EU Information and Consultation Directive (Hansard, 5 July 2001)

§ Lord McIntosh of Haringey
My Lords, the Government have always believed that good companies inform and consult with their employees. During negotiations on the proposed information and consultation directive, our aim has been to avoid a rigid, one-size-fits-all approach, which would be inappropriate for the United Kingdom, given its traditional strength of employee relations, which are built on flexibility, partnership and company-based solutions. The agreement reached in Brussels on 11th June meets those requirements.

§ Lord Waddington
My Lords, I am grateful to the Minister for his reply, but is it not lamentable that as soon as the general election was over, the Government agreed to a measure that, for months before, the Prime Minister had been saying that he objected to and opposed in principle because it offended against the principle of subsidiarity and because it was wrong to impose EU requirements for consultation on companies operating at a national level? Was not the measure forced on the Government, who gained no more than a delay in implementation for the smallest companies, because of their folly in ending the opt-out from the social chapter? Is not the measure a classic example of the EU interfering in matters that have nothing to do with the requirements of the single market?

§ Lord McIntosh of Haringey
My Lords, our objection to the directive as originally proposed was as I have said: we objected to a one-size-fits-all approach that was prescriptive in the way in which it operated and applied too much to small businesses. All our objections were sustained in the negotiations that concluded on 11th June. Under those circumstances, it is clear that we were right to opt in again to the social chapter when we came to office in 1997 and we have been right to agree to the presidency compromise that was reached on 11th June.

§ Lord Lea of Crondall
My Lords, does my noble friend agree that it is significant that the decision was 864 reached unanimously, even though it was formally subject to qualified majority voting? That is because all the big countries—Spain, Italy, Germany and France—which collectively constitute a successful European economy, think that, with the rapid changes in Europe, such minimum information and consultation with workers will make a more adaptive and successful European economy.

§ Lord McIntosh of Haringey
My Lords, we are concerned not only that the measure should be good for the European economy, but that it should be good for business and employment in this country. We believe that the draft directive achieves that It has to have a Second Reading in the European Parliament, where it could be amended, but we are satisfied with the outcome of the negotiations so far.

§ Lord Roberts of Conwy
My Lords, how has the position of small businesses been alleviated as a result of the negotiation?

§ Lord McIntosh of Haringey
My Lords, it is not a question of being alleviated. The directive does not apply to small businesses. In the first place, nothing can happen for three years after the directive completes its passage through the European Parliament, which takes us to the beginning of 2005. Secondly, it will be a further two years before it applies to firms in this country with fewer than 150 employees and another two years again before it applies to firms with fewer than 100 employees. Even after that, it will still apply only to firms with more than 50 employees, which excludes all but 2.5 per cent of businesses in this country.

§ Lord Razzall
My Lords, does the Minister accept that the events of the past few months, particularly in the manufacturing sector, have demonstrated the need to improve consultation mechanisms between management and workforces? Does he also accept that the implementation of the directive in due course will provide only minimum standards for the sort of consultation that ought to be present in any modern economy?

§ Lord McIntosh of Haringey
My Lords, I hope that I have made it clear that I agree with both those points. The directive has a delayed implementation date and it excludes a large proportion of businesses in this country, but it has always been our view that businesses in this country should inform their employees and should consult with them on the basis that the noble Lord, Lord Razzall, suggests.

§ Lord Brookman
My Lords, my noble friend will be aware of the tragic job losses in what was once called British Steel and is now called Corus. The majority of the 10,000 job losses at that firm have been in the United Kingdom. Is he aware that there was no consultation in this country but that there was lengthy consultation in Holland? Does he agree that there is an urgent need for that situation to be put 865 right? Does he further agree that the comments from the Conservatives hark to the past and not to the future?

§ Lord McIntosh of Haringey
My Lords, I certainly agree with my noble friend's last point. The regrettable job losses at Corus are subject to the collective redundancies directive, which has been in force for more than 25 years and requires a consultation period of 90 days. Corus has observed that. I am sure that my noble friend agrees that the important point is to start consulting earlier. That would be one of the beneficial results of the proposed directive.

§ Lord Waddington
My Lords, is it not apparent that the Minister has not had an opportunity to read the memorandum put out by the Department of Trade and Industry on 21st November last year? It stated categorically: The Government is not persuaded of the need for a directive on information and consultation in companies operating only at a national level".

§ Lord McIntosh of Haringey
My Lords, of course I have read that. That is exactly why the Government successfully negotiated the result that we achieved on 11th June.