Brexit and the Labour Market (Economic Affairs Committee Report)

Lord Lea of Crondall Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Lea of Crondall (Lab)]

My Lords, the debate about Brexit is becoming a debate about what are settling down to be three broad options for the country. The first is a hard Brexit, by which I mean pulling up more of a drawbridge on migration. At the opposite end, the second is the status quo as near as possible. The third, which I would put somewhere in the middle, is the European Economic Area option, where you still have the four freedoms but with some degree of tweaking of the agreed criteria on migration. That is where there is at least a 50% chance we will wind up, as it is in our national interest—certainly our economic interest—for the reasons stated by every speaker, beginning with my noble friends Lord Livermore and Lord Darling, moving through to the noble Lords, Lord Burns and Lord Turnbull.

It has been said by many people that we need the flexibility we currently have. We certainly cannot overnight, say, treat all the Poles the same as those from the rest of the world. It would just be a catastrophe for the economy. There is a labour market in Europe, and I am a bit surprised that the report did not pay some attention to the nature of that market. One or two noble Lords spoke about this at the edges, saying that of course people may go back to Poland for whatever reason. Those reasons include the state of the Polish economy; for people from Portugal, it depends in part on the state of the Portuguese economy.

As for the trade union movement—I speak in the presence of a former general-secretary of the European Trade Union Confederation, my noble friend Lord Monks—we have European works councils in hundreds of firms, where we meet and discuss matters and people get to know best practice in all the different countries. I wish the report had paid more attention to the nature of the European labour market. The most obvious example, which everyone can understand, is the single factory floor in big component-supplying companies along with the final output in Rolls-Royce, Airbus and Jaguar Land Rover. Then there are logistical companies, as well as those dealing with food and pharmaceuticals and so on, for example Unilever. They are not only in one enterprise; they move around many of them all the time. We are having this debate against a background where even today a newspaper says that the majority of the Cabinet want a migration policy that would be the same for Europeans as for the rest of the world. I repeat that that would be a catastrophe. However, I do not think it will happen; reality will overtake it, and the Conservative Party will have to sort itself out.

There is a question over why we have so many problems in our own labour supply. People have mentioned education, but I would like to refer to the lax behaviour of British management in many of these questions. You get to do all sorts of things when you are a TUC official, and for some time I was secretary of the construction committee. I remember going one day to Canary Wharf, which was under construction, with the boss there, Mr Reichmann, and the secretary of the construction union, Albert Williams. Mr Reichmann said on an informal basis, as we admired the view of London from the top floor, “Mr Williams, I’ve got an issue. I’m short of spidermen”. Mr Williams said after a time, “Well, Mr Reichmann, we’ve had cowboys in the industry for many years. You can get these spidermen from the Rockies, so I don’t think there’s any problem if we have a few more Indians”. Perhaps that anecdote is not politically correct these days, but the reality is that there is an international labour market in different ways. Think of Toscanini, or someone who has transferred from Real Madrid to Manchester United—perhaps we need one or two more of those. That is another aspect of the labour market, and I am in favour of a greater degree of manpower planning in that area. I look forward to hearing the latest take on this from Migration Watch.

We have gone to the extremely liberal non-regulated end of the idea of having our own standards of obligation on training. We have a different situation now with the structure of our corporations; there was a letter in the Financial Times the other day from directors saying that we need new corporations to deal with PFI-type companies, with different stakeholders involved. The fact is that the likes of Carillion are not interested in the quality of the labour supply because they are not really a company at all in the old sense: there are those at the top who are earning a few bob, and below them are the actual construction companies. So, because of the obsession in the City of London with takeovers and mergers, we in this country have a company structure that is very much in need of reform. All these factors come into play.

Labour markets can give us a picture of where we are in the economy, so simply to stop it all up would be very ill advised. Take the Anglo-Irish labour market. We have known all our lives how that works and will have to go on working. I do not think there is any doubt about that. Indeed, we are now committed to it and the Government will have to get off their high horse and sign up to the formula that Michel Barnier has more or less written out. There is a flow backwards and forwards. When the Irish economy had its last boom—it is coming to another one now—more people wanted to go back to work in Ireland; more wanted to come this way on other occasions. Whether it is academics or conductors of symphony orchestras, we have to think of the European labour market.

Finally on labour standards, we had the Taylor report yesterday. There are posted workers within companies. We need to update the formula to deal with workers who cross frontiers, and we can do that only if in some central areas we do not take back control but share sensible ways to determine an agreed policy. That is why we need to pay attention to this being, in many respects, a European labour market.