost secrecy and only a few people are in on the transaction until it is announced to the stock exchange. Employee consultation in such a situation is thus normally impossible and currently negotiations normally centre on which, of the buyer or the seller, will indemnify the other for the possible fines involved in non-consultation. In effect, the requirement has become another cost on business and in that regard the Bill will tighten the screws on business just that little bit more.

We have reached the stage where consultation could become such a burden that many more companies will accelerate their move abroad. In effect, if the labour force is not unionised, the management has to create representative bodies. Some managers have told me that they do not want to be labour organisers, so they have encouraged their staff to join a union. That may seem great to the unions—indeed, many Labour Members are nodding in agreement—but it is resented by management. If hon. Members think it will work towards good industrial relations, they have another think coming.

We shall be legislating to create a platform whereby Parliament can introduce regulations for information and additional consultation rights in the workplace. Whether that will relate to the quality of food served in the canteen or the rights of workers to have additional consultation time, we do not yet know, but I suspect that the measure will take the form of whatever additional rights happen to be in vogue on the continent every year or two.

We have a Government who are rapidly losing credibility. The Labour party has been losing members and new Labour's sources of funding are rapidly drying up, as donors increasingly join the mass of the population who feel that Labour has not delivered. That has meant, and will increasingly mean, that Labour will need to rely on funding from its traditional backers, the unions, which will come at a price to industrial relations and British business. For instance, the Bill will stop days lost through lock-out counting as days for the purposes of the recently introduced eight-week protected dismissal period for strikers. Only a couple of weeks ago, I sat on a Statutory Instrument Committee to discuss regulations that ostensibly concerned employment agencies. However, stuck in the middle of those regulations was a short clause banning companies from employing temporary staff during official strikes.

If we add that ban to the proposed new lock-out provisions, we can see how the unions will grow stronger by the day and how that will move the balance of power.

We must recognise that there will be unofficial implications, too. There was nothing official about the postal workers almost bringing Royal Mail to its knees a few weeks ago, yet the Secretary of State for Trade and Industry sat on the fence, which verged on the useless. The right hon. Lady and her colleagues know well enough where their support lies—now is not the time for the Labour party to be rocking the union boat.

Mr. Tynan

The hon. Gentleman indicates that he believes that the proposed legislation on lock-outs is unjust. Would he support a situation in which a lock-out of workers was not accounted strike action?

Mr. Djanogly

I do not believe that is a matter for legislation.

It was no shock to hear union leaders say recently that the Bill does not go far enough. Labour Members have repeated that today, so let us see how well the Government deal with union pressure during the course of the Bill. We shall wait and watch.

Our jobs are leaving the country, yet we have more employment regulations to stifle business. Industry has had a tough time, yet we see more strikes. The Government get weaker, yet the unions get stronger. Welcome back, old Labour.

3.25 pm

Albert Owen (Ynys Môn)(Lab)

I welcome this opportunity to speak on the Bill. I welcome the Bill as a necessity; not only does it amend the Employment Relations Act 1999, it includes important clauses in its own right. The 1999 Act marked an epoch in employment and industrial relations law. It was a return to a more balanced and sensible position after two decades of ideological onslaught driven by the Thatcher Government. The 1999 Act and the Bill benefit employees, employers and the economy as a whole. Most importantly, the Bill attempts to marry social justice and economic stability.

The 1999 Act was not designed to roll back the Thatcher years of piecemeal legislation that provided a framework, and gave guidance to many employers, for an onslaught on trade unions and on workers.

The step-by-step approach adopted by the then Conservative Administration was a process that restricted the unions and removed basic protection in biennial Acts of Parliament that created a more divisive workplace. It created a them and us culture within the work force, pitting worker against worker, manager against worker and employee against employer.

It is a popular myth that the Thatcher Government sorted out the unions. It certainly did not assist them during that period, but there were other factors, as close analysis shows. It was not the hostile laws that caused the unions to lose their membership but the failure of the Conservative Administration to manage the economy properly. High unemployment reduced the unions' bargaining powers. The Tories thought high unemployment was a price worth paying. Workers in my constituency, and in the constituencies of other hon.

Members, paid that price. Structural and industrial change throughout western democracies during the 1980s and the 1990s had an impact on trade union bargaining power. The pattern in Europe resembled that in the United Kingdom, despite the absence of those hostile laws and their wide impact.

The Employment Act 1999 redressed the balance and restored dignity to workers. It did so by giving maternity and paternity rights, complementing the European social chapter; by giving basic rights to part-time workers—an area often overlooked and for too long ignored—and by prohibiting discrimination against trade unionists and improving collective bargaining units. Importantly, it increased the maximum compensation for unfair dismissal from £12,000 to £50,000—a level more in keeping with today's prices; I believe that the figure is now £55,000. The Bill will go a long way towards improving those measures, and the rights of workers, further, and providing protection, including access to union services, for members. It will also improve the consultation on key decisions that impact on the work lives of employees. That is not unnecessary red tape, as some hon. Members have suggested; it will give working people basic dignity.

As the Secretary of State hinted in her opening remarks, the Bill attempts to create a "no surprises" culture. Fellow Members have alerted us to announcements, which we have also seen on our TV screens, of huge job losses throughout the United Kingdom. The public relations managers of the companies have not had the decency to pass on that news to the work force, but have instead run to the TV cameras. We have even seen the obscene situation of employees being sacked by text message.

However, there is much good practice in recent years, with employers and employees engaging in collective bargaining units; I refer to unionised employees in particular. There is more available information, more consultation and more open and honest dialogue between the two parties. In my constituency, the Great Lakes chemical works is faced with possible closure. At least the unions and the works council have had the opportunity to list their concerns and negotiate—but outsourcing to the middle east will probably bring that closure about.

I visit many places where there are decent industrial relations, but history has taught us that the purely voluntary system of industrial relations is problematic. There was strife in the 1960s and 1970s, and chaos in the 1980s and 1990s. I call for a more mature framework for employment laws and a partnership approach, and I believe that, building on the 1999 Act, the Bill goes a long way towards providing that.

Recent history demonstrates that current laws have loopholes and allow unscrupulous employers to exploit them. In an intervention I mentioned Friction Dynamics, which is in the constituency of the hon. Member for Caernarfon (Hywel Williams) but also affects workers from my constituency; I co-sponsored an early-day motion with him. Clause 21 will help to redress the situation that was highlighted at that company by extending protective rights, but it does not go far enough. None the less, I welcome that positive move, and congratulate the Government on listening to hon. Members on both sides of the House who conveyed those concerns to them.

I have also been vocal to Ministers about the subsequent action of Friction Dynamics because of the impact that its behaviour has on other companies in the United Kingdom. The company abdicated its responsibility by going into liquidation and trading under another name. Let us not forget, as the Secretary of State pointed out in her opening remarks, that the workers, ably aided by the Transport and General Workers Union, actually won the employment tribunal. The company made a formal appeal but withdrew it and went into liquidation, and as a consequence it owes its workers compensation. It remained on the very same site, trading as another company in another name, yet it has had Government grants, albeit from the National Assembly. I should like to hear the Minister say in her winding-up speech whether, if such circumstances occurred again, and did not come under the umbrella of the National Assembly, the Government would legislate to prevent the payment, or recoup some of that grant money. It is important that taxpayers' money should not be used as it has been used.

The north-west Wales area, which I represent, witnessed at the beginning of the 20th century the great strikes in the quarry areas. I was amazed that at the beginning of the 21st century a similar lock-out took place. I urge the Government once again to introduce measures to stop companies going into liquidation and cynically abandoning their responsibilities. There is a need for social justice for workers such as those who worked for Friction Dynamics.

I will not discuss other clauses in detail because other hon. Members have touched on them, but I welcome the clause on flexible working and the clause on the need to comply with the European directive. As the clause has the word Europe in it, I believe that it is really a tidying-up exercise.

Part 4, on the minimum wage, would bring about an improvement, but I should like to place on record my support for extending the minimum wage to 16 and 17-year-olds and giving them the protection of the law.

I especially welcome part 5, on rights for the clergy. Again, I congratulate the Government on listening to the GMB's campaign on that point, which has been well aired in the House. That demonstrates that the Government are listening to hon. Members in drafting legislation.

I have one concern, however, and it relates to a section of the work force that is not addressed in the Bill—those who are employed by agencies, which often hire foreign labour from countries in the EU. Those agents provide travel to this country and accommodation, and they deal with the deductions from the wages of those workers. This is anecdotalߞI will provide the Minister with this information at a later date—but the TGWU has brought it to my attention that in my constituency, people in those agencies have threatened workers and told them not to talk to the unions, or even union members. Those workers are often employed on low wages in the meat-packing industry. That exploitative labour undermines the collective bargaining units in those workplaces, as well as the whole ethos of the 1999 Act—and, indeed, the measures in the Bill.

In conclusion, the Bill has many important aspects. Again, I emphasise the need to deal more firmly with situations such as those that arose during, and in particular after, the tribunal decision on Friction Dynamics. I ask my hon. Friend the Minister to consider the exploitation carried out by agencies. Will he meet a delegation from the TGWU, and myself, to consider that matter? I welcome the move towards a more balanced industrial relations package, which has been sadly missing in the past two decades, and to marry that social justice with economic stability. I look forward to supporting the Bill's Second Reading.

3.36 pm

Gregory Barker (Bexhill and Battle)(Con)

Earlier in the debate, in an intervention on my colleague the shadow Secretary of State for Trade and Industry, the hon. Member for Luton, North (Mr. Hopkins) blamed the unemployment of the 19th century on the laissez-faire business practices that then prevailed, and compared it unfavourably with the low unemployment of the managed economy of Britain in the post-war period. Well, if the past is a foreign country, 19th century Britain is well and truly overseas, and for the purposes of the debate there is little use in visiting it for long. However, comparing the Government and their programme, of which the Bill is the latest manifestation, with the managed economy of the 1950s and 1960s serves a useful purpose.

In the '50s and '60s, Britain experienced remarkably low unemployment—albeit with a much smaller proportion of the work force in work, as women had yet to enjoy the career opportunities that they do today, but nevertheless the comparison holds good. That managed low unemployment was bought at the price of lower productivity and, crucially, lower productivity growth, compared with major economies in Europe, the far east and north America.

Mr. Clapham

If the hon. Gentleman reflects on that point, he will find that we in the UK were still living on capital from the earlier part of the century. He makes a comparison with Japan and Germany, but they had embarked on an all-new investment programme and were working with new capital. That is why productivity was that much higher in those countries.

Gregory Barker

I accept that that made a contribution to the uncompetitive position of British industry, but, fundamentally, it was the uncompetitive nature of our work practices and our work forces, not just the capital employed, that really burdened our industry and our competitive position in the world, as I shall explain.

The price of low unemployment in those halcyon years stored up dragon's teeth for decades ahead, and the over-regulation and Government imposed rigidities of the managed economy in post-war Britain ended in the financial crisis and economic collapse of the 1970s, with a Labour Government forced to impose swingeing cuts on public services. That ultimately led to the humiliation of a Labour Chancellor going cap in hand to the International Monetary Fund, and Britain

descended into the squalor of the winter of discontent. That is the history of Britain hobbling its economy with restrictive practices.

Mr. Connarty

Except that, as I learned when I studied economics, the £3 billion cuts were not necessary. Again, the Treasury officials could not come up with a proper balance of what the Budget could afford. The crawling to the IMF at that time was unnecessary, as has since been proven.

Gregory Barker

If the cuts were unnecessary, it is a great shame that the hon. Gentleman was not in government at the time; we had an incompetent Labour Government then.

It is easy to pile burdens on to business in the good times with seemingly little effect, but the true effect of regulations and rigidities hits home only when the chill wind of economic downturn starts to blow, as it inevitably does under all Governments. A country's competitive position in the world is truly tested when the order book starts to thin, or margins start to narrow.

A further example of that might be the way in which the Government thought that they could get away with taking a huge amount out of the pensions industry when they came to power in 1997 at a time of rising markets. They could seemingly take that money without much effect, but after the downturn in the stock market, that compounded the crisis in the pensions industry, and we are still reeling from the effect of that today. Exactly the same thing could happen to British industry, which is why a climate of regulation, fixed costs and restrictive practices can make the difference between a company being able to ride out a downturn and being forced to make swingeing job cuts. Such measures can represent the last straw that sends an enterprise to the wall.

That is not a textbook theory—it is the real experience of the rest of Europe. According to the House of Commons Library, the Organisation for Economic Co-operation and Development reports that unemployment in the UK was 5 per cent. in 2003. That compares with a figure of 8.8 per cent. in the eurozone, which is expected to rise to 9 per cent. in 2004. Many of the practices in the Bill that are so lauded by the Government already exist in that zone.

Jim Sheridan

Earlier in the debate, the hon. Gentleman was proud to comment on the measures introduced by previous Conservative Governments to get rid of bad working practices. Does he accept that there are some disciplines with bad working practices and closed shops—especially as regards the Law Society?

Gregory Barker

I am afraid that I do not understand the law or its practices, and to refer to them would stray well outside the terms of the debate.

Mr. Greg Knight (East Yorkshire)(Con)

rose—

Hon. Members

He is a lawyer.

Mr. Knight

I am indeed a lawyer—and I would be quite happy for the legal profession to be included in the scope of the Bill. If we started to see every Tom, Dick and Harry appearing as a legal representative in court, people would truly value their lawyers.

Gregory Barker

I am grateful to my right hon. Friend for that intervention.

For the sound reasons that I outlined, and especially given the experience of our competitors in the eurozone, I echo the sentiments of several of my hon. Friends by expressing worries that the Bill will put further burdens on British business. The CBI's submission on the latest pre-Budget report provisionally estimates that if one adds the cost of Labour's business tax increases to the cost of new regulations, the total cost to business is about £15 billion a year. The Bill can be seen only as an unwanted addition to the burden on businesses throughout Britain, which are already suffering from the cumulative burden of the taxation and regulations imposed by the Government.

Mr. Knight

I share my hon. Friend's view that the Bill is basically bad, but does he agree that it is not entirely without merit? For example, Conservative Members welcome clauses 27 and 28, which will extend and clarify the rights of an employee to have a companion at a disciplinary hearing, because we believe in justice. Does he accept that a superb worker, who is unsurpassed at the lathe, could be inarticulate when faced with a hearing?

Gregory Barker

My right hon. Friend makes a good point. I do not condemn everything in the Bill, but I only have time to address certain points, and I will confine my remarks to those.

I agree, of course, that there are good parts in the Bill, but its regulatory nature gives me the greatest concern, and is the focus of my comments.

In employment legislation, what is important to business is the quantity and frequency of change. I am struck by the fact that the Bill represents what is worst about the whole consultancy culture brought about by the Government's attitude to business, although that is perhaps not a surprise, given the Secretary of State's employment history. However, I am afraid that she brings to this role the enthusiasm for management change and for change strategy that is typical of so many consultants in that burgeoning service industry. What real industry, particularly small firms, seek from the Government is not constant change but stability and security so that they can plan for the future with some certainty, and that is all too absent from the Government's programme.

The cumulative effect of those constant changes and additions to the regulatory burden poses problems, and the volume of red tape imposed by the Government can be overwhelming for businesses. The Bill contains a number of measures that will add to the burdens on business, and it has been suggested that they may increase during the Bill's passage through Parliament as further concessions are made to the Labour party's union allies. It is cause for concern that this may, quietly, be payback time for the brothers. [HON. MEMBERS: "And sisters."] Indeed.

The first three parts of the Bill concentrate on labour law and trade union rights. In July 2002 the Government announced a review of the Employment

Relations Act 1999, the centrepiece of which was the establishment of a statutory procedure for the recognition of trade unions by employers for collective bargaining rights. The Bill implements the findings of that review. The CBI has welcomed the Government's approach because it does not seek to overhaul the key principles of the 1999 Act. I share that welcome, although it comes as little surprise to me that many of the CBI's key points relate to what is left out of the Bill rather than what it contains.

The Bill is, I am afraid, just another example of the Government's tendency to regulate first and think later. I am of course pleased that, in this instance, legislation is rather less substantial than it could have been, but I have grave concerns about over-regulation, particularly when that is placed in the context of the ever-increasing burden of regulation.

I am particularly pleased to note that the small firms exemption is to be kept. That is a key part of the Bill, and I am keen to see it replicated in other areas of regulation. Small firms are the bedrock of our economy. They are the seedbed of innovation, stimulating competition, and many are the large firms of tomorrow. Small enterprises and entrepreneurs are the key drivers of job creation in the 21st century. They mop up jobs lost in large companies and create new jobs at an ever-increasing rate. Research by the Federation of Small Businesses shows that between 1995 and 1999 the net number of jobs created by small firms was 545,000, compared with just 218,000 by larger companies.

My concern is that small firms feel the burden of regulation far more acutely than larger firms. The FSB said that the odds are now stacked against small and medium-sized companies because of tax inequalities, rising business costs and premiums for liability insurance". I fear that that is right, and I am pleased that my party is looking at ways to reduce the burden of regulation on small businesses as part of our commitment to reducing that burden for all UK businesses.

I shall focus my remaining comments on clause 31, which gives the Secretary of State the power to make regulations implementing the EU directive on information and consultation. The directive establishes a framework for informing and consulting employees in the European Community. The sentiments behind the measure are not contentious. Many measures, including this one, sound eminently laudable; indeed, I am absolutely certain that informing and consulting employees and generally involving them in the running of a firm is good for both employers and employees. There are undoubtedly benefits of trust, respect and partnership to be gained.

Most successful businesses do that well, not because it is an obligation but because they recognise that empowering their employees gives them a competitive advantage. Businesses must learn that for themselves, not have it imposed upon them, with the associated compliance and auditing costs.

It is beyond doubt that good companies already operate in such a manner as to have necessary lines of communication in place, and best practice and competitive advantage will be the greatest spur to improve upon that. As I said, there are likely to be productivity gains from doing so, so it is ludicrous to assume that a company acting in the best interests of its shareholders, let alone its wider stakeholders and employees, will not implement measures when it realises that there are productivity gains to be had.

That is borne out by the facts. A study conducted by the Institute of Directors in 1998 showed that 85 per cent. of directors had communications arrangements with their staff in place. Undoubtedly, those can and must be improved, but I would rather leave that to business to work out than leave it to civil servants or politicians in the DTI. To enshrine it in law as a duty to carry out a standard way of operating that will be of practical benefit to the companies involved will be a burden, not a competitive advantage. The Government's proposals as outlined in their consultation on the issue impose a uniform EU-drafted directive on British companies—yet another directive that is not necessarily the best way of achieving the desired outcome.

All companies are different, so the way in which they inform and consult their staff must fit in with the way in which the company is run and be compatible with its operating culture. That is dependent on many factors, such as management structure, employee history and existing practice. It is vital that the regulations are implemented with a degree of flexibility that allows firms to take account of their individual peculiarities and advantages.

Productivity growth has halved under Labour as firms feel the heat of the regulatory burden. The Bill will only add to the burden—

Madam Deputy Speaker (Sylvia Heal)

Order. The hon. Gentleman's time is up.

3.52 pm

Mr. Bill Tynan (Hamilton, South)(Lab)

My contribution will come as no surprise to the Chamber. I am a member of the AEEU, which is now Amicus. I was a full-time official of that union and I am proud of how I acted as a union official and how I protected workers where I possibly could, in spite of legislation passed by Conservative Governments.

The Bill is evidence of the Government's clear and continuing commitment to protecting the interests of workers against unscrupulous and exploitive employers. Anyone who denies that needs a reality check. It might be useful for Opposition Members to consider the example of the right hon. Member for Kensington and Chelsea (Mr. Portillo), who spent some time with a family in order to understand just how difficult it is to survive in the real world. If Opposition Members took the opportunity to act as workers in factories, they would realise how difficult it sometimes is to deal with their conditions and the wages that they try to negotiate.

It will not surprise the Chamber that I welcome the fact that the Bill is based on open review and consultation in order to reach a consensus.

Gregory Barker

The hon. Gentleman raised an interesting point about Members being able to draw on their individual experience and mentioned my right hon. Friend the Member for Kensington and Chelsea (Mr.

Portillo) in order to inform the debate. Is it not noticeable that the number of members of the parliamentary Labour party who have worked in the private sector, let alone run businesses and understood what makes an enterprise tick and how profit is generated, is lamentably low? The vast majority of members of the Government and their Back-Bench supporters come from the public sector.

Mr. Tynan

I refer the hon. Gentleman to the employment created by the Government, with unemployment at its lowest level, and to the inflation rate and mortgage interest rates. I challenge him to say that the Government have been a failure in managing the economy. I dismiss his point because we are obviously doing very well and will continue to do so.

Let me make my point by referring to a small company called Craven Taskers in Cumbernauld where I represented members. Some of its workers had spent a lifetime—30 years—in the company's service. The owners put a bad manager in to manage that company and he treated his workers in such a way that they went on strike. Within three days, under legislation introduced by a Conservative Government, every one of those workers was dismissed, and, despite my best efforts, the company refused to discuss or negotiate. I am sad to say that the result was that the company closed down completely. The workers were determined not to be denied and they continued to picket the factory for a year. That is not the way to conduct industrial relations, but there are employers even today who under the same circumstances would do as that employer did, and that is why this legislation is necessary.

The Conservative party conference last autumn called for a sunset clause for Labour employment legislation to see whether it is costing jobs. We do not need a sunset clause to see whether we are losing jobs. The Conservatives could do that from their own experience. But as the Bill is based on a wide-ranging consideration of previous legislation, I had hoped that Opposition Members would show some humility and co-operation, instead of petty political opportunism. It is said that hope springs eternal, but unfortunately the hope that I had for today has not been realised.

Conservative Members have attempted to present a wide gulf between workers and management, but that is not the case. Many companies, such as Babcock and Wilcox, Rolls-Royce and Honeywell, negotiate with their employees on a yearly, two-yearly or three-yearly basis and reach agreement.

Miss Kirkbride

I have a great regard for the hon. Gentleman, but he is unfairly representing the Opposition's point of view. We say that much of what is in the Bill is best practice in many companies, which we applaud and welcome, but we believe that voluntary co-operation is by far the best way forward rather than Government diktat. That is precisely our point.

Mr. Tynan

I thank the hon. Lady for her intervention, but she misses the point. Where companies have good relations and best practice, there is no problem, and this Bill will not affect them because they already do what it seeks to achieve. Where it will have an effect is where a bad employer treats its work force in the wrong way. It will ensure that such workers have the same benefits as those who work for good employers, and that is something on which the Government should be congratulated.

That is why I welcome the Bill, and I was happy to hear from the review that there was a general recognition that procedures are working well and that the Bill is primarily a tidying-up exercise. But the comments of Opposition Members suggest that they view it not as a tidying-up exercise but as a waste of time, and that is sad.

It clearly demonstrates the difference between Conservative and Labour Members.

I welcome the proposal on the eight-week period. As has been said, that is relevant to Dynamex Friction. If a work force goes on strike and is locked out by the employer, who lets the dispute lie idle over an eight-week period without any negotiation to try to resolve it, then sacks the work force, that is grossly unfair. To bring sanity to that situation, it is important to encourage negotiation and dialogue, which allows for real progress in improving the working relationship between the company and the work force. Given this afternoon's events, I would have liked the period to be longer than eight weeks, but I recognise that we are living in the real world, and this provision will help to resolve the problem.

I support the strengthening of the right to be accompanied at disciplinary and grievance hearings. In one instance in Scotland, a friend of mine—who was suspended from the Labour party, believe it or not—was asked to go into the general office and told to bring a witness, but that witness could not speak. I welcome the opportunity to correct that anomaly, which is grossly unfair.

Much has been said about stopping small firms with 20 employees developing and growing. Many small employers have an excellent relationship with their employees, and many recognise trade unions, but some are hellbent on refusing to accept that they should treat their work force in a reasonable manner. In a company just outside Motherwell with 210 employees, a person who wanted an aspirin had to go to ask someone on the middle of the shop floor and to give the reason why they wanted it. On the nightshift, the fire doors were blocked, the doors were locked, and the work force was retained in the plant. Those people were desperate to join a trade union. Unfortunately, as a trade union official, I got involved with the problem. No disrespect to the work force, but we spent six months trying to resolve it. The elected shop stewards were sacked within three or four days of joining the union, and the work force came out to support them. Such an employer should not be allowed to continue in that vein. I ask the Minister to consider companies of 20 employees, because there is scope for the Government to monitor the situation.

I will be proud to go into the Lobby to support the Bill, and I hope that, even at this late stage, the road to Damascus will reopen to Conservative Members. However, I have serious concerns about several issues. including pensions. At Hoover, where I was a full-time convenor, I was involved with the pension advisory committee that was set up to enable us to negotiate with the employer. The company had a staff pension scheme of 5 per cent. and a manual workers scheme of 2.5 per cent. On Monday, during Work and Pensions questions, I suggested that the Conservatives have selective amnesia as regards pensions. It was because of legislation passed by the Conservative party that employers were able to raid pension schemes of their surpluses and take contribution holidays that badly affected their long-standing viability.

I wanted to make that point on Monday and I am glad that I got the opportunity to make it today. Wages and conditions are important. Pensions are deferred wages and they should be part of negotiations. I ask the Minister to consider that seriously.

I should like to speak about political ballots, which the previous Conservative Government vindictively introduced in an attempt to prevent funding to the Labour party. I am delighted that unions continue to contribute—I make no apology for accepting a union contribution. The union has an agreement with my constituency party, to which it pays £2,000 a year. That is transparent and above board and I have no problem with the unions contributing on that basis. The Minister should consider political ballots. I do not believe that there is a need for a ballot every 10 years, but if my hon. Friend is convinced of the case for that, why do not we ask the various companies that contribute to the Conservative party to ballot their shareholders?

I conclude by focusing on the Bill's important union and employment aspects. The national minimum wage is one of our greatest achievements and a measure that the Conservative party would love to remove. When asked what measures Conservative Members would abolish, they reply that they would have to be considered collectively. However, the minimum wage is important and has been a tremendous gift to its beneficiaries. Conservative Members have accepted it through gritted teeth. My hon. Friend the Member for Falkirk, East (Mr. Connarty) made a point about tips being taken into account in the minimum wage. I urge the Minister to deal with that problem in Committee.

I am delighted to have the opportunity to air my grievances. For a long time when I was a union official, I was frustrated by the legislation that emanated from the Conservative Government. At last, I have the opportunity to say, in a debate on a trade union Bill, exactly how I felt on behalf of the members whom I represent.

4.7 pm

Hywel Williams (Caernarfon)(PC)

As the fashion in today's debate dictates, I declare that I am not a union member, although I have been a member of the National and Local Government Officers Association, a shop steward for the National Union of Public Employees and, most recently, a member of Undeb Cenedlaethol Athrawon Cymru, the Welsh teachers' and lecturers' union.

My party welcomes the proposals, as far as they go, with some reservations. Plaid Cymru has campaigned at all levels of government for the introduction of many of the clauses. We have campaigned in the House of Commons, in Europe and on the picket line, shoulder to shoulder with the Dynamex Friction workers. That dispute has already been mentioned this afternoon. We supported Corus workers who were sacked overnight.

The hon. Member for Huntingdon (Mr. Djanogly), who is no longer in his place, was not especially familiar with that situation. We also supported workers at Allied Steel and Wire when their pensions were so cruelly taken away.

We are glad that the Government are finally willing to act on concerns that we, hon. Members of other parties and trade unionists have voiced time and again. We have argued that employment relations legislation that is weaker than in the rest of the European Union has meant that it is generally easier and cheaper to close a plant in Wales and the UK than in the rest of Europe. Corus is a case in point when one compares what happened to the steelworkers in Wales and the UK with events in the Netherlands. Recent closures at Corus and ASW should have been covered by European legislation, had the Government acted sooner. The long overdue changes that the Bill introduces mean that such overnight redundancies should not be possible. We are glad about that and workers in Wales and throughout the UK will also be glad about it.

The Bill will prevent lock-outs from counting towards the protected eight-week period during which workers cannot be dismissed—at least, not fairly—simply for going on strike. I want to devote some of my remarks to Dynamex Friction in my constituency.

That change is a testament to the heroic—I use that word advisedly—struggle of the Dynamex Friction workers and their trade union, the Transport and General Workers Union, supported by the people of Caernarfon and people throughout Wales and the UK, as well as trade unionists and others throughout the world who are simply interested in securing justice.

This year, significantly, marks the 100th anniversary of the end of the Penrhyn quarry strike. For three years, the Bethesda quarrymen were locked out by Lord Penrhyn for refusing to accept poorer working conditions that were to be imposed without negotiation. That resulted in the longest industrial dispute in British industrial history, lasting for more than three years. They were three years of suffering that dispersed families as men left to seek work elsewhere, often going to the pits in south Wales. They were three years that tried the people of Bethesda sorely. That lock-out was an assault on the community, and those workers had to fight for their rights and dignity. They lost that battle and had to return to work with poorer conditions—that is, those who were allowed to return to work. The best and the boldest of them were victimised. Who in this place today would defend Lord Penrhyn's tactics? However, at the time, the course that he took was supported by the law, by the state and by, as we would say, all right-thinking people.

The Dynamex Friction workers have faced the same situation as the quarrymen of the Penrhyn quarry 100 years ago. They were locked out and were on the picket line, come rain, come shine, for 965 days—almost three years, almost as long as in the Penrhyn strike. They were locked out after an imposed settlement from their employer because he, as unprincipled as Lord Penrhyn, tried to violate their rights. He tried to treat them as a thing, an asset to be stripped of value. He thought that he could get away with that with the support of the law, the state and right-thinking people, but he was wrong.

The Dynamex Friction workers were very reluctant strikers. Most had given decades of service to the previous company. They were striking not for more pay or better conditions, but merely to protect the pay and conditions that they had won over many years and that they deserved for their contribution to the previous company's profitability. They wanted to negotiate with the TGWU, but the employer did not. They went on strike legally for just one week; then he locked them out. Eventually, after two years of waiting, the workers won their industrial tribunal and the employer was proved to have acted unfairly. He appealed but withdrew his appeal on the penultimate day before the hearing was to take place.

In the meantime, the employer reorganised his business and, to no one's surprise, suddenly found that Dynamex Friction was to be put into the hands of the administrators, with more than £8 million of debt. The circumstances surrounding that are the subject of DTI inquiries, and we await an explanation of how one company suddenly became three, two of them being prosperous and having holdings of land and buildings, the other going bust. The one that went bust is, unsurprisingly, the one that owes £2.5 million in compensation to the workers.

No one can be satisfied with the outcome of the dispute. The workers are still waiting for their compensation. Their jobs have gone; they will not be able to return. The best and the boldest workers will not return to the Dynamex Friction plants. The law that allowed that to happen is clearly wrong and must be amended.

Mr. Sutcliffe

I am grateful to the hon. Gentleman for giving way, and I apologise for intervening on him, but there might not be time when winding up to give this topic as much attention as it needs. On Dynamex Friction, there are issues other than those covered in the Bill that need to be looked at. He can rest assured that the Secretary of State and I are looking at all of those and that I have reported that to the TGWU and to the Dynamex Friction workers.

Hywel Williams

I am heartened by that information. I have discussed the matter with the DTI myself, but a great many more nefarious activities on the part of that particular employer need proper investigation.

As we have established, the Bill will stop lock-outs counting towards the eight-week period during which staff can be fairly dismissed for striking. Any time after that will constitute an extension. As things stand, any period during which workers are locked out counts as an extension period, day for day, and will be disregarded in the determination of the length of the protected period. That presumably means that the protection could be extended indefinitely if the lock-out were extended indefinitely

Perhaps the Minister will confirm to me in a letter that when lock-outs occur within the eight-week period the protection will be extended for as long as the lock-outs continue. If a lock-out ends and the strike continues, might the usual period apply? In the case of Dynamex Friction, had the lock-out stopped at week eight would the seven weeks of lock-out have been added, so that at week 15 we would have been back at square one? I see the Minister indicating that he will write to me. The danger in this case, of course, is that the employer would have been able to sack the workers not at week eight but, say, at week 15.

The Bill fails to address another issue arising from the Dynamex Friction case, which has already been mentioned. There will still be no protection from unfair dismissal after the workers have been on strike for eight weeks—however reasonable their cause, however dignified their behaviour and however much support they receive from the community. As long as the employer continues to negotiate for the eight-week period, he can sack the workers on the 57th day whatever the nature of their cause.

We in Plaid Cymru have consistently made common cause with the workers of Dynamex Friction and their union, and with members of other political parties who have shown a great willingness to work with us. We are very grateful for that. We have called for the abolition of the eight-week rule, and I now ask the Minister again how a strike can be lawful for 56 days and suddenly become a sackable offence on the 57th. Nothing changed overnight in Caernarfon—apart, that is, from the power granted by legislation to a bad employer who took full advantage of it and sacked workers wrongly. That is the second lesson of the Dynamex Friction dispute, and one that the Government have apparently not yet learnt.

We in Plaid Cymru will support the Bill tonight, but we retain our determination to end the unjust eight-week rule, and our right to table amendments to that end. The workers at Dynamex Friction want that, and their sacrifice demands it.

4.17 pm

Mr. Michael Connarty (Falkirk, East) (Lab)

I expected to hear more union-bashing from the Opposition. What I heard in the very windy speech of the hon. Member for Eddisbury (Mr. O'Brien), however, was what we should really have come to expect—an antipathy to the rights and conditions of working people, whom the Opposition still regard as beneath recognition in terms of the structure of society. In fact, I was surprised at that.

I was shocked by what I considered to be outrageous union-bashing on the part of the hon. Member for Gordon (Malcolm Bruce), who attacked members of the Communication Workers Union who went on strike. Those were unofficial strikes. If the hon. Gentleman had taken the trouble to look into the behaviour of management in some parts of the UK where the strikes took place after the ballot—as I did in my capacity as secretary of the parliamentary panel—he would know that the ballot was not on ending negotiations on the pay deal; it was just on refraining from industrial action. The managers took unilateral action, and deeply offended union members by trying to reorganise their workplace as though they had lost all rights.

The hon. Gentleman and I will have to have a talk later. I am sure he will withdraw what he said when he is aware of all the facts. It did sound like union-bashing, though, which is not what I expected from a Liberal Democrat.

This is an excellent day on which to be debating employment issues, because figures have been published showing that 1.7 million more people are employed than when we came to office in 1997. As my hon. Friend the Member for Greenock and Inverclyde (David Cairns) pointed out, most of them are in the private sector. Unemployment is down again: in my constituency, it is below 4 per cent. I do not believe that that has been the case for 25 or 30 years. I am aware of the difference in my constituency. Young men and women in their twenties are no longer hanging around on street corners, because they are in employment.

I was amazed by the hon. Member for Bexhill and Battle (Gregory Barker), who I am sorry to say is not present now, who said that we had a benign economy. We are in the middle of a world recession, and are being attacked on all sides by the cost-cutting that is happening around the world; yet our economy has low unemployment and high employment.

That has not been achieved with the wave of a magic wand, as Gandalf would do in "The Lord of the Rings", although I know that Opposition Members regard the Chancellor as something of a dark lord. In fact, it has been achieved by positive policies: the new deal, which was opposed by the Opposition; low interest rates and low inflation, which were in part brought about by the independence of the Bank of England that was opposed by the Opposition; multiple business incentives, which were welcomed by my small and medium-sized enterprises but opposed by the Opposition; and, of course, the minimum wage, which was opposed by the Opposition.

The hon. Member for Hamilton, South (Mr. Tynan) was good enough to mention that I raised the issue of tips and the minimum wage in an early-day motion. I have met the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) with members of the Low Pay Commission and enforcement unit staff. Their arguments against immediate introduction of the amendment were so weak that I thought that by now it would be in this Bill. They argued that if we had changed regulation 31(1)(e) to say that tips paid through wages would be excluded from consideration in relation to the minimum wage, someone who received a wage of £5 could write to them saying, "I think I got £1 in tips rather than 40p." That is nonsense.

My proposal, which I hope the Minister will include in the Bill, would remove the enforcement police from the situation. People would know that their wage was £4.60 and that their tips were on top of that. That is important, because 1.8 million workers suffer from that regulation, and it should be changed. It would be a win-win-win situation: a win for the Government; a win for the workers; and a win for the customers, who think that they are giving their tips to the people who serve them, not to the establishment that employs those people. I warn everyone throughout the country not to put their tip on their credit card or on their cheque, as it is put automatically on the wages and is counted towards the minimum wage of the worker.

Anne Picking (East Lothian) (Lab)

Before my hon. Friend moves off the subject of the minimum wage, may I raise the issue of who supported the National Minimum Wage Bill in 1997? That was before my time in the House, but he was a Member at that time. Did he not find it totally astonishing that the Scottish National party did not support the legislation introducing the national minimum wage?

Mr. Connarty

That history will come back to haunt the SNP again and again—

Mr. Michael Weir (Angus) (SNP)

Will the hon. Gentleman give way?

Mr. Connarty

I am replying to one intervention; I shall take another in a minute. Clearly, SNP Members could not be bothered to get up out of their beds, or stay out of their beds, to come here and vote for the legislation. That will be held against them by every worker in this country.

Mr. Weir

I am sad that the hon. Gentleman brings up that hoary old story again. It is simply not the case. If he looks back, he will find that the Scottish National party supported the National Minimum Wage Bill on Second Reading, and that we served on the Committee. If he wants to look back at who voted on Third Reading, would he like to tell us how the hon. Member for Stirling (Mrs. McGuire), who now runs the remains of the Scotland Office, voted? If memory serves, she did not vote on Third Reading either.

Mr. Connarty

The Labour party did not decide en bloc to refuse to vote for the Bill or to miss the vote, whereas no one in the Scottish National party voted for the Bill when it went through.

On the question of recognition, we heard a speech from one Opposition Member who bemoaned the fact that there had been more than 400 voluntary agreements since the Labour Government came to power. Even with that—and particularly with that—we have the lowest stoppage level since the 1920s in terms of industrial disputes. I think that there is a correlation there, and it should enthuse people about the idea of voluntary agreements.

As my hon. Friend the Member for Hamilton, South (Mr. Tynan) illustrated in his contribution, the exemption of companies with fewer than 20 employees is not tenable, and the Government should examine that. Many small companies welcome trade union membership and use trade unions properly, in terms of co-operation and building a better work force and workplace.

I welcome BP's recent agreement at Grangemouth, which recognised the Transport and General Workers Union, Amicus and the GMB without the requirement even for a ballot. The agreement states: BP Grangemouth management and trade unions will work together in a co-operative way with the common aims of promoting a successful and viable business…it is recognised that this can only be achieved through the pursuance of good industrial relations. That shows what is on offer for businesses, workers and trade unions if they go down the road of voluntary recognition agreements.

Such agreements exist in respect of other plants and major employers in my constituency, such as Zyngenta, GE Plastics, Polmari, White and Mackay, Forth Ports and Calor Gas, and for most small and medium-sized enterprises. It is wrong for Conservatives to try to whip up antagonism towards trade union recognition among smaller employers; it is not necessary. The Conservatives say that the Government are trying to make people act as their paymasters and tax gatherers, but the fact is that, although paying the various subsidies that we have created to encourage people into work may require the work of a few employees, paying out such support keeps down firms' wage bills. The working tax credit and other measures have given people an incentive to go back to work. It is nonsense for a company whose wage bills are kept down in that way to say that that constitutes a great burden; rather, it is a great support.

We want a level playing field in respect of recognition. The Government should look seriously at the example of T-Mobile, which was mentioned by my hon. Friend the Member for Glasgow, Anniesland (John Robertson). It is a direct subsidiary of Deutsche Telekom, which is a totally unionised company. It spent £2 million on bringing in a gang of union-busters from Florida—Burkes. which is also known as the TBG Group.

John Robertson

Does my hon. Friend agree that we should ask why a company such as T-Mobile, in the form of Deutsche Telekom, has union representation in that country but not in this country? Should the Government not look at that issue, so that our workers can get the same rate of pay as those in another country?

Mr. Connarty

I agree. My hon. Friend is a member of Connect, which is not affiliated to any political party. It had a recognition ballot, and was opposed by a company that has total union recognition in its home country of Germany. The Communication Workers Union—I am not a member of it, but my predecessor was, which is why I have a connection with it—has taken a very positive approach to the industry. It ran a "demand broadband" campaign to expand broadband uptake for the good not just of its members, but of the economy. It also ran a "banking on you" campaign to get people to open accounts at the post office, because it recognised the threat that will otherwise exist to the post office network. Yet it was regarded by T-Mobile as a negative influence, even though 70 per cent. of employees had inquired about, or taken up, trade union membership.

The Government also need to look at the issue of pensions. I totally agree that pensions constitute deferred pay. I used to be president of the Educational Institute of Scotland, a regional teachers union. I was disappointed to hear the hon. Member for Caernarfon (Hywel Williams) say that he used to be a member of a teachers trade union—[Interruption.] He seems not to be listening; perhaps he no longer listens to his union. On entering the House, maintaining a connection with the EIS is easy: one keeps paying the subscription, and it continues to recognise that one is a union member who is interested in the profession.

The fact that the BP trade union agreement makes no mention of pensions is quite worrying. Indeed, it is contradictory, because there is a national pensions fund management system.

There should be a structure to allow the entire work force to know what is happening to their pensions.

I am deeply concerned that BP, in contradiction of the recognition agreement, has said that it is about to wind up the pensions consultation councils, from which members of the Transport and General and other unions normally receive information about the pension funds at the centre in London. I have written to BP and I hope that Lord Brown will write back positively and recognise that, in the light of recent scandals, trade unions must be involved and must know through information and consultation what is happening to the pension funds.

We do not want a repetition of circumstances where a company has a problem with a pension fund, but lets the senior executives get redundancy and run off with the pensions. When the firm goes down the tubes, the ordinary workers find that there is no money left in the pension fund to pay their pensions. Under clause 31, information, consultation and accountability should be as strong as possible and stronger than it is in the Bill as drafted. A new directive has been on the statute book for some time and should be implemented.

The Bill should also deal with the exploitation of workers from overseas. My hon. Friend the Member for West Renfrewshire (Jim Sheridan) has been campaigning about gang workers, but not only low-paid work such as agriculture is affected. As its number—96/71/EC—shows, the posting of workers directive was passed in 1996. It was designed to stop people who came from companies in one EU country into another EU country receiving worse wages and conditions than other employees in the company.

There was a recent scandal, well illustrated by an excellent pamphlet put together by the unions involved and the National Engineering Construction Committee. In "Social-dumping: a crisis in the UK Engineering Construction industry" of November 2003, the TGWU, the GMB and Amicus pointed out that highly skilled and highly qualified workers from Portugal were not receiving the same money or conditions when they come here to work on power stations, for example. Those people are skilled at building power stations for us, but are getting ripped off because the posting of workers directive is not being properly implemented. It is important that we respond to that.

TUPE in private finance initiatives or public-private partnerships was mentioned earlier. Those contracts can greatly benefit local authorities and public services by bringing private finance into them, but we must ensure that levering in such investment does not mean levering out the rights of workers on pay, benefits and pensions. I commend the Government for introducing the Bill, but I urge them to consider such matters further in Committee.

4.32 pm

Derek Conway (Old Bexley and Sidcup) (Con)

I am grateful for the opportunity to contribute briefly to the Second Reading debate. As the debate has developed, I have noticed that both sides of the House have slipped into almost pre-cold war rhetoric, where anyone on the Labour Benches is a champion of the sons of horny hands and those on the Tory Benches are wicked mill owners wanting to grind the faces of the poor. The position has generally become more diluted these days.

I used to be a branch secretary of the Transport and General Workers Union, a fact that will no doubt horrify some of my hon. Friends and puzzle some hon. Gentlemen. On one occasion I received a Christmas card from Jack Jones that shows how long ago it was and in the same post a Christmas card from the leader of the Tory party. Some of my Labour friends were determined to put a stop to that and the following year it stopped. I like to think, in any case, that I was not considered completely anti-trade union.

However, part of my dark and distant history was as Parliamentary Private Secretary to Lord Forsyth—[Interruption.]—when he was an employment Minister. That was a time of interesting battles. Listening earlier to some of the north of the border fratricide between the Labour party and the Scottish National party took me hack to the Committee stages, during which what Scottish Members wanted to do to my friend, Michael Forsyth, did not bear consideration. He survived, however, and prospers in the other place.

Docs the Bill have a particular point? Hon. Members on both sides of the House have highlighted the clauses that are of concern, the provisions that they would like to make tougher, and what they would like not to be in the Bill at all.

It will make the Committee stage interesting. In my experience, the Minister for Employment Relations, Competition and Consumers is not an unreasonable man. His personal demeanour and the expertise of my colleagues on the Front Bench will make it an enlightening Standing Committee. However, I hope that all members of the Committee will bear in mind the Bill's impact on employees as well as on work forces. That matter deserves a little more consideration.

The House will recall that I took an enforced sabbatical from this Chamber, courtesy of the 1997 general election. In that period, I became the chief executive of an organisation with 300 employees. When one is responsible for such a large work force, one is inevitably involved in some pretty serious and unpleasant disciplinary actions. There was partial union representation in that organisation, but it was not 100 per cent. The popular image is that all shop stewards resemble Peter Sellers, but time has moved on. In my experience, people are much more responsible than was the case in the bad old days.

There has been a perceptible shift in the legislation on employee rights. It is sometimes difficult for hon. Members to understand the impact in the workplace of the turgid clauses and black-and-white paragraphs that we pore over, or to realise their effect on people's ability to run organisations and companies effectively.

Reference has been made to the change in compensation levels. At one stage, the usual amount was about £10,000, rising to some £50,000. In the case of some maternity provisions, compensation can continue until the child is 23 years old. Compensation levels could therefore be extremely heavy. That was good news for the people who benefited, but the matter became a festival for lawyers.

My right hon. Friend the Member for East Yorkshire (Mr. Knight) spoke about the wisdom of getting more lawyers involved. No doubt they are well informed and well intentioned, but lawyers are very expensive. However, companies with big budgets can cope with that.

John Robertson

Does the hon. Gentleman accept that the success rate achieved by people attempting to secure fairness from firms that employ lawyers at great cost is very low? Only about 2 per cent. of industrial tribunals are successful, even though the workers involved have lost everything. The hon. Gentleman makes it sound as though every industrial tribunal case wins compensation. That is not true. What are people supposed to do to get representation against firms? The only organisations that can provide that in a collective way are trade unions. Does the hon. Gentleman not accept that bad employers exist?

Derek Conway

I fully accept that bad employers exist, but some employees are pretty wicked as well. The world is not made of good guys and bad guys. Many people like to go for the 10-card trick. Everyone takes a stance on these matters.

The organisation that I took over had a tradition of settling every dispute. I decided that that would not any more. The personnel department—the title has now changed to human resources department—and the lawyers were responsible for getting matters right, but we were no longer going to send out the signal that we could always be rolled over.

Some cases are genuine, however, and hon. Members come across them all the time. I am involved in a case at the moment, in which I think that my constituent was given a very rough ride by the local authority—not my own authority—for which she works. It is not always a case of black and white, good or bad: that is not how things work.

Many employers are subject to vexatious employment tribunal cases. Giving evidence to such a tribunal is never a happy experience, but it is better than appearing before a proper court of law. Employment tribunal chairmen tend to help claimants as much as they possibly can, especially if the person defending the action is sitting with a battery of lawyers and advisers. I do not accept that the process is as one-sided now as it used to be. Big organisations that can afford the support mechanism of personnel officers and lawyers consider employment tribunals an irritant. Tribunals are part of the budget process, and allowance is made for them. Managers try to avoid them, but they can handle them. For small companies, tribunals can be dynamite. Those hon. Members with extreme opinions on these matters sometimes lose sight of their effect on small employers and companies.

The Bill, in its entirety, is not a bad one. I do not think that any Opposition Member has claimed that it is, and the Government will no doubt succeed in getting it through the House, although it may be amended in Standing Committee.

Some of its provisions are good. For example, the provision for an accompanying person at a disciplinary hearing is welcome. Good employers allow that, because employees facing a hearing can be scared and emotional—although some are cocky—and it is not pleasant to have to conduct such occasions. Employers and managers do not like such hearings. Some perverse creatures may get a kick out of it, but most normal people do not find exercising such discipline enjoyable. It is not enjoyable for the victim, certainly, but nor is it any fun for the manager involved.

I am especially concerned about the provisions on the information and consultation process, which other hon. Members have mentioned in connection with the EU directive. The culture in continental Europe is very different, as hon. Members, whether Europhiles or Europhobes, will agree. One of the big changes in recent political history is the fact that the Labour party has embraced and understood the concept that we trade in a world environment, which means that a ring of steel around the UK—or around Europe, as the French would like—would not wash in the modern world. It is a welcome development for the health of the economy that the major political parties now recognise that.

Consulting and informing a work force is not always straightforward or easy. We have complicated guidelines on redundancy, and employers have to follow them or they will be in difficulty subsequently with employment tribunals. Most good employers get it right so as not to face those penalties, but the directive—when fully in force—will have an overriding impact on that.

The directive will be fully in force by 2008 for firms with as few as 20 employees and it will be a considerable burden for firms of that size. When one runs a business with 20 employees, and a concomitant budget, it is hard to throw around cash on lawyers and human resources officers. Such expenditure becomes very significant for small and growing companies. The 20-employee limit—even if it will not be introduced until 2008—is far too low.

The problem is the scale of the burden. Professor Sissons of Warwick university, whom the Library has helpfully quoted extensively, has estimated that 75 per cent. of the British work force will be covered by the provision, but that only a small minority of companies will be "evenly remotely" able to match the directive's requirements. This debate is not frivolous: it will have a real impact on businesses. They will have to make these provisions work or face substantial penalties. The Bill will have a resonance for the employment community, but it may not have the impact that the Government intend.

We need a balanced approach. Many Conservatives now realise that not all employers are angels and not all trade unions are devils. We will not return to the days of Charles Dickens for reasons of international competition, but also—I hope—for reasons of decency. We must accept that we have a more mobile work force and that some things need to change. I welcome the fact that the clergy will be brought within the scope of employment law. I do not know whether Members of Parliament and Ministers will ever be brought into its scope, so that after every reshuffle we could have a raft of employment tribunals to see whether the Prime Minister was right to wield the axe. I felt pretty sore after the 1997 election and I would not have minded taking my chance on a court deciding whether I had been an effective Member of Parliament before I was unceremoniously sacked without consultation and without representation and without representation—and with very little redundancy pay. Vicars will be welcomed warmly into the fold and there may still be room for Members of Parliament and Ministers, although I doubt that public demand for that would be very high.

The Bill will progress, although I suspect that my Front-Bench colleagues will give Ministers a run for their money in Committee as they hammer out the issues of concern. I urge the House to be mindful of the fact that not all employers are devils and not all employees are angels, and that the Bill's impact will unquestionably be a yet heavier burden, especially on small employers who are least able to cope and who do not have the support mechanisms that the big companies and the unions can deploy in their arguments.

On balance, although the Bill is not bad, it is not desperately needed. If it did not progress to Committee, that would not be the worse thing the House has ever done.

4.45 pm

Rob Marris (Wolverhampton, South-West) (Lab)

First, I declare my interests. I am a member of the Transport and General Workers Union, which gives money to my constituency Labour party and I am chair of the TGWU group of Labour MPs. My constituency party also receives money from Thompsons, the trade union solicitors. I hope that covers all the bases.

In some ways the Bill is boring, because it is so technical, but it is also important, like the speech of the hon. Member for Eddisbury (Mr. O'Brien), who opened for the Opposition. My goodness, he was boring but his speech was quite important—as were the speeches of his hon. Friends. For example, the hon. Gentleman pointed out that the Institute of Directors had found that 8.5 per cent. of firms have already set up mechanisms for staff communication. Great. If that is true, they will not have a problem with the information and consultation directive.

The hon. Gentleman was strangely evasive about the figures on employment growth, which show that there are 1.7 million more jobs under the Labour Government. He said that he could not obtain the figures from the Government to disaggregate them, yet he asserted that there were thousands and thousands of non-productive. non-front-line public sector workers. He produced no actual figures—because he said he could not disaggregate them; that was a mere assertion that was not backed up at all.

The thrust of the hon. Gentleman's speech and some of those made by his hon. Friends was about the whole regulatory environment. That is why his speech and that of the hon. Member for Huntingdon (Mr. Djanogly) were important. The Conservative approach to regulation, whether on the labour force or on other aspects of our economy and our society, has clearly switched; the Conservatives have been caught too many times by people such as me, who ask them what they would get rid of, and they cannot tell us. We now hear— as we did clearly from the hon. Member for Huntingdon—that the process is cumulative. When my hon. Friend the Member for Amber Valley (Judy Mallaber) asked the hon. Gentleman what he would get rid of, he said, in effect, "Ah no, it's only cumulative". What an evasive reply.

That approach is typical of Conservative Members. The same thing happened on two separate occasions when my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) and I put questions on the subject to the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) when he was the shadow Chancellor. He was talking about red tape and regulations and kindly took interventions from my hon. Friend and me. We asked him to name three regulations that he would get rid of. He could not do so when I intervened, but he was a little wiser when my hon. Friend put his question and gave one example of regulation. However, when my right hon. Friend the Secretary of State for Trade and Industry made her closing remarks in that debate, she pointed out that the regulation that the right hon. and learned Gentleman wanted to get rid of abolished seven regulations, so the Government were simplifying the situation. His response was evasive. That is making up policy on the hoof and it is not good enough.

David Cairns

Is not my hon. Friend being a tad generous? He says that the Conservatives do not know which regulations they want to get rid of, but in fact they know full well and are afraid to tell us. We know that the minimum wage, the new deal and the working tax credits, all of which they regard as regulation, will be for the chop when they get into power. They know which regulations they want to get rid of, but they do not have the courage to tell people.

Rob Marris

Sad to say, my hon. Friend may be right; the Conservatives are being evasive and are not giving us their true agenda. That would be true about many of the policies of the official Opposition.

We need to debate the Bill more broadly rather than focusing only on the technicalities, many of which have been covered by hon. Members on both sides of the House, although I shall return to some of them if I have time. We need to cast our eyes a little wider and consider what kind of society we want to live in. Do we want a low-wage, low-skill society where employers grind the faces of the employees? I do not. In most countries, there is generally a correlation between trade union rights and quality of life. I am sure that a Member could intervene with a specific example to show that I am wrong, but I suggest that there is that broad correlation: the stronger the trade union rights, the better the society.

If we look at the successful countries and countries that are, on the UN scale, desirable to live in, we find that broad correlation.

The richest country in the world is the United States of America in terms of its overall gross domestic product and, leaving aside some of the oil emirates, it is one of the richest in terms of GDP per capita, but according to the UN index it is not the best to live in. One reason is that over the past 25 years unionisation and union rights in the United States of America have been progressively lessened. That trend reached a plateau under the Clinton Administration, but George W. Bush is continuing the work of Ronald Reagan—who smashed the air traffic controllers—and of his father, in depressing trade union rights. That depresses the whole society in the United States of America; it is not as pleasant a place to live and, despite the country's massive wealth, in the past 25 years family income has stayed about the same or gone down. That is partly because the rate of unionisation has gone down. I say that as someone who used to be a member of the Amalgamated Transit Union, which was an affiliate to the American Federation of Labour and Congress of Industrial Organisations. I also say that as someone who lived across the border in Canada; I was also a member of the independent Canadian transit union.

The rate of union density in Canada is roughly twice that in the States and it is a much better society to live in. I do not say that just because I lived there; I rely on the UN annually updated index of desirable countries to live in. Generally, Canada vies with Sweden for first or second place—Canada is often ranked first, although last year, I believe it was ranked second. I would hazard that the rate of unionisation in Sweden is about 70 per cent.

The two richest countries in the European Union in terms of per capita GDP are Luxembourg and Denmark. The rate of unionisation in Luxembourg is very high—give the precise figures; if an hon. Member can, I will gladly take an intervention. In Denmark the rate of trade union organisation in the labour force is about 90 per cent.

I am not saying that if one strengthens trade union rights as much as possible, a more wonderful society will necessarily result, but that, as a broad correlation and a broad generalisation, if there are stronger trade union rights, it tends to be indicative of a society that respects the people who live in it and the way in which they earn their living and one that respects trade union involvement and worker involvement in enterprise and fostering innovation and involvement and so on. One tends to get a better society in those circumstances.

In the United States they have had problems because the rate of unionisation is dropping. I accept that that is not the only reason for its problems; the States has huge economic problems and is sucking in imports at the rate of $1billion a day. The structural problems in that economy are also enormous. Its rate of productivity is behind that of France, which has quite a high level of worker organisation, although not formal trade unions in the way that we would recognise them. The States is also ranked behind the Netherlands.

As I said, the US has big problems, but because union density has dropped, companies like BMW have been going to South Carolina, where they do not want union rates. so they pitch the wages at just below the union rates. What keeps up the standard of living of some people in the States is pay rates that piggyback on the rates set by unions, that is particularly the practice in some of the Japanese companies, which piggyback just below the United Auto Workers rates for the big three domestics, principally based in Detroit. Because of such piggybacking, American unions are in a sense maintaining the living standards of a number of others in the work force. With a membership density rate of about 16 per cent.-my hon. Friend the Member for Dagenham (Jon Cruddas), who has a PhD in political economy, could probably tell me the figures—the unions are probably holding up the living standards of at least another 16 to 20 per cent. of the US work force, whose pay is just below the agreed union rate, or may even be a little more because of the Wilson-Palmer type of arrangement that the Bill will fortunately get rid of, according to which employers pay a little more than the union rate to keep a union out because those employers are philosophically opposed to trade unions.

The type of society we live in is, as I hope hon. Members realise, intensely important to me, as it should be to all hon. Members. I am stunned that the official Opposition seem to be coming in with what is, to my mind, an anti-regulation agenda, to the point where the right hon. Member for South-West Surrey (Virginia Bottomley) seems to be saying, "I think we should get rid of all regulations and leave it to the market—employers and employees—to work out."

We should bear in mind that 10,000 people a year are dying of asbestosis, mesothelioma and pleural plaques that lead to those diseases. Many lives have been saved by safety legislation, from the factories acts from the beginning of the 20th century to the Factories Act 1961, to the Health and Safety at Work, etc. Act 1974 introduced by Labour Government, and the daughter directive brought in under the 1974 Act to protect people at work.

That is true health and safety regulation, and there is more, because the six-pack of regulations that came into effect on 1 January 1993 and the Control of Substances Hazardous to Health Regulations 1988, under an EU directive, have saved hundreds of lives in the United Kingdom. Almost all those regulations apply in every workplace because, in our society, the state, the Government and we as individuals have a duty to protect people at work.

All hon. Members—even the right hon. Member for South-West Surrey, who probably was not thinking of health and safety when she appeared to suggest that all regulations should go—would say that we need some health and safety regulation at work. Fine—we have got some common ground, so let us build on it. We also need regulations to govern the way in which employers and employees interact with one another. If we did not have such regulations, as some official Opposition Members seem to suggest, we would have a situation that, I suspect, they would be the first to decry: wildcat strikes would break out all over the place, because that is what happens in such circumstances.

People in Latin America used to say, "You can't dig coal with a bayonet." The point was that people could repress the miners all they liked in Chile, or wherever, but they could not get the soldiers to dig the mines. Workers are needed to produce the wealth in society, and the relations between employers and employees need to be regulated. If people allow a free-for-all, they will end up with wildcat strikes, which reduce production, which will not suit employers.

An awful lot of this country's employers—not only in the public sector, but in the private sector—welcome those regulations because they produce a level playing field, for example, in health and safety. A disproportionate number of deaths at work happen in small companies. That is not to say that all small companies are unsafe to work for, but they are proportionally, statistically and as a generality unsafe, and those arrangements have to be enforced on them to create a level playing field. That is very important in terms of state regulation.

Such legislation prevents the better employers—those who are more innovative, more flexible. engage their work force more and so on—from being dragged back by bad employers. Hon. Members should strive collectively to raise standards in the workplace in terms of pay, innovation, investment and so on. That is tremendously important, and it is what the Bill seeks to do.

I have some minor problems with the Bill, and if it receives its Second Reading and I serve on the Standing Committee, I hope to raise them, along with those of my hon. Friends who have also mentioned them. However, I make no apology to the House for setting the scene, by putting the Bill and the massive improvement in worker protection introduced in the past six and a half years under the Government into a social context.

Official Opposition Members should think very seriously before they go down the anti-union route because they think that the effect of all this regulation is cumulative. In fact, as my hon. Friend the Member for Greenock and Inverclyde (David Cairns) suggested, Opposition Members want to chip away at all regulation, but they have not guts to say so. Worst of all, they and members of Conservative associations throughout the country fail to realise that they would be horrified at the kind of society that we would all end up living in without the cumulative, beneficial effect of regulation.

Sadly, if the official Opposition were ever in government and they stripped away the maternity rights, the minimum wage and the health and safety regulations—all those basic things that we take for granted in our society—they would regret it along with the rest of us, because we would live in a poorer society, both materially and in terms of the human condition and the human spirit. I do not want that to be belittled; I want to raise the standards—

Madam Deputy Speaker

Order. The hon. Gentleman's time is up.

4.58 pm

John McDonnell (Hayes and Harlington) (Lab)

This Second Reading debate has been interesting in defining not just attitudes to the Bill, but the wider attitudes of different parties to progressive legislation generally.

I wish to commemorate the fact that Norberto Bobbio died this week. People will know him as one of the most significant political philosophers in Europe of the past 50 years. In reaction to the development of fascism in Italy and Stalinism in Russia, he raised the importance of building civil society and the institutions of civil society—pluralist institutions based on rights in law.

He identified a key element by defining trade unions as the bastions of civil liberties. Interestingly enough, he defined the difference between right and left. He said that the right always wanted to increase inequality, while the left always wanted to increase equality. He also said that the left always defined its freedom by way of rights, while the right always defined its freedom by way of the market. That definition is interesting because it describes our debate. When the Government published their White Paper on fairness in work in 1998, they clearly put themselves on the path that Bobbio identified for the left: defining freedom by way of rights by re-establishing trade union rights. I shall briefly talk about five rights. Although I welcome the Government's Bill, White Paper and approach on defining the strength of civil society through creating trade unions on the basis of legal rights, I am anxious about the timidity of their approach because it does not go far or fast enough in several areas.

The first right that I shall discuss is the right to strike. I repeat that our greatest failure is not embodying the right to strike in legislation. We are one of the few European countries with no legal right to strike. All that we provide is a form of legal protection against breach of contract, but that is provided for only eight weeks. The decision to provide that protection for only a limited eight-week period was bizarre and arbitrary.

Hon. Members and trade unionists are not the only people who have drawn attention to those problems because this country is condemned for them fairly consistently. In June 2003, we were condemned by the supervisory body of the International Covenant on Economic, Social and Cultural Rights for not embodying in law the right to withdraw labour, which the International Labour Organisation always defined as a basic human right. The Council of Europe's European Committee of Social Rights again condemned us for providing inadequate protection against dismissal because of the eight-week rule. We need a debate on how we go forward to embody the right to withdraw labour basically and fundamentally in British law; otherwise we will return to the matter time and again. The time period could be eight or 10 weeks without the lock-out, but we must reflect the reality of what goes on in the world: people demand rights that are firm and clear.

When we considered the Bill that became the Fire Services Act 2003, we pointed out that by not embodying the right to strike in legislation, we made workers vulnerable to legal action against them and their trade unions if they took industrial action that had an impact on the performance of a statutory duty. The Bill does not clarify the situation, although I am sure that Baroness Turner, Lord Wedderburn and other Members of the other place will try to amend the Bill to enable that to happen.

The Bill attempts to address how we seek to frustrate the implementation of the way in which people may withdraw their labour. In the past, that has been brought about through a bizarre and cumulatively awkward process of holding ballots and giving detailed information to employers. The problem is not the principle of ballots, but the nature of the hurdles that must be overcome that exist to frustrate the will of people who wish to withdraw their labour. Many unions have expressed the view that although the Bill is an attempt to improve the situation, it might well make it worse, especially with regard to the categories of information that will still have to be provided to employers. I hope that hon. Members will examine that matter in Committee.

The second right that I shall mention is the right to recognition. I support hon. Members who said that the arbitrary decision to define a firm to which the right will apply as one with 21 or more employees—given the processes in existing legislation—is extraordinary. In my area, as in most areas, the worst firms can often be the smaller firms.

It is in those firms that the black economy is thriving and illegal workers are exploited and mistreated, and fail to gain recognition rights. I hope that we can consider a solution to that problem. If the measure would be a burden on the employer, let us look at how we can overcome that burden by granting tax concessions or linking some of the cost elements to the individual company's profit rate so that the burden is fairly shared.

The third right is the right to be treated fairly and not be discriminated against just because one is a member of a trade union. The Employment Rights Act 1999 made a breakthrough when it outlawed the blacklisting of trade unionists. However, the regulations on blacklisting have not yet been published, and I would welcome an indication of the timetable not only for publication, discussion and debate but for implementation. Blacklisting still happens, not often I hope, and it can destroy not only people's livelihoods but their whole lives. It is a form of discrimination that we should outlaw.

I am pleased that we are addressing the issues raised by the Ullswater amendment and the Wilson and Palmer cases, but I am extremely concerned that no matter how we seek to protect the individual worker against discrimination based on membership of a trade union, the phrase "sole or main purpose" in clause 23 sets too high a test for us to enforce the rights of trade union membership in law, and I urge those Members who will be on the Standing Committee to consider whether those words could be deleted.

Much has been said about including pensions in the core bargaining remit, and I fully support that. However, I suggest that if we are to end discrimination and ensure that people are treated fairly, we should also include equality issues, particularly as they relate to access to training, improvement in one's working conditions and access to promotion, which has impacted on women in particular.

The fourth right is one that has been raised in the past, and that is the right of protection in pursuit of employment. This applies to specific areas, one of which is journalism. A number of journalists, in undertaking their professional work, now run the risk of legal action that could impose heavy financial and other punishments on them because they refuse to name their sources. I would welcome consideration of that matter with a view to tackling it in the Bill, because it is an issue of employment rights.

Finally, the fifth right is the right to consultation. This strikes at the timidity of our approach: I do not want the right to consultation; I want the right to have a say. I want workers to have the right to influence the direction of their company. I regret that we have stepped back from the discussion of industrial democracy that went on for so long in the history of the Labour party and trade union movement. I welcome the European directive on consultation, although I regret that it has taken us so long to implement it. The Bill does not set up workers councils, and I would like it to do so. Those workers councils should have the right not only to be consulted but to express a view that is taken into account in planning the direction of the company, particularly in those public sectors that have been privatised and turned into agencies. I want the Government to go further.

I welcome this rights-based approach. I urge the Government to consider the work done by the Institute of Employment Rights for the charter of workers rights and by the TUC for its document, "Modern Rights for Modern Workplaces". That is the approach that we now need to take; those are the next steps. I would welcome a consolidated employment rights Act. The charter of workers rights calls for rights embodied in law that ensure, first, dignity and fair terms in employment. Secondly, there should be a more comprehensive health and safety commitment. Thirdly, every worker should have the right not to be discriminated against and to be treated with equality in equivalent circumstances.

The fourth right is job security. We need to go much further in ensuring that every worker has the right to security of employment, whether in relation to closures, redundancies, transfers or otherwise. Workers have a right to security in their long-term future and, as we have said before, in respect of the deferred wages that they have invested in pensions. The fifth right in a charter of workers rights is the right to income security. Every worker should have the right to a fair income and security in retirement, sickness and unemployment. That requires a dramatic improvement in the minimum wage and its extension to younger workers.

Further rights include the right to union membership and the right to union autonomy. Some of that will hopefully be enacted through the Bill, which removes some interference by the state in union operation, but we need to go further. Other rights are the right to industrial action, the right to full union representation and the right to effective remedies. Too many of us are still dealing with cases through industrial tribunals, where the rights of those who have been aggrieved are frustrated by delays and compensated inadequately. We have not yet provided effective remedies in all cases.

Overall, I welcome the Bill. It is the next step but I look forward to a more courageous approach.

5.10 pm

Miss Julie Kirkbride (Bromsgrove) (Con)

I am grateful for the opportunity to take part in the debate, despite the fact that I had some meetings scheduled for today which, sadly, conflicted with earlier parts of the debate. I apologise to hon. Members whose speeches I missed, but I have been able to hear some speeches and intervene in some.

I shall take up some of the points made by the hon. Member for Wolverhampton, South-West (Rob Marris), who made an interesting speech that I enjoyed listening to, although I profoundly disagreed with pretty much everything he said. I found it curious that he said there was a distinct correlation between union membership and participation, and well-being—making a country a better place to live in. The ultimate example of a unionised country was the former Soviet Union, and I cannot imagine a more horrible country in which to live in the 20th century. I am not sure whether the hon. Gentleman's argument is strictly true.

Ann McKechin (Glasgow, Maryhill) (Lab)

Will the hon. Lady give way?

Miss Kirkbride

In a minute.

Although I was interested to hear the comparison that the hon. Member for Wolverhampton, South-West made between America and Canada, I think he will find that a great many more people wish to go to America to make a fortune or earn their living than to Canada. There may be problems with labour relations in America, but it is still by far the richest country in the world, in terms of both gross domestic product per head and overall GDP. That is manifested by the fact that it has announced that it intends to send a man to Mars at some distant future date. That shows the dynamism and power of the American economy, where there is a much more successful balance between individuals' legitimate desire to make a lot of money, to be very successful and to contribute to society through their taxes, than in the more passive countries that the hon. Gentleman clearly prefers, where trade union rights sometimes hinder the dynamism that makes the difference between economic prosperity and other things, which he may value more.

Rob Marris

rose

Miss Kirkbride

As I have mentioned the hon. Gentleman, I must let him intervene.

Rob Marris

I am grateful to the hon. Lady for that. Does she recognise, as I suggested when I was speaking, that working people's average income in the United States has not gone up for more than 25 years, although the country has got much richer? The reason for that apparent contradiction is that the rich in America have got a whole lot richer in the past 25 years, whereas the average working Joe, as Americans would say, has hardly got any richer at all. Does the hon. Lady think that such inequality makes for a desirable society?

Miss Kirkbride

I should be interested to see the hon. Gentleman's figures for that, as I am not inclined to believe those statistics. I suspect that spending power in America has got much greater, because taxation rates in the US are a good deal lower than ours, and those of other countries. It is not the amount that people earn, but the amount that they have left to spend when the Government have had their take, that is significant. I do not believe that people in America, even the poorer sections of society there, are significantly worse off than people in Europe. Indeed, I believe they are a good deal better off.

I do not accept, either, the idea that the rich getting richer makes the poor poorer, and I think that even the Labour Government have come to that conclusion. Despite the fact that the Conservative Government were berated for encouraging a growing disparity between rich and poor, the poorer sections of society are becoming better off, although the gap is still widening. When we talk about union regulation, Labour Members might bear in mind the fact that despite all the opprobrium that they attached to the Conservative Government during the 18 years that they were in power, in the past seven years of Labour government the gap between the rich and poor has got wider—and I am happy to take a bet with Labour Members that that will continue to be the case while Labour remains in power.

The hon. Gentleman also raised another interesting point, which is worthy of mention because it is certainly something that I find in my constituency—he should be flattered that I listened to him so much. He said that all the regulations were a good idea because they put employers on a level playing field, and that employers like that. Some employers might. The really big employers love it. It gives them a competitive advantage because they have systems in place to deal with their personnel requirements and other matters. But the smaller the employer is, the harder it becomes.

I know from my constituency post and my dealings in my constituency, that that affects many legitimate small employers who do a good job. I can think of one building firm in particular that is a model employer and a good business, but which is beside itself because the more the regulation increases and the more onerous the burden of public liability insurance upon them, the more their legitimate business of roofing and doing people's driveways is simply going to the cowboy operators who have no earthly intention of meeting any rule that the Government introduce. More regulation can act as a detriment to the smaller employers who cannot afford it, and find that they are priced out of the market because the customer will accept the cheapest quote on offer. Customers do not consider whether a company complies with the Government's new regulations; they just see the £1,000 difference in the cost of tiling their roof and they go with the guy who is cheaper. That is part of the problem. We want people to be legitimate, pay their taxes and abide by the rules, so we need a balance in the way that we introduce these rules.

Jim Sheridan

The hon. Lady refers to cowboys. Surely we all have a responsibility to report to the proper authorities any cowboys who are undermining legitimate jobs. In addition, if there were no health and safety legislate on there would be even more fatalities, particularly in the construction industry.

Miss Kirkbride

The hon. Gentleman must bear in mind the need for balance in all this. It would be a wonderful world if everything that people did wrong in society was reported and dealt with, by prosecution if appropriate, but he will know from his own postbag that we simply do not live in such a world anymore. Creating more rules that have to be policed will not get any of us anywhere. Everyone will ignore them, and the more difficult it is to police the law the less it will be obeyed, the more it will fall into disrepute, and the sadder it is for all of us. If we do not have a society in which proper rules are abided by, we can all—including grannies and everybody else who takes on a rogue builder without realising it—end up with the problems that result from not going to a legitimate builder who can afford to do the job at a suitable price.

The question of balance is the key difference between Opposition Members who have concerns about the Bill and Labour Members, some of whom, it has to be said, have a strong constituency interest in supporting such a measure—because, as the hon. Member for Hamilton, South (Mr. Tynan), who is smiling, told us, the unions pay some of their wages. We know where Labour Members are coming from, which is one reason why we believe that the Bill is unnecessary and why we are disappointed that other more important pieces of legislation, which we have been expecting in the Government's programme, are not forthcoming. As my right hon. Friend the Member for South-West Surrey (Virginia Bottomley) said, we would have liked to see a Bill on mental health issues. We would also have liked to see a Bill on the civil service, which I would argue is a much more legitimate matter for legislation than the matters dealt with in the Bill, which although it is not terrible, is largely unnecessary.

Mr. Sutcliffe

I try not to intervene on hon. Members, but there may not be time to deal with the hon. Lady's comments at the end of the debate. She thinks highly of family life, and she will be aware of the Government's family-friendly policies on work-life balance, so is she happy to welcome any of those policies, and would she protect them if she ever got into government?

Miss Kirkbride

The Minister has introduced a red herring. I noticed no family-friendly measures in the Bill. If there were any, I would have liked to discuss them.

Under this Labour Government, employment regulations have become like pouring sand into the machinery of employment creation. So far, the effect has been largely benign, but that will not necessarily be true in future, because the more sand is introduced into the machinery, the worse the situation will be. That is why it is not encouraging to see the Bill going on to the statute book. The hon. Member for Hamilton, South upbraided me when I told him that it was my party's policy to welcome good employment relations, but they are absolutely vital; during the 1970s and 1980s we saw to our cost just how bad industrial relations can be. We welcome good employment regulations and believe that most employers abide by them, while accepting that there are some wicked employers who do not behave in a way that any of us would wish to defend.

I suggest to the hon. Member for Hamilton, South that introducing more regulations is using a sledgehammer to crack a nut, and that the law in itself cannot create better citizens. Creating more laws will merely make life much harder for the perfectly good, decent smaller employer who goes home every night and has to read a 100-page manual on how to implement the minimum wage, or take up his book on how to pay to working families tax credit, or whatever it is called nowadays—it changes every year, and I can never remember. Administering the benefits system used to be the job of the Benefits Agency; now, under this Labour Government, it is the job of employers.

Mr. Tynan

I have two points. First, the only person who pays my wages is the same person in the pay office who pays the hon. Lady's wages. Secondly, if there are bad employers, employees are suffering. Does she not think that protecting them by introducing legislation such as this is a price worth paying?

Miss Kirkbride

I have every sympathy for those people, because there is nothing worse than going out to work in the morning feeling miserable because one does not want to be there. That is a horrible thing to have to do, and I would not wish it on any of my fellow citizens. Nevertheless, I believe that the best way to create a better society for all of us is to is to create a dynamic economy in which people have a choice of whom to work for, and entrepreneurs feel happy to go out and create jobs because they do not have to read a 100-page manual on the minimum wage or do all the other things that they have to do now in order to set up a business. We should encourage more people to set up businesses, create jobs and give people choice, not diminish job creation by imposing more burdens. Obviously, Conservative and Labour Members will disagree fundamentally on the way forward, but that belief goes to the heart of how we feel about the Bill.

Labour Members know that our party has no problem with the minimum wage and that we would not try to abolish it, although we might try to cut the number of pages in the manual on its implementation. Labour Members must also accept that they introduced the minimum wage at a much lower rate than the TUC would have liked. That level has not caused significant problems for the economy. Anyone on the minimum wage today would also have to claim benefit—whether family credit under the previous Government or working families tax credit now. Under a Labour Government, one cannot earn enough on the minimum wage to live in high-price Britain. We approve of the minimum wage, but we realise that it does not represent a sort of Valhalla, as some Labour Members appear to believe. I urge Labour Members to consider carefully before trying to introduce the minimum wage for young people of 16 and 17. Many young people would gain more from simply having a job than from having to be employed on the minimum wage that the Labour Government set.

5.25 pm

Judy Mallaber (Amber Valley) (Lab)

I am a member of Unison, which contributes to my constituency party, not to me. The hon. Member for Bromsgrove (Miss Kirkbride) referred to constituency interest. My constituency interest, which makes me feel so passionately that this measure is important, is that of Coats Viyella workers, whom the hon. Lady would perhaps like to meet. They were treated disgracefully by their employers, and I shall return to that subject later. My constituency interest is therefore that of workers who are not members of my union.

Many points have been made about the Labour Government's advances in modernising our industrial relations system and getting rid of some of the Tory Government's worst excesses, which had nothing to do with enhancing co-operation between employers and employees. Indeed, the reverse was true. Many of the basic rights and protections that we have given workers take account of modern working conditions. We especially wanted to consider a proper work-life balance and provide the flexibility that recognises changing working patterns and the need to combine work and home life. I welcome provisions to give greater protection to those who want flexibility. The hon. Member for Bromsgrove said that the Bill contained nothing about that, but we are providing greater protection to people who use the rights in the previous employment Act to seek flexible working patterns.

I was an employer in a small organisation before becoming a Member of Parliament. We had better relations and communication when my staff got together and had decent representation in their union. I therefore know from personal experience that it can be helpful to be encouraged into proper bargaining relationships. The extension of union recognition rights was important in enhancing industrial relations, and measures to improve that are welcome.

I want to highlight a few provisions and make suggestions for further consideration. Some of what I say will support points that others have already made. Those who oppose Labour's improvements to our industrial relations system want to take us backwards. At the beginning of the debate, it was said that the introduction of the minimum wage had been described as a potential disaster for the economy. Nothing could be further from the truth, as shown by the creation of an extra 1.7 million jobs since Labour came to power.

Whatever Conservative Members say now, I shall not forget the bitter opposition that they expressed when they were not prepared to help the low-paid workers, especially women, who have benefited so much from the minimum wage legislation. Earlier, the hon. Member for Buckingham (Mr. Bercow) said that he was wrong, but I shall not forget that he kept me up hour after hour through the night when we discussed the minimum wage in Committee, telling us that it was wrong and that we should not introduce it. I shall not forget that, even though in my recent Adjournment debate on equal pay, he said mea culpa. The minimum wage legislation has helped with equal pay, but a large gender gap in pay rates remains.

Conservative Members opposed our efforts to bring justice to those on poverty wages. I therefore welcome the provisions that make it easier to implement the minimum wage legislation, but I want to reiterate three points that were made earlier.

First, we should consider extending protection to 16 and 17-year-olds; secondly, I support what my hon. Friend the Member for Falkirk, East (Mr. Connarty) said about tips; and thirdly, I very much endorse the comments of my hon. Friend the Member for Aberdeen, Central (Mr. Doran) on the employee-worker definition. I have raised those points in the past with predecessors of my hon. Friend the Minister in relation to part-time workers and the implementation of the minimum wage legislation.

Returning to where I began, the part of the Bill with which I am most pleased is the introduction, at last, of provisions on information and disclosure, on which we have seen Victorian practices and a return to the past. Some 5,000 textiles jobs have been lost in the east midlands in Coats Viyella plants, many hundreds of them in my constituency. I emphasise, however, that during the Tory years, 500,000 jobs were lost in the textiles and clothing industry. At Coats Viyella there was no consultation or information. It is not acceptable for a person to learn that they are losing their job over the internet because it has to be announced on the stock exchange first. It is not acceptable to hear in the factory that 200 jobs are being lost, only to have that contradicted two hours later in a press release. There was uncertainty for weeks, and the Government were kept in the dark. The Coats Viyella officials told the Department of Trade and Industry that they were getting rid of their clothing business just the night before the stock exchange announcement. It is outrageous for employers to behave in that way. Many of the people concerned had worked for the company for 20 or 30 years. When I went to talk to the workers, I found that whole families were employed by the company. Why were there no discussions about its position before that?

My parliamentary neighbour, my hon. Friend the Member for North-East Derbyshire (Mr. Barnes), referred earlier to the outrageous behaviour of Saint-Gobain at the Biwater pipe manufacturing company at Clay Cross. The company was closed not because the firm was doing badly, but in an asset-stripping exercise to wipe out the opposition. The employees were told that their future was safe, only to hear the announcement of the firm's closure within minutes of the takeover. In April 2001, when Marks and Spencer announced that it would close stores in continental Europe, the French courts forced it to suspend the closures because it had failed to abide by French law and consult employees. It is very important that we introduce such measures, and I hope that we can extend them to lower levels of employment, and take account of other issues raised by my hon. Friends, which I shall not go into now.

I emphasise that we want to stop the appalling practices in companies such as Coats Viyella, Biwater, Vauxhall and Ford. However, it is also important that we consider the Bill as a positive measure. The most authoritative workplace study, done in 1998, showed that fewer than one fifth of workers reported that they were regularly consulted about workplace change. That is just ridiculous if we want to harness the information, ideas and experience of the people in those workplaces. They ought to be consulted. I hope that we will look more positively at how to implement this legislation, and examine how workers in workplaces can have a say, as my hon. Friend the Member for Hayes and Harlington (John McDonnell) suggested.

I have mentioned flexible working patterns, and I welcome the proposals on those in the Bill. I have previously given the example of nurses. We are desperately crying out for more nurses, but many have left work in the national health service. In spite of encouragement being given throughout the health service, from the top down, I can give examples of nurses with children having to leave because management could not find ways of enabling them to work flexibly. That is a tragic waste. Anything that can help to encourage flexible working is to be welcomed.

I support any measures that will make it easier to implement the law on industrial action, but there might be other areas that my hon. Friend the Minister should consider, such as the definition of a trade dispute. That definition makes it difficult, or impossible, for unions to take action over terms and conditions when their employer is being restructured, perhaps following a TUPE transfer, and their future employer will be different—following a private finance initiative deal, for example. That happened when my union, Unison, found itself in court over workers seeking to take protective action at University College hospital. It is important for my hon. Friend the Minister to look into that matter, and perhaps others.

Let me say something about a matter that has not been raised for a while today: the importance of preventing the infiltration of unions by the British National party and other ultra-right-wing and fascist organisations. I was pleased to hear that my right hon. Friend the Secretary of State was determined to include that in the Bill. At present, even if a BNP member is acting against the aims and objectives of the union as set out in its rule book, he or she can be protected from exclusion if there is any suggestion that the actions involved are linked with membership of a political party. That still obtains even if the party is despicable and its objectives are racist, and it can take precedence over the worthy aims in the union's rule book.

There should be no doubt about the fact that the BNP and similar organisations are trying to infiltrate and subvert trade unions. An article in The Guardian spoke of how the BNP was encouraging activists to join unions, advising them to seek compensation if they are kicked out when their politics are uncovered. The Guardian found a members' bulletin stating: Those looking to be thrown out of a trade union and then getting a big five figure payout should make it known to the local union lefty that they are members and may be standing as candidates for the BNP. The BNP is encouraging unions to expel members so that it can get hold of the lolly and add it to its funds so that it can continue to pursue its despicable racist activities. That must be stopped. I will not mention specific unions, but a number are involved.

Anne Picking

While we are on the subject of political parties and the trade union movement, should we not place on record that it was the trade union movement that created the Labour party? That is where the unions' allegiance has traditionally been bestowed, and where it should remain.

Judy Mallaber

I entirely agree. It is absurd and appalling that the objectives of a racist organisation can supersede in law the worthy objectives on which a union was founded, and which it seeks to pursue in the interests of its members.

I strongly support the Bill as a whole, although I hope that my comments on the possible extension of some of its provisions will be borne in mind. We want good relations in the workplace, not confrontation. I am appalled by the number of Opposition Members who oppose measures to help people obtain work and acquire skills. It is unbelievable that they oppose the new deal, one of the most positive employment programmes that has been introduced.

When I was a member of the Standing Committee considering the last employment Bill, I was stunned by the amount of time spent by Opposition Members in quizzing the Minister about our introduction of proper legislative backing for union learning representatives—one of the most positive and imaginative ways of encouraging people in the workplace to enhance their skills and learning. I should have thought that members of all parties would feel able to support that, but the Tories spent half a day in Committee trying to undermine the provision.

What we want is positive action, and I think we have it in the Bill, although, as I have said, I would like to see it extended. I am not surprised at the opposition expressed by Conservative Members; as for Labour Members, I am sure that they will seek to enhance and improve the Bill.

5.38 pm

Mr. Peter Atkinson (Hexham) (Con)

It is a pleasure to speak in the debate, and to follow the hon. Member for Amber Valley (Judy Mallaber). Her speech was interesting, in that it encompassed the dilemmas that her party experiences in dealing with the modern age. She mentioned the closure of Coats Viyella, and also the dilemma that confronted Marks and Spencer when it wanted to close its continental stores and had to deal with legislation from the French Government.

One reason for the loss of half a million jobs in the textile industry, including many in my region of the north and north-east, is the simple fact that businesses have been moved abroad to lower-cost economies. The hon. Lady will recall that Marks and Spencer, under its own management, was one of the few major British retailers that took pride in sourcing many clothing items, such as shoes, from British manufacturers. As a result, the cost of those items to customers was much higher than in other high-street outlets which imported clothes and shoes from abroad. A financial crisis hit Marks and Spencer because no one bought its clothes and shoes. That nearly destroyed the company, and forced it to close its shops in continental Europe.

That is the reality of life these days. Ordinary families do not want to spend more money than they need to on necessities such as clothes. If they spend more money buying shoes made in the UK rather than shoes made in Morocco or Turkey, they will have less money to spend on other things. That is the basis of the capitalist society. It is a hard lesson but one that is inescapable. The Opposition are keen to do everything possible to avoid further burdens and costs being put on British industry to avoid the situation in which Marks and Spencer nearly ended up.

As I listened to the debate, I was, rather like my hon. Friend the Member for Old Bexley and Sidcup (Derek Conway), transported to an earlier era. There was an unusually large turnout of Labour Members, many of whom, I suspect, would admit to being badged as good old Labour. It was nice to hear them. They were happily attacking Conservative Members as the lackeys of the boss class, wearing our pin-striped suits and wanting to bash the unions at every opportunity. In many ways, we are back on old-fashioned, pre-new Labour, familiar ground, when we all knew our place and our role. Unfortunately, times have changed, and as I said to the hon. Member for Amber Valley, when the factory hooter goes off, if it ever does, thousands of workers do not pour out of the factory gate to return home to the rows of terraced houses at the foot of the shipyard or industrial plant. The world has moved on.

If Members shop in stores such as IKEA, they will see the enormous amount of stuff manufactured in China. That is the inescapable conclusion of the modern world in which we live. That is why Conservative Members are so opposed to the Bill. Although it is not the end of human life as we know it—it will not individually be particularly damaging to British businesses—it is another example of the incessant meddling of the Government, which is eroding our productive base, which we must protect. It is an irony that European countries such as France and Germany are rowing back on such legislation to make their economies more competitive with countries outside the EU. If we do not want to export more and more jobs to the far east and other countries, we will have to take great care about the additional regulations that we introduce.

In my region, the north-east, where the old, basic industries are now long gone, we are beginning to replace them with new home-grown industries, which I am proud to say is the result of the vast investment in the region by the previous Conservative Government, who invested more money in the north-east of England than this Government have done in their six or seven years in power. Growth in small but technically advanced new businesses is taking place, and those businesses tell me on every occasion—they are small companies, but they are the future of our region—that the burden of red tape and regulation is weighing them down and making them less and less productive.

The hon. Member for Wolverhampton, South-West (Rob Marris), who is no longer in his place, talked about how the Conservative party would abolish regulations. I would dearly love to abolish many regulations that have been introduced because that would help British industry and business. One problem is that we cannot do that any more, because regulations such as those that we are debating tonight are the result of European directives. The difficulty is that this Government threw away recklessly our opt-out on the social chapter and allowed such legislation to be introduced. We are not saying that we would abolish all the health and safety regulations—of course, we would not do that—but we want to abolish those parts of the regulations that are disproportionate and unrealistic. I shall give the House an example.

The company that runs the local train services, Tyne and Wear Metro, wanted to open on Boxing day, whereas the rest of the rail network was closed. Only one station in the entire network is run by a rail company: Sunderland station is run by Arriva Trains Northern, and the rest are run by Tyne and Wear Metro. Because of the health and safety regulations, in order to open that station on Boxing day a 48-page document had to be produced, which had to be submitted to the Strategic Rail Authority, Network Rail, the rail regulator and Arriva Trains Northern. It took months of negotiation and thousands of pounds in officers' time to open one station on one day. That is the result of the disproportionate use of regulation that companies complain about so greatly. The information and consultation directive that we are debating is a good example of a measure being propelled into our legislation because of an EU directive.

The hon. Member for Hamilton, South (Mr. Tynan) seemed to think that the Tory party is still funded by fat cat shareholders. The party treasurer would be grateful if it were, and I need not remind Labour Members that, as I understand it, new Labour is substantially funded by various industrialists, some of whose record in the steel industry and abroad is not something of which they ought to be terribly proud.

The hon. Gentleman said that the Bill will have no effect on good employers and companies that employ best practice, but it will. I can tell the House what will happen, as sure as day follows night—even to a company that consults and has good relations with its staff, and has its own proper systems. Clause 31 states: The Secretary of State may make regulations for the purpose of conferring on employees of an employer regulations and rights. So companies will soon get letters from the Department of Trade and Industry or others, saying, "You have to make sure that your existing information and consultation system actually meets the requirements of the Government's legislation." Sure enough, a vast bureaucracy will be created, even for those companies that operate a good system.

Mr. Clapham

As the hon. Gentleman will have heard during today's debate, 85 per cent. of British companies have some form of consultation. He will also be aware that, where a company has conciliation procedures, it will take matters such as health and safety, to which there is a general approach, out of the collective bargaining machinery and subject them to consultation. Sophisticated consultation procedures are already in place to assist the move towards the European directive. The added burden that he talks of simply will not exist for the great majority of companies. He seems merely to be expressing antipathy towards a regulation that will in fact benefit industry.

Mr. Atkinson

The hon. Gentleman makes some of my case for me. We now accept the fact that the vast majority of companies operate a satisfactory information and consultation process in some form or other. But many companies, particularly small ones, do not have the bureaucratic structure that he describes. I accept that large companies with human resource directors may well have such a structure, but the vast majority of new, smaller and growing businesses will not, so the regulation will constitute a particular burden for them. I know that the CBI and the Institute of Directors do not object to many parts of the Bill, but that reminds me of the person who expects a two-year prison sentence but is given a two-year conditional discharge. The regulations that will flow from the Bill will be particularly damaging to British industry.

It is disappointing that we did not have a debate on the clergy, given that the Bill contains an interesting provision in that respect. I do not know whether the Minister will have time to discuss that issue. I was rather hoping that the hon. Member for Greenock and Inverclyde (David Cairns) might have taken part in such a debate, given his former interest in the issue. I was fascinated to discover that the courts had ruled that clergymen serve God and their congregations but have no terrestrial employer.

If they are designated and given rights by the Government, perhaps what we mentioned earlier should apply to Members of Parliament, too. That would be interesting. The case of the Bishop of Reading who, as everyone knows, had to resign because of the fuss, is also interesting. Under the Bill, it could end up as an employment tribunal case. That would bring about a fascinating debate that would considerably exercise the Church of England.

The Secretary of State referred to the infiltration of British National party activists into trade unions. I do not want to be misquoted. In common with every hon. Member, I object to that party, but I find some aspects of the issue baffling and hope that the Minister can explain them. The Secretary of State made a speech on that subject to the Labour party conference in September. Why, then, could we not have something in the Bill to deal with it, rather than a promise of amendments in Committee? I have some concerns about the issue, because it is difficult to draft legislation that defines someone as a racist, irrespective of whether it can be determined that they are a member of the BNP. How could such legislation work? Some people could be kept out of the unions for wrong and false reasons.

Mr. Sutcliffe

Briefly, the hon. Gentleman makes a point that it is vital to debate. The measure is not built into the Bill because we are still reflecting on how to get the detail right. It is not about political party membership, but the activities of an individual within a particular political party.

Mr. Atkinson

I appreciate that it must be difficult to draft the provision, but the concern remains that the legislation, though desirable, could be abused by people who wanted to keep someone out of the union because he did not agree with a particular part of union policy. We await the provisions in Committee.

I am grateful for the opportunity to participate in the debate tonight. I shall willingly vote against the Bill, because it is substantially unnecessary and I fear that it will begin to destroy the competitiveness of British business and industry once again. As in the case of Coats Viyella, that will continue to cost jobs.

Mr. Deputy Speaker (Sir Michael Lord)

Before I call the next hon. Member, I can tell the House that five hon. Members are seeking to catch my eye. We do not have a great deal of time left, but if contributions can be reasonably brief, hon. Members who want to will have an opportunity to address the House. I call Jon Cruddas.

5.52 pm

Jon Cruddas (Dagenham) (Lab)

I shall keep my comments as brief as possible so that other hon. Members can make a contribution.

I support the Bill and wish to raise some points that might be debated in more detail in Committee. As we know, the Government agreed to review any subsequent legislation when the "Fairness at Work" White Paper was first published in 1998. In February last year, the Government stated that the review would be for the purposes of making "operational" changes to some aspects of the Employment Relations Act 1999, but they were not persuaded of the need for major changes to it. Neither would the review cover areas of labour law over and above those contained in the 1999 Act.

My first point—I hope that the Government will accept it—is that the review and Bill should not necessarily conclude the agenda of fairness at work for the Government. My second and related point is that there seems to remain intact an assumption that the framework established in the fairness at work discussions prior to publication of the White Paper should not change. Many in the labour movement will view that as a disappointing response from the Government in respect, for example, of the small firms' opt-out, the eight weeks issue and the 40 per cent. ballot thresholds for statutory recognition procedures.

On the substance of the Bill, several significant improvements are made over what was enacted in 1999, such as the tidying up of elements surrounding the statutory recognition procedure; the reduction of the 20-day period for negotiating the bargaining unit when there is failure to agree; and the top-up recognition procedure whereby the union should have access to the statutory procedure to cover the core topics of pay, hours and holidays in a voluntary agreement. Other improvements include the changes to the minimum wage enforcement procedures and to the law on industrial action to ensure that the courts can disregard accidental failure to meet legislative requirements. I welcome all those changes.

Furthermore, I welcome changes to the right to accompaniment, which other hon. Members have mentioned.

Clause 27 would improve the current provision by allowing the companion to contribute throughout the meeting. It addresses some of the slippage on this proposal between the publication of the "Fairness at Work" White Paper and the publication and passage of the 1999 Act. That limited the role of what was initially conceived as a representative function to that of a companion with limited advocacy powers. Again, I very much welcome the proposal in the Bill.

On the dismissal of striking workers, clause 21 would provide for "locked-out" days to be disregarded when determining the length of period. However, workers on legitimate industrial action will still not be protected after eight weeks. The eight-weeks rule was a compromise between those who argued for a suspension of the contract of employment during legitimate industrial action, and those who wanted there to be less protection. I have always argued that protection against unfair dismissal should be afforded to those on a legitimate trade dispute—for example, one involving the suspension of the contract of employment.

Proposed new section 145B would give a new right to a worker who is a member of an independent trade union that is recognised not to have an offer made to him whose objective is to ensure that his terms will no longer be determined by a collective agreement with the union. Again, that development is to be welcomed. It arises from the European Court of Human Rights judgment on the Wilson and Palmer cases.

The Government's response to the review states: the Government intends that as a matter of principle trade union law should comply with the European Convention. Clause 23 introduces a new set of provisions prohibiting inducements that have the sole or main purpose of persuading workers to relinquish union rights, or rights secured in collective agreements. Those rights not to be discriminated against are to be welcomed, but I do not understand why the spirit of the judgment in the Wilson and Palmer cases is not extended when considering trade union recognition.

Paragraph 48 of that judgment stated that, under UK law, it was possible for an employer effectively to undermine or frustrate a trade union's ability to strive for the protection of its members interests. Arguably, the judgment should also cover the process of trade union recognition.

Other hon. Members have referred to some of the issues at stake. I shall list some of the matters that have been reported to me and to others and presented to the Government in the review. They include placing workers under surveillance as they walk past organisers both in the workplace and outside it; using threats of closure or relocation as a consequence of recognition; dismissing union members or declaring their jobs redundant; intimidating workers on a one-to-one basis; threatening detrimental treatment, such as the withdrawal of benefits, or refusing to promote union members; offering wage increases outside the normal wage round during the recognition procedure; preventing union representatives from approaching or recruiting workers in rest breaks or off the premises; asking workers how they intend to vote; stating that the company will not deal with a union; visiting the homes of workers; and contacting them in relation to the union campaign.

The remedies available through employment tribunals are brought to bear too late, as the damage to the union's case has already been done during the recognition process. The code of practice does not specifically preclude the practices that I have listed.

Given those activities, and article 11 of the European convention on human rights, I do not understand why the Government do not seek to put into the code of practice an unfair labour practices clause. Why have we not stated that such tactics are deemed unfavourable because they restrain trade unions' ability to protect their members' interests in line with what we understand the convention to mean? The primary legislation could state that, once an application to the Central Arbitration Committee has been accepted, practices designated to be unfair, which would be set out in a revised code, would simply not be allowed. When the CAC found that the employer had engaged in a specified unfair labour practice, recognition could be granted automatically.

The Government response to the review, on page 30, states: The Government recognises that intimidatory behaviour by any party during the process, especially at the ballot stage, is reprehensible. Such behaviour, though still untypical of recognition cases, appears to be increasing. The evidence suggests that this problem will not go away, as companies import US-style union-busting consultancies to threaten and intimidate workers away from supporting union campaigns for recognition. I am surprised that such initiatives are not contained in the Bill.

Overall, the Bill is another building block in the bid to secure fairness at work. I commend the work of Ministers and the Government to date.

5.59 pm

Mark Tami (Alyn and Deeside) (Lab)

Before an Opposition Member jumps up to intervene, may I say that I am proud to be a member of Amicus, which provides financial support to my local party but not to me? Some allegation was made that unions provide financial support to Members, but that is clearly not the case.

The Government have demonstrated beyond question that decent employment laws and standards can and do go arm in arm with strong and sustainable levels of economic growth. However, we need to do more if we are to build on our success. We need to promote partnership in the workplace and encourage employers and employees to recognise that they share common goals and common aspirations. The biggest challenge facing British industry today is the productivity gap, as hon. Members on both sides of the House have pointed out. It is not a new problem, but industry and successive Governments have failed to tackle it effectively. Productivity will be improved only if we dramatically increase the level of training in the workplace. Members of Parliament have spent hours, days and weeks discussing the pros and cons of tuition fees and the future of higher education, but how long have we spent discussing the need for more education and training in the workplace and in industry? Not long.

Most major employers tell a good story about training, but in reality they have done little to improve the level and quality of training in the workplace. Employers would still rather poach skilled and valued employees from other companies than train their own. Why waste one's money training staff when someone else will train them? Unfortunately, an increasing number of employers take that approach and as a result skilled employees are lacking in our work force today. I ask my hon. Friend the Minister to consider what steps can be taken to tackle that serious problem.

I recognise that the option of a training levy, under which all employers of a certain size would be required to train a certain number of people, has gone out of vogue, but it is the only option that would deliver significant change. In saying that, I welcome the Government's recognition of the positive role of trade union learning representatives in the last Employment Bill, because they are making a major contribution to encouraging employees to gain new skills and convincing employers to invest in training for the future success of the company.

The Government have taken a "steady as you go" attitude to employment law reform. Many unions would have liked the Government to move more quickly, but no one can deny that major changes and improvements have been made. Statutory trade union recognition and the minimum wage are achievements to be proud of. I also welcome the inclusion in the Bill of regulations to give the Government power to introduce the EU directive on information and consultation. That change is long overdue.

The fact that Britain has not been covered by the directive has led many to believe—rightly or wrongly—that multinational companies have been encouraged to close their factories and other operations in Britain because doing so is easier, quicker and cheaper than it is on the European mainland. Many of the changes in the Bill modify previous reforms. In a previous life, I worked for the Amalgamated Engineering and Electrical Union—now Amicus—and had the pleasure of dealing with the Central Arbitration Committee when it was first set up. I doubted whether it would be a successful way to deal with questions of recognition, but in my limited experience—I have talked to colleagues who still deal with that body and to representatives from both sides of industry—it has generally worked well.

Many in the trade union movement—and many hon. Members in the debate—have shared my concern about the 40 per cent. threshold for a yes vote. That hurdle is unfair and one would be hard pressed—as some of my hon. Friends have pointed out—to think of another election in this country that requires such a level for a positive result. People who do not vote are assumed to be against the proposition. As has been said, few Governments or councils would remain in post under such rules. The threshold also encourages some employers to avoid a voluntary or negotiated route to union recognition because they think that the union is unlikely to achieve the threshold. That is not a positive approach.

I am still unclear about the impact of the changes introduced in the eight-week rule. Several Members have mentioned the scandalous treatment of workers at Friction Dynamics and the behaviour of the owner of the company, who went out of his way to circumvent the law when he sacked the work force and reconstituted the company. I am thankful that such examples are rare, but they show the need for legislation that allows for the worst in employment practice while encouraging the best. Will my hon. Friend the Minister consider some changes to the eight-week protection period to help workers who face a situation similar to that of the workers at Friction Dynamics?

Since 1997. we have seen an overall increase in the number of recognition agreements in the workplace. The majority of employers have dealt with unions reasonably, although a minority still try to derail recognition by using union-busting firms to provide either incentives or threats to the work force to prevent unions from achieving the necessary level of membership. From my own experience, I know that employees have been encouraged to write letters saying that they do not want a union, and I have heard of threats being issued that a company would be closed if the majority of workers dared to join a union. Although such threats and innuendoes are, by their very nature, rarely detailed in correspondence and are thus difficult to prove, they are clearly contrary to the meaning and intent of the legislation. Will my hon. Friend consider how we can achieve meaningful protection against those employment practices?

My final point is on political fund ballots. We all know why that legislation was introduced: it was nothing but a cynical attempt by the Conservatives to starve the Labour party of support. The legislation backfired badly for them, as, in fact, more funds were set up, but the process remains cumbersome. Indeed, it is a perfect example of the red tape and over-regulation that the Conservatives harp on about. It is high time that that unnecessary bureaucratic process was removed.

6.7 pm

Ann McKechin (Glasgow, Maryhill) (Lab)

It is a pleasure to speak in support of the Bill. I speak both as a member of the Transport and General Workers Union and as an employer in a small enterprise in the service industry for 10 years before my election in 2001, so I think I speak with experience of both sides.

I welcome the Bill. It is not merely a tidying-up exercise after the review of the Employment Relations Act 1999; it is most important because it implements the information and consultation directive, which will go a long way towards improving working relationships in this country. The Bill contains many other provisions that are sensible, fair and balanced, and will be valuable in helping to encourage a progressive and productive workplace.

That is the core difference between our Government, who believe in a fair and balanced approach to employment relations and workplace rights, and the previous Conservative Government, who introduced successive legislation motivated not by a desire for good employment relations, but in an ideologically driven campaign to undermine trade unions and collective representation at work.

I was dismayed that the hon. Members for Huntingdon (Mr. Djanogly) and for Bromsgrove (Miss Kirkbride) spent so much time demonising the role of trade unions in our society. Throughout the world, independent and free trade unions are the cornerstone of modern democracy. I welcomed especially the thoughtful comments of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris). We should not forget that even today people across the world suffer oppression, imprisonment and death for exercising their rights as trade unionists.

Only last year, a close friend who campaigns for Banana Link visited Ecuador with several trade unionists. Just before their arrival at a banana plantation, a gang of thugs employed by the company that owned it had harassed the workers, shooting one of them so badly in the leg that it had to be amputated. The chap was only in his 20s. We should not forget that people are still dying in the fight for trade union rights in the world today.

We should be pleased that we live in a society that recognises the role of trade unions and the very constructive role that they can play in our democracy.

I have a number of concerns regarding practical aspects of the Bill. I would ask the Government, as a number of my colleagues have, to think again, when presenting the regulations, about the effect that the phasing in of the regulations on information and consultation, based on the size of the enterprise, would have particularly on women, ethnic minorities and lower-paid workers. Many people from those categories are employed in small and medium-sized enterprises and, accordingly, the effect of phasing in the regulations could be to leave those already disadvantaged groups less protected than other workers. I seek some reassurance.

That concern has been expressed to me by the Scottish Trades Union Congress, which, although it warmly welcomes the Bill, has asked for a level playing field providing equal recognition rights in small businesses, and the TUC, which has expressed concern about the 6 million workers in companies and firms that employ fewer than 20 people, who will miss out on union recognition rights. It really would be a missed opportunity if the Bill, with all that it has to commend it, were to increase the relative disadvantage of workers who are already the lowest paid or least effectively represented.

The national minimum wage is one of the proudest achievements of this Labour Government. I welcome the measures included in clauses 32 to 34 to improve the operation of the national minimum wage. It delivers more money into the wage packets of our lowest-paid workers, especially among women and ethnic minorities. Last year I was pleased to take part, as a member of the Scottish Affairs Committee, in an inquiry regarding home workers and the effect of the national minimum wage. This group of people, more than any other in the work force, deserve to be made aware of their rights to qualify and deserve public protection. The inquiry showed clearly that many of these people rarely benefit from union recognition and are particularly vulnerable to the practices of unscrupulous employers. The national minimum wage has helped many low-paid workers, and with further enforcement measures I am sure we can help even more of them. I hope that the Government will continue to strengthen their efforts to protect home workers, and I seek the Minister's assurance that his Department will investigate any further abuses of the home workers industry to ensure that it can benefit from minimum rights.

I am aware of the time, so I shall conclude by saying that the Bill offers a fair and balanced approach. I believe it will assist in creating good relationships between employers and employees, and allow us to work towards a sustainable, more productive economy. I am pleased to support the Bill.

6.13 pm

Jim Sheridan (West Renfrewshire) (Lab)

As a long-standing and proud member of the Transport and General Workers Union, I have a genuine interest in the debate. I place on the record my public recognition of the Government's progressive and pragmatic approach to employment legislation. I agree in principle with the Bill, although I have one or two minor concerns that I would be happy to take up at a later stage. A number of my Labour colleagues perhaps have some interest—genuine or otherwise—in the speed or direction of the Government's approach to employment legislation, but I am sure that having listened to the speeches of the official Opposition this afternoon, we now recognise what the alternative is. I hope that that concentrates the minds of those Labour Members who think that there is something better out there.

I place on the record my thanks to the many, if not thousands, of shop stewards throughout the UK who depend on legislation such as this to enable them to do the work that they need to do to represent their members. Without the tools, they cannot achieve that.

I want to place on record the fact that the trade unions have kept their integrity, even after the vicious attacks by the last Tory Government. I doubt whether any other organisation in the UK would have survived the attacks that the trade union movement suffered during that period.

The Minister will also be aware that I have been successfully selected to introduce a private Member's Bill: the Gangmasters (Licensing) Bill, which deals with agricultural workers. Although the Government have made good progress in introducing effective employment legislation, I hope that that vein will continue with that private Member's Bill. Gangmasters take the word "exploitation" to the extreme, as health and safety is ignored, there is a no national minimum wage, tax evasion is the norm and people can be evicted from their homes without any reason whatsoever. That applies not only to indigenous workers, but to migrant workers, who are absolutely exploited. I know from my own research that Opposition Members' constituents have contacted them about the role and concept of gangmasters. Although I seek the Government's support in that private Member's Bill, I sincerely hope that I will also secure the support of the Opposition parties.

I am conscious of the time, so I want to make two final points. First, I have already raised the question of agency workers with the Minister, so he knows my views on them. A large company in my constituency has merely transformed all its employees into agency workers. It did nothing wrong; it was simply following the competitive edge of the industry. In effect, that is like an irresponsible adult getting someone else to babysit for their children. That is wrong; it is a misuse of agency workers, and it should be legislated against.

I have some difficulties with the 40 per cent. rule in relation to recruitment. The TGWU has been active in recruitment, and I know how difficult it is to try to recruit workers, particularly with the existing barriers.

The hon. Member for Gordon (Malcolm Bruce)—unfortunately, he is not here now—spoke warmly about works councils in the workplace. I can tell him, quite categorically, that works councils are sometimes necessary, but they are absolutely no substitute for independent trade unions.

In conclusion, I welcome the Bill, although there are one or two jaggy bits, which I have difficulty with, but I am happy to discuss them at a later stage.

6.17 pm

Colin Burgon (Elmet) (Lab)

Thank you, Mr. Deputy Speaker, for calling me at this late stage.

I am pleased that this Labour Government are building on the Employment Relations Act 1999, after a wide-ranging review influenced by the unions and employers. That review took place against a background of the lowest unemployment figures since 1975. In my constituency, for example, the unemployment rate is now 1.5 per cent. That contrasts, nationally, with the 3 million people who were unemployed under the Conservatives. Now that we have got the highest ever number of people in work—some 28 million-plus—we need to look constructively at ways in which we can positively support them, and the Bill should be judged in that light.

The TUC has welcomed several changes to the 1999 Act, and many of my hon. Friends and I share its view. For example, on union recognition, it views positively the fact that the Central Arbitration Committee will be given more powers to speed up recognition claims and introduce more clarity on how that procedure operates.

As many hon. Members have said already, the Bill will change the law to reflect the ECHR's so-called Wilson and Palmer judgment, by establishing a positive right for union members to gain access to the services of their union and, while accepting that employers can offer individualised contracts with workers, they cannot require people to give up their union representation as a precondition to that offer—a very important point.

Another important issue is the right of workers to be accompanied. I know of the tremendous importance of that from dealing with many constituents over the past few years. Previously, an employee could ask a union representative to attend grievance or disciplinary proceedings, but that union rep had no legal right to speak.

The Bill will give, at long last, union reps the right to contribute fully to the process. The measure will be widely welcomed, as it was by the right hon. Member for East Yorkshire (Mr. Knight).

I am pleased that the Bill will strengthen the enforcement of national minimum wage legislation. I have read that information picked up from employment tribunal hearings on other matters may be used by the Inland Revenue to prosecute employers for breaching such legislation. I put on record my support for widening minimum wage legislation so that it covers 16 and 17-year-olds.

Like the TUC, I welcome the fact that the Bill will give the Government powers to transpose the EU directive on information and consultation into regulations. Employees will at long last gain the right to be consulted on important decisions and to access information that could directly affect their working lives. It is good that the Minister for Employment Relations, Competition and Consumers has said that he wants a no-surprise culture to be introduced to industry, despite the fact that several Conservative Members derided him for that.

The Government's approach on the Bill could be summed up by a memorable quote from the former head of the TUC, Vic Feather—older hon. Members will remember him. He said that industrial relations are like sexual relations; they are better between two consenting parties—I always wondered why he had a twinkle in his eye. The Conservative party's stance is different from that of the Government because it clearly wishes to reverse trade union legislation and sees little value in partnerships in the work place. Conservative Members describe the Bill as nannying, interfering and meddling, so we have a strong indication of the way in which they are heading. After hearing the drift of those who have spoken, I have no doubt that if they were given the chance, they would undermine maternity and paternity rights, the minimum wage and paid holidays.

My reservations about the Bill are rooted on a totally different approach from that of the Conservative party. I join with several Labour Members in saying that a few key aspects of the Bill do not go far enough to help us to build better protection for working people. It is accepted by many of my colleagues that its chief omission is represented by the fact that it will deny recognition rights to the 6 million employees who work in companies that employ fewer than 20 people. My hon. Friend the Member for Manchester, Central (Tony Lloyd) made his case on that well.

The Government propose to stipulate that the core bargaining topics for the purpose of statutory recognition should not include pensions. They have rejected the option of including training and equality as topics. I agree with people such as my hon. Friend the Member for Hamilton, South (Mr. Tynan), who put his point strongly, who take the view that we are missing a golden opportunity to change attitudes on those three matters. Given working people's massive concern about pensions, I would be pleased if the Minister told us that there might be movement on that.

I share most of my colleagues' views that the 40 per cent. figure. for a recognition ballot is too high. We also need to consider the practice of importing US-style union-busting consultants and of using fair practice in labour law, so I was pleased by several of the Secretary of State's comments in her opening statement. On extreme right-wing infiltration of unions, many of us want amendments to be moved in Committee to provide that unions will be given the means not to recruit fascists and to expel them from membership. Fascist organisations, whatever name they go under, are dedicated to a world view that denigrates many ordinary trade union members. Their philosophy and practices are totally opposed to those of trade unions, which try to promote the interests of all their members regardless of race, creed or colour. Unions should thus be able to expel people who join merely to undermine their central tenets, so I hope that the Government will respond to that.

I am convinced that the Bill will not be the final word because the world of work is dynamic and changing conflicts are always present in it. We will therefore be returning to these matters in legislation, and certainly while we have a Labour Government, they will receive positive consideration.

I have been convinced, just by experiences with constituents over the past few months, that there is a great need to protect people at work. A high-tech firm in Leeds has weekly staff meetings at which anybody who has not met their target has to stand up on a table and explain themselves to the rest of the company—this is in 2004. Unfortunately, my local Co-op has sold the bakery part of its business without informing the workers, many of whom have given years of service to the firm. Many of my constituents work at the Norsk Hydro engineering plant in Leeds, which is partly owned by a Norwegian company. Those workers were left in the dark for months, demoralised by stories that the plant was to shut, and they had to look in local editions of the Yorkshire Evening Post for confirmation that their jobs had disappeared.

A local shop worker said that because her company views her as "staff" she is expected to work up to 10 hours a week without pay for those hours, which means that over the working week she is effectively paid less than £3 an hour. Workers have also, certainly in my constituency, faced the loss of call centre jobs to India. I welcome the recent ContactBabel report and its central finding that the cost savings from moving offshore can be outweighed by the loss of frustrated customers. That will make employers in call centres such as those in Leeds think again.

The Government want to ensure stability, security and dignity for people at work, which is what they should be all about, and if the Bill helps to deliver that, it will have the wholehearted support of Members, certainly on this side of the House.

6.26 pm

Mr. Henry Bellingham (North-West Norfolk) (Con)

We have had an excellent debate that has been well informed and generally good humoured. We have no intention of opposing for opposition's sake, and we welcome a number of the Government's proposals.

We had said that it was too early to review the Employment Rights Act 1999, but we acknowledge that the Government were forced to act by the 2002 European Court of Human Rights judgment in the Wilson and Palmer case. The result is clause 23. We agree that employers should not be allowed to offer unfair inducements for employees not to take up their full union rights. The Secretary of State commented on that in some detail, as did the hon. Members for Aberdeen, Central (Mr. Doran) and for Wolverhampton, South-West (Rob Marris). The hon. Member for Hayes and Harlington (John McDonnell) flagged up as potentially misleading the terminology in line 30 on page 19. Perhaps that can be considered in Committee.

We also welcome the provisions in clause 27, which further clarifies an employee's right to be accompanied at an employment tribunal. That has been widely welcomed this afternoon. The hon. Member for Aberdeen, Central remarked on it in some detail, as did my hon. Friend the Member for Old Bexley and Sidcup (Derek Conway) and the hon. Member for Dagenham (Jon Cruddas). There is wide agreement in the House that the measure is a sensible, pragmatic improvement. We also support the protection from unfair detriment or dismissal for employees acting as companions. All in all, I think that the clause will go through the Standing Committee fairly quickly.

I turn now to the eight-week rule and the lock-out days being added to the protection period for employees taking lawful industrial action. That, obviously, is a response to the ruling of the employment tribunal in the Friction Dynamics case. We have only had one case, and I should like the Minister to tell us exactly what legal advice the Government received on the matter. That could wait until the Committee proceedings. A number of colleagues mentioned the subject. The hon. Member for Ynys Môn (Albert Owen) went into it in some detail, drawing on his Welsh experience, and the hon. Member for Caernarfon (Hywel Williams) displayed great expertise and not a little passion. My hon. Friend the Member for Huntingdon (Mr. Djanogly) asked whether the Government could have appealed against the judgment; perhaps the Minister can answer that in his winding-up speech. But having lost the case, the Government had no alternative but to take action in the Bill.

As my hon. Friend the Member for Eddisbury (Mr O'Brien) pointed out about four hours ago, the Opposition take on board and acknowledge that the Government have listened to quite a few of the concerns voiced by industry and acted accordingly in some areas, and it would be churlish not to flag that up. For example, the small firms exemption for organisations employing fewer than 21 people was widely welcomed by the Federation of Small Businesses, the Forum of Private Business and a number of other organisations. We think that the Government did the right thing on that score, even though the hon. Member for Manchester, Central (Tony Lloyd) disapproved of it and a number of his colleagues were also fairly critical.

The Government are right that clause 15 will confirm that the core areas of collective bargaining will remain pay, hours and holidays, and that must make sense. We also welcome those provisions of the Employment Relations Act 1999 that have been left in place after last year's consultation—for example, the requirement for 10 per cent. union membership for a claim to be valid, and the rule requiring 40 per cent. of those eligible to vote if a ballot is ordered. I do not agree with the hon. Member for Manchester, Central who said that the 40 per cent. was unfair and too stiff a threshold and target. If it had been altered, it would have been a mistake.

Having said that, we have a number of key areas of concern and we will table various amendments in Committee. I have struck up a rapport with the Minister since I have been shadowing him and we seem to get on very well. He has suggested that I might come round to the Department for a cup of tea and some biscuits to discuss the amendments. Perhaps if it is late in the evening he might stretch to a glass of sherry. I can assure you, Mr. Deputy Speaker, that we will be entering into the spirit of the offer of constructive engagement, but our starting point is obviously a general wariness of imposing further unnecessary regulatory burdens on small and medium-sized businesses that can emerge from this employment legislation.

As my hon. Friend the Member for Huntingdon pointed out, a point also flagged up by my hon. Friend the Member for Hexham (Mr. Atkinson), most European countries are reducing the level of employment legislation, not adding to it. Furthermore, my hon. Friend the Member for Old Bexley and Sidcup pointed out that the number of industrial tribunals had increased substantially, fuelling the compensation culture—I think the figure went from 35,000 cases six years ago up to 125,000 cases last year. He talked about the compensation culture and he had a good point.

As my right hon. Friend the Member for South-West Surrey (Virginia Bottomley) and my hon. Friend the Member for Hexham pointed out, had the Government not given up the opt-out on the social chapter we would not have to be implementing the EU directive on information and consultation, which will be particularly onerous for small and medium-sized enterprises.

A number of hon. Members have cited cases today showing the lack of consultation by companies in their constituencies, and several good points were made. The hon. Member for Amber Valley (Judy Mallaber) pointed out that Coats Viyella embarked upon almost no consultation whatever. The hon. Member for Greenock and Inverclyde (David Cairns) cited two companies in his constituency, FCI and Misco. In the case of Misco, there was a 20-minute warning to employees. Furthermore, the hon. Member for Ynys Môn also mentioned a number of cases, including some companies that had properly consulted and had exactly the fair and right procedures in place.

As my hon. Friend the Member for Eddisbury said, consultation is all about trust and building up a common purpose and respect through the right level of communication.

Where that happens, is there any need for the strictures and regimentation of legislation? That is important, because the burden will fall disproportionately on SMEs and smaller firms. We cannot countenance the suggestion by the hon. Member for Hayes and Harlington that the directive should be extended still further.

In its new role, the Central Arbitration Committee is required to take into account the employer's view on the appropriateness of the proposed bargaining unit, but it is not obliged to give equal consideration to the views of both parties. That is worrying. Under the 1999 Act, trade unions were required to supply to the CAC information on employees that would help the employer to make plans. The Bill clarifies the kinds of information that that could imply, but states that such information is not deemed to be in the union's possession unless it is held centrally in documented form. There is no similar exception for employers, who are obliged to make employees' personal details available to trade unions via the CAC. What are the implications of that for an employee's privacy, especially one who does not wish to have their details given to trade unions? We will return to that in Committee.

Clause 37 deals with changes in trade union structures. For example, in the case of the amalgamation of two or more unions, the amended law would automatically recognise the amalgamated union provided that all the unions involved hold certificates of independence. The union would not have to reapply to the CAC for recognition—therefore, employers would have no input into the decision-making process.

Those may be fairly minor changes, but, as my right hon. Friend the Member for South-West Surrey said, the cumulative effect will be much more serious. The Secretary of State said that the cost of the Bill will be very small, but the DTI has made it clear that the implementation of the information and consultation directive will result in businesses having to bear not inconsiderable up-front implementation costs". We are very wary of these extra burdens being put on to small and medium-sized enterprises. It is always smaller companies that have to bear the burden of such changes—many larger companies can take them in their stride. As my hon. Friend the Member for Bromsgrove (Miss Kirkbride) said in her very good speech, many of the multinationals and multiples can cope with them quite comfortably—indeed, they often help their competitive advantage.

The recent quarterly report by the Forum of Private Business says that the number of small businesses reporting expansion has fallen from 44 per cent. of its members in 1998 to 36 per cent.—all of which took place during an extremely strong period for the economy.

Although we welcome the recent unemployment figures, several of my hon. Friends mentioned the hidden unemployment that has resulted from job losses in manufacturing. According to the labour market statistics produced by the Office for National Statistics, 51,000 manufacturing jobs were lost in the six months from March 2003. The Secretary of State criticised the record of the last Conservative Government, but since her Government have been in power, 600,000 manufacturing jobs have been lost. Manufacturing output is now lower than in 1997, and manufacturing investment is 30 per cent. lower than in 1997.

As my hon. Friend the shadow Secretary of State pointed out, last month there was a record monthly trade gap of £3.9 billion—a very high figure indeed. And all the time more new jobs are being created in the public sector—350,000 from 1998 to 2002.

Obviously, business will have to pick up much of the bill for the Government's spending spree in the public sector.

The Government inherited a favourable economic situation. As my hon. Friend the Member for Eddisbury pointed out, Britain was ranked fourth in the world in international competitiveness, according to World Economic Forum figures. It has now fallen to 15th, behind Finland, Sweden, Denmark, Norway, the Netherlands and Germany.

Let us consider inward investment. When the Government came to office, Britain was the No. 1 place to do business. In 1996, Britain attracted the lion's share of inward investment in Europe—more than Germany, France and Italy combined. Even in 2001, our share was £60 billion—not euros but pounds. Last year, it had fallen to £25 billion—a fall of 60 per cent.

Rob Marris

Will the hon. Gentleman give way?

Mr. Bellingham

I shall not because we want the Minister to answer many points when he winds up.

Surely the Minister can perceive the link between the figures and the extra burdens that the Government continue to impose on business. Our competitive advantage is constantly eroded. Is it surprising that our productivity growth has halved under the Government? One has to ask why. The answer is that increasing burdens and regulations are placed on business. The tidal wave of regulation must be stopped.

The current balance of power between business and the trade unions is about right. It is not the right time to put further burdens on business. Now is not the time to increase the likelihood of days being lost through strike action. In 1997, 235,000 working days were lost in stoppages. By 1999, that figure had increased to 499,000. Last year, 1.3 million working days were lost through stoppages and industrial action.

Of course, some tidying up of legislation was necessary. That would have been justifiable in the light of the two court cases. Surely the Government should have taken on board the warning of Lord Sainsbury of Turville. When he considered the information and consultation directive, he made it clear that: The Government see no need for the proposed directive establishing a general framework for informing and consulting employees in the European Community, which is difficult to reconcile with subsidiarity and would cut across member state traditions to no benefit."—[Official Report, House of Lords, 5 March 2001; Vol. 623, c. WA 14.] We strongly believe that the Government have failed to grasp the concept that the best way in which to achieve best practice is through working with business rather than imposing further burdens. I repeat the point of my hon. Friend the Member for Eddisbury that we need to build on the trust and respect between employees and employers that is created through communication, leadership and the right climate at work. It is more in sorrow than in anger that I urge my hon. Friends to vote against the Bill. It represents yet another measure—albeit not hugely significant—that will destroy wealth and jobs rather than create them.

6.43 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe)

We have had an interesting debate on an important subject. My trade union history and life is well known and registered with the appropriate bodies. I am proud of my background.

I am grateful for the contributions and I shall do my best in the time available to answer many of the points. If I cannot do that now, I shall write to hon. Members about the detail because some technical points have been raised. However, I shall endeavour to deal with some matters in the short time that we have left. The debate has set clear political dividing lines between a party that remains in the past and tries to fight the battles of the past and a Government who look to the country's future. We recognise where we are and how we must operate in the country's interests.

My right hon. Friend the Secretary of State outlined the Bill's principles. We believe that successful, high-performing workplaces are founded on partnerships between employers, workers and their representatives. The way in which companies deal with their workers is fundamental to their success. The close engagement of the work force in running the business and a no-surprises culture at work translates into a more motivated and productive workplace.

Involvement at work helps to make staff feel valued and encourages commitment. That is why, so far as I am concerned, the key element of the Bill is the power to make regulations on information and consultation, implementing a framework agreement concluded by the CBI and the TUC. That was a landmark agreement which I hope will change the culture of industrial relations in this country.

We know that we must take employers, workers and trade unions with us if we are to realise our vision of employment relations for the future. Our policies must strike a balance between legitimate competing interests if they are to work. We have therefore been at pains to consult on these measures in advance. We do not want to impose burdensome or unworkable solutions, and we believe that we have got the balance right. The Bill will build on our achievements by making improvements to existing rights and protections for workers while respecting the necessary flexibilities. I am not in favour of tick-box legislation. We cannot just tick boxes and say, "That's it." These things have to work.

The Employment Relations Act 1999 was a milestone of our first term in office. In it, we created a new framework of individual and collective employment rights. The Act also combined a new set of family-friendly measures, which we have built on subsequently, and we have made the business and employment rights case for implementing those measures. With such a key piece of legislation, it made sense to review its operation at an early stage. When we launched the review of the Act in July 2002, we said that we would implement its recommendations in the lifetime of this Parliament.

That is what we are now doing; the Bill delivers on that promise. We used the review to assemble all the available evidence on the Act's effects.

Gregory Barker

I am grateful to the Minister for giving way. When the Government were looking at the Act and considering what measures they should take, what account did they take of the high rate of unemployment that predominates in the eurozone and of the dramatic fall in productivity growth over the last five years?

Mr. Sutcliffe

I shall come to the Conservatives' Europhobia a little later, if the hon. Gentleman can wait.

The Bill delivers on our promise, as I was saying. We considered all the available evidence on the effect of the Act, and consulted widely from the very start. Many meetings with interested parties were convened by DTI officials and Ministers. We also published a detailed consultation document which set out our initial findings. The review found that the Act was working well. The dire predictions of the Conservatives have not come true. The Act has not led to industrial strife; we continue to enjoy low levels of strike activity. It has not destroyed jobs; employment has in fact grown. About 1.7 million new jobs have been created in the economy. The Act has not impeded business performance. Our labour market flexibility is the envy of other industrialised countries.

Members have raised a number of specific issues on the Bill which I would now like to address. The hon. Member for Eddisbury (Mr. O'Brien) took 51 minutes to say absolutely nothing. He said that there was no point to the Bill. He was very generous in giving way, because he had nothing to say. I think that that set the tone. When he was asked by several of my hon. Friends what he would do about the many terrible abuses of employees by what I can only call the rogue employers that we have heard about, he had nothing to say. He wrung his hands and said that it was terrible, and that he was not here to stand up for rogue employers, yet he would do nothing whatever about those abuses.

We then had a long discussion on the meaning of consultation, and I was quite perplexed by the route that the hon. Gentleman took us down. I know, however, that consultation is about ensuring that employees are involved and valued by the companies in which they work. He quoted selectively from the Federation of Small Businesses and other bodies, but the CBI and the TUC broadly welcome the Bill. They have concerns about the particular issues that the hon. Member for North-West Norfolk (Mr. Bellingham) mentioned, and we shall look at those either this evening or in Committee. However, in the framework document on information and consultation, the CBI and the TUC have recognised the need for a culture change in our industrial relations, and I am convinced that we need to move forward together. As the Minister with responsibility for employment relations, I do not want to be the referee between the CBI and the TUC. I want to ensure that we set minimum standards through legislation, while encouraging the good practice that exists in many of our companies and trade unions to develop into a common approach to industrial matters.

The hon. Gentleman trivialised the issue of consultation. He failed to recognise the need to create a climate of trust in that way. He was also clearly at odds with others on Europe, and what we need to do in that context. The Conservatives must be clear: they must tell the country honestly what they believe. If they want to leave Europe, why do they not stand up and say so? In the European context, we simply want to ensure that Britain leads the way in negotiating and ensuring that the employment rights that come from the European Union are appropriate to British needs—indeed, to United Kingdom needs. We have stood up for employment rights for British workers in that context.

If, as he says, the hon. Gentleman talks to business leaders and others across the range, he must know that they are keen for the UK's position to be enhanced and maintained in the European context. That is why, when I attend EU Council meetings, it is clear to me that employment Ministers from other member states consider the UK model to be the most appropriate. If the Conservatives want to opt out of Europe, they really must stand up and say so.

Mr. Stephen O'Brien

We do not want to.

Mr. Sutcliffe

What about the issue of four weeks' holiday? What about the attempts to end the culture of long working hours? Has the hon. Gentleman any view on whether any of that is appropriate?

The hon. Member for North-West Norfolk welcomed much of the Bill—although I am afraid he killed my credibility by describing our relationship in such glowing terms. I look forward to working with him. Although I liked a good deal of what he said, it would have been far better coming from the person who is supposedly a senior adviser to the new leader of the Conservative group on employment rights. In a speech lasting 51 minutes, not much advice was forthcoming from that person.

As for the other Opposition party, I was pleased to hear the hon. Member for Gordon (Malcolm Bruce) support the Bill and express his views on information and consultation. He described how he had fought for those things over the years, and spoke of the involvement of the works councils. The official Opposition merely wanted to engage in union-bashing. Labour Members remember what they have said in the past—how they described the GCHQ workers as the enemy within, and said that unemployment was a price worth paying. Whatever we think of Lady Thatcher—and lots of us think lots of things—she knew what she was about. The present day Conservative party is not prepared to say what it is about. In fact, it wants to undermine trade union legislation, and the idea that trade unions can be a force for good.

The hon. Member for Gordon said that he thought the Government had got it right when it came to the exemption of firms with fewer than 21 workers. Many of my hon. Friends have raised the issue of whether the Government have done the right thing. We do not oppose the voluntary arrangements for the "under-21s", but we do not think a statutory recognition agreement is appropriate. That does not mean ending individual employment rights, and it does not stop union representatives from continuing to accompany employees for the purpose of dispute and grievance procedures. We think we have got the balance right, but we are prepared to work with individual industries to establish whether anything else can be done. Indeed, we are already doing that.

The Liberals Democrats were supportive, but some of their memories are clearly selective. They opposed the national minimum wage increase that we proposed last March. If the hon. Member for Gordon does not remember that, we shall be happy to remind him in Committee.

The hon. Member for Twickenham (Dr. Cable) has also argued against the long hours culture in relation to the Government's attitude to working time.

There were many contributions to the debate: a comparison between the number of Labour Members who wanted to debate employment legislation and the sparsity of contributions from the Opposition is telling. My hon. Friend the Member for Greenock and Inverclyde (David Cairns) welcomed the Government's proposals and the partnership approach, and gave some appalling examples of how employees have been treated in his constituency by FCI and Misco. FCI sacked its workers, locked the premises and did not let those people back in, which was outrageous. In addition, giving people only 20 minutes' notice of their employment being ended is unacceptable and outrageous.

My hon. Friend also referred to agency workers. It is vital that we consider what the Government have just done in terms of domestic legislation on agency workers. We recognise the ebbs and flows of business, but we also recognise the demographic changes that will take place in the next few years. The Opposition have not recognised those changes, or that good employers will have to ensure that they offer the right employment environment to the workers of the future.

I welcome the work of my hon. Friend the Member for Aberdeen, Central (Mr. Doran) in the trade union group of Labour MPs, and the work that he has done to help discussions on some of the issues that we will face in the future. He welcomed the flexibility and the minimum standards that the Bill will introduce. He also touched on some issues in relation to intimidation. Many hon. Friends raised the issue of intimidation, and I invite Members on both sides of the House to give me any examples of intimidation taking place. As the Bill progresses, we will consider the issues that are raised. I am also happy to meet my hon. Friend the Member for Aberdeen, Central to discuss the question of the Transfer of Undertakings (Protection of Employment) Regulations 1981 as they affect North sea oil workers.

I was disappointed with the outlook of the right hon. Member for South-West Surrey (Virginia Bottomley). She said that the Bill gave the wrong signals on the wrong priorities. Would she say that about paid annual leave? Would she want to see the scrapping of maternity and paternity benefits? Would she want to see the end of flexible working? I was sad to hear her remarks, given the involvement with trade unions of the person with whom she lives—I think that that is how she described the hon. Member for Worthing, West (Peter Bottomley)—and his record of raising issues as a trade union member during the life of the Conservative Government.

My hon. Friend the Member for Manchester, Central (Tony Lloyd) also raised the issue of intimidation, and gave the example of Mission Foods. If he speaks to me, we will examine the detail of what happened at that company. He also had an Adjournment debate on the issues in relation to the Accident Group and people being sacked by text message.

There are many issues that I would like to discuss in greater detail, but time will not permit. We look forward to the opportunity to examine in Committee the many important issues raised by my hon. Friends.

In the time left to me, I want to remind the House that since taking office we have set a new course for industrial relations under our "Fairness at Work" agenda. We have given every employee the right to decent minimum standards at work, including a national minimum wage, rights to paid holidays, a cap on the working week, rights for parents to manage their home and work life, and the right to trade union recognition. We have also put the role of union learning representatives on a statutory footing. The Tories would have the House believe that our policies destroy jobs, ruin the economy and increase industrial strife. I am happy to say, however, that that will not happen—and, to put the record straight, it has not happened.

All that has been achieved against the backdrop of economic stability, record levels of employment, and the lowest number of stoppages since the 1920s. We have ushered in an era of partnership between employers and employees. I commend the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 404, Noes 148.

Division No. 30]	[6:59 pm
AYES
Abbott, Ms Diane	Bradley, rh Keith (Withington)
Adams, Irene (Paisley N)	Bradley, Peter (The Wrekin)
Ainger, Nick	Bradshaw, Ben
Ainsworth, Bob (Cov'try NE)	Brake, Tom (Carshalton)
Alexander, Douglas	Breed, Colin
Allan, Richard	Brennan, Kevin
Allen, Graham	Brooke, Mrs Annette L.
Anderson, rh Donald (Swansea E)	Brown, rh Gordon (Dunfermline
Anderson, Janet (Rossendale &	E)
Darwen)	Brown, rh Nicholas (Newcastle E
Armstrong, rh Ms Hilary	Wallsend)
Atherton, Ms Candy	Brown, Russell (Dumfries)
Atkins, Charlotte	Browne, Desmond
Austin, John	Bruce, Malcolm
Bailey, Adrian	Bryant, Chris
Baird, Vera	Burden, Richard
Baker, Norman	Burgon, Colin
Barnes, Harry	Burnham, Andy
Barrett, John	Burstow, Paul
Barron, rh Kevin	Byers, rh Stephen
Battle, John	Cable, Dr. Vincent
Bayley, Hugh	Caborn, rh Richard
Beard, Nigel	Cairns, David
Beckett, rh Margaret	Calton, Mrs Patsy
Begg, Miss Anne	Campbell, Alan (Tynemouth)
Beith, rh A. J.	Campbell, Mrs Anne (C'bridge)
Bell, Sir Stuart	Caplin, Ivor
Bennett, Andrew	Carmichael, Alistair
Benton, Joe (Bootle)	Casale, Roger
Berry, Roger	Caton, Martin
Best, Harold	Cawsey, Ian (Brigg)
Betts, Clive	Chapman, Ben (Wirral S)
Blackman, Liz	Chidgey, David
Blears, Ms Hazel	Clapham, Michael
Blizzard, Bob	Clark, Dr. Lynda (Edinburgh
Borrow, David	Pentlands)

Clark, Paul (Gillingham)	Griffiths, Nigel (Edinburgh S)
Clarke, rh Charles (Norwich S)	Grogan, John
Clarke, rh Tom (Coatbridge &	Hain, rh Peter
Chryston)	Hall, Mike (Weaver Vale)
Clarke, Tony (Northampton S)	Hall, Patrick (Bedford)
Clelland, David	Hamilton, David (Midlothian)
Clwyd, Ann (Cynon V)	Hamilton, Fabian (Leeds NE)
Coffey, Ms Ann	Hancock, Mike
Cohen, Harry	Hanson, David
Coleman, Iain	Harman, rh Ms Harriet
Colman, Tony	Harris, Dr. Evan (Oxford W &
Connarty, Michael	Abingdon)
Cook, Frank (Stockton N)	Harris, Tom (Glasgow Cathcart)
Cook, rh Robin (Livingston)	Harvey, Nick
Cooper, Yvette	Healey, John
Corston, Jean	Heath, David
Cotter, Brian	Henderson, Doug (Newcastle N)
Cranston, Ross	Henderson, Ivan (Harwich)
Cruddas, Jon	Hendrick, Mark
Cryer, Ann (Keighley)	Hepburn, Stephen
Cummings, John	Hermon, Lady
Cunningham, rh Dr. Jack	Hesford, Stephen
(Copeland)	Hewitt, rh Ms Patricia
Cunningham, Jim (Coventry S)	Heyes, David
Cunningham, Tony (Workington)	Hinchliffe, David
Dalyell, Tam	Hodge, Margaret
Darling, rh Alistair	Hoey, Kate (Vauxhall)
Davey, Valerie (Bristol W)	Holmes, Paul
David, Wayne	Hood, Jimmy (Clydesdale)
Davidson, Ian	Hoon, rh Geoffrey
Davies, rh Denzil (Llanelli)	Hope, Phil (Corby)
Davies, Geraint (Croydon C)	Hopkins, Kelvin
Davis, rh Terry (B'ham Hodge H)	Howarth, rh Alan (Newport E)
Dawson, Hilton	Howarth, George (Knowsley N &
Dean, Mrs Janet	Sefton E)
Denham, rh John	Howells, Dr. Kim
Dhanda, Parmjit	Hoyle, Lindsay
Dismore, Andrew	Hughes, Beverley (Stretford &
Dobbin, Jim (Heywood)	Urmston)
Dobson, rh Frank	Hughes, Kevin (Doncaster N)
Donohoe, Brian H.	Hughes, Simon (Southwark N)
Doran, Frank	Humble, Mrs Joan
Doughty, Sue	Hurst, Alan (Braintree)
Dowd, Jim (Lewisham W)	Hutton, rh John
Drew, David (Stroud)	Iddon, Dr. Brian
Drown, Ms Julia	Illsley, Eric
Eagle, Angela (Wallasey)	Irranca-Davies, Huw
Eagle, Maria (L'pool Garston)	Jackson, Glenda (Hampstead &
Edwards, Huw	Highgate)
Ennis, Jeff (Barnsley E)	Jackson, Helen (Hillsborough)
Etherington, Bill	Jamieson, David
Ewing, Annabelle	Jenkins, Brian
Farrelly, Paul	Johnson, Alan (Hull W)
Field, rh Frank (Birkenhead)	Johnson, Miss Melanie (Welwyn
Fisher, Mark	Hatfield)
Fitzpatrick, Jim	Jones, Helen (Warrington N)
Fitzsimons, Mrs Lorna	Jones, Jon Owen (Cardiff C)
Flint, Caroline	Jones, Lynne (Selly Oak)
Flynn, Paul (Newport W)	Jones, Martyn (Clwyd S)
Follett, Barbara	Jowell, rh Tessa
Foster, rh Derek	Joyce, Eric (Falkirk W)
Foster, Don (Bath)	Kaufman, rh Gerald
Foster, Michael (Worcester)	Keeble, Ms Sally
Foster, Michael Jabez (Hastings	Keen, Alan (Feltham)
& Rye)	Keen, Ann (Brentford)
Foulkes, rh George	Keetch, Paul
Francis, Dr. Hywel	Kemp, Fraser
Gardiner, Barry	Khabra, Piara S.
George, Andrew (St. Ives)	Kidney, David
Gerrard, Neil	Kilfoyle, Peter
Gibson, Dr. Ian	King, Andy (Rugby)
Gidley, Sandra	King, Ms Oona (Bethnal Green &
Gilroy, Linda	Bow)
Godsiff, Roger	Kirkwood, Sir Archy
Green, Matthew (Ludlow)	Knight Jim (S Dorset)
Griffiths, Jane (Reading E)	Kumar, Dr. Ashok

Ladyman, Dr. Stephen	Palmer, Dr. Nick
Lamb, Norman	Pearson, Ian
Lammy, David	Perham, Linda
Lawrence, Mrs Jackie	Picking, Anne
Laws, David (Yeovil)	Pickthall, Colin
Laxton, Bob (Derby N)	Pike, Peter (Burnley)
Lazarowicz, Mark	Plaskitt, James
Lepper, David	Pollard, Kerry
Leslie, Christopher	Pope, Greg (Hyndburn)
Levitt, Tom (High Peak)	Prentice, Ms Bridget (Lewisham
Lewis, Ivan (Bury S)	E)
Liddell, rh Mrs Helen	Prentice, Gordon (Pendle)
Linton, Martin	Prescott, rh John
Lloyd, Tony (Manchester C)	Price, Adam (E Carmarthen &
Llwyd, Elfyn	Dinefwr)
Love, Andrew	Primarolo, rh Dawn
Luke, Iain (Dundee E)	Prosser, Gwyn
Lyons, John (Strathkelvin)	Pugh, Dr. John
McAvoy, Thomas	Purchase, Ken
McCabe, Stephen	Purnell, James
McCafferty, Chris	Quin, rh Joyce
McCartney, rh Ian	Quinn, Lawrie
McDonagh, Siobhain	Rapson, Syd (Portsmouth N)
MacDonald, Calum	Raynsford, rh Nick
McDonnell, John	Reed, Andy (Loughborough)
MacDougall, John	Reid, Alan (Argyll & Bute)
McFall, John	Reid, rh Dr. John (Hamilton N &
McGuire, Mrs Anne	Bellshill)
McIsaac, Shona	Rendel, David
McKechin, Ann	Robertson, Angus (Moray)
McKenna, Rosemary	Robertson, John (Glasgow
Mackinlay, Andrew	Anniesland)
McNamara, Kevin	Robinson, Geoffrey (Coventry
McNulty, Tony	NW)
Mactaggart, Fiona	Roche, Mrs Barbara
McWilliam, John	Rooney, Terry
Mahmood, Khalid	Ross, Ernie (Dundee W)
Mahon, Mrs Alice	Ruane, Chris
Mallaber, Judy	Ruddock, Joan
Mendelson, rh Peter	Russell, Bob (Colchester)
Mann, John (Bassetlaw)	Russell, Ms Christine (City of
Marris, Rob (Wolverh'ton SW)	Chester)
Marsden, Gordon (Blackpool S)	Ryan, Joan (Enfield N)
Marshall, David (Glasgow	Salmond, Alex
Shettleston)	Salter, Martin
Marshall, Jim (Leicester S)	Sanders, Adrian
Marshall-Andrews, Robert	Sarwar, Mohammad
Martlew, Eric	Savidge, Malcolm
Meale, Alan (Mansfield)	Sawford, Phil
Merron, Gillian	Sedgemore, Brian
Michael, rh Alun	Shaw, Jonathan
Miller, Andrew	Sheerman, Barry
Mitchell, Austin (Gt Grimsby)	Sheridan, Jim
Moffatt, Laura	Simon, Siôn (B'ham Erdington)
Mole, Chris	Simpson, Alan (Nottingham S)
Moonie, Dr. Lewis	Skinner, Dennis
Moore, Michael	Smith, rh Andrew (Oxford E)
Moran, Margaret	Smith, Angela (Basildon)
Morgan, Julie	Smith, rh Chris (Islington S &
Morley, Elliot	Finsbury)
Morris, rh Estelle	Smith, Geraldine (Morecambe &
Mudie, George	Lunesdale)
Munn, Ms Meg	Smith, Jacqui (Redditch)
Murphy, Denis (Wansbeck)	Smith, John (Glamorgan)
Murphy, Jim (Eastwood)	Smith, Sir Robert (W Ab'd'ns &
Naysmith, Dr. Doug	Kincardine)
Oaten, Mark (Winchester)	Soley, Clive
O'Brien, Bill (Normanton)	Southworth, Helen
O'Brien, Mike (N Warks)	Speller, rh John
O'Hara, Edward	Starkey, Dr. Phyllis
Olner, Bill	Stewart, David (Inverness E &
O'Neill, Martin	Lochaber)
Öpik, Lembit	Stewart, Ian (Eccles)
Organ, Diana	Stinchcombe, Paul
Osborne, Sandra (Ayr)	Stoate, Dr. Howard
Owen, Albert	Straw, rh Jack

Stuart, Ms Gisela	Watson, Tom (W Bromwich E)
Stunell, Andrew	Watts, David
Sutcliffe, Gerry	White, Brian
Tami, Mark (Alyn)	Whitehead, Dr. Alan
Taylor, rh Ann (Dewsbury)	Wicks, Malcolm
Taylor, Dari (Stockton S)	Williams, rh Alan (Swansea W)
Taylor, David (NW Leics)	Williams, Betty (Conwy)
Taylor, Matthew (Truro)	Williams, Hywel (Caernarfon)
Taylor, Dr. Richard (Wyre F)	Williams, Roger (Brecon)
Teather, Sarah	Willis, Phil
Thomas, Gareth (Harrow W)	Wills, Michael
Thomas, Simon (Ceredigion)	Wilson, Brian
Thurso, John	Winnick, David
Timms, Stephen	Winterton, Ms Rosie (Doncaster
Tipping, Paddy	C)
Todd, Mark (S Derbyshire)	Wishart, Pete
Tonge, Dr. Jenny	Wood, Mike (Batley)
Touhig, Don (IsIwyn)	Woodward, Shaun
Trickett, Jon	Woolas, Phil
Truswell, Paul	Worthington, Tony
Turner, Dennis (Wolverh'ton SE)	Wright, Anthony D. (Gt
Turner, Neil (Wigan)	Yarmouth)
Twigg, Derek (Halton)	Wright, David (Telford)
Twigg, Stephen (Enfield)	Wright, Tony (Cannock)
Tynan, Bill (Hamilton S)	Wyatt, Derek
Vaz, Keith (Leicester E)
Vis, Dr. Rudi	Tellers for the Ayes:
Walley, Ms Joan	Mr. John Heppell and
Wareing, Robert N.	Vernon Coaker

NOES
Ainsworth, Peter (E Surrey)	Field, Mark (Cities of London &
Amess, David	Westminster)
Arbuthnot, rh James	Flight, Howard
Atkinson, David (Bour'mth E)	Flook, Adrian
Bacon, Richard	Francois, Mark
Baldry, Tony	Gale, Roger (N Thanet)
Baron, John (Billericay)	Garnier, Edward
Beggs, Roy (E Antrim)	Gibb, Nick (Bognor Regis)
Bellingham, Henry	Goodman, Paul
Bercow, John	Green, Damian (Ashford)
Boswell, Tim	Greenway, John
Bottomley, Peter (Worthing W)	Grieve, Dominic
Bottomley, rh Virginia (SW	Gummer, rh John
Surrey)	Hague, rh William
Brady, Graham	Hammond, Philip
Brazier, Julian	Hawkins, Nick
Browning, Mrs Angela	Hayes, John (S Holland)
Burns, Simon	Heald, Oliver
Burnside, David	Heathcoat-Amory, rh David
Burt, Alistair	Hendry, Charles
Butterfill, Sir John	Hoban, Mark (Fareham)
Cash, William	Hogg, rh Douglas
Chapman, Sir Sydney (Chipping	Horam, John (Orpington)
Barnet)	Howard, rh Michael
Chope, Christopher	Hunter, Andrew
Clappison, James	Jack, rh Michael
Clarke, rh Kenneth (Rushcliffe)	Jackson, Robert (Wantage)
Clifton-Brown, Geoffrey	Jenkin, Bernard
Collins, Tim	Johnson, Boris (Henley)
Conway, Derek	Key, Robert (Salisbury)
Cormack, Sir Patrick	Kirkbride, Miss Julie
Curry, rh David	Knight, rh Greg (E Yorkshire)
Davies, Quentin (Grantham &	Lait, Mrs Jacqui
Stamford)	Lansley, Andrew
Davis, rh David (Haltemprice &	Leigh, Edward
Howden)	Letwin, rh Oliver
Djanogly, Jonathan	Lewis, Dr. Julian (New Forest E)
Dodds, Nigel	Liddell-Grainger, Ian
Dorrell, rh Stephen	Lidington, David
Duncan, Alan (Rutland)	Loughton, Tim
Duncan, Peter (Galloway)	McIntosh, Miss Anne
Duncan Smith, rh Iain	Mackay, rh Andrew
Evans, Nigel	Maclean, rh David
Fabricant, Michael	McLoughlin, Patrick
Fallon, Michael	Malins, Humfrey

Maples, John	Smyth, Rev. Martin (Belfast S)
Mates, Michael	Soames, Nicholas
Maude, rh Francis	Spelman, Mrs Caroline
Mawhinney, rh Sir Brian	Spicer, Sir Michael
May, Mrs Theresa	Spring, Richard
Mercer, Patrick	Stanley, rh Sir John
Mitchell, Andrew (Sutton	Steen, Anthony
Coldfield)	Swayne, Desmond
Moss, Malcolm	Swire, Hugo (E Devon)
Murrison, Dr. Andrew	Syms, Robert
Norman, Archie	Tapsell, Sir Peter
O'Brien, Stephen (Eddisbury)	Taylor, Ian (Esher)
Osborne, George (Talton)	Taylor, John (Solihull)
Ottaway, Richard	Taylor, Sir Teddy
Page, Richard	Trend, Michael
Paice, James	Trimble, rh David
Paterson, Owen	Turner, Andrew (Isle of Wight)
Pickles, Eric	Tyrie, Andrew
Portillo, rh Michael	Walter, Robert
Prisk, Mark (Hertford)	Waterson, Nigel
Randall, John	Watkinson, Angela
Robathan, Andrew	Whittingdale, John
Robertson, Hugh (Faversham &	Wiggin, Bill
M-Kent)	Wilkinson, John
Robertson, Laurence (Tewk'b'ry)	Willetts, David
Robinson, Mrs Iris (Strangford)	Wilshire, David
Robinson, Peter (Belfast E)	Winterton, Ann (Congleton)
Roe, Mrs Marion	Winterton, Sir Nicholas
Rosindell, Andrew	(Macclesfield)
Ruffley, David	Yeo, Tim (S Suffolk)
Sayeed, Jonathan	Young, rh Sir George
Selous, Andrew
Shephard, rh Mrs Gillian	Tellers for the Noes:
Shepherd, Richard	Gregory Barker and
Simmonds, Mark	Mr. Peter Atkinson

Question accordingly agreed to.

Bill read a Second time.