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                                 ON THE RECORD 
                                                          
 
RECORDED FROM TRANSMISSION BBC-1                                 DATE:  9.11.97
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JOHN HUMPHRYS:                         Good afternoon.  Britain's bosses are 
starting their annual conference this weekend.  The government says relations 
with industry have never been better, but I'll be asking the President of the 
Board of Trade Margaret Beckett if the Labour Party is now really the friend of 
big business.  That's after the News read by JENNIE BOND. 
 
NEWS                                    
 
HUMPHRYS:                              Thank you Jennie.  Tomorrow the leaders 
of Britain's biggest businesses - the CBI - get together in Birmingham for 
their annual conference... this time under a Labour government.  So you might 
think they'd be a little depressed at that prospect.  On the contrary, they 
think they may well be able to do business with the Labour Party.  And one of 
the reasons for that is that people like Tony Blair and Gordon Brown talk their 
language of competitiveness but is it really the same language?  What business 
wants - has always wanted - is a free hand.  Is a Labour government really 
prepared to give it that.   The President of the board of Trade is Margaret 
Beckett and she is in her constituency in Derby. 
 
                                       Good afternoon Mrs Beckett. 
 
MARGARET BECKETT:                      Hello. 
 
HUMPHRYS:                              This question of the language that you 
use.  What you mean by competitiveness is different from what they mean.  What 
they want is absolute flexibility to do what they will, to let the market run 
riot if you like.  That isn't what you mean is it? 
 
BECKETT:                               But I don't think it's what they mean 
either.  One of the features of the developing relationship between a Labour 
Government and the business community and others is that we are, unlike the 
previous government, listening to what people say to us, we are working with 
them to advance Britain's competitiveness, but that doesn't mean just a free 
hand to run riot.   It's the business commmunity for example, that want to see 
changes in the competition law because everybody agrees it's not strong enough. 
It's the business community that want a sensible and workable relationship with 
their workforce, so I think actually that many of the things we're saying are 
similar, because we are all trying to address what's in Britian's national 
interest. 
 
HUMPHRYS:                              Well, let's take the competition law.  
You're introducing a competition bill, and one of the effects of that bill will 
be that if companies want to take over other companies in breach of the sort of 
guidelines, the rules that you set out, they could be fined, very substantial 
fines up to ten per cent of their total turnover.  Now, they don't want that do 
they? 
 
BECKETT:                               I think you'll find the position varies. 
Generally the CBI and most of the business organisations welcome the notion of 
the competition bill.  We've been talking about if for something like ten 
years.  The previous government never got round to doing anything about it, and 
we are.  Now, the aspect of the bill that you pick up is the one where they've 
got some anxieties, and that'll all be explored when the bill is being 
discussed. 
 
HUMPHRYS:                              What, so you might give may on that 
d'you mean? 
 
BECKETT:                               Well, we can't give way on the basic 
principle because it's about making sure that companies are deterred from 
abusing their power in the market, and you know different companies have 
different interests in this respect.  A part of the problem with our present 
law is that especially a smaller company could be driven out of business before 
our law as it is today can act.  So we're looking at getting a new balance. 
 
HUMPHRYS:                              And part of the new balance that you put 
it, might not be the ten per cent fine that I just mentioned.  You might back 
away a little from that? 
 
BECKETT:                               Well, we shall look at the issue of what 
is a deterrent and there is no doubt that some level of fines will be included 
in the regime. 
 
HUMPHRYS:                              But not necessarily ten per cent - up to 
ten per cent of turnover? 
 
BECKETT:                               It could well be, but these are the kind 
of things that you explore in discussion on the bill, but the principle we 
think is right, because the principle is to try and make sure that we have the 
kind of competition law that encourages competitiveness. 
 
HUMPHRYS:                              But possibly a smaller amount of money 
than has been talked about? 
 
BECKETT:                               I'd rather doubt it, but I don't believe 
in having a closed mind when a bill is barely started on its discussion stage. 
 
HUMPHRYS:                              All right.  Flexibility then, let's look 
at that.  This is another one of those words that you mean something by it, 
they perhaps mean something different.  When they talk about flexibility they 
talk about better education and training, so that workers can move from one job 
to another, and that of course - you go along with that.  But you mean 
something else as well.  They mean something else as well, and what they mean 
is that they should be able to hire and fire more easily, perhaps they should 
have shorter contracts for their workers, perhaps workers should work 
different, more flexible sort of hours to suit them.  Now, there is another 
difference between you, isn't there? 
 
BECKETT:                               I think there's a danger of confusing  
what the previous government used to say about flexibility with what the 
business community used to say and does say.  Again, we are saying that there's 
nothing the matter with flexibility which means that companies and individuals 
can respond to the different circumstances in which they find themselves, and 
that means that they can secure their markets and secure the jobs for their 
employees, and that does mean aiming for skill, it means aiming for quality, it 
means all the kind of things that we've been urging on the business community 
and on the representatives of the workforce and there's a ready acceptance for 
that.  There have been people who've talked about flexibility just meaning hire 
and fire at will, but as I say they've tended to be in the Conservative Party 
rather than in the real world. 
 
HUMPHRYS:                              Let's look at that in a little bit more 
detail then.  You want to change the law which would increase trade union 
recognition.  You would actually say to a company:  if more than half your 
workforce wants trade union recognition they should have it.  Now, they don't 
like that very much.  You would give workers more employment rights.  the 
bosses, many of them, don't like that very much because that would add to their 
costs.  another difference between you. 
 
BECKETT:                               Nobody would dispute that there are 
times when we will take a different point of view from the representatives of 
the business community, that's a perfectly reasonable thing.  It will happen 
from time to time, but there's a world of difference between some areas of 
difference and just not being able to see eye to eye at all, for example over 
the issue of trade union recognition.  With our encouragement the CBI and the 
TUC are talking to see if they can clear the undergrowth in any way, if there's 
any area of common ground that they can agree on and simplify what is the area 
within which there are differences, and then the Government will have to make a
decision as to how they take things forward.  But in a lot of these things the 
business community would hate grossly over-regulation which would cause 
problems and make them less competitive, but having better regulation, having 
reasonable minimum standards often protects decent, hardworking, competitive 
businesses who are competing on quality just as much as it protects the 
workforce from exploitation.  So as long as you get the balance right it can be 
in everybody's interests. 
 
HUMPHRYS:                              But your idea of the balance, their idea 
of the balance, might be different.  Are you prepared to give on this? 
 
BECKETT:                               Well, there will be times no doubt.  I 
think we can't ..., we definitely can't give on the principle of it being right 
for people to be able to join a trade union, and right for them to have it act 
on their behalf if more than half of them want it.  That seems to me to be 
simple justice and democracy, but certainly we don't want to go about drafting 
masses of rules that will cause difficulties, both for business and for the 
secure long-term employment of the workforce, and it's getting that balance 
right in constructive discussion that the Government's set its hand to. 
 
HUMPHRYS:                              And the problem from their point of view 
is they would say, and they don't think you've got it right at the moment, 
clearly, that you would be adding to their costs, additional trade union rights 
would add recognition, would add to their costs.  Do you accept that? 
 
BECKETT:                               Well, we're at a very early stage in 
those discussions.  They may say that in the end, but where there will be times 
as I say, when we don't see eye to eye, when they may feel that we're adding to 
their costs.  There are other occasions, just as many more I think, where we do 
see eye to eye, and I understand that this morning the President of the CBI, 
Colin Marshall for example, said he thought it was a good thing and in the 
country's interests that the Labour government was encouraging companies and 
their workforce to work together. 
 
HUMPHRYS:                              On the other hand lots of people, 
including some people, lots of bosses including some now in your Government, 
one in particular I'm thinking of, thinks it's not a very good idea, or thought 
it wasn't a very good idea, actually de-recognised unions when they were 
running companies themselves. 
 
BECKETT:                               Well we've seen that happen in some 
companies over the years but if the basis of the law changes and if, as I say, 
more than half a workforce want to be represented by their trade unions then 
I'm sure British companies will accept that. But I think very much too, that 
they will welcome the other things that we're doing to create a climate in 
which we can have strong and competitive markets, in which modern companies can 
develop constructive relationships with their workforce which is actually the 
key to success in all of our most successful companies and in which government 
works with the business community to try and set the right framework for the 
future.  
 
HUMPHRYS:                              Yes, but the people I referred to are 
some, in your terms, the most constructive people. I mean Lord Simon for 
instance, who's a very important minister in  your government now, used to run 
BP, derecognised the Transport and General Workers Union in some areas. Martin 
Taylor, boss of Barclays Bank, who you've given an important job to, exactly 
the same, you're going to have to placate them first aren't you?  
 
BECKETT:                               Well I doubt if either of those two 
would argue that they as individuals, rather than as part of their companies 
took such decisions, but as I say... 
 
HUMPHRYS:                              They did run the companies.  
 
BECKETT:                               Not single-handed I think.   
 
HUMPHRYS:                              They were the bosses.  
 
BECKETT:                               The past climate of industrial relations 
is exactly that, it is behind us.  What modern companies recognise is the need 
to work constructively with their workforce, and most of them do.  
 
HUMPHRYS:                              Now, another area where they are rather 
worried about is this question of unfair dismissal, what is regarded as unfair 
dismissal and under previous rules you had to work for a company for two years 
before you had those rights and you, at one stage, the Labour Party said those 
rights will apply from day one, then it was going to be six months, now it 
seems to be going back a bit. I'm very puzzled as to what is actually happening 
here and bosses are very worried about this. What is the situation?  
 
BECKETT:                               We will be publishing a White Paper in 
the New Year and we shall look then at what we think is the right balance for 
the future and obviously it will be a White Paper, it will be for consultation. 
We shall put forward our proposals then. But we will be looking to see again 
what are the right, minimum standards, what is a fair level-playing field for 
everyone to operate on, and what will work reasonably well in practice and it 
is a matter of getting that right.  
 
HUMPHRYS:                              Well you used to know that didn't you. 
You yourself used to know that. You supported John Smith in saying those rights 
ought to apply from day one. What's changed? 
 
BECKETT:                               John Smith did say that.  
 
HUMPHRYS:                              And you supported him. 
 
BECKETT:                               Well, naturally.  A  great deal... 
 
HUMPHRYS:                              Have you stopped supporting the view 
now? 
 
BECKETT:                               Pardon? 
 
HUMPHRYS:                              Have you stopped supporting that view 
now? 
 
BECKETT:                               What happened after John made that 
statement, was that we got then a great deal of input and discussion, including 
incidently from within the Trades Union movement, not simply from the business 
community, about whether that was actually workable in practice and how you 
carried it out. And one of the things that we are not interested in doing, and 
never were interested in doing, including under John Smith, is introducing 
proposals for the sake of it, if they're not workable and don't contribute to a 
good climate of working relations in practice. So we've looked at the balance 
of opinion and we shall be looking at it in its sort of final stages when we 
publish our White Paper in the New Year.  
 
HUMPHRYS:                              It sounds as if you're backing off 
again. 
 
BECKETT:                               No I don't think that. What is important 
is that we're showing very clearly as a government the direction in which we're 
going. I don't think anyone can dispute that. There are clear signs, clear 
steps being taken to go in the right direction. As you move in that direction, 
from time to time a whole range of practical issues will come up and if you're 
a sensible government you take heed of those, and sometimes you make changes, 
sometimes they're minor, sometimes they're more significant but that's the 
process of government as opposed to the process of opposition and it's the 
direction that  matters.  
 
HUMPHRYS:                              And sometimes you might even acknowledge 
that mightn't you and say: yeah well that was a bit of a U-turn but there we 
are.  However, I digress. Let's look at the minimum wage, something else that 
John Smith was entirely in support of and so were you pf course and this 
government is too. But, and here's the problem, you have said yourself in a 
letter, that you should consider the possibility of people who are under the 
age of twenty-five being excluded from the requirements of the minimum wage. Is 
that your position? 
 
BECKETT:                               That isn't a recommendation, what you 
are quoting from I think is the terms of reference which we sent to the Low Pay 
Commission.  
 
HUMPHRYS:                              Because there is going to be a Low Pay 
Commission precisely.  
 
BECKETT:                               That's right yes.  That is an 
independent body. The area of greatest interest and controversy and some would 
argue the greatest difficulty is exactly how you handle the issue of how young 
workers are treated, particularly in the context of training. So what you are 
quoting is the terms of reference that say to the Low Pay Commission this is an 
area of particular sensitivity, it's an area where it is particularly important 
to try and get it right because the one thing none of us wants, is to put in 
place a structure for the national minimum wage that discourages young people 
from undergoing continuing training or that indeed that discourages employers 
from taking on young people. So again there's a huge amount of ideas and input 
and discussion about that and what that letter said was: you the Low Pay 
Commission should look at this and come back to us Government with your 
recommendations. It was not a recommendation to them as to the decision they 
should make, it was a recommendation that this was an area that they had to 
study.  
 
HUMPHRYS:                              Right, so if they come back to you and 
say: well we've looked at it, read your letter with great interest and we've 
decided you're quite right, we ought to study this very carefully, you will 
say good, go ahead and do that. The implication then, of course being that that 
is what may be implemented in years to come or months to come, who knows.  
 
BECKETT:                               No, no. They are doing that. I mean 
they're taking evidence now, they are engaged in all kinds of discussions, 
they're reading the great bulk of written material that there is on this. They 
are now looking at these issues with a view to making recommendations to the 
Government.  
                                                              
HUMPHRYS:                              And if the - sorry to interrupt you, but 
to cut you short there because I may have misled as well. If the recommendation 
at the end of this process is that twenty-five year olds, under twenty-five 
year olds should be excluded from the provisions, you, the Government would 
say, fine, okay.  
 
BECKETT:                               Well we the Government will look at what 
they recommend and then we'll form our conclusions and announce the policy that 
we have decided to pursue. The Low Pay Commission are very well aware that 
their job is to look at the evidence, to make proposals to us and that then the 
government will decide on the balance of the recommendations they make. So I 
think it's very early days for anybody to be leaping to conclusions but what is 
very clear is that it's very important for us to do something about the 
position in which we're the only developed economy which has no kind of minimum 
standards, no kind of minimum protection and which we believe has actually 
undermined the competitiveness of our country and of our companies of recent 
years, but it's important to get that right.  
 
HUMPHRYS:                              And that's an area, what you just said, 
may well encourage one or two bosses watching this programme. Let's look at 
another area where perhaps you might offer a bit of encouragement again, the 
Social Chapter under the European Union. Now you had, the Government had 
promised the bosses when you were in opposition, certainly you said: we will 
sign the Social Chapter because there's nothing in the pipeline that should 
bother you at all, absolutely nothing there that you ought to get exercised 
about. Then we discover that indeed there is, that the Commission wants Works 
Councils for small and medium sized companies. Something that your lot 
apparently didn't want and didn't know was going to happen. Now you have made 
it almost inevitable as a result of signing the Social Chapter that that is 
going to happen, or perhaps you can say something that watching bosses will be 
able to take some encouragement from this morning on that.  
 
BECKETT:                               Well, I don't think we're anywhere near 
to a decision on such a proposal which is in... 
 
HUMPHRYS:                              Not that far off. 
 
BECKETT:                               Well, no, I don't think that's right.  
We're in the very earliest stages where the Commission has come forward with 
some suggestions as to what they would like to see.  But the councils of 
employers within the European Union as a whole and the other social partners - 
the representatives of trades unions and so on, are now looking at and 
discussing this proposal. So I mean it hasn't even come out of that process, 
never mind coming to Government. 
 
HUMPHRYS:                              Yes, sure, but I mean we know that the 
Commission wants it, we know that thirteen of the fifteen ministers who will 
eventually sit around in the Council of Ministers and discuss it, we know that 
they want it because they've already got it in their countries and they are not 
going to want to give up what may or may not be a perceived advantage.  So we 
are going to lose on that. 
 
BECKETT:                               That may not mean that they want to see 
European Union legislation about something they may feel is a domestic matter,  
so we are at a very early stage.  Let me take you back for a second to the 
contents of your question, John, because the fact is that before the election 
we had a wholly unreal debate about the Social Chapter.  The previous 
Government used to try and pretend that if Britain signed the Social Chapter we 
would forthwith have to adopt the social security policies, the industrial 
relations law and so on of other member states.  That was always rubbish and 
now I think it's recognised as being rubbish.  Now nobody ever said that there 
would never be any further proposals coming up from the Commission in the 
context of the Social Chapter but our view is - and it is very strongly - that 
because of the neglect of the previous Government, we still have a lot of work 
to do to get into our domestic legislation the consequences of being in the 
Social Chapter.  A lot of companies, particularly big companies who are bound 
by the existing works council directive, have a lot of work to do to get their 
structures in line so that their work force and they don't lose out because we 
weren't in the Social Chapter. 
 
HUMPHRYS:                              So, therefore, are we going to support 
or oppose this if - when, when - I am much more tempted to say 'when' it comes 
up. 
 
BECKETT:                               Well, we are still at such early stages 
that it's far from clear in what form... 
 
HUMPHRYS:                              Come on, you must have a view on that, 
heavens, you must have thought about it. 
 
BECKETT:                               Well, at the moment we would resist that 
further extension. 
 
HUMPHRYS:                              But you might accept it. 
 
BECKETT:                               No.  We would resist what we understand 
to be under discussion now because we already have a lot of domestic 
legislation.  What we were talking about before - the national minimum wage, 
the fairness at work White Paper, we've got a huge amount of work already in 
train under this Government and at the moment we don't need somebody to try and 
give us some more, thank you very much.  We would like to get these issues 
right and not... we are opposed to being pushed by anybody into taking further 
steps of the kind that are now being discussed.  But it's far from clear when 
or if and in what form they will finally come forward. 
 
HUMPHRYS:                              But when they do ... 
 
BECKETT:                               Well, if they do. 
 
HUMPHRYS:                              All right, if you like.  You will resist 
but you can't actually stop it happening. 
 
BECKETT:                               Well, er, we shall see how things go. 
 
HUMPHRYS:                              Well you can't, you haven't got a veto, 
have you. 
 
BECKETT:                               No we haven't.  The previous Government 
gave up our veto and we can't restore it but it's always the case within the 
European Union that other countries recognise a balance of interest.  There 
will be things that we perhaps might be keen on that other countries might not 
want.  It's much too early to say where we might end up in an issue where we've 
only just begun the discussions.        
 
HUMPHRYS:                              Let's deal with the final and the big 
one as far as - the biggest one of all as far as many bosses are concerned, and 
that is the Euro, the Single European Currency.  They like it, certainly many 
of them do, apparently the majority of them do, because it gives them what they 
want most of all - and that is stability, stability on interest rates, 
stability on exchange rates and so on.  Now, you have ruled that out for years 
to come, so therefore the thing they most wanted from you, they are not going 
to get it - at least for a very long time. 
 
BECKETT:                               I don't think that you would get that 
reaction from most of the business community.   
 
HUMPHRYS:                              What reaction?  That they don't want it? 
 
BECKETT:                               The reaction that we have created 
instability.  We have actually made the position very simple and clear so that 
the business community now know where they stand in a way they haven't known 
for years. 
 
HUMPHRYS:                              Sorry, but just let me point out to you 
before you leave that.  Have you seen what's happening - the pound's going up 
and down like a yo-yo on speed!  I mean, I've never seen the pound - and 
probably you haven't - shooting up and down the way it has been.  That's 
stability? 
 
BECKETT:                               Well, with respect, I think that's got 
rather more to do with things like what's happening on the Stock Markets inHong 
Kong and in New York - over which even this Government has no control, than it 
has to do with what we said about economic and monetary union. What we've done 
is to make it plain that we don't see any constitutional barrier to Britain 
being in a single currency if, as we all expect, it goes ahead in a few years' 
time.  We've also made it plain that now is the time for people in Britain 
generally and particularly people in Britain's businesses, to stop allowing 
this area of discussion to be clogged by the presentation of the previous 
Government, that somehow what mattered was whether Britain was in or out and if 
we weren't going in we didn't need to think about it.  There is a huge amoung 
of work to be done to prepare for the impact of a single currency when or if 
ever Britain goes in.  The issue of how it will impact on British business is 
hugely important and thanks to the neglect of the previous Government, little 
has been done about it.  Can I also add that if there is any small degree of 
contribution to the instability of the pound from discussions about economic 
and monetary union, the time-frame and so on, then it makes the point all over 
again that it is in Britain's long-term national interests for there to be a 
sensible approach for the debate and for European Monetary Union to be well 
handled and that is something to which this Government have committed 
ourselves.                            
 
HUMPHRYS:                              And in the meantime, only a few seconds 
left, you are quite happy to see the Bank of England pushing up interest rates 
and the pound with it - even though business doesn't like that? 
 
BECKETT:                               Well, it is for the Bank of England to 
decide on control of interest rates.  In the long-term we believe that giving 
that decision out of the hands of government so no-one can say it's political 
interference will contribute to stability.  These are all issues the Bank of 
England themselves presumably took into account when they made their decision. 
 
HUMPHRYS:                              Margaret Beckett, thank you very much 
indeed for joining us this morning. 
 
BECKETT:                               Thank you. 
 
HUMPHRYS:                              And that's it for this week.  Next week 
we'll be looking at the price Britain pays for its food.  Has Europe added too 
much to our bills?  Until then, good afternoon. 
 
 
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