§ 5.21 p.m.
§ Lord Allen of Abbeydale rose to move, That this House takes note of the report of the European Communities Committee on a Community social charter (3rd Report, HL Paper 6).
§ The noble Lord said: My Lords, I shall begin by thanking those who have put down their names to speak in this debate which shows every sign of being an interesting one. It may be one-sided but we shall see whether that is the case. The report is one in which the practice was followed of publishing a version with the evidence and another shorter version without the evidence. I hope that that practice is found to be useful.
§ The committee's inquiry into the Community's proposals for a social charter could not begin until after the Summer Recess. The House will recall that the Government are committed to delaying agreement on Community proposals until both Houses have had an opportunity to comment. As the European Communities Committee has a responsibility to make its conclusions known before a final decision is taken by the Council of Ministers, that meant that this time the committee had to aim at reporting before the European Council on 8th and 9th December of last year.
§ Although the inquiry was therefore quite short, the sub-committee concerned, Sub-Committee C, had an opportunity to hear the key witnesses, including the Minister of State from the Department of Employment, Mr. Eggar, and informally those from the European Commission. The committee, as ever, is greatly obliged to the witnesses for their help. It is also indebted to its clerk, Mr. William Sleath, for his helpful service.
§ At the European Council in December the social charter was adopted by 11 member states. The United Kingdom was alone in dissenting. However, that is not the end of the story. Indeed in a sense it is only the beginning. There is general acceptance, as the conclusions at the Madrid summit made clear, that there is a social dimension to the internal market. Over the coming years the implementation of that social dimension is likely to remain near the top of the Community's agenda. The United Kingdom Government for their part would, I know, put special emphasis on the conclusion at the Madrid summit that for the well-being of Community citizens priority must be given to the creation of jobs. However, the Commission, with the approval of the 11 other member states, sees an important role, subject to that overriding aim, in formulating proposals to make a reality of the charter. In passing I should say that our report made the point that, along with full United Kingdom membership of the European monetary system, adoption of the social charter, whether one likes it or not, has become something of a touchstone for judging the United Kingdom's commitment to the development of the Community.
§ The first draft of the charter appeared in May of last year and further drafts followed in September and October. It is the October draft on which the 46 committee's inquiry was based. The draft is printed with the report. It showed considerable differences from the earlier versions. However, the member states were not given much opportunity to negotiate on this final version. The committee believes that more time should have been allowed for ironing out remaining problems in the text. However, the French presidency and the Commission were adamant that the charter should be discussed, and if possible settled, at the December meeting of the Council. Perhaps they were influenced by what they regarded as a failure on the part of the charter's critics to respond to the compromises which appeared in the October draft.
§ The introduction to our report tries to summarise the 12 categories of fundamental social rights which are set out in the charter. Some of these are not controversial. I think that all our witnesses accepted that health and safety provision, equal treatment for men and women, freedom of movement and vocational training are all legitimate areas if there is to be a charter at all. There are also some absentees. There is nothing about mandatory worker representation on all boards and young boys will still be able to deliver our morning newspapers. Those are two matters on which there had been a lot of anticipatory comment in this country. However, there are certainly other elements in the charter which are calculated to provoke more argument; for example, part-time work and minimum rights to annual paid leave.
§ Our report recognised that there was a perfectly understandable groundswell of support in other member states for some form of social charter which would look to benefits for workers, children, the elderly and the disabled as well as those accruing from the market to shareholders and managers. At the same time we recognised the feeling of the United Kingdom Government that more restrictions and rules would be likely to result in more loss of jobs and more unemployment. But for our part we found it hard to accept that a social charter necessarily implied a mandate for unrealistic regulation which could smother economic growth. We noted that the preamble to the charter recognises in terms that employment development and creation must be given first priority. We noted also that what was in contemplation was acceptable to the Germans, the French and the Italians, who are hardly less interested than we are in economic growth.
§ The general principle underlying our report mirrored that of the Select Committee's recent findings on the Delors Report, that the United Kingdom would have a greater say on the social charter in particular and on the future of the Community in general if it could persuade its partners that it was fully committed to the Community. That was one reason why the report recommended that the Government should accept the draft as a basis for negotiation. That did not mean that the committee believed the final draft of the charter to be faultless. It did not embrace the charter with, say, the enthusiasm of the Labour Party, whose fervour led it to take the significant step of abandoning the closed shop. Rather, we believe that a commitment by the Government to work towards 47 a compromise on the text would have allowed them to carry more weight in suggesting improvements. As it was the Government were forced into isolation.
§ The report argues that the charter should have been a statement of generally accepted principles, for the most part contained in existing Community law or in international agreements. The report also argues that some detailed provisions still feature in the final draft which sit rather uncomfortably in their surroundings; for example, some of the provisions about children and adolescents. We believe that that material would have been better left out. Such material in the charter itself tends to prejudge issues which are more suited to detailed legislation, whether at Community or national level. The exclusion of the material would have made the charter, in our view, more consistent. in tone and form as a statement of generally accepted principles.
§ Although under the final version of the charter responsibility for implementation is to be divided between member states, the Community and employers and others responsible at local level, the charter itself does not spell out where the dividing lines are to be. Some of the rights in the charter were to be the subject of proposals from the Commission; others were not. The choice in the end will be determined by the Treaty of Rome as amended by the Single European Act and within that framework by the principle underlined at the Madrid summit of subsidiarity—namely, that action should be taken at Community level only when the objective can be better reached in that way than by leaving the matter to member states.
§ It was quite clear to us in the course of our inquiry that, although the latest text of the charter acknowledges subsidiarity and also respect for national practices, critics feared that the failure of the charter itself to specify at what level each proposal would be implemented would mean that in the event more action would inevitably be taken at Community level. That is why we recommended that the charter should have provided explicitly that its adoption would not affect or prejudice the question of legislative competence to implement its provisions. We felt that had that been done it might have allayed to some extent fears that the charter was designed to pre-empt decisions in areas of disputed competence.
§ The committee's report was written before the Commission issued its action programme to implement the charter, although we had some informal indication of what was in prospect. That programme, now that we have it, does a good deal to clarify the proposed divisions of responsibility. The programme consists of 43 new initiatives, of which 17 are for legally binding directives. The idea would be to spread the programme over the next three years. The proposed legally binding directives are certainly not limited to uncontroversial areas. However, at the same time some of the topics which could have proved to be controversial are to be left to member states to implement. In particular, wage-setting is described in the programme as a matter for the member states and the two sides of industry alone. The Commission proposes to limit 48 itselt to expressing an opinion which will impose no legal obligation.
§ In a Written Answer to a Question on 15th January (at col. 511 of Hansard) the noble Lord who is to answer the debate said that the United Kingdom Government had been unable to support the proposals for a charter and that the charter was therefore not applicable in the United Kingdom. I believe that the Minister would readily agree that that does not dispose of the issue and that the United Kingdom will not be able to simply ignore proposals for action in the areas covered by the charter. For one thing the comparison between the charter and existing international and Community obligations, which for convenience we set out in the appendix to the report, shows that the United Kingdom is already committed to much of the charter's contents.
§ The United Kingdom's decision to reject the charter has no effect on the power of the Commission to submit proposals to the Council of Ministers on the lines it has indicated. Indeed, the Prime Minister herself said in a written reply on 13th February in another place that the Commission had the right to make proposals on any matters falling within the competence of the Community. No doubt when the time comes the United Kingdom, along with other member states, will engage in the usual vigorous negotiation of every proposal made. There are indications that some of the other member states will have difficulties over some of the detailed proposals.
§ The United Kingdom, unlike the others, is not, as it were, morally committed to the principles enshrined in the charter, but the Government can hardly stand aside when the draft directives start to appear and refrain from arguing about content and competence. In some areas, probably including proposals dealing with health and safety, the powers likely to be invoked could mean that the council could act by qualified majority vote so that this country would be bound even though it might not have voted for the proposal in council.
§ As I said at the beginning, therefore, the story of the social charter is far from over. Perhaps I may make the modest claim that as the statements of intent in the charter are translated into proposals for action over the coming years, and as argument takes place over those proposals, this report may act as a useful summary of the arguments surrounding the charter at the time of its adoption. I beg to move.
§ Moved, That this House takes note of the report of the European Communities Committee on a Community social charter (3rd Report, HL Paper 6).—(Lord Allen of Abbeydale.)
§ 5.37 p.m.
§ Lord McCarthy
My Lords, we for our part should like to thank the noble Lord, Lord Allen of Abbeydale, and his committee on three counts: first, for the fascinating review in the report of opinions on the charter. Everything from the soaking wet to the positively dehydrated is there. It is a very good source for students of attitudes towards the charter. Secondly, and in some ways more importantly, we should like to thank them for the very balanced judgment with which they reached their conclusion 49 at the end of the report. They say that the Government should accept the present draft as a basis for negotiation. That is a very modest, reasonable and well argued conclusion. We feel that that is a very good way into the debate.
Thirdly, we should like to thank them for their account, particularly via the evidence put forward by the Minister of State, Mr. Eggar, following the speech made by the former Secretary of State, Mr. Fowler, on 29th November in another place, of Mrs. Thatcher's view of the social charter. That fills out the statement which the Prime Minister made to the Daily Mail in May last year:The Social Charter was a throwback to a Marxist period: a class struggle period".Those Ministers who have been responsible for developing the Government's policy in relation to the social charter have been committed to developing that approach.
I want this evening, first, to analyse the Government's arguments for saying that the social charter is a throwback to the Marxist period—a period of class struggle—and then to specify the Opposition's position. If I misunderstand and misrepresent the Government's position, I know that the Minister will be quick to correct me.
As I understand it—this is an attempt to summarise the argument advanced by Mr. Eggar before the committee—there are three contentions. First, the social dimension now means improving the standard of living of citizens and workers in Europe by encouraging unrestricted competition rather than by encouraging social action; in other words, in the form of minimum standards of terms and conditions and minimum industrial rights. The social dimension, which everyone thought meant social action, now means competition. That astonishing argument derives from the fact that the remainder of the partners accepted, particularly at the Madrid Summit, various points in the preamble, notably, the reference to job creation as a top priority, together with the principle of subsidiarity and other points.
The Minister appears to suggest that, if the principle of job creation as a priority is included in the preamble, the remainder of the charter, including the action programme, is therefore inevitably what he calls a mish-mash of contradictions; and that the remainder of Europe is totally misguided in not appreciating that, when it allowed the Prime Minister to include the phrase "job creation", it torpedoed the rest of the charter. That seems to be the guts of the argument. Perhaps the Minister will tell me if I am wrong.
If that is the Government's argument, there are three points that I should make. First, why do the Government, Mr. Eggar, Sir Norman Fowler and the Prime Minister never give us any evidence that job creation can be maximised only if the labour market is totally deregulated, and that we are the only country in Europe to see that? Secondly, why do they grossly exaggerate the extent to which the charter and the action programme constitute a programme for regulation at European level?
50 The evidence advanced by Mr. Eggar in the committee's report was non-existent. He was asked at one stage whether he or the Government had made any estimate of the effect of the charter on jobs. He said that, unfortunately, they had not done so, but—as I understand it—that someone in the Commission had told him that that was the case. Unfortunately, we do not know who that was. It might have been the noble Lord, Lord Cockfield; that is the kind of thing that he would say. It might have been Sir Leon Brittan; that is the kind of thing that he might have said. It was not the Commissioner responsible, Mrs. Papandreou, although various attempts have been made on the Government's part to insinuate that she said precisely that. In fact, she said that no one could say one way or another. That is the conclusion to which anyone would come if they considered the objective evidence about the relationship between job creation and deregulation.
There are a number of kinds of evidence which I must list briefly for the House. There is the evidence on the non-wage side which is largely the Government's own evidence. In the early 1980s the Government asked the Department of Employment and the PSI to carry out a number of studies to see how far the existing employment protection facilities in this country discouraged employment. The answer was that most employers did not think that they had much to do with it, so the Government stopped inquiring.
Secondly, on the wage side and the question of whether job creation is minimised by regulation or deregulation, the Government sponsored and the Department of Employment paid for a number of studies into the abolition of wages councils to see whether their abolition had led to a growth in employment. The answer was that, although wages continued to decline, employment also continued to decline, so the Government stopped commissioning such studies. One might say that there was some international evidence of minimum wage regulation and its effect on job creation. The trouble is that, as is always the case with international studies, if one goes to one economist, one is given one set of arguments, but if one goes to another, one is given a quite separate set of arguments and the overall effect is magnificently inconclusive.
Thirdly, if one moves into the realm of economic theory, one finds those economists who on the whole support the Government, such as Professor Minford, who says that his model tells him that (deregulation creates jobs. However, one finds other economists, such as Deakin and Wilkinson who say that low wages are linked to high absenteeism, low productivity, little capital investment and a low rate of technical advance. The Government no longer pretend to cite any iron-clad evidence to suggest that deregulation creates jobs and regulation destroys jobs.
I turn now to the Government's gross exaggeration of the charter's supposed effects. When Mr. Eggar addressed the committee, he spoke as if the charter and the action programme involved a Community-wide minimum wage. As the noble Lord, Lord Allen of Abbeydale, said, that is not the case. It will not be regulated across the Community 51 and regulations imposing minimum wages are not suggested either in the charter or in the action programme. Again, Mr. Eggar spoke as if all 43 items in the action programme produced regulations. As the noble Lord, Lord Allen of Abbeydale, reminded the House, that is not the case. Of the 17 directions, which are legally binding in some sense, 10 are concentrated in the area of health and safety. The Minister spoke at one time as though we had already adopted the qualified majority rule across the area covered by the social charter. As the noble Lord, Lord Allen of Abbeydale, said, it appears that, if the qualified majority rule is to operate in the foreseeable future, it will do so in the area of health and safety and will not commit us legally to anything else in general at this time, if the Government desire to veto the results.
One can only turn therefore to the Government's record in their attitude towards not this social charter but previous documents and attempts on the Community's part to create a framework of social rights. One cannot explain the Government's attitude. One cannot explain the rejection—and I am sure that the Minister will refer to this point tonight—of the modest proposal in the committee's report that the Government should accept the present basis of the charter as a reason and basis for negotiation. One sees that against the background of the Government's 10-year campaign against the introduction of all kinds of social standards in the EC—their failure fully to implement the equal pay and equal treatment directive; their evasion of the transfer of undertakings directive; their blocking of all progress on the fifth directive; their blocking of the Vredeling directive; and their opposition to the Commission's proposals for protection in such areas as hazards including for example, benzene and carcinogens. One cannot understand that approach unless one sees it in the Government's terms; in other words, in terms of a large part of the legislation which they have put through the House.
Much as we should like to do so, we cannot believe that, if further modifications were made—and significant modifications were made at Madrid in an attempt to get the Government on board—the Government, under the Prime Minister, will reverse their policy of the past 10 years and accept any form of social regulation in the EC as a consequence of 1992.
So I come to the second observation that I want to make briefly in this House; namely, to define the position of the Opposition. I should like to make four points very quickly. First of all, we favour Britain adopting similar industrial rights, both individually and collectively, to those which at present apply in the best of EC countries. In other words, we believe in a levelling up and not a levelling down. We would rather follow the higher standards of countries in Europe than the lower standards.
Secondly, we do not accept—certainly the Government pray in aid no evidence—that the employment consequences of social justice, which is what it comes to, are so coercive, especially in 1992, that not only can we make no advances but, if we adopt the Government's policy, we must have continued deregulation.
52 Thirdly, in the case of collective rights—I hope that other speakers on this side of the House will have more time to develop this topic than I have—it is not so much a case of the social charter as the action programme. There is very little in the action programme which pertains to collective rights. Certainly there is very little which pertains to collective rights in a legally enforceable way. Therefore if one talks about collective rights in terms of the action programme, one has to look for a benchmark toward the standards of the ILO rather than to the standards of the action programme.
Finally, we believe that an across-the-board, community-wide approach is absolutely vital in this field. Given the existence of a single market, there has to be pressure toward a single structure of labour costs. There is bound to be pressure toward a single structure of labour costs. Without some commitment to common minimum standards, however slowly and however subject to local variation, that pressure will be downwards. Therefore, to us the alternative to social dumping is social regulation and if it is a choice between social dumping and social regulation we go for social regulation.
With a few moments to spare I come to the question of the closed shop. Whenever that matter is debated noble Lords opposite and Members in another place seem to be particularly concerned that the Labour Party should find time to explain its position on the closed shop. I must therefore beg leave of the House to spend a few moments on this matter.
It seems to me that the argument concerning trade union membership as a condition of employment is entering a third phase. The first phase began in effect with the Mogul case at the turn of the century and ended in 1971. Then the argument was that since the House of Lords had said that an employer's closed shop was perfectly lawful, that employers could discriminate, keep out, refuse entry and expel so long as they were motivated by the desire to defend their trading interests, then what was right for employers was right for unions and what was needed by employers was needed by working men and working women. That was the position and our position until the 1971 Industrial Relations Act when a previous Conservative Government introduced the concept of unfair dismissal.
The issue then was whether unfair dismissal should cover dismissal on grounds of union membership. At that time and indeed until the entry into office of this Government the general position was that under certain conditions dismissal on grounds of refusal to belong to a trade union would be fair. If certain arrangements were made for conscientious objection, we might argue about the extent of that. If certain alternatives were offered, perhaps an agency shop, we might argue about that. But the position of the major political parties from 1971 to 1979 was that within that general framework union non-membership was a ground for fair dismissal. That was the position until the present Government sought to undermine it in what we regarded as a partisan way.
We would argue that that two-act drama—if drama it be—has now been changed by the 53 emergence of the social charter. The social charter offers workers a series of individual and collective rights: the right to collective bargaining, the right to recognition and the right not to be refused a job on grounds of being a trade unionist, not merely on grounds of not being a trade unionist. Yet Section 11 of the social charter says quite simply that "freedom to join or not to join" has to be protected and must not be visited with "any personal or occupational damage". Of course it does say—as the Government do not like to be reminded—that it is not only freedom to join or not to join a trade union but freedom to join or not to join a professional association. That is something which the Government do not mention. They do not and have not included it in their Bill in another place.
We have taken the view that the social charter is not an à la carte menu; it is table d'hôte. If one accepts the social charter in general, one has to accept each one of the headings. If the social charter gives freedom to join or not to join without any personal or occupational damage, then that must be accepted. That is the position of our party. Therefore we say that so long as it applies to trade unions and professional associations, so long as the rights on both sides are genuinely equal, so long as they cover trade union activists as well as trade unionists and so long as they cover blacklists on both sides, then the direct justification of membership or non-employment is no longer possible under the terms of the social charter.
In conclusion, I should have thought that there is a degree of flexibility which the Government would welcome. No doubt the Minister would welcome a more flexible position if he were able to adopt it. No doubt he would like nothing better. His problem of course is the Prime Minister. The Prime Minister still believes that the social charter is the final expression of Marxism and he is stuck with the consequences.
§ 5.58 p.m.
§ Lord Rochester
My Lords, I was interested but not altogether convinced by the exposition of the noble Lord, Lord McCarthy—or should I call it perhaps a rationalisation—of the Labour Party's position on the closed shop. But I do not propose to follow him down that road except to say that the opposition of my party, particularly to the pre-entry closed shop, is well known. I think there is no need for me to elaborate on it now.
The opinion of Sub-Committee C, on which I had the honour to serve during this inquiry, has been so well explained by the noble Lord, Lord Allen of Abbeydale, that there is little that I need add on the general position. Perhaps I may simply support most strongly the proposition that this country should adopt a positive approach to the charter by seeking through negotiation to adapt it to industrial conditions in this country. In my view the pace at which political and economic change in Eastern Europe has occurred since the report was published makes it all the more desirable that the United Kingdom should demonstrate its commitment to the development of the Community in this way.
54 The part of the charter on which I wish to speak is Section 17, dealing with information, consultation and participation for workers. In that section the key paragraph reads:Information, consultation and participation for workers must be developed along appropriate lines, taking account of the practices in force in the various Member States".That phrase stems from the Fifth Company Law Directive. It is significant that it is also reflected in the proposal for a Council directive complementing the European Company Statute which is now being considered by an ad hoc sub-committee of your Lordships' European Communities Committee.
Under Article 6 of that directive one of the possible options that could in certain circumstances become available to any European companies that might be formed is what is called a standard model of participation, which must be,in conformity with the most advanced national practices".That is a concept that I welcome. It has long seemed to me that in the field of employee involvement our aim should be to improve this country's international competitiveness by building on the practices already operating, if not in European companies, as the noble Lord, Lord McCarthy, seemed to be saying, at least in our own more progressive companies.
To that end, in 1982 I was privileged to introduce an amendment to the Employment Bill of that year which was accepted in principle by the Government and eventually became Section 1 of the Employment Act 1982. Your Lordships will recall that that is the section which makes it a statutory requirement for any company employing more than 250 people in the UK to include in its annual report a statement describing the action that it has taken during the financial year to develop arrangements aimed broadly at providing employees with informtion on matters of concern to them, consulting employees or their representatives so that their views can be taken into account in making decisions affecting their interest and encouraging the involvement of employees in the company's performance through a share scheme or other means.
Just before the section came into force on 1st January 1984 the then Secretary of State declared that he would be watching developments closely and would be profoundly disappointed if it appeared that even a minority of employers appeared to be willing, by inactivity, to provide ammunition for those who agreed that prescriptive legislation such as that which would be imposed by the draft Vredeling and Fifth Company Law Directives was the only way of achieving progress. Yet according to a report published by the British Institute of Management last year, there is now general agreement that the requirement to make such statements has had little practical effect. Surely the time has come to make it obligatory that at the very least in all UK companies employing more than a certain number of people there should be consultative bodies of some kind.
Against that background I find it depressing to learn from the evidence of Mr. Tim Eggar, the Minister of State for Employment, to Sub-Committee C that the Government are still 55 averse to any further legislation in this field. In its evidence earlier this month to the sub-committee inquiring into the proposed European Company Statute and Council Directive, the CBI also stated that it was still its view that arrangements for employee involvement were best left to voluntary agreement between employers and employees.
Fortunately not all employers are so slow moving in their attitude. I have been encouraged to learn, for example, that the British Institute of Management has proposed what it calls a UK option under which public companies employing more than 1,000 people would give influence at board level by granting the same right as shareholders collectively by means of a trust which would be deemed to have sufficient equity to call an extraordinary general meeting or to put items on the agenda for an AGM. For this purpose, the deemed level of equity would be that defined in the fifth directive as 5 per cent. of subscribed capital or 100,000 ecu. The Involvement and Participation Association has suggested a somewhat similar equity option under which measures to encourage significant employee share ownership would be supplemented by a legal provision that an employee share trust which owned 5 per cent. of a company would have the right to nominate a non-executive director for election at a general meeting.
The association has further drawn attention to the code concerning employee involvement, which received praise from the Government when it was produced jointly by the IPA and the Institute of Personnel Management in 1983. At that time the Government declined to give the code statutory backing. When he replies to the debate, I shall be grateful if the noble Lord, Lord Strathclyde, will tell us—and I have given him notice of this question—whether he agrees with the IPA that seven years after 1983 it is time for government to reconsider the idea of introducing enabling legislation to strengthen that code.
Those are some of the ways in which the Government could demonstrate their willingness to make progress in this field, if only, as the report that we are debating recommends, they would accept the draft charter as a basis for negotiation.
§ 6.7 p.m.
§ Baroness Turner of Camden
My Lords, first I should like to apologise for the fact that I shall not be able to stay until the end of the debate. Unfortunately I have a long-standing engagement and I shall have to leave early. I am very sorry for that because I think that it will be a very interesting debate.
I was a member of Sub-committee C whose report on the Community social charter is now before your Lordships. I welcome the opportunity to speak from the Back-Benches on the report. The committee worked very quickly and very thoroughly in an endeavour to produce its report in advance of the Strasbourg Conference last year. Of course we were seeking to influence the Government prior to that conference. We do not appear to have done so. I believe that that is a great pity.
56 The principles involved in the social charter are surely entirely admirable. Indeed, almost all the witnesses we saw, whether or not they agreed with the charter in its entirety, agreed with the objectives. The idea is that all citizens should feel that they have a stake in the Community and will gain some benefit from it. Indeed, that is seen as essential for sustained economic growth.
Moreover, all, including the UK Government, are agreed that priority must be given to job creation. Disagreement arises as to the means by which this objective is to be achieved. The noble Lord, Lord Allen of Abbeydale, who chaired the committee, has already outlined the reasons for the committee's report and has explained the categories of fundamental social rights to which it refers. As he has explained, these include freedom of movement, provisions for workers to receive fair remuneration, social protection, training, equal treatment for men and women, basic health and safety provisions, and so on. Much of this is apparently acceptable to the Government. However, it seems that the provisions concerning freedom of association, collective bargaining and the right to organise in trade unions worry the Government.
In the time at my disposal, I should like to concentrate on employment although the charter covers a great deal more than that. There was a time when the UK led the world in providing legislation giving rights at work. The UK Government have ratified—and indeed the present Government have not denounced—International Labour Office Conventions 87 and 98 which are concerned with freedom of association and the right to organise and bargain collectively. As my noble friend Lord McCarthy, has explained, they are in similar terms to the provisions of the charter.
However, since 1979 rights of employment have been eroded. We no longer have the fair wages resolution which was first introduced in 1945 and was supported by all governments until the present administration. Other protective legislation has also disappeared with amendments to the Employment Protection Act. Sections of that Act allowing unions to go to arbitration in low wage cases, and also to refer to the Advisory Conciliation and Arbritration Service cases where trade union recognition has been refused, have disappeared. Wages councils have had their powers eroded and some of them have also disappeared. We have no minimum wage provisions outside the remaining wages councils and they no longer cover young people.
The employment legislation introduced by this Government has concentrated almost entirely on restricting union freedoms. The right to belong to a trade union has been removed from employees at GCHQ, even though there is no evidence that the ordinary employees formerly covered by union agreements were in any way a security risk. The Government's attitude to employment rights is that employees have to be protected from their unions rather than from unscrupulous employers. To me—and I have spent a lifetime working in the trade union movement—that attitude to employment issues is absolutely bizarre.
57 It is quite clear that that attitude is not shared by those responsible for drafting the social charter. They believe that unions do have rights—not privileges but rights—and that they must be protected; as must the individual right to belong or not to belong to a trade union. That is supported by the Trade Union Congress which has stated that it accepts the social charter in its entirety. However, it believes in an even-handed approach and complains that the Government appear to give much greater weight to the right not to belong to a union than to the right to belong.
The social charter also includes the right to take collective action; that is, the right to strike. That also appears to cause problems for the Government. It is maintained that that is contrary to British tradition and practice where it has always been possible for employers to dismiss employees who strike because strike action involves breach of the contract of employment. The right to strike in Britain has been provided by a system of trade union immunities. However, those immunities are constantly being eroded as a result of successive pieces of legislation.
When members of the committee met representatives of the TUC we questioned them about the difference in practice between this and other EC countries where the contract of employment is merely suspended during a strike and not terminated as in Britain. Of course, it is now incumbent upon unions to inform their members on the ballot paper that the proposed action could mean that their contract of employment could be terminated.
The TUC responded that its prime aim was that a system should be established which protects from dismissal workers participating in industrial action. Changes to the law since 1979 have, it states, weakened the rights of individuals taking industrial action and encouraged employers to adopt a heavy-handed attitude to disputes. For example, the TUC states that, despite widespread public concern about safety standards in ferries, P&O sacked over 1,000 employees who were in dispute about the company's arbitrary imposition of worsened terms and conditions of employment. It states that it cannot be right for workers to be treated in that way.
Another aspect of the social charter that appears to cause the Government concern is the proposition about remuneration for workers. As my noble friend Lord McCarthy has pointed out, the Government appeared to express the view that what was envisaged was a minimum wage across the entire Community. However, the charter refers to a decent wage and, apparently, that is to be achieved in accordance with the traditions of the various member states. That was made clear when Mrs. Papandreou, the EC Commissioner for Employment and Social Affairs, met the Select Committee on Employment in the other place. It is a bland, even pious, statement and perhaps does not go as far as some of us would like. However, that is what is stated in the charter.
Mrs. Papandreou also dealt in some detail with the charge that the charter would have the effect of lessening competitiveness and thus reduce jobs and job opportunities. She said: 58In the Charter we do make a reference to the employment problems in that we give priority to job creation. I do not think that the creation of new jobs should be at the expense of the working and living conditions of the people. It is not, according to my opinion, a straight line between job creation and the standards of living and working conditions for the workers. On the contrary, what we see in many countries is that the level of employment goes in parallel with the standard of living and working conditions, with higher standards in health and safety and with participation and with more involvement of the workers. I do not think that the implementation of the Charter is going to have a negative effect on job creation".As has already been pointed out, the original draft of the charter has been watered down quite substantially in an attempt to gain the support of the UK Government. For example, it has been made clear that the section covering information, consultation and participation of workers—indeed, the whole subject of worker participation—could be developed in such a way as to take account of existing traditions. That covers the attitude of the UK Government that employees should participate via wider employee share ownership.
Moreover, the principle of subsidiarity means that each country will develop its own commitment to the charter via its own national institutions. Only some of the measures will be the subject of directives; others will not be the subject of Community legislation. Surely it is right that that statement of laudable aims—a fair standard of living, reasonable working hours, good working conditions, freedom of association, good standards of health and safety, and so forth—should receive support.
There is nothing particularly new about that. The idea of a social dimension can be traced back to the Treaty of Rome in 1957. Article 118 of the treaty lists a number of areas in which the Commission should have the task of promoting close co-operation between members states. They cover employment, labour law and working conditions, social security, health and safety, and the right of association and collective bargaining. Other articles deal with equal pay, freedom of movement, vocational training, and so forth. Therefore, the aims are not new. What is new is the desire to make some progress as a result of the Single European Act.
For all those reasons, and for others set out in the report, the committee, of which I had the honour to be a member, urged the Government to emphasise their willingness to endorse a Community social charter; to acknowledge the substantial amendments already made to meet their objections; and to concentrate on persuading the European Council to do more to carry into the text principles contained in the preamble. I am sure that the committee—which was unanimous in its view—was right to reach that conclusion and I commend it to your Lordships.
§ 6.18 p.m.
§ Lord Bridges
My Lords, I wish to explain at the outset that, although I was a member of the Select Committee and fully endorse its report, I was not a member of the sub-committee which wrote that document and the remarks which I am about to make are entirely personal.
The Minister of State for Employment told the sub-committee that the Government did not object 59 to the charter in toto but to the current version of it. Nevertheless, I detect that the Government's reaction is one of considerable reserve, even scepticism, to the idea of a social charter. Such a general feeling appears to lie behind the Government's decision not to participate in the vote at the Strasbourg European Council. I may be wrong, but the impression created is that the notion of a charter dealing with social issues in the European Community is unwelcome to the Government, who find it an inappropriate way of addressing the subject. Such broad declarations of principle are thought to be vague, uncertain and risky—a rather un-British way of proceeding. That general attitude is the subject of what I have to say and it is that to which I wish to draw your Lordships' attention.
I do not find the idea of a social charter unjustified or inappropriate. After all, charters have a long history in this country. As the Prime Minister reminded us in her reflections on the bi-centenary of the French Revolution in Paris last year, our own rights and liberties can be traced back to the greatest charter of them all—the Magna Carta of 1215. The Bill of Rights is the charter which has framed our constitutional evolution. In the last century the Chartist movement embodied the political aspirations of a mass of people for a generation. Most of those objectives have since been enacted by statute. When Churchill and Roosevelt wrote their statement of war aims, the result was called the Atlantic Charter.
Therefore, when it is hinted that broad statements of principle in political matters with legislative effect are alien to our law-making, we do not need take such objections too seriously. Indeed, one may criticise some of our own legislation for its excessive particularity and detail. Perhaps we should write better laws if we included in them fuller statements of principle. They might be more widely understood and more readily interpreted. At any rate, I do not believe that it is sensible to criticise the social charter on those grounds, as some have done.
My second reason for regretting the Government's reaction to that proposal to date is the effect which it has produced on the other member states of the Community. The Government seem to have created the impression by that and other actions that Britain is back to its old hobbyhorse—the creation not of a real community but of a mere free trade area, with a minimal institutional framework and few supporting policies in other fields. I do not believe that to be the Government's view. It would be quite inconsistent with the terms of the Treaty of Rome and of the Single European Act. However, I believe that that impression now prevails in some other Community countries and what has been said about the social charter has contributed to that result.
When we consider the current political context in Europe, it is clearly not a good moment to fall out unnecessarily with our Community partners. We are in the middle of a major programme of work—the creation of a single European market and the adoption of the many measures necessary for that end. The events in Eastern Europe create fresh problems but enormous opportunities for the future.
60 In such circumstances it is surely wise to show sympathy and understanding whenever we can for the aspirations of our partners and to express our open support for their entirely praiseworthy objectives in the area of social policy, even if we have reservations on detail. Trench warfare from immobile, fixed and hostile positions is not likely to lead to victory in this campaign. On the contrary, the position can easily be outflanked.
There is a third reason, nearer home, for doubting whether the Government's attitude towards the social charter is altogether wise. I refer to the position of our trade union movement. The TUC and many of its most powerful unions were among the most strenuous opponents of our entry to the Community. I find it one of the most welcome recent developments of our political life that that policy has changed and that, broadly speaking, most British trade unions now accept our membership of the Community as a fact of life.
This Community initiative—the social charter—is approved by trade unionists in large measure in this country not, I suggest, because of a narrow calculation that that might give them some privileges which they could not obtain from our own Government but because it justifies the view which they have taken of our future in the Community as a whole. I believe that it is very much in the interests of this country that the trade union movement should be encouraged to continue the policy which it has adopted. For that reason also I regret the Government's reserve and non-participation in the Strasbourg decision.
My suggestion is that in order to see that proposal correctly we need a broader angle and a longer perspective than the Government have yet offered us. I find no difficulty in supporting wholeheartedly the conclusion in paragraph 38 of the committee's report. That seems to me to be a very fair and fully justified recommendation. I hope that in the detailed negotiations which will now follow the Government will be able to adopt a more forthcoming and rather more far-sighted attitude. I fully support the terms in which my noble friend Lord Allen of Abbeydale introduced this Motion.
§ 6.26 p.m.
§ Lord Irvine of Lairg
My Lords, the most depressing feature of the debate about the social charter is the Government's hostility to social objectives which are broadly uncontroversial in the rest of Europe and if adopted would create no more than a reasonable expectation that the workforces within the single market will share equitably in the benefits intended to flow from it.
The Government's response to the whole concept of the charter affords yet further grounds for our Community partners to be deeply doubtful about our European credentials. I make a selection from the press notices emanating from the Department of Employment, giving extracts from recent speeches by Government Ministers. They add up to a crescendo of hostility to the charter.
61 On 26th April 1989 the then Employment Secretary, Mr. Fowler, said:What we do not accept are measures which impose unnecessary regulations and costs on employers, measures which will destroy jobs".On 28th September he was even more explicit:We believe that the draft social charter points in the wrong direction—towards a Europe of greater regulation and additional restrictions on business growth and not towards a Europe of increased employment opportunities and falling unemployment".On 3rd October the Minister of State, Mr. Eggar, was even more condemnatory. He said:The European social charter is ill-conceived and bad for small firms… It will not create a single job. What it will do is create more red tape and further regulations which will directly harm the growth and development of the small business sector".
§ Lord Irvine of Lairg
My Lords, he went on to declaim:Why should Brussels make it impossible for youngsters under sixteen to do paper rounds and take on Saturday jobs?I hope that the noble Lord, Lord Strathclyde, who is fulsome with his "Hear, hears"—and not for what I say but for the quotations from the Government Ministers—will abstain from "Hear, hearing" on that point because that at least is a heresy which has since been repudiated by the European Commission. Indeed, that was something to which the noble Lord, Lord Allen of Abbeydale, referred to at the outset when he opened this debate.
On 18th October Mr. Eggar revealed,that the UK Government has considerable reservations about the whole concept of a Social Charter. Our approach, our traditions, lead us to believe that one is not needed. What we are firmly against, however, is the existing draft of the Social Charter".On 7th November Mr. Fowler was no less hostile. In an address to a CBI seminar he attacked the charter as calculated to increase costs and destroy jobs. All that was preceded by statements by the Prime Minister herself of the character to which my noble friend Lord McCarthy referred.
In reality the Government's position is that any enhancement of workers' rights which could conceivably be said to be likely to increase employers' costs is to be rejected on that ground alone because it is said that increased costs necessarily lead to job losses. Of course, that is pure assertion. The proposition that a workforce which is fairly dealt with and better trained is likely to be more productive is ignored. The proposition that a homogeneous floor of workers' rights is a corollary of the very concept of the single market, necessary if there is to be popular enthusiasm for it, is ignored. The argument for social justice within the single market goes by default. There is a depressing similarity between the Government's response to the concept of a social charter and its record of securing for workers in this country the rights that they are already guaranteed under European law. I pass over altogether the diminution of rights of individual employees which this Government have imposed in domestic law. I confine myself to the European dimension.
62 In practice, the Government's policy has been to do as little as possible, as late as possible, and to delay as long as they can in securing for workers in this country the rights that they are guaranteed under European law. A good example of that situation is The European Commission v. United Kingdom Government in 1982. Legislation providing for equal pay for work of equal value, the Equal Value Amendment Regulations 1983, was introduced because the European Court of Justice in Luxembourg ruled that United Kingdom law was inadequate to protect workers' rights under Article 119 of the Treaty of Rome. The Government resisted to the last ditch. The Commission made a formal finding that the UK Government were in default. The Government did not respond to diplomatic pressure; they fought the reference to the court, all the way to inevitable defeat.
The story is the same in regard to efforts for women to be protected against discriminatory retirement ages, basically 65 for men and 60 for women. That was the Marshall case which was brought not by the Commission but by the individual concerned. The Government had resisted demands for equal retirement ages for men and women for many years and only acted when their hand was forced. The result was the equal retirement age provisions of the Sex Discimination Act 1986. I could offer other such examples, but I abstain in the name of economy.
Much of the Government's antagonism to the social charter stems from an inability or unwillingness to come to terms with the existing obligations of the United Kingdom under European law. To that extent their stance is that of the ostrich. When it comes to the charter, the Government single out for special attack the provision of Article 5 that all employment shall be fairly remunerated. However, as I understand that article, it does not require any particular minimum level of income or minimum conditions but only that employees be remunerated fairly according to national circumstances. That situation is confirmed by the Commission's action programme, as we were told by the noble Lord, Lord Allen of Abbeydale.
The spectre has been raised by Ministers many times that the charter will make part-time and temporary work more expensive and that that will cost jobs. However, already the equal treatment directive of 1976, as interpreted by the European Court, extends the general protection against discrimination in pay on the grounds of sex to part-time workers. In Britain 85 per cent. of such workers are women, which is much the same percentage as for the Community as a whole. They are already entitled to be treated equally pro rata to the hours they work, unless there are objective commercial reasons for the difference in treatment. The charter does not affect that situation.
The charter recognises the right to join or not to join a trade union. I do not understand the Government's concern about Article 11. Already in this country employees cannot be dismissed for being or not being trade unionists. The new Employment Bill, which is passing through another place, extends the same protection to job applicants. That was 63 not Mr. Fowler's original intention. His original intention was to outlaw discrimination in recruitment only where the reason for it was that the applicant was not a member of a trade union. The Government were subsequently persuaded, by pressure from my party, to outlaw discrimination in recruitment also on the ground that an employee or prospective employee was a member of a trade union. Therefore on that point we are coming into line with the proposed charter.
Under Article 13 the right to strike is given,subject to the obligations arising under national regulations and collective agreements".Therefore the charter has no impact on the right of the United Kingdom to decide the limits of lawful strike action in the United Kingdom. It leaves untouched all the legal requirements as to ballots, restrictions on political strikes, secondary action and picketing under United Kingdom law.
I wonder whether the Government truly fear, from this part of the charter, nothing other than that, under it, employers may be unable to continue the unfairest aspect of our current labour legislation. My noble friend Lady Turner referred to the fact that an employer who dismisses the whole of his workforce which is on lawful strike action after a lawful ballot can do so with impunity without having an industrial tribunal decide whether it was fair or reasonable for the employer to do so. I doubt if there are many who would think that this is an employer's right for which the Government should go to the wall in resisting the charter.
It may be that Article 16—equal treatment for men and women—is not to the Government's liking, despite the Community law to which we are already subject in this area. Article 16 provides that, for instance, measures should be developed that would enable men and women to reconcile their vocational and family obligations. That will mean in practice career breaks, family leave, parental leave, including parental leave for men, and flexible working arrangements allowing a worker to come back on a more flexible basis; for example, part time after childbirth.
An increasing number of major employers in this country, particularly in the banking and financial sector and the retail sector, are making arrangements of that kind for good commercial reasons; otherwise they will not be able to recruit sufficient skilled workers in the 1990s. Surely not to encourage this trend will severely reduce our ability to compete within the single market.
Lastly I should like to refer to Article 15 under which every EC worker must be able to have access to vocational training and have access to that training throughout his working life. Surely it would be folly to deny our employees a right to training that will be accorded by our competitors within the single market. The statistics are well known and discouraging. Only 30 per cent. of our workforce have recognised qualifications equivalent to one O-level, compared to at least 70 per cent. in Germany. Only 40 per cent. of our engineers have recognised qualifications, compared to 70 per cent.
64 in Germany. The number of apprenticeships in Britain is down by half since 1979.
I am sure that it would be of interest to the House if the noble Lord, Lord Strathclyde, when he makes his contribution for the Government to this debate, would say what the Government's reaction is to the obligations to provide vocational training as proposed in the social charter. We await with keen interest the noble Lord's contribution to this debate. There is no member of his party other than he who has chosen to contribute to this debate. The Benches behind him are empty. We are entitled to infer from this total want of contribution to the debate from the Government Benches that either there is no Member on those Benches who is sufficiently interested to contribute to this important subject, which is unlikely; or, more likely, that there is no one from the noble Lord's Benches who is willing to defend the stance that his Government are adopting to the dismay of the rest of Europe. The noble Lord, Lord Allen of Abbeydale, anticipated in opening this debate that it would prove to be one-sided, but only by the choice of the Government Benches.
I am as confident that the conclusion of the Select Committee's report in paragraph 38 is right as I am pessimistic that the Government will pay any attention. This is a Government who are not for learning. Their rooted inability to free themselves of their prejudices to workers' rights means that yet again we are likely to be sidelined in Europe, reduced to a querulous irrelevance, refusing unless compelled to do what everyone else, by agreement, is enthusiastically putting into practice.
If I may be so bold as to offer a modest postscript to the Select Committee's advice to the Government in paragraph 38, it is this: make a careful analysis of what are this country's obligations under European law already, together with existing workers' rights under United Kingdom domestic law; then one will find that much in the charter is not new at all and that what is new can surely be justified in terms of economic efficiency, deriving from a better trained and more flexible workforce, operating upon a homogenous floor of basic workers' rights. That in the long term is essential for that popular enthusiasm of the single market upon which its ultimate success must depend.
§ 6.40 p.m.
§ Lord Houghton of Sowerby
My Lords, I spent the weekend reading the report and much of the evidence. I thought, not for the first time, that the Government need look no further than a report of a Select Committee of your Lordships' House for the material for an act of statemanship. It is contained in that report. The committee's opinions are expressed clearly, sympathetically and wisely as to what opportunity lies before this country at present on this, among other matters, related to our membership of the EC. But, unfortunately, governments can scarcely wait to hear from Select Committees before they begin to rubbish their conclusions.
I see the noble Lord, Lord Aldington, in his place. He was a chairman of a Select Committee some years ago. Its report was received with acclaim as a 65 document of foresight and wisdom and a close analysis of the unpleasant side of Britain's future. He was roughly handled by the Government at the time. They feared the Select Committee's conclusions. They thought that they were damaging to the Government and might harm their reputation for being what they are not. That seems to be likely in the present case.
Of course when we have a chairman of Select Committee of the experience and skill of the noble Lord, Lord Allen of Abbeydale, we have a first division civil servant at work, and the imprint of a permanent secretary, and an admirable one too, is to be found on the report.
In my reading over the weekend, I read a comment to the effect that Europe does not exist; it is merely a collection of mistakes. There is a lot of truth in that. Europe is a collection of mistakes. Unless we are careful, a few more will be made in the near future. One thing is pretty clear now. If the EC cracks up, Europe will turn into a Balkanised collection of states, which would be a tragic development out of the present upheaval in Europe. We are leaving Mr. Gorbachev to say all the things that are worth saying about the future of Europe. We should have a contribution of our own to make.
The value of the report and of the draft Community social charter lies in the fact that something is beginning to be put into the Community which it does not yet have—a sense of purpose which will attract the interest and support of the common people of our continent. The noble Lord, Lord Bridges, in an admirable speech, referred to what the Government's approach to Europe appears to be: a free trade area with as little institutional machinery around it as possible. That is just what is wrong with it. People do not feel that the European concept has any substance. It does not get down far enough. It gets lost in the common agricultural policy. There are issues that Europe could now be expressing in human terms which would make a great difference to our attitude towards the European Community. We want more people in the European Community. We have something than can form the nucleus of a new and wider concept of Europe.
I know that a document of this kind can be criticised for being woolly. An old term has been resurrected for government use—"mish-mash". Are we so clever at expressing ourselves that we scorn such a document, comprehensive in general terms, and probably written in language which it would be difficult to construe in legislative terms? The charter provides the substance of what everyone wants out of life in the European Community. It is a reflection of our European standards and hopes. If we can put that document on its way towards implementation, we can try to get right our priorities and to look at the possibilities and disappointments which may lay ahead.
I am not enthusiastic about giving terms to such documents which we may never be able to live up to. To describe the charter as a collection of fundamental social rights frightens me a little, because there are many rights floating about the world at present but not enough are settling in 66 different parts of the world. Human rights have been widened considerably in the past 30 or 40 years; but we can see how far we still have to go before they will be real to those for whom they are placed as safeguards and aspirations.
Why do we carp all the time about Europe? I sometimes wonder whether we genuinely intend to get there. I reflect upon my experience of the difficulties of party policy on the adherence to the European idea and I must say that that experience was disagreeable. Prime Minister Heath got the European Communities Bill through the other place on the votes of 60 dissidents from a Labour Party three-line Whip who were led by me. I was immediately challenged by the chairman of the Parliamentary Labour Party for dissenting from a three-line Whip; but the Government had not done much better. They had given the Conservative Party in the other place a free vote which suggested that they did not have the courage of their convictions, if convictions they had, to ask their supporters to rally around and give them a good entry into the Common Market.
We had to have a referendum after that. What happened? No one seemed to want to go into Europe. It was going to be given to the public to decide. The referendum was an emphatic endorsement of our then provisional membership of the European Community. What happened after that? The voice of the people was pretty well sabotaged by every government who came thereafter because there was no enthusiasm for what the Government had a mandate to do. I shall not dwell on that point. It is in the past. However, it does not provide the foundation for the right spirit today, because, looking back on the history of our association with Europe, there is not much that inspires those who today are being asked to adopt an adherence to the European idea.
We want to generate a good deal more enthusiasm for membership of Europe. We are saying all the right things in your Lordships' House just now, but the trouble is that not enough people are saying them. We still have to have a voluntary body called the European Movement to try to stimulate the spirit of Europe and a vision of the future. While everybody is grubbing around with the economic detail, someone must look with a vision of the future.
There is no future for Britain outside partnership with our European friends—none. We all know that we do not have the resources. Small nations must merge, federate, ally or join in partnership with others. There must be enough between them to enable a concerted effort to be made to replace in a novel form of association of separate nations the economic and political power of those who in the past have gathered under the American or Russian flags in the great land masses in attempts to get consolidated political opinion. A lot of that is now breaking up.
I welcome the opportunity of pledging myself as far as the future is concerned. I have never wavered in this regard. I have believed for years that Britain's destiny is in Europe. We are slow to realise that. I wish that we had a Prime Minister with a greater sense of historical purpose and vision. What an 67 opportunity for leadership there is now, with the world in turmoil. But every utterance that comes from No. 10 Downing Street about events in Europe is one of caution and withdrawal. I thought yesterday that the Prime Minister was about to resign her membership of Europe altogether because something that she thought should not happen and was not on the agenda is now inevitable. That is not the spirit in which to enter Europe.
We should see that if we do not keep close to our European friends they will go ahead of us. We need them a great deal more than they need us. We should realise that. I hope something will go out from this debate. We should have more of them in order to foresee what may be happening in Europe which could provide the opportunity to avert some of the graver mistakes that may lie ahead. We have opportunities but in my view we are in serious danger in the turmoil of events which are now flashing through Europe with amazing speed.
§ 6.53 p.m.
§ Baroness Lockwood
My Lords, as a Member of Sub-Committee C, which undertook this inquiry, I would like to thank the noble Lord, Lord Allen of Abbeydale, for the way in which he introduced the report and for outlining the reasons behind the committee's approach and recommendations. The charter is not a binding document; it is largely a statement of intent on broad principles relating to the social rights of workers within the Community.
At the time of the inquiry the action programme was not available. It now is and I suggest that the two should be seen together. Had the action programme been available during the inquiry, some of the fears expressed by some of the witnesses might have been removed or at any rate mitigated. It certainly clearly sets out the responsibilities of the Commission, the national government and the two sides of industry in a way that the charter did not.
As the noble Lord, Lord Allen of Abbeydale, said, and as the report indicates on page 13, paragraph 30, negotiations on the charter became symbolic as a measure for judging the United Kingdom's commitment to the future development of the Community. It was because of this that the sub-committee urged the Government to accept the broad principles of the charter and then negotiate the details through the action programme and through the subsequent draft Community legislation.
The committee regretted that the Government appeared to be so intransigent, because, as we state on page 13, paragraph 33,the latest text of the Charter has gone a long way towards meeting the United Kingdom's objections".Moreover, the action programme has taken aboard even more of the Government's concerns. So it seems a pity that by our public stance the UK appears to be so hostile to Europe. Yet simultaneously it also appears that the Government have been negotiating on some of the issues: otherwise we might not have had the changes that are seen in the action programme.
68 Of course the Government cannot expect to win all the time; with 12 countries involved there must inevitably be compromise, and we should gracefully accept that compromise. None of the witnesses who appeared before the committee, with the possible exception of the Engineering Employers' Federation, said that they were opposed to a charter as such. Those who were critical, including Mr. Tim Eggar on behalf of the Government, were opposed to the terms of this particular charter. Fundamentally, their opposition was based on the premise that the Community's concern should be with wealth and job creation and that the workers would, in the normal course of events, benefit from such developments.
They also felt that some of the measures indicated could be a burden and would reduce the Community's competitiveness. This view was vigorously contested by other witnesses. I do not propose to go into the details of that argument. My noble friend on the Front Bench has already done so to a great extent. Nevertheless, it is important to remind ourselves that the single market is about the free movement of people as well as the free movement of goods, services and capital.
As my noble friend Lady Turner indicated, the Community has consistently involved itself with social problems. The Madrid heads of government conference in June last year said in its final communique:The European Council considered that in the course of the construction of the single European market social aspects should be given the same importance as economic aspects and should accordingly be developed in a balanced fashion".It seems that by the introduction of the social charter we are attempting to balance the two issues. Nowhere is it suggested in either the charter or the action programme that there should be uniformity of working conditions or of social provisions throughout the Community.
Nevertheless there must be some agreement on the principles on which these are based. The mutual recognition of qualifications is a typical example of the kind of principles that we must have if there is to be free movement. A considerable part of the action programme is concerned with stimulating debate and putting forward opinions as to how these matters can be fairly dealt with. Many of these issues involve my own special field of interest of equal opportunities between the sexes. As my noble friend Lord Irvine of Lairg has already indicated, the Community has been deeply involved in this issue since its first directive on equal pay in 1974.
The social charter seeks to build on the work already undertaken. Community legislation in this field has complemented national legislation. In all Community countries there have been individual programmes by national governments. Community action has been based on two principles; first, that the resources which women in the Community provide should be sufficiently developed so that they can make a greater contribution to the wellbeing of the Community; and secondly, that, as a human right, women should not be exploited vis-a-vis their male colleagues and that such exploitation should not give one country an unfair advantage over another. From these tenets, the directives on equal 69 access to pay, employment and training and to social security have flowed and have been amplified by action programmes.
The current action programme elaborates on the principles set out in the charter, proposing four initiatives for promoting greater equality between the sexes; first, a third Community programme on equal opportunities for women; secondly, a directive on the protection of pregnant women at work; thirdly, recommendations concerning child care; and, fourthly, recommendations concerning a code of good conduct on the protection of pregnancy. The measures proposed to safeguard the conditions of those involved in what is termed non-traditional work patterns—for example, part-time work—will affect women very considerably.
The action programme also draws attention to the fact that the earlier directives on parental leave, on burden of proof and on retirement age have not yet received Council agreement. It urges a resumption of deliberations on these matters. The main body of opinion among women in this country would fully support that view, particularly in relation to parental leave. Perhaps the Minister will note that point. He might also note the fact that, of the four proposed measures on women's equality, only one would have binding effect on member countries. That one falls within the ambit of health and safety at work, so no doubt the Government will find that acceptable. But this emphasis on recommendation, on opinion and on further discussion is typical of the action programme. Some—I am afraid that I should be one—would regretfully conclude that too little of the programme is to have binding effect. No doubt the Government will be comforted by this. Because of the watered-down nature of the action programme, one might ask what all the fuss has been about. Surely the Government should ask themselves that question. Equally, those who support the charter might ask whether it will, as a consequence, have any effect. Personally, I should have preferred the action programme to be more binding. But I nevertheless think it is to be welcomed. It is a charter, pointing to principles that we need to consider and abide by within the Community. It is also a signpost to Community progress and one to which I suggest your Lordships will return in the very near future.
§ 7.5 p.m.
§ Lord Monkswell
My Lords, one of the difficulties of the debate this afternoon has been the way in which it has taken place. All noble Lords have spoken in support of the social charter but nobody on the Government Benches has been prepared to stand up and argue the case. It is a rather difficult debate to contribute to because there has not been the normal to and fro. The noble Lord, Lord Irvine of Lairg, suggested that the noble Lord, Lord Strathclyde, is a volunteer. Given that the noble Lord, Lord Strathclyde, is fronting for the Government, I wonder whether he is not a volunteer but a pressed man. However, we shall not think any the worse of him for that.
I thought that I would try to introduce a couple of elements different from those that have been mentioned before. While I support virtually 70 everything previous speakers have said, a number of different elements need to be brought out. First, I should like to refer to the Government's reaction to the social charter. Something that comes to my mind is an experience I had in the company I worked for 20 years ago. A product designed in the United States was being marketed in this country. However, circumstances in the United States were different from those in this country and so the product needed to be developed. Unfortunately, the engineering department was not prepared to devote resources to developing the product. The attitude was "not invented here". It was not the department's baby and so it was not interested in the product. As a result, a very good product for the United Kingdom market with export potential beyond that died on its feet through lack of support.
The Government's attitude to the social charter reminded me of that. Their attitude is that as they have not thought about it they will not support it. They are prepared to let it die on its feet. The social charter is rather more important than that. It is on this point that I diverge from most of the speakers who have contributed to the debate. Most of them have spoken in terms of the employment effects and of the attitude of workers to the single market. My concern is wider than that. I am concerned about the attitude of individuals in society to society at large. If individuals do not feel part of that society and do not believe that it is a positive and constructive society, they will rebel against it.
The message coming from the Government seems to be that they want people to be paid low wages; they want bad pension provisions; they want poor medical services; they want discrimination against the disabled, women and foreigners; they positively want unhealthy and unsafe working practices; they want poor training and above all they want to get out of Europe. That is obviously not what the Government want but it is the impression they give to the rest of the world. They also give that impression to the people of this country. It is wrong. I would hope that it is unfair to the Government but I am, unfortunately, a little doubtful.
Perhaps we should look at what the Government profess. They profess to be in favour of competition. Indeed, I think that we should all like to see a measure of competition. They profess to be in favour of a free market. However, there is no such thing as a free market; it just does not exist. Every market is circumscribed with certain rules and regulations. We have only to look at the market which operates in this country to see that this is so. After 10 years of Thatcherite free market philosophy we still have regulations which prevent publicans from watering the beer. That is just an example. Moreover, we still have the Health and Safety at Work etc. Act which seeks to provide a safe and healthy environment for people at work, albeit not very well enforced. However, it is still on the statute book. Therefore, even our market after 10 years of Thatcherism is circumscribed by certain rules and regulations.
I hope that when we talk about competition we will talk about fair compeition and that we will talk about competition in terms of more effective working together; in other words, teamwork. A 71 company which can engender better teamwork will be more successful than a company which does not enjoy success in that respect. The same applies in terms of knowledge. The company which can use knowledge better than its competitor will win out in the end. That aspect could be summarised as more effective training. Moreover, the companies which use their capital resources more effectively and efficiently and invest better than their competitors will also win out in the end. I think that that is the kind of competition we would all applaud.
However, when the competition leads effectively to poorer living standards, low pay or poverty wages for workers, poorer care for the community and discimination against various people in favour of others, I would argue that that is unfair competition. It is not the sort of competition that the Government seek to promote—at least, I hope that it is not what they are seeking to promote.
There are many elements within the social charter. I shall not list them all because other speakers in today's debate have done so. However, in essence I think thay many of them could be supported by the Government. I hope that they will say that they are in favour of a decent pension provision and that they are in favour of good training provisions. I also hope that they will say that they are opposed to discrimination against disabled people, women and other categories of persons. Perhaps we shall hear something about that from the Minister.
Having discussed certain aspects of the social charter, I should like to return to two points. One relates to domestic social peace. I am thinking now in terms of discrimination, the projection of a society which is fair, which seeks to be fair and which adopts a charter to support that aim. I am thinking also of the problems that we have in Northern Ireland where for years the minority community has felt discriminated against. The Government have taken action in that respect. In my view that is perfectly laudable. However, why can they not embrace the social charter so as to give a wider expression to that action?
Social conflict goes a little wider than just Northern Ireland. During this century we have seen the most enormous social conflict that ever existed in the history of mankind. I refer to the Second World War, the 1939–45 war or the great patriotic war, depending on how you describe it. Millions of people were killed during that time. If we look at the seeds and the kernels which gave rise to such conflict, we can see that they were embedded in the discriminatory attitudes of the German and Japanese establishments before the war.
We are moving into changing times. Since the Government first started pronouncing on the social charter, we have seen amazing changes in Eastern Europe. Those changes will need a reaction. One of the most important mechanisms we have to deal with that changing pattern of international relations is the EC. We have the mechanism in the social charter to speak not only to our own communities—because we have problems there in terms of certain aspects which the charter 72 addresses—but also to communities which will join us or will aspire to do so. It is important that we should have a framework of social cohesion which enables people to work and live together, but which does not contain the seeds of, or the recipe for, conflict for the future.
In my view the Government should change their mind about the way they project their reaction to the social charter. I hope that over the next few weeks and months we may see a change in attitude; that is, not only towards thinking in terms of what the social charter will do for us or against us but also towards thinking about it in more positive terms. In other words: what can it do for our community, the wider community, and not just the EC? We should be thinking in terms of the example it can give to the whole of Europe; that is, the Europe about which Gorbachev has talked, between the Urals and the Atlantic. I hope that the Government will grasp the opportunity and that they will see the social charter as a tool for good and not, as they appear to do at present, as a tool for bad.
§ 7.16 p.m.
§ Lord Bonham-Carter
My Lords, I too was a member of Sub-Committee C, which produced this report under the chairmanship of the noble Lord, Lord Allen of Abbeydale. He skilfully guided us to a unanimous conclusion which has so far received the unanimous support of all speakers in the debate today. Moreover, I suspect that it will receive the support of all those who have yet to speak with the exception of one speaker—the noble Lord, Lord Strathclyde, who will be in exactly the same position in which this Government find themselves again and again in their negotiations with our European colleagues. It is not a comfortable situation and it is not a noble situation.
As the Prime Minister once said, isolation is not leadership. I must say that I have great sympathy with the noble Lord in having to answer this debate because I regard him as a closet European. As such it must go against his instincts to have to adopt this extraordinarily negative attitude to a charter that consists of a series of propositions which to most of us would seem self-evident but which to none of us would seem objectionable. For him to have to dream up plausible and apparently respectable arguments against the charter is indeed a hard task, with so little support as a sounding board behind him.
As I expected, your Lordships have covered the ground extremely thoroughly. Indeed many of the matters that I wished to raise have already been dealt with and dealt with in a much better way that I could have done. As a consequence I shall be able to abbreviate my speech to a relatively short oration. I shall try not to waste your Lordships' time.
It seems to me that the main issues which the report raised were, first and foremost, whether the social charter falls within the competence of the European Community. The matter is covered pretty thoroughly in the body of the report. It was also covered very clearly in the speech made by the noble Lord, Lord Allen of Abbeydale. Therefore, I do not propose to go into that aspect on this occasion.
73 Secondly, the report raises the much wider question of whether the social charter is desirable. I wish to examine that at slightly greater length. The Government's view, as expressed by Mr. Eggar, who spent some time with the committee, was that, while a social charter of principles was desirable in principle, in practice this one was not, primarily because it did not pay sufficient attention to the priorities agreed in the Madrid communiqué of the Council. It did not pay sufficient attention to job creation, though that appears prominently at the beginning of the social charter, to subsidiarity, though that appears again and again in the social charter, or to national traditions, mention of which appears quite frequently in the charter and also in the action programme.
I found that aspect of Mr. Eggar's argument unconvincing, just as I found unconvincing his other suggestion which has been mentioned before and which was supported by the evidence of the Institute of Directors. That evidence, I have to say, must have been written before Lord Shaftesbury was born. It suggested that the idea of a decent wage, always called "a minimum wage", should be Community-wide. There is no suggestion in the social charter that this is so. In addition, another of Mr. Eggar's statements was that it was not so. Nonetheless the suggestion—which almost amounted to misinformation—continued to be made by some people in the evidence that they submitted to us. Mr. Eggar's position raised two questions in my mind. First, were the reasons that he gave the real ones? Secondly, were the British Government's tactics wise and well considered?
Perhaps I may deal with the latter first because in his masterly speech the noble Lord, Lord Bridges, dealt with the tactical problem with extreme skill and unanswerable logic. I also agreed with him profoundly when he said that it appears to outsiders—"outsiders" meaning not only other members of the Community but those who are not members of the Government—as though the Prime Minister hankers after the old free trade area of the late Mr. Reginald Maudling rather than the Treaty of Rome which we signed. It is particularly ironic that this should be her apparent stance since at this moment members of the existing free trade area are queueing up to join the European Community.
However, the tactics seem to me to have been misguided for the reasons that the noble Lord, Lord Bridges, gave. In the evidence submitted to us Mr. Eggar constantly told us how constructive our attitude had been to the negotiations about the social charter. It is a peculiar use of the word "constructive" if we then proceed to vote against the matter which we were being constructive about. However, that was his position and as usual we find ourselves in the "Strathclyde position"—alone against the unanimous belief of our colleagues. That cannot possibly increase our influence. It must be better to say, "Yes, but", in the words of Sir Leon Brittan, rather than, "No, on no account". I cannot understand what lay behind those tactics. I can only say that they seem to be self-defeating.
If we return to the real reasons or what were the real reasons for the Government's posture—which I 74 hope will be described to us later by the noble Lord, Lord Strathclyde—it was noticeable that everyone agreed that a social dimension to the internal market was desirable. However, the great difference which emerged was in the interpretation of the two words "social dimension". Mr. Eggar's interpretation of a social dimension was that the benefits of the completion of the single market flowed through improving the standard of living of the citizens and workers of Europe. Mr. Delors' interpretation was that the internal market should be designed to benefit each and every member of the Community.
It seems to me that the implicit assumption that lies behind the Delors interpretation is that the trickle-down effect may not reach all the groups within the Community and that some intervention is necessary to ensure that each and every member of the Community benefits from increased, growing economic success. The implicit assumption behind the Eggar interpretation was put rather crudely by the Institute of Directors, which said:The Internal Market Programme itself … contains a social dimension".That is, no social intervention is necessary. That seems to me to be the implicit assumption which lies behind the Government's disagreement with the social charter. If that is the case, they should never have agreed to the Madrid communiqué.
In addition, the evidence is that the trickle-down effect in any society does not reach all and every member of the community without some governmental or social intervention. During the past 10 years here in a period of high economic growth the living standards of those on benefit have fallen further behind average living standards. The real increase in the value of welfare payments has been less than in periods of slower economic growth. That indicates that positive action must be taken if we are to give each and every citizen the benefit of increased prosperity.
An even more dramatic illustration than that which I read in the Economist over the weekend is that in the United States the expectation of life for males in Detroit and Harlem is lower than it is in Bangladesh. If that does not make people think, I do not know what will. What we are doing here by deregulation is creating an underclass which the trickle does not reach. All it receives is a drop from the rich man's glass.
I suspect that one of the problems of the social charter lies in a doctrinal difference that exist between Social Democrats and Christian Democrats in the European Community and the Conservative Party over here. The Christian democrats in the European Community accept a responsibility for the social consequences of the market. That is apparently not the case with our Government.
Beyond that, all governments in the European Community believe that a social consensus, as they call it, needs to be built; that it is a condition for economic success; that a social charter provides a balance to the internal market; that this is socially necessary; and that it is the duty of governments to underpin economic and financial success by strengthening the social consensus. I should have thought that that was a pretty self-evident fact. It is 75 a fact, a belief, a view or an acceptance of a government responsibility which I believe every previous Conservative Government in this country would have accepted as a truism. It is an extraordinary and sad state of affairs that this Government do not accept it.
§ 7.30 p.m.
§ Lord Wedderburn of Charlton
My Lords, I wish to join the noble Lords who have thanked your Lordships' committee for this report, in particular the noble Lord, Lord Allen of Abbeydale, for guiding its work and for introducing the debate in the way that he did. We must congratulate the committee, as other noble Lords have said, in the light of its difficulties with the constant amendments to the changing drafts of the charter and of the fact that the Commission's action programme became available to them—as my noble friend Lady Lockwood said—only at the very end. It is to that action programme that I wish to address some of my remarks in the hope that we can obtain further elucidation of government policy on it. This is the first time that the Government have had the chance to put forward their remarks on the action programme as the debate in another place took place only two days after its official publication.
As my noble friends have made clear, we on this side of the Chamber share the view of the committee that the statement of aims in the charter is to be welcomed. The committee stated in its report that it is:a statement of the Community's determination to spread the benefits of the Single Market amongst all its citizens".The noble Lord, Lord Bonham-Carter, referred to that in a way that I cannot improve upon. The president of the European Trade Union Confederation said in 1988 that he saw the provision as forging:a Europe which links democracy, social justice and economic success".That is the basis of our position.
As many noble Lords have pointed out—for example, the noble Lord, Lord Bridges, and my noble friends Lord Houghton and Lord Monkswell—the importance of the social charter and the action programme is growing, not decreasing. The freeing of Eastern Europe from authoritarian control opens up new opportunities for democracy in Europe as a whole. However, with them come new dangers of instability. Those require a united Community with social policies which will prevent the process of liberation from becoming a process of social dumping which would be injurious to the interests of working people both in the East and in the West. At the very least this was hardly the opportune moment for the United Kingdom to stand aside yet again in isolation. What, after all, are the Government's objections to the charter? Some of your Lordships have listed them, but basically I believe they rest upon two propositions. Both those propositions appeared in the speech of the Secretary of State in another place on 29th November, when he said that it would be a terrible irony if the freeing 76 of Eastern Europe from bureaucratic regulations were to be replaced by,a flood of new controls from Brussels".—[Official Report, Commons, 29/11/89; col. 726.]It would be a much worse tragedy if liberation in Eastern Europe was the occasion for jettisoning those very social measures which are the conditions necessary for a society which is both efficient and decent.
Are the Government not detracting a little from that proposition now that they have studied the action programme? I believe my next point has not been made tonight. It is worth noting that the Commission promotes many of the measures in the action programme as suitable for social dialogue, for promoting social solidarity and for strengthening the economic and social cohesion of the Community. Those are purposes to which we are committed under Articles 118b and 130a and 130b of the treaty. On what grounds do the Government resist the measures to which those objectives are attached?
As I have said, we await, perhaps with trepidation but also with some anxiety, the views that the Minister will give us on the action programme. He can be quite frank as he does not have to worry too much about pleasing anyone behind him. The Secretary of State made a comment on the action programme which has already been quoted. He said that it contains:43 Community instruments, including 17 legally binding directives".—[Official Report, Commons, 29/11/89; col. 724.]The first point I have to make on that is an important point and is that 10 of the 17 directives concern themselves with health and safety. The Secretary of State made his position on that quite clear when he said that the Government could accept general health and safety regulations. We must give the Government credit on health and safety. That is one area where, although the problems are not conquered, great success has been achieved in the Community. The record testifies to what can be achieved when all the member states work together. Why are the Government so blind that they cannot see that similar advantages would accrue in other areas if they adopted a similar position in those areas? What is so magical about health and safety that it does not allow the Government to co-operate on workers' welfare?
As regards the other directives, I believe there are four which would have legal effect and there are also six decisions which might have legal effect. I do not know whether the Government object to those, as they concern such matters as disabled workers, the elderly and vocational training for the most part. There are also 15 opinions and recommendations which would have no legal effect, although, as my noble friend Lady Lockwood said, many of them are important, not least that concerned with the child care and maternity programme. There are five instruments which remain rather obscure in the action programme. They concern vocational training, conditions of sub-contracting workers, social clauses in public contracts, profit sharing and procedures on workers' rights to consultation in complex, European-scale undertakings. I hope the Government will tell us which items in that list they 77 object to. The Government do not object to 10 of the 17 objectives. Therefore the number of directives they object to is cut down to seven. Which of the six decisions and which of the instruments do the Government object to and on what grounds? On what grounds are those matters different from health and safety? Those other issues concern matters within the working environment. I say "working environment" advisedly because that is a matter on which majority decisions can be taken, so isolation may not be enough to stop progress on many of those issues.
The Government have also objected to Community action on the grounds of subsidiarity. The principle of subsidiarity means that what can appropriately be done at national level should not be the subject of action at Community level. That is hardly a plea available to the Government. According to their record so far on most of these matters the Government do not wish any action at all at any level. They have defined subsidiarity to mean inactivity. However, having listened to the debate this evening, it seems to me that there is a sad but unavoidable fact which provides the explanation of the Government's isolation on these issues. Simply from an analytical point of view, if one looks comparatively at the social and labour legislation of member states, one finds a chasm. On one side of the chasm stand pretty well all the other member states—one might question one or two—and certainly all the larger member states while on the other side, unhappily, stands the United Kingdom. On that other side there is a common thread which is expressed in a variety of national institutions where the pursuit of flexibility and efficiency in the labour market has been linked with the protection of workers and maintained both by legislation and collective bargaining. A leading Italian author, Professor Giugni, expresses this as building:a labour law which suits the needs of our industrial culture and also combines the objectives of social purpose with those of efficiency".It is the objective of social purpose which the Government do not share. One does not have to look to socialist governments to find such policies at work. I share fully the view suggested by the noble Lord, Lord Bonham-Carter, on this issue. At European level this is not a party point. It is no wonder that the Conservative Party finds it difficult to find fellows with whom to sit at the European Parliament. This is not a party point. One does not have to look at socialist governments to see this point exemplified. One can look at the Federal Republic of Germany, which has consistently followed this path. The government of the most powerful capitalist society in the Community sustains the strongest system of worker participation in Europe in the structures of co-determination. When they deregulated fixed-term or part-time contracts in 1985 they did not deregulate merely by sweeping away controls. They retained protections for the workers concerned and also for those under the Kapovatz system, which had become an abuse of flexible hours.
In a very different society in Italy one finds exactly the same thread. When legislation was established 78 in 1983 which removed obstacles for employers to part-time work the part-time workers were given priority rights to full-time employment if it was available and full protection in social security matters. One also finds that the part-time work schemes had to be negotiated with trade unions. That is a different balance but there is a very similar aim, clearly on the other side of the divide.
Against that, the United Kingdom's policy of the past 10 years, and more particularly of the past few years—with the exception of health and safety; and let us hear why that is such a great exception—stand out very bleakly. There has been a steady reduction of the social rights and legal protections of both workers and trade unions. The Government tend to rely on the argument that we have heard for so many years that one cannot allow such burdens on business. The Minister murmurs in assent. I invite him to look at employers in the other member states, who are on the other side of the chasm, and see whether that great burden of social legislation prevents them from competing against British firms. They do not find that the cost of workers' rights makes them uncompetitive: in many cases, quite the contrary.
We have been over the ground again and again. If the Government do not want to accept the conclusion that emerges from all the debates—that there is no evidence to support their case that the burdens on business are a reason for excluding all kinds of social protection—they must stand alone in their isolation. They stand in isolation from the facts. Across the Community as a whole there is no evidence to suggest that the social measures outlined in the charter and in the action programme would lead to loss of jobs. The Commission believes, on the contrary, that they would lead to the development and creation of employment, which is the Commission's priority.
There is one further point. The charter enshrines a package of rights for workers and their unions. Those are the rights to consult and bargain collectively, to join or not to join trade unions, and to strike as part of the right of association. That is a limited right, it is true, as my noble friend Lord Irvine has pointed out. On another occasion no doubt we can debate those limits. That is a package of rights. The action programme suggests that there will not be Community legislation on the matter. Therefore the subsidiarity argument is met. The European Trade Union Confederation is very critical of that decision. It wants basic Community legislation, as my noble friend Lord McCarthy said, as part of building a floor of labour relations throughout the Community.
The Minister must remember, as his right honourable friend mentioned in his speech in another place, that it is a package of rights which hangs together. We are in favour of it as a package, but it cannot be shredded into bits and pieces as the Government always want to do. The Minister cannot pick and choose the fundamental right to join or not to join a union, to bargain, strike, and so on. He cannot put his thumb into the charter, pick out a right-not-to-join plum and say what a good European 79 am I. That is not the way it works. The charter has an inherent logic, which we support. It cannot be shredded.
Both the charter and the action programme take for granted a level of collective consultation, collective bargaining and negotiation between the social partners which is not to the Government's liking. I found it sad to see that the Confederation of British Industry in its evidence (on page 20 of the evidence) also suggested that the charter,would potentially disrupt industrial relations, requiring companies to decide a wide range of issues through collective bargaining rather than individually with employees".That was the first time that I was aware of that view from the CBI. I hope that it will not persist in that view. That is also the Government's view.
Perhaps I may make one small criticism of the report of the committee chaired by the noble Lord, Lord Allen. The international sources set out in the table to the report did not include the conventions of the International Labour Organisation. The minimum standards of the ILO are those most widely recognised in the world. One reason for including them in the report is that the preamble to the charter itself states that it draws inspiration from the ILO conventions. I do not suggest that is why the committee omitted the conventions, but the Government must be pleased that they were not included.
Not only have the Government abrogated four major ILO conventions since they came to power, but in its report of 28th April 1989 the ILO Committee of Experts—a body respected throughout the world as independent experts—held that the condition of our laws on trade union rights, the dismissal of strikers and sympathetic action contravenes the minimum levels laid down by the Convention on Freedom of Association. To that must be added the fact that the ILO has condemned the banning of collective bargaining for teachers and the infringement of union rights at GCHQ as breaches of our international obligations. It is therefore relevant to look at the ILO standards which we should like our labour laws to meet.
Finally, it is astonishing to find the Minister, Mr. Eggar—who has been much in evidence tonight and for whom the noble Lord will have to answer—putting it to the committee that positive rights for workers in this country to organise, to bargain, to participate or to strike in place of the traditional immunities could not be supported because that would mean,upsetting the balance of industrial relations legislation",and,changing something that has been unchanged since 1906".As my noble friend Lady Turner suggested, it is the Government's own legislation which has upset the traditional balance by smashing the traditions which grew out of 1906 and led to levels falling below minimum international standards.
The truth is that the Government prefer individualised employment relations. I am sure that the Minister will agree that that is their position. That is why they are cut off from the very broad 80 philosophy which appears in the charter. They abhor tripartism. They either reduce the number of trade unionists or eliminate trade unionists from public bodies wherever they can. No other state in the Community has changed the direction of its social policy in that way. Perhaps tonight the Minister will give us not the old recording about burdens on business but a new number, one that acknowledges that even at this late hour, having had time to absorb the contents of the action programme, at least the Government will not obstruct the fulfilment of the social dimension which is needed for the Community to play its full role in Western Europe, and indeed in the whole of Europe.
§ Lord Campbell of Alloway
My Lords, before the noble Lord sits down, perhaps he will allow me to intervene. He suggested that the Government, whom I support, were dedicated to the elimination of trade unionists. Does the noble Lord realise that it was largely the trade union vote which put them in office?
§ Lord Wedderburn of Charlton
My Lords, I thank the noble Lord for his question. I think that we should both read Hansard. I said that the Government had tried to to get rid of trade union representation on a number of tripartite bodies. So far as concerns trade unionists, the Government want to get rid of those rights—and have done so in a certain respects—which make trade unions effective.
§ Lord Campbell of Alloway
My Lords, with respect, that is not what the noble Lord said. Perhaps he will consult Hansard.
§ 7.48 p.m.
§ Lord Strathclyde
My Lords, this has been a useful debate on a very interesting report from the Select Committee on the European Communities. The committee has carried out a detailed and thorough examination and deserves praise for putting the report together in such a short space of time. I believe that the essential aims of the Government and of the committee are very close. We are all firmly committed to the principle that the single market must serve the interests of everybody in the Community. In particular, it must create the climate for job creation and development.
I want to respond to as many of the detailed points which have been raised this evening as possible. I am sorry that the noble Baroness, Lady Turner, has left us. I should say that I have grown accustomed to her face on the other side of the Dispatch Box. However, it has been a joy tonight to see the noble Lords, Lord McCarthy and Lord Wedderburn of Charlton, instead.
The noble Lord, Lord Irvine of Lairg, and the noble Lord, Lord Monkswell, criticised the Government Back-Benchers for not being here to hear me speak. I believe that there are two reasons that that. First, they support the Government's view concerning the social charter. Secondly, they probably have every confidence in my ability to reply to the accusations of noble Lords opposite.
I should respond to the contention of the noble Lord, Lord Allen of Abbeydale, that the critics of 81 the charter, by whom I understand he means the Government, did not respond constructively to the amendments agreed in negotiations. I must tell the House that we were a part of that process of negotiation.
§ Lord Allen of Abbeydale
My Lords, if the Minister is replying to me, perhaps he will get the facts right. I commented that it was perhaps what the French presidency and the supporters of the charter concluded. I did not say that it was the reaction in this country.
§ Lord Strathclyde
Fair enough, my Lords. I must have misunderstood the noble Lord. However, the point remains that we took a full part in the process of negotiation. We participated constructively in the discussions and supported a number of the changes that were made, but those changes did not go far enough for us to accept the full charter.
The Government's position was summed up by the Prime Minister in her Statement in another place following the Strasbourg meeting of the European Council in December. There were three main concerns. The first was the effect of the Commission's proposals on jobs and unemployment. There can be no doubt that the charter would lead to more legislation, more rules and more regulations. There is ample evidence for that in the Commission's action programme of measures necessary to implement the charter. Of the 43 new initiatives in the action programme, almost half involve legally binding proposals. The general thrust of the Commission's intentions is therefore regulatory.
Yet the Government have pursued a very successful policy in their 10 years in office of getting rid of unnecessary rules and regulations and encouraging greater flexibility in the labour market. Much of our success in bringing down unemployment is due to our policy of deregulation. Noble Lords should look more carefully at the results. We now have an unemployment rate of 5–9 per cent., the lowest level since September 1980 and well below the average for the Community as a whole of 8–9 per cent. Those are OECD figures.
§ Lord McCarthy
My Lords, does the Minister not admit that even on the OECD figures, since the Government have made 30 changes in the way in which they calculate those figures, one must add 30 per cent. to achieve the proper figure?
§ Lord Strathclyde
My Lords, the noble Lord knows that that is not true. If he listens a little longer he will hear some further proof.
The noble Lord, Lord Irvine of Lairg, said that increased costs do not necessarily mean lost jobs, but what about the effect on international competition, not just within the European Community, but with Japan, the USA and the rest of the world? We do not need reports and studies to see how successful we have been. We can see the results. In the 1980s this country grew faster than any other European country, in stark contrast to the previous two decades when we were at the bottom of the league table. We have changed the pattern.
82 There are more people in employment than ever before. That is social progress. There is now wider choice and more jobs.
The Community already agreed at the summit in Madrid last June that completion of the single market offered the best chance of improving living and working standards and that in moving towards that goal in 1992 job creation and development should have top priority. In the Government's view the effect of the charter and some of the proposals in the action programme will be to reduce labour market flexibility, add to employers' costs, damage the competitiveness of Europe's firms, particularly in world markets, and have an adverse effect on employment prospects.
Our second main concern about the social charter was the question of subsidiarity. We have heard a good deal about that this evening. Let us be clear as to its meaning. It means that action should be taken at Community level only where the desired objectives cannot be achieved by action within member states, either at national or local level. Both the charter and the action programme include statements about the need to respect the principle of subsidiarity. However, despite those statements there are a number of proposals in the action programme with regard to which we do not see any need for Community involvement.
Let us take, for example, holiday entitlements, working hours and pay for part-time workers. Those matters are best dealt with in free negotiation between employers and employees.
The noble Lord, Lord Irvine of Lairg, mentioned a number of articles of the social charter to which he implied that the Government were opposed. He referred to articles about the right to belong to a trade union, about equal treatment and particularly about access to training. The Government have never said that they are opposed to those provisions. They are parts of the charter that we could support. The Government have made it clear that they are committed to improved training by setting up TECs. In terms of records on training, the Government have done far more than the last Labour Government ever even imagined possible. A sum of £3 billion is now being spent compared with £500 million then.
A number of noble Lords, including the noble Lord, Lord Bonham-Carter, pointed out that the action programme does not set out a minimum wage. However, it proposes an opinion on a decent wage. There are two points to be made in that respect. How can member states implement an opinion on decent wages unless there is a regulation of some kind of the negotiation of wage levels? If there is, what business has the Community to pronounce on that subject? Surely the principle of subsidiarity is that there are some areas in which the Community has no role at all. I believe that this is one of them.
It is important to recall that we are not alone in our concern about subsidiarity. This too was an issue on which there was unanimous agreement at the Madrid summit.
Our third main concern was about the extent to which social and labour market policies need to be 83 harmonised and standardised. Again this was an issue on which all heads of government reached agreement at Madrid. They agreed that where action is taken at Community level it must respect national practice and tradition. The Community embraces a wide variety of social systems and practices. That very diversity has enabled each country to make progress in its own way and at its own pace.
I have said enough to show why we were disappointed with the charter. It was out of step with important criteria which we and the Community hold dear.
I now come to detailed points. First, let me address the points made by the Committee in its report on the charter. It is gratifying to note that a number of points that it made supported the Government's position; for example, the fact that in many places the charter confuses principle and detail and lacks a clear division of responsibility for implementation between the Community, national governments and local agreements. However, I must say that I find it surprising that the committee should have reached the conclusion that we should have accepted the draft charter as a basis for negotiation. That displays a misunderstanding of the significance of the social charter and its effect on the future developments of social policy within the Community.
Specifically, the committee took the view that the charter should be a statement of generally accepted principles contained in existing law or in international agreements. That would make it merely a restatement of commitment to the social dimension of the Community. If the charter had simply been such a document, the Government would have had considerably less difficulty with it. That was the point made by the noble Lord, Lord Bridges. We are not opposed to those kinds of statement.
We argued precisely those points during the course of the detailed negotiations. In a debate in another place on 29th November, my colleague, the Minister of State for Employment, Tim Eggar, whose name has been mentioned a great deal this evening, made clear that we could have contemplated a short declaratory statement, setting out broad objectives, taking account of the Madrid conclusions, particularly the conclusion that gave priority to job creation, respecting the principle of subsidiarity and taking account of the diversity of national practice.
I must also say something about what has been portrayed as an inconsistency between our refusal to adopt the charter despite the fact that it repeats a number of commitments which we have already accepted in other international agreements. Appendix 3 of the committee's report sets out those commitments in the form of a table.
There is a good deal of difference between those other international agreements and the commitment that we would have made in the social charter. In the case of other international objections, the key word is flexibility. The Government can choose in the first place whether or not to ratify a particular agreement. If they choose to ratify, they have flexibility in the method in which they meet the 84 new obligations. In most cases there is scope for withdrawing agreement to a particular commitment where it is no longer thought to be appropriate.
There is no guarantee of flexibility in agreements reached at Community level. Member states may be challenged before the European Court of Justice, which may dictate a particular formula for implementation.
Moreover, the charter was not simply a consolidating document drawing together all relevant international commitments and giving them a Community seal of approval. The charter invited the Commission to bring forward an action programme of measures to implement the charter and, as I have already mentioned, the action programme contains no fewer than 43 different new initiatives, of which almost half are for legally binding instruments.
With regard to the committee's recommendation on the issue of subsidiarity, in paragraph 36 of its report it criticises the charter for its lack of a clear division of responsibility for implementation as between the Community, national governments and local agreements. It recognises that supporting the charter could be taken as support for Community action in areas where national or local action would be more appropriate. Again, it is gratifying to find support for the Government's view in the report. But the committee goes on to underline the fact that the text acknowledges the general need for subsidiarity and respect for national practices. It concludes that the appropriate place for debate about the level at which action should be taken is in the context of the detailed negotiations on individual proposals.
I hear the point that the committee makes, but it seems to me to be unrealistic. The committee seems to be saying that all the Government's concerns about subsidiarity were justified but that there were nevertheless sufficient safeguards already written into the document to enable us to sign up and argue about the details later. I regard that as negotiating within an air of mendacity. That is also an imprudent way of proceeding, particularly when it was quite clear from the Commission's action programme that in a number of areas the Commission was intent on pushing for Community standards whereas the UK's view was that matters should be left to member states.
The noble Lord, Lord McCarthy, suggested that only those directives dealing with health and safety would be dealt with by qualified majority voting. We do not know that. We shall have to see what the Commission proposes. We cannot be sure that it will not bring forward as many proposals as it can in addition to those dealing with health and safety on a qualified majority legal basis.
The main point is that this Government do not sign up and argue the details later as perhaps some noble Lords opposite would like us to do. The draft social charter was a flawed document. To have signed it would have committed us to taking steps to implement the rights contained in it; and our adoption of it would have made it very difficult, if not impossible, to argue against what we had agreed 85 to in the charter. That is the difficulty that some other member states will be faced with as the detailed negotiations on specific proposals in the action programme get under way. That is why I have to say that the committee's recommendation that the UK should have accepted the charter as a basis for negotiation was misjudged. Such an approach would have served only to weaken our negotiating position and not strengthen it.
We have not turned our backs on social Europe as some have alleged. We fully support the single market programme—indeed we have a record second only to Denmark when it comes to implementation of the single market measures. That is hardly anti-communautaire. We share the view of the Community as a whole that completion of the single market offers the best chance to improve living and working conditions throughout the Community.
We reject the notion that the single market is uniquely for business, as though business interests were in some way separate from those of ordinary people. We must free business to create wealth, which alone can permit the improvements in living and working conditions that all of us seek.
Our approach assumes some basic social protection. We believe that everyone has a right to effective and easily available social protection. This should cover pensions, sickness and unemployment benefits; it should provide an adequate income to everyone.
The state has a massive commitment to social security, accounting for £51 billion or nearly one-third of public expenditure. Add to that extensive occupational and private pensions. We have a comprehensive social assistance scheme that provides adequate income for all groups living permanently in the country, whatever their nationality. But we believe firmly that further economic progress is the essential prerequisite of further advances on the social front. Only by making economic progress is it possible to maintain and strengthen our high levels of social protection. That is precisely the view that the committee took in paragraph 31 of its report when it said:a social dimension to the Community will have to fall into step behind wealth and job creation".Members of the House may have seen a recent article in the Spectator by Tim Congdon. It was essentially about the issue of fiscal harmonisation. He argued that by sticking to a low tax policy, the UK would encourage foreign investment and improve incentives and that this would lead on to higher growth. There are parallels here with the Government's deregulation policy. By getting rid of unnecessary rules and regulations we have encouraged enterprise and initiative and this in turn has led to more jobs and greater prosperity. We cannot afford to undermine this progress by adopting proposals which will add to the sum of regulation. Other European governments spend more and more of their wealth. This Government have reduced the proportion of government spending. That has been excellent for growth and that is why, if there is to be a two-speed Europe, Great Britain will be in the fast stream.
86 There are areas where the Community has a necessary role: the achievement of the single market requires the agreement of all member states since no single member country can make it work. There also need to be some general principles by which we should all abide. I refer in the employment field to such items as the freedom for workers to move around within the Community, freedom to engage in an occupation, freedom of establishment, mutual recognition of qualifications, equal pay and equal treatment for men and women, the importance of training and a healthy and safe working environment wherever people are in the Community.
The noble Baroness, Lady Lockwood, drew attention to those measures in the action programme for women. We are committed to equal opportunities for men and women, as she recognises. We have the second highest participation rates for women within the Community and women's contributions will be even more vital in the 1990s. But more legislation is not necessarily the key to greater equality of opportunity. Can regulation help to create jobs? Indeed, I believe, and the noble Baroness heard me say so earlier, that only businesses can do that and if we curb businesses our opportunities will diminish.
Let me take for an example worker participation, as referred to by the noble Lord, Lord Rochester. Many countries within the Community attach great importance to legal requirements governing worker participation. They are right to follow the paths which are best suited to their conditions and circumstances. We in Britain are also committed to employee involvement. We have recently issued a booklet People and Companies, which reports what we believe to be one of the major success stories of British industry in recent years. But unlike the report referred to by the noble Lord, we believe that the success has been based not on legislation but on voluntary co-operation and diversity. The key to success has been to allow companies to develop their own approach to these issues.
Making rules is always the easy part. What counts is implementation. As I said, the United Kingdom's record is one of the best among the 12 member states. What we sign up to we bring into effect. I do not accept the claim made by the noble Lord, Lord McCarthy, that the United Kingdom is dragging its feet. The Commission presented a report on implementation to the internal market council on 21st December which confirms the United Kingdom's excellent record. We have implemented more measures of the single market than all others bar one. In fact our record is even better than the latest report would suggest and, as Mr. Delors himself said, our record is as good as any.
The noble Lord, Lord McCarthy, said that the Prime Minister thought that this was a Marxist document. The Prime Minister and the noble Lord, Lord McCarthy, know a lot more about Marxism than I do. I am quite happy to take the view of my right honourable friend the Prime Minister on that point.
The noble Lord, Lord McCarthy, also spent some time talking about the closed shop. I shall have to read Hansard very carefully tomorrow because I am 87 not quite sure whether at the end of it all he came down for or against the pre-entry closed shop. No doubt that is something that we shall be able to discuss at considerable length in the summer when we have the Employment Bill.
The noble Lord, Lord Wedderburn of Charlton, asked what proposals we can accept. We still await detailed proposals of the proposed action programme. Subject to careful scrutiny of the detailed proposals I believe that there will be a considerable number of measures that we shall be able to support, in particular health and safety and freedom of movement. I have to say that some pose real difficulties for the United Kingdom and justify our reservation over the package as a whole, since we cannot see how they contribute to economic growth or justify a role for the Community as a whole.
The noble Lord was also quite right to point to changes in Europe, especially in Eastern Europe. I believe that these developments vindicate our caution. We believe in a strong Europe but not a fortress Europe. It must be better able to compete with the international market. For this we need flexibility. The worst policy today would be to tie ourselves to particular models belonging to yesterday's world, and I refer in particular to worker participation and the regulation of hours.
The noble Lord, Lord McCarthy, said that the Opposition wanted to accept the practice of other European countries. The noble Lord, Lord Irvine of Lairg, echoed that sentiment, although not in the same words, when he said that we should acpept the traditions normal on the Continent. I may have exaggerated his words but that was the gist of them. I have to ask noble Lords these questions. Do they really want the Community to dictate how we manage our affairs? Do they really want other countries and their traditions forced upon us? That is important. In France, one cannot do more than seven hours' overtime a week without special permission. In Germany, weekend working is strictly controlled. In Belgium, according to the Commission's own study, women can work at night only by special royal decree. In Greece, night work is forbidden with few exceptions for all female employees in industrial enterprises. This Government are not pressing for excessive overtime and unsocial hours. We are saying that the people are perfectly able to decide for themselves what hours they work. Such matters are best left to free negotiations at the workplace.
§ Lord McCarthy
My Lords, does the noble Lord agree with this: He knows very well that we never said any of those things. Can he answer the question put to him by my noble friend? What is so special about health and safety? He does not want regulations on working hours, wages or protection of children because they raise costs. Yet he does not abolish all the legislation on health and safety. Surely that adds to cost also. What is so special about that?
§ Lord Strathclyde
My Lords, what an extraordinary question for the noble Lord to ask. Is 88 he suggesting that any future Labour Government would do away with health and safety legislation? That is the way his question came across to me. It seems quite obvious to me why we have health and safety legislation in this country and why we seek to increase it where it has proved necessary.
§ Lord McCarthy
My Lords, the noble Lord knows very well what I am saying. If the Government were consistent in their position, they would abolish health and safety legislation. If they do not, they are inconsistent.
§ Lord Strathclyde
My Lords, precisely.
The noble Lords, Lord Houghton of Sowerby and Lord Monkswell, mentioned Eastern Europe. The noble Lord, Lord Houghton, was particularly refreshing on the subject. He talked about the lack of vision in this country and in particular within the Community. But the Community already has a sense of purpose: that is, the free market and 1992; the free movement of people, of goods, of capital—the free market which basically means freedom. A CAP is not a good example where the European Community has been successful in instituting its policies. With 1992, we now have an opportunity to see whether all the countries that want to see greater European integration can produce it before we become involved in other issues such as the social charter.
This Government do not wish to go on carping about Europe, or even to be seen as carping about Europe, because we believe that we are genuine Europeans. We want the remainder of Europe to accept our policies for growth. It is the Conservative Party that has always had the vision on Europe.
§ Lord Bonham-Carter
My Lords, the noble Lord really must withdraw that. The Conservative Party fought election after election on the basis that if we joined Europe it would be the ruin—I remember one slogan—of farmers, farm workers and farming throughout the land. For the noble Lord to say that the Conservative Party has been the leader in this field is a travesty.
§ Lord Strathclyde
My Lords, I bow to the noble Lord's greater knowledge because I know that his party has been proponents of the idea ever since the beginning. But it was a Conservative Prime Minister who brought this country into Europe. It was under a Conservative Government that the idea of 1992 was conceived. It was a Conservative Government who brought in the Single European Act. And where was the Labour Party in all that time? We all know that even in 1983 it had a manifesto commitment to bring us out of the European Community. Yet here the members are all exhorting us to accept a social Europe. There is one reason for this sudden contradiction.
§ Lord Tordoff
My Lords, dare the noble Lord bring to his lips the name of the Conservative Prime Minister who brought us into Europe?
§ Lord Strathclyde
My Lords, I have no difficulty with that, but the noble Lord is missing my point. I am talking about the Labour Party and how it has changed. The reason it has changed is that after nearly 11 years out of office, and with the pathetic opposition that it has provided over the past 11 years, it sees the only effective opposition to this Government's policies is with the red dawn rising over Brussels. That is the truth. This Government are keen to look ahead. The social charter is now passed. It was a political declaration but one which we believe also commits the signatories to a package implementing measures many of which we have not had sight of. We must now move to the next stage.
The Commission has now published its action programme setting out its stall. We await detailed proposals of the action programme. Subject to careful scrutiny of detailed proposals, I believe that there will be a considerable number of measures that we shall be able to support. Some pose real difficulties for the UK and justify our reservation over the package as a whole since we cannot see how they contribute to economic growth or justify a role for the Community as a whole.
However, we shall be considering each and every measure in the action programme. We shall not be sulking in our tents. We intend to participate fully and constructively in all negotiations. We shall be listening to what the Commission and other member states have to say, and we shall be applying the criteria that they and we have agreed; namely, will the measures create jobs and are they best undertaken by the Community or best left to member states? Far from hindering our ability to negotiate, we believe our stance on the charter has left our hands free to explore each and every proposal as it comes forward. Noble Lords can be sure that in doing so we have at heart the interests of everybody in this country and in the Community at large.
§ 8.18 p.m.
§ Lord Allen of Abbeydale
My Lords, we have had an interesting debate. As I said at the beginning, it has been one-sided although in the past half-hour we have seen the government spokesman doing his best. I was very anxious that this should not develop into a party political struggle. I was particularly pleased to have the support of a fellow Cross-Bencher in the admirable speech of my noble friend Lord Bridges.
I was a little disappointed but not in the slightest degree surprised by what the Minister said. I realise that his hands are tied. However, he said some rather strange things; for example, about the attitude of the Commission and the effect of the opinion the Commission proffers on wages. I do not think it is appropriate for me to go into detail at this stage on the various points that he made. He completely failed to convince me that the committee was wrong in thinking that it would have been better, for a number of reasons, for this country to join the social charter and to have got in so that not only could it argue about the charter but could give the impression that it was really concerned with the future of the Community and with the social dimension—matters 90 on which I am afraid the Minister's speech still leaves us in some doubt.
However, he went at such a rate in his 30 minutes' reading that I should like to leave the matter there, in particular since I have another speech to make later this evening. Like other noble Lords, I shall study what he said in Hansard. However, I hope that the Government will study in Hansard what other people have said and note some very helpful and constructive points which have been made in the course of the debate. I commend the Motion.
§ On Question, Motion agreed to.