Worker Participation: EC Proposal (Hansard, 19 March 1991)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, the Government are opposed to these provisions because they fail to take account of the United Kingdom's successful voluntary employee involvement arrangements.

§ Lord Clinton-Davis
My Lords, is the Minister aware that by no means all major United Kingdom companies have worker consultation or participation? Is the view that the Minister has just expressed representative of all Conservative parliamentary groups?

§ Viscount Ullswater
My Lords, the Government and industry favour a voluntary system. The United Kingdom's voluntary system has strength, variety and flexibility. The compulsory provisions on worker participation in the draft EC statute for European companies are unnecessary and damaging. British industry would agree with that. As regards the second supplementary question of the noble Lord, I am aware that some Members of the European Parliament have expressed their own opinion on the matter.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that many of us view with considerable concern this attempt by the European authorities to intervene in an area which we manage perfectly well for ourselves?

§ Viscount Ullswater
My Lords, I agree with my noble friend that the voluntary system has treated us well. It enables companies to devise the systems best suited to their circumstances. We recognise that no law could do that.

§ Lord Rochester
My Lords, do the Government endorse paragraph 94 of the report of the European Communities Select Committee of this House on the draft statute in which the committee agreed with the section of the social charter which states in relation to worker participation Information, consultation and participation must be developed along appropriate lines, taking account of the practices in force in the various Member States"?

§ Viscount Ullswater
My Lords, I am grateful to the noble Lord for referring to the report of the Select Committee of your Lordships' House. It is not just the Government's opinion that the provisions in the draft statute should not be accepted. The Select Committee's report also expressed that view. Having said that, the Government are firmly committed to employee involvement. I wish to make that quite clear. It has been made absolutely clear—should there be any doubt—by the Government's booklet People and 524 Companies published late in 1989. I must repeat that it is the compulsory basis of the worker participation proposals of the statute which is unacceptable.

§ Baroness Seear
My Lords, does the Minister not agree that a number of companies make no effort at all in this field and have no intention of doing anything? While one might agree with the Government in refusing an overall system, the opportunity to choose between a number of systems and to require that something should be done could well improve British industrial relations. Those relations are far from perfect.

§ Viscount Ullswater
My Lords, I do not agree with the noble Baroness if the choice is between compulsory schemes.

Lord Bruce of Donington
My Lords, I agree with the observations made by the noble Lord, Lord Boyd-Carpenter, on the desirability of the United Kingdom making its own legislation covering its own affairs. However, is it not true that a consultation within German industry under the statute of that country has been largely responsible for Germany's good economic performance? Should not we in this country put workers' consultation firmly on the statute book through our own legislation?

§ Viscount Ullswater
My Lords, it is up to each nation and national government to implement the laws that suit the country. The Government's consultations held in 1988–1989 showed that the employers and employer organisations were overwhelmingly against the Commission's proposal.

§ Lord Mellish
My Lords, have the unions said anything about the matter and if so what?

§ Viscount Ullswater
My Lords, I believe that the TUC gave evidence to the House of Lords Select Committee. Its witnesses were the only ones who approved the proposals in some measure.

The Viscount of Oxfuird
My Lords, is my noble friend aware of the total quality management programme which has been supported for some considerable time by the Department of Trade and Industry? The essence of the programme insists on worker participation at all levels in decision making.

§ Viscount Ullswater
My Lords, yes, and my noble friend has reinforced my comments. The Government are wholly committed to employee involvement and participation. People and Companies published in late 1989 said of the practice that it was, the foundation of good business practice and therefore…an essential element in the pursuit of prosperity and of secure employment".

§ Lord Clinton-Davis
My Lords, it is right, is it not, that the Conservative group in the European Parliament does not share the Minister's complacency about the success of the British approach and is asking for a more open mind to be shown by the Government? How can the Minister assert, as did his noble friend Lord Boyd-Carpenter, that the British system is so overwhelmingly successful when the so-called British economic miracle dissipated so 525 quickly? How can the Government assert that they have nothing to learn from the German, French, Dutch and Scandinavian systems which appear to work successfully in marked contrast to the British system?

§ Viscount Ullswater
My Lords, I thought that I had made clear the fact that it is up to each nation and national government to pursue the policies that suit them. The European Parliament made a number of recommendations that would make the Commission's proposal on worker participation even more far reaching. The Government are against those proposals, as my original Answer made clear. However, that poses a problem for the Commission because it is not clear whether it will incorporate any of the proposed amendments in the revised text now being prepared.

§ Lord Mackie of Benshie
My Lords, the Minister's reply indicates that he is strongly in favour of companies encouraging worker participation. As he dislikes compulsion, can he say what kind of sweeteners and incentives the Government are prepared to give? A few tax concessions might give the virtuous companies some reward.

§ Viscount Ullswater
My Lords, a number of participation schemes favour the employee. I have in mind the share option scheme.