Speech by Ian McCartney MP
Introduction
I am
grateful to have been invited to address you today, and I am, as you
will appreciate, particularly pleased to do so in my new capacity as
Minister for [social partnership].
The GFTU is very much about co-operation and partnership. It also places great emphasis on training, to help officials to do their jobs better. The Government wholeheartedly shares those values. So I am glad to be at your conference and to bring you a message of support and encouragement from the Government, a Government which sees the trade union movement not as a threat but as a partner with a legitimate and valuable role in our democracy.
I want to talk today about our plans for creating a fairer balance in the world of work, to equip our country for the challenges of global competition. In particular, I want to talk about how we can replace conflict and division with partnership, both in the workplace and more widely.
Europe
In
the week and a half since the election, we have already moved quickly
to start to build partnership. You will have seen Robin Cook and Doug
Henderson on the news, as they went to Brussels, Paris and Bonn to end
our years of isolation in Europe and signal our acceptance of the social
chapter.
The election of this government marks a fresh start to our relationship with our partners in Europe. We have put an end to knee jerk opposition to every proposal on social affairs from the European Commission. An end to using negotiations simply to block or delay proposals. An end to trailing fruitlessly through the European Court, vainly trying to stave off measures such as the working time directive. No longer will British workers be denied the benefits enjoyed by their fellow workers throughout the rest of Europe.
Partnership Social partnership means adopting a joint approach to solving industrial
relations problems, respecting the interests of all the parties. It means
valuing the people who work for companies, paying them well, treating
them fairly and ensuring that all receive training. It means securing
the highest possible levels of job security. But social partnership also means ensuring that businesses operate as
efficiently as possible, and meet their customers' needs for quality
and performance. It means accepting that change is inevitable and that
all partners must adapt to ensure the continuing success of the enterprise.
Successful businesses are the prerequisite for good pay and job security. My own department, Trade and Industry, provides a concrete example of
the new spirit of social partnership. Margaret Beckett and I will have
Sir David Simon from BP working with us, bringing his experience of business
and Europe. Together, we aim to restore a fair balance to the world of
work and to promote competitiveness. We believe that employees deserve
good conditions. That is a moral right. But it also makes good economic
sense. A business which respects its workers and treats them as partners
in the enterprise will have a more committed and productive workforce.
That is good for the business, good for the workers who enjoy secure
employment and fair conditions, and is good for the national economy. Conversely, the business which treats its employees badly, and regards
them as a cost to be ruthlessly chopped, cannot expect to succeed. That
is why we need reasonable minimum standards for individuals at work.
Perhaps the most important of these standards is a national minimum wage.
Just
as we need partnership in Europe, so we need it here in Britain. We need
partnership at work because everyone involved, workers, their trade unions
and management, have many common goals and depend on one another to achieve
them.
National
Minimum Wage
We
need a wage floor to remove the worst excesses of low pay and exploitation
of workers. Almost one million workers are currently paid below £2.50
an hour. A minimum wage will rule out unfair competition by those companies
who choose the low labour cost route to competitiveness. With our other
policies, a minimum wage will help to narrow the poverty gap. The rate
will be set at a level that enables individual workers to be better off
in work than they would be if unemployed and living on state benefits.
The National Minimum Wage will also do much to ease pay discrimination as a large proportion of those workers who will benefit following its introduction will be women.
We have all heard the scare stories about the adverse effect a minimum wage would allegedly have on employment. How many times did we hear that a national minimum wage in the UK would cost one or even two million jobs? But repetition cannot make such stories true. Does anybody really believe these scare tactics? In fact, survey after survey show that the minimum wage enjoys overwhelming support amongst the general public. Furthermore, employers in every industrial sector now say the introduction of a national minimum wage would present few if any problems for them.
Indeed, many employers welcome it because they recognise that low pay leads to unfair competition. Low pay also leads to high staff turnover rates and makes it harder for companies to fill vacancies. It puts companies in a dilemma: they cannot afford to pay more than their competitors, but people are not willing to take low paid jobs. So you have the paradox of many unfilled vacancies alongside large numbers of unemployed people.
A minimum wage will reduce staff turnover and absenteeism, improve morale and so improve productivity. That is the experience of other countries. A minimum wage will also mean that companies can no longer compete by undercutting each other at their workers' expense. Instead, they will have to compete on quality. That in turn means they will need a higher skilled, better motivated workforce. So a minimum wage increases the incentive for training and employee involvement.
The benefits of a minimum wage go beyond the workplace. The lowest paid spend a high proportion of their wages on goods and services in the local economy. By increasing the spending power of the lowest paid, a minimum wage will generate demand as part of our overall regeneration of local economies. This will create additional employment.
And finally, a minimum wage should reduce the need for inwork benefits. Without a minimum wage, taxpayers are effectively subsidising employers who can get away with paying below the fair rate in the knowledge that workers can get benefits.
We will therefore legislate as quickly as possible. We will then introduce the Minimum Wage sensibly, taking account of the economic circumstances prevailing at the time. We are already moving to set up an independent Low Pay Commission very quickly, in advance of legislation, to advise Government on the level of the minimum wage. Its membership will include representatives of employers, including small business, as well as of employees.
I expect the commission to become a permanent body with wide-ranging functions. Its tasks will probably include not only reviewing and recommending the initial level of the minimum wage to be fixed by the Government but also:
- Conducting periodic reviews of its impact and effect;
- considering matters of implementation and other questions referred to it by Ministers;
- overseeing and monitoring enforcement mechanisms and the operation of the legislation;
- conducting consultations before making recommendations; and
- making formal reports to Parliament on its work.
The commission will have a key role in ensuring that the minimum wage takes effect smoothly and successfully in all parts of the economy.
The Government's commitment to working through the Low Pay Commission is another example of our support for social partnership. It is the shape of things to come.
Trade
union representation and recognition
Another
aspect of minimum standards is the right for employees to join an effective
trade union. We are committed to ensuring that people are genuinely free
to join a union if they wish. Where they decide to join, they should
have the right to be represented by a union official in individual disciplinary
or grievance proceedings. And where a majority of the relevant workforce
vote in a ballot for the union to represent them, then the union should
be recognised.
We are committed to consulting fully on the implementation of these principles. Consultation is designed to achieve the greatest possible consensus. Trade union recognition should be a form of partnership, not a source of conflict. Many responsible employers already recognise trade unions. In 1990, when the last survey was conducted, 53% of all establishments had recognised trade unions. In most workplaces where unions are recognised, there is no debate about the issue. It is a fact of life and employers acknowledge and welcome the contribution which the union presence makes to good industrial relations.
Those who claim it will be damaging and disruptive ignore the fact that according to TUC analysis, 44 of the Financial Times Top 50 companies recognise trade unions. They ignore the fact that today's unions are keen to help companies succeed, in order to provide secure, well-paid jobs for their members. Above all, they ignore legitimate wishes of thousands of workers.
Working
time
A
further example of minimum standards is working time. We shall be taking
steps to ensure that the Working Time Directive is fully implemented.
We support this directive. We believe that, like a national minimum wage,
it is a positive contribution to a successful, modern economy based partnership,
not conflict.
Of course, it will be necessary to ensure that the Directive is implemented in a sensible and flexible way. This is why we shall be examining carefully the views of both trade unions and employers to achieve the right balance in regulations. There must be a balance between on the one hand the needs of individuals and families, and on the other the need for business to be able to operate efficiently and flexibly. Many of the most successful businesses already adopt such an approach and I believe that, with flexibility in implementation and with careful use of the scope for exemptions we can achieve the aims of the Directive without the problems some have suggested. I simply cannot believe that employees should be forced to work more than 48 hours a week, or to go without paid annual holiday.
Young
workers directive
We
shall also fully implement the Young Workers Directive. We attach the
utmost importance to safeguarding the health and safety of children and
young people and encouraging their physical and intellectual development.
Our young people must be guaranteed working conditions appropriate to
their age and which protect them against any specific risks arising from
their lack of experience or awareness. We shall move ahead with all possible
speed.
Homeworking
I
shall also be examining what steps we can take to help homeworkers, some
of whom represent one of the most vulnerable groups in society whose
problems have for too long been disregarded. Such workers are often women
from ethnic minority communities earning low wages and with no clear
definition of their status. I have asked my officials to open up channels
of communication with homeworkers and others with an interest in homeworking
to identify the steps which are needed to help homeworkers raise their
status and to put work in this important sector of the economy on a proper
and clear basis.
The challenge in all these areas is to bring the worst employers up to an acceptable minimum standard. Legislation alone is not the answer. We need to persuade those employers that partnership produces better results than conflict. Otherwise they will waste effort fighting legislation, rather than making it work. We in DTI will be working to promote best practice throughout industry. In the past the DTI has looked mainly at company performance. That is important but it is far from the whole story. We are now the Department for the whole of industry and all who work in it and depend on its output and success. We aim to identify and encourage best practice in management, in technology, in exporting, in industrial relations and employee involvement. We want to help all managements, staff and unions to work together as effectively as the best already do. And we look to you, the trade unions to help us in the task of winning hearts and minds and spreading the new spirit of partnership.
Jobs
So
far I have dwelt on measures for people in work. But we must not forget
those denied the opportunity to work by the evil of unemployment.
Unemployment is debilitating for all those affected. But it hurts young people most of all. Far too many of our young people have been let down by the education and training system. They are a lost generation. They live in communities scarred by unemployment, where one in five non pensioner households has no working member. They have lost all self-esteem. That and poverty lead to the breakdown of family life and to ill health. All too often, hopelessness and despair lead to involvement in crime, drug and alcohol abuse and sexual exploitation.
But it need not and should not be like this. What young people should experience is:
- Affordable and safe personalised accommodation;
- integration into society, not marginalisation;
- support from family, the peer group and the community;
- access to social facilities;
- vocational guidance and support;
- training and help in job search;
- meaningful links with responsible employers;
- work experience and opportunities; and
- the ability to move within the wider labour market to seek out better job prospects.
In our Manifesto we set out our long term objective of high and stable levels of employment. Our welfare to work programme will combat unemployment and break the spiral of escalating spending on social security. Our ambitions programme will take 250,000 young unemployed people off benefit, guaranteeing them a job or training. We will also provide rebates to help employers to recruit the long term unemployed.
This Government will provide opportunities which break the vicious cycle of unemployment. If we do not act, many of today's young unemployed will become unemployable, and we will face decades of growing social division. Making the most of the talents of a forgotten generation of the young and long term unemployed is the objective of our new welfare to work programme - a modernisation of the welfare state for the 1990s and beyond.
We plan to develop and improve the skills of unemployed people, so that as a nation we become better able to compete. We are committed to providing a range of high quality options: jobs, full time education or useful work experience for unemployed people under 25. Our aim is to help young people to find work and stay in work.
We will offer every young person unemployed for six months or more a range of four options:
- Jobs with employers who will be offered £60 a week for six months;
- work experience with a voluntary sector employer;
- full time study on an approved course for young people without qualifications;
- work experience with the environment task force.
But with these rights go responsibilities. There will be no option of life on full benefit.
The long term unemployed will be offered a new deal too. There will be new opportunities for people unemployed for two or more years which will end the waste of long term unemployment.
We have made it clear that our welfare to work proposals are one of our most urgent priorities. In particular, we promised that the new deal for unemployed people under 25 would be implemented quickly.
We are already living up to these promises. Within days of the election, the first meeting of the welfare to work cabinet committee, chaired by the Chancellor, had taken place. A programme of work has been agreed to develop the new deal programme as quickly as possible. The Employment Service will be the lead agency with responsibility for co-ordinating the programmes, offering opportunities for the unemployed, ensuring quality control and policing sanctions. We are determined to bring new help and new hope as soon as we can to young and long term unemployed people in need of work.
We are calling upon all sections of our community business, voluntary organisations, young people and the long term unemployed - to join us in a partnership to end the waste of young and long term unemployment. We will establish a new task force to deliver external advice and assistance, and ensure the support of business, the voluntary sector, environmental groups, higher and further education, TECs and academic experts. Together we can build a more cohesive and more efficient economy.
Peroration
We
have set ourselves ambitious targets. It will take time to achieve all
of them, but we are already making progress and the Queen's Speech later
this week will list the measures we will bring forward in the first session
of Parliament. But let me repeat, legislation and measures for the unemployed
are not enough. We are seeking to change the culture of working life
in Britain, to end the divisions and promote co-operation. A modern industrial
society must be based on partnership. We see the success of the partnership
model in countries such as Germany, the Netherlands and Denmark.
The British people deserve better and this Government will ensure they get it.
Ian McCartney MP