British jobs for British workers

I must admit to having some sympathy for the workers at Lindsey oil refinery who protested against the shipping in of Italian workers to carry out work there; and with those Labour MPs like Jon Cruddas who have called for a change to the European legislation which undoubtedly permits what the company in question, IREM, have done here – the posted workers directive. According to the European Court’s ruling in Laval, that Directive also makes the “wildcat” strikes unlawful. No doubt lawyers were being instructed to apply for an injuction against the strikers if a deal acceptable to the employers had not been reached.

It’s all very well for ministers like Lord Mandelson to argue against protectionism – I’m opposed to that too, very strongly, and very much in favour of free movement of workers within Europe. But the truth is that British workers are less protected than many others, precisely because of the government’s policy of encouraging a flexible labour market. Article 3(1) of the Directive guarantees posted workers terms and conditions, including pay, which are laid down by law or in binding collective agreements in the host country. Because in the UK we have no system of binding collective agreements applicable across a whole industry – rates negotiated at a national level and which must be paid by all employers – foreign firms posting their workers here have nothing to comply with except the national minimum wage legislation.

Fine, if you want ruthless labour cost competition across Europe, but we don’t have that. Lord Mandelson is being disingenuous in suggesting there is a level playing for British workers who can find work abroad, because many other countries (though not all) do have systems of binding collective agreements – British firms posting their workers will need to comply with the going pay rate there, and will find it less easy to win contracts once the additional wage costs are factored in to their bids.

For better or for worse, British governments have made our choice for us, preferring the potential benefits of importing cheap labour to those of protecting domestic workers from competition; yet they’ve failed to sell their flexible vision to European partners who continue to apply their own social model, while the EU’s “Lisbon strategy” to become the world’s most dynamic and competitive economy by next year is far from a wild success. The idea that, after lecturing others for years about flexibility and the evils of social protection the UK would now carry any credibility in trying to amend the posted workers directive is just unrealistic.