BBC On The Record - Broadcast: 19.03.00

Film: ECONOMIC VT European leaders meet in Portugal this week for a summit on economic reform. Can Tony Blair persuade his colleagues to follow the British economic model.



PAOLO BUONADONNA: Rush hour at London' s Waterloo station. Tony Blair is proud of Britain's booming economy and its record for creating jobs. Next week at a special summit in Lisbon he hopes to persuade other European leaders to go his way and adopt British-style reforms to tackle unemployment. The Prime Minister needs progress on these economic reforms if he is to persuade the British public to join the Euro. HELEN LIDDELL MP: We need to create an environment that is business friendly and through that we can create high quality jobs. And we also have to at the same time make sure through skills and training that all of our people are getting an opportunity to benefit from the kind of changes that a modern economy has. BUONADONNA: By Eurostar France is less than an hour away from Ashford in Kent but its government's attitude to the economy is worlds apart. Several thousand French entrepreneurs like Jean-Claude Cathias have made their feelings clear by relocating this side of the Channel Tunnel. He now helps run an association which advises French businesses based in the UK. JEAN-CLAUDE CATHIAS: France always thinks we need regulation for everything - absolutely everything. It costs twice the price in France to employ someone than in Britain. So it really prevents employers to employ people and as a result in France you have approximately twelve per cent unemployment for only five per cent here in England. BUONADONNA: The flexibility that French entrepreneurs enjoy in Ashford is what the British government insists is needed to stimulate job creation. Tony Blair says that the Lisbon summit should be a turning point in European economic policy. He says we can combine a more dynamic economy with the European Social Model and its concern for workers. The Prime Minister wants to avoid what he calls "heavy handed intervention and regulation". But a core group of continental countries, headed by France, is determined to use the summit to strengthen the social agenda. The champion of this approach is the French minister for employment, who's also the daughter of Jacques Delors, one of the architects of the European Social model. MARTINE AUBRY (INTERPRETED): I think if Europe has failed to deliver on jobs for years it's simply because it believed that economic growth would solve everything and the unemployed should adapt to the needs of companies. But the State has a greater role to play. It must anticipate and be more proactive. JOHN MONKS: Different countries have got different agendas going into Lisbon. I think the British government, I think wrongly, have tended to preach at Europe and say that Britain holds the key, holds the way. In fact I think mainland Europe is doing well in some areas we're not doing very well. Its education and training standards are higher, productivity is generally higher and certainly in terms of manufacturing it's doing better on balance of payments than we are. BUONADONNA: On the French side of the Channel Genset is one of the leading biotech companies in Europe. Although managers here have had to contend with a raft of social legislation, including recently the thirty-five hour week, they say higher regulation doesn't necessarily mean higher costs and it makes for a more committed workforce. DANIEL COHEN: You will always need rules to protect the employees against the employers. The employers tend to forget the human aspects of the people in the company. We must understand and accept that for a company to be successful everyone has to be comfortable and successful. BUONADONNA: It's from the Gare du Nord in Paris that the Eurostar travels back to Britain but the message coming from the continent is not a welcome one for Tony Blair. France, together with Luxembourg, Belgium and Italy is determined to strengthen employment rights and wants to see new directives to protect workers on the agenda soon. France will be in charge of EU business in three months' time as it takes over the Presidency from the Portuguese and there's little doubt that social legislation will be high on their list of priorities. Many governments in Europe feel that legislation has a part to play to protect the growing number of workers who are not in traditional full-time jobs. The British government is currently drafting regulation to implement a new EU directive on part-time work. The aim is to ensure that part-time workers receive the same hourly pay and similar conditions as their full-time counterparts. Two more EU directives to regulate temporary work and agency work are being drafted and could be pushed through in the next couple of years. AUBRY: (INTERPRETED) I think that companies which choose to operate on a temporary footing must bear the cost. There is no reason why other companies, why taxpayers, should foot the bill for what then becomes a form of institutionalised job insecurity. LAURETTE ONKELINX:(INTERPRETED)It is clear that any directives aiming to offer better protection for people, for workers, must be adopted as quickly as possible. BUONADONNA: But businesses in Britain say they cannot cope with more legislation. Caterham Cars is a successful sports car manufacturer in Kent. They build these models by hand and employ sixty-five technicians but also need part-time and temporary staff during busy periods. Its managing director says more regulation will put companies like this under pressure. SIMON NEARN: We have to maintain our flexibility. If there's business to be done out there we have to react and to do that we have to bring in new staff, sometimes on a part-time basis, sometimes on a short contract. We need the flexibility and the more we are laboured down with different regulations and requirements from our point of view the more it makes it hard to react to these things. BUONADONNA: The government is sensitive to employers' concerns. Unions and some Labour MPs fear that some part-time workers will be excluded from the new rules. The government is meant to put the finishing touches to legislation to implement this directive by next month. MONKS: We think they're being too narrow and minimalist in their interpretation of it. The major argument is that we want to apply it to all workers - they're thinking of limiting it to just employees. That makes a difference of several million people who will be covered by the directive. TONY LLOYD: One of the concerns to members of parliament, Labour members of parliament, one of the concerns of people within the world of work, is that we have a definition that allows people who are part-time workers to benefit from the protection that this directive seeks to give them. So we want a wide definition that takes in as many as possible. BUONADONNA: Another draft directive waiting for approval in Brussels would give workers in companies with more than fifty employees the right to be informed and consulted about any major changes to their contract of employment. If a company fails to consult its workers, its plans could be stopped. So far the UK has been blocking progress on this. LIDDELL: Good businesses are already communicating both upwards and downwards within those businesses. So I don't think over burdensome regulation is the way forward. We want to create a modern business model that recognises the dynamism of a modern economy. BUONADONNA: Caterham cars is doing well - but it's one of the few remaining examples of what was once a thriving industry. Some feel that what's happened at Rover's Longbridge plant underscores the need for better consultation with workers and they're hoping to persuade the government to listen. LLOYD: I don't think we have anything to be afraid of in terms of information and consultation. I think we have an awful lot to gain by saying that where we take an issue like Longbridge for example, it's in the interest of everybody if the workforce are consulted at the earliest possible time when major changes are due to take place. BUONADONNA: French companies such as Genset have already accepted this type of legislation. If a substantial majority of countries could be found to back a European directive on this it would become law despite British opposition. MONKS: We expect when the French take over the presidency of the European Union in the second half of this year, for them to revive the proposal for a directive on information and consultation. And we think it's a very, very important measure. AUBREY: (INTERPRETED) This approach exists in France, Germany, Belgium, in most European countries. I think that at a time when there are increasing numbers of pan-European companies, which are merging across European borders, the implementation of common regulations would be useful. Naturally we mustn't impinge on the operations of the companies. I think however, that a balance can be found so that employees are not reduced to learning that their company is about to shut down one of its plants by reading about it in a newspaper. With such an attitude how can anyone persuade them that they're important to the company? BUONADONNA: A whole series of proposals are heading the British way. The Lisbon summit will also start a five year plan to update the European social model. The plan, known as the Social Agenda, will include programmes to tackle discrimination and offer more protection for workers and will inevitably lead to more Europe-wide regulation. ANNA DIAMANTOPOULOU: It will be a coherent framework with a piece of legislation, with projects, with programmes, with policies for co-operation and co-ordination between member states and it will refer to social inclusion issues, to other discrimination policies, to social protection issues, to women issues and we will launch our public debate after Lisbon. ONKELINX: (INTERPETED) We are lobbying for the creation of a genuine European Social Agenda which would act as the guiding thread of Europe's Social integration. It would provide for the monitoring of all developments in the matter throughout Europe, both European standards and European social frameworks. If such a decision is taken the forthcoming rotating presidencies of Europe - France, which is very keen to see a European social agenda, followed by Sweden and Belgium, which is no less keen - will be able to push through the changes required. BUONADONNA: The direction some in Europe are taking is not just worrying for Britain, the chief economist of the European Central Bank says that Europe's economy is hindered by over- regulation. A message Britain will repeat in Lisbon. LIDDELL: Rather than just seeking a legislative solution we should be looking at best practice, at how other countries have coped with situations, who's done it well and who's done it less well rather than necessarily always going down the legislative route. You know, we need to get away from red-tape Europe. Red tape Europe inhibits business, inhibits opportunities for employment and inhibits opportunities for growth. AUBRY: (INTERPRETED) I would like to answer with a Tony Blair anecdote. When he came to France he told us there's no such thing as left-wing policies or right-wing policies. There were only good or bad policies. I don't necessarily share this point of view. I personally would tell him there are good or bad ways of regulating things. To reject regulation as something which is always negative seems to me just as bad as to claim that everything should be regulated. BUONADONNA: This week's summit will be a crucial test for Tony Blair. Unless he can be seen to drive the European economic reform it will be even harder to push Britain's membership of the Single Currency. Although he may have begun the journey he still seems to have a long way to go to persuade all his European partners to follow him.
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.