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UK Workers

Volume 487: debated on Thursday 5 February 2009

3. If he will take steps at EU level to secure greater employment opportunities for UK workers when contracts for work in the UK are awarded to companies registered overseas; and if he will make a statement. (254310)

The Government support the rights of labour mobility that go with European Union membership. We supported the European Commission’s proposals to ask its group of experts to examine the operation of the posted workers directive and to ask social partners at European level to discuss the implications of recent European Court judgments. The posted workers directive operates throughout the EU and the recent report from the European Commission showed that there were 47,000 UK posted workers in the rest of the EU—three times more than the 15,000 posted workers from the rest of the EU working here in the UK.

The posted workers directive is, of course, the problem. The court ruling has brought it into disrepute, with subcontracting companies playing worker against worker, which is why we ended up with the strikes this week. Is it not time the UK put workers rights in the EU as No. 1 on the agenda, and made sure that we lead the field in ensuring that the rights of those workers are looked after?

I understand what my hon. Friend says, but I am not sure that the recent court judgments are relevant to the unofficial strike action over the past weeks. Those judgments are essentially about pay and about the capacity of trade unions to take industrial action in support of collective agreements. We have been told that all subcontractors on the site at the Lindsey oil refinery are required to pay according to the industry agreed rates. ACAS will test the veracity of that claim, but that is what we have been told, so whatever this week’s dispute was about, it does not seem, on the face of it, to have been about a race to the bottom in terms of pay.

Is not the recent industrial unrest a direct result of the Prime Minister’s call, from weakness, for “British jobs for British workers”? In answering the hon. Member for Glasgow, North-West (John Robertson), would it not be more honest for the Government to admit that the Prime Minister could never deliver on that promise? He is legally bound by EU law, which the European Commission has no intention of amending at all. What other way is the Minister finding through this terrible dilemma of serious industrial unrest, up against a legal prohibition on anything serious being done to remedy it?

I do not accept the right hon. Gentleman’s premise. Everyone in the House wants to see British workers having jobs, and we want them to have the skills and training necessary for that. However, we do not want to forsake a relationship whereby half our exports go to the rest of the EU, half of our inward investment comes from the rest of the EU, and 3 million to 3.5 million—one in 10—of the jobs in this country are in some way associated with trade with the rest of the EU. It is not inconsistent to support that and also to support skills and training for British workers for the jobs and industries of the future.

Given that the dispute at the Lindsey oil refinery seems to have been resolved, I would like Ministers to consider some of the wider issues underlying it. If terms and conditions are equal and there are no differences in pay, will the Minister and his ministerial colleagues look into why British firms are losing contracts, and why they are not winning the contracts when they compete against European firms? We need to establish that if we are to get to the real reason why the dispute occurred.

My hon. Friend raises an important question, and I know that she has been very close to this issue and taken time to establish the facts. The question that she poses is a good one. If the issue was not about pay, what, in the competition for the contracts, may sometimes mean that UK firms lose out? That does not mean that every time a non-UK firm wins a contract some rule has been broken or we need a change in the law. There could be other reasons. My hon. Friend has asked an important and pertinent question.

The Minister will be aware of the Bill that I introduced a couple of days ago on this issue. It supports, of course, the notion of fair movement, but it also supports free movement and fair provision for services and workers. Is he aware that in several other member states, parallel legislation already prevents social dumping, precisely because there are circumstances in which a correction is needed? Will the Minister be good enough to answer the question that I now have on the Order Paper? It is about ensuring that we bring in domestic legislation to ensure fair and free movement, and that we look after British workers as well.

I believe in fair and free movement, and the Government have introduced many important employment rights for UK workers in the past decade. I hope that the hon. Gentleman will agree that it was a step forward for the employers in this situation to agree on guidance, which states:

“Always consider whether there are competent workers available locally. If there are, it is good practice for the non-UK contractor to explore and consider the local skills availability and to consider any applications that may be forthcoming.”

Two important things were required to end the dispute. One was that there should be a fair chance for UK workers. The other was that no Italian worker who was here legally should have to be sent home; I am glad that that too was supported by the trade unions in this situation.

If the Government want to ensure that we do not have another situation such as that at Lindsey or anywhere else, the truth is that we need, among other things, to enact the Temporary and Agency Workers (Equal Treatment) Bill in total. That would ensure that middlemen and agency operators were not allowed to pick up about 25 per cent. of the earnings from foreign labour. Once we do that, we can stop the Lindseys of the future and deal with the matter in the Common Market as well.

I do not believe that agency workers were a factor in the Lindsey dispute. My understanding is that in that particular part of the construction industry the workers are directly employed by the subcontractors on the site. I have also been told that the subcontractors all have to pay the agreed rates. However, I agree with my hon. Friend that it was right to reach an agreement on the agency workers directive which suited the UK labour market. We did that on the basis of an agreement between the TUC and the CBI which was then reflected in the text of the agreed directive. The Government will bring forward a consultation on the implementation of the directive here in the UK.

More than 16 jobs will be lost as a result of the recent awarding of a specialist vessel requirement Navy contract in the Falklands to a Dutch company with a Filipino crew, instead of to the Scottish company that has provided the service successfully for 27 years. As there are serious questions about the tendering process, with correct procedure not having been followed, will the Minister ask his colleagues in the Ministry of Defence to investigate the circumstances of this case?

I am not aware of the individual circumstances of that case, but I am happy to ask the relevant Department to look into the issues that the hon. Lady has raised.

Does my hon. Friend accept that it is not protectionist to insist on minimum pay and working conditions for British workers in competition with foreign workers? In that context, and in terms of the posted workers directive, can he insist that the European Commission gets a move on with its review? Will he also look at the British angle of this, which is that the current minimum standard is the minimum wage, but that we could move the standard up to nationally agreed collective bargaining regulation?

I believe—or at least, I have been informed—that the agreed collective bargaining rate applies in this case, and that therefore pay was not an issue in this dispute. As for the European Commission’s proposal to examine the operation of the posted workers directive, the UK Government supported that when it was discussed in December.