Sir Digby Jones is angry. He was recently asked by trade and industry secretary, Alan Johnson, to get the CBI involved in implementing 67 promises the government made to unions at the so-called Warwick Agreement.
Unions say the promises included supporting the proposed EU directive on agency temps, extending the scope of collective bargaining and increasing statutory redundancy pay. These redundancy demands have a certain whiff of Europe about them, where you can’t fire someone for love nor money, according to Jones. Well, you can for money, but it will involve lots of it.
The agreement was signed and sealed behind closed doors and the CBI was neither consulted nor offered any kind of input. But the Department of Trade and Industry (DTI) has now asked Jones to reconsider his position, saying it needs as many stakeholders involved as possible.
But it looks like Johnson will be disappointed as Jones is not for turning.
Speaking to Personnel Today at the CBI’s head office in central London, he said: “You have a political party and they reach an agreement with a group of members – the trade unions – on certain policy for the party. That’s got nothing to do with us at all. They are entitled to do what they want politically – welcome to a free society.
“Then they turn round to us afterwards as a government and say: ‘We didn’t involve you in formulating this, or ask you whether it could work. You had nothing to do with developing this, but now would you actually come and work with us and the unions in implementing it’.”
Jones becomes increasingly animated as he continues: “I don’t see why the CBI should suddenly be asked to form a social partnership that frankly was consigned to the dustbin of history in this country many years ago. If this government has got itself into a mess with its union paymasters, it has got nothing to do with me.”
Trade unions holding the purse strings
It is not just that business was left out that concerns Jones, it is the financial power the unions wield over the Labour Party.
He continually refers to the unions as an “irrelevant lobby group” – but one that is the government’s “paymasters”. He has a point – only 17% of private sector workers are members of trade unions. But Labour Party membership is falling so funds need to come from somewhere else.
Money talks, and the unions gave more than £5m to Labour in the first quarter of 2005 alone. This presumably gives them plenty of talk time.
In a familiar refrain, Jones said unions and government were using this to attempt an “enormous push towards the 1970s”. But surprisingly, the group he singles out as the biggest victims of Warwick are union reps themselves.
“It is an insult to good quality unions at local level,” he said. “The unions work well with local management and they sort out conditions of working that suit that locality, the individual workforce and the flexible needs of the employer.
“That’s how it happens in the UK and it’s very successful,” Jones added. “So why should the CBI, the TUC and the government suddenly say: ‘We are not going to have that anymore, we are going to have this big collective bargaining; we are going to do it all over beer and sandwiches at Number 10 and then say ‘you are going to do it this way’.”
“How do you think union learning reps, who are trying to get people to skill and upskill for the 21st century, feel when they look in a newspaper and see the leaders of the trade unions calling for secondary picketing?” Jones asked. “They think they are bonkers.”
Is regulation that bad?
Union power aside, the deal struck at Warwick would add a considerable regulatory burden to business if it was implemented, argues Jones. But with the CBI constantly campaigning for less regulation, many believe this argument is wearing thin. The introduction of the minimum wage did not herald the economic disaster predicted by the group, and a recent study by the University of Sheffield concluded that increased employment law had actually benefited business.
So is it not time the CBI stopped worrying about employment legislation and moved on? Jones does not share this sentiment.
“If you really want to put up a big sign in Detroit or New York and say don’t invest in the UK, then bring on the employment legislation and let’s tell the Americans we want to be like France,” he said.
There’s also plenty of evidence to show good working practice has to be forced out of some businesses through legislation. Wendy Olsen, an expert in gender pay from the University of Manchester, recently told Personnel Today that there would never be fair pay unless companies were forced to act on gender discrimination.
“Private sector companies won’t adopt [anti-discrimination] measures unless they are forced to,” she said. “It is not justice that is the main concern, it is fear of getting caught.”
Does this prove to Jones that now and again the carrot and stick approach requires a bigger stick? The answer is a resounding “no”.
“You are going to get a much more lasting and better result if we constantly keep the pressure on for a change in the culture of business rather than more regulation,” he said. “We are coming close to the point that if this country has any more employment law regulation, you will be putting up a big sign saying ‘do not come and invest in the UK’ – that is unacceptable.”
“By the way, the people this will help are those people the regulations are supposed to help. Employers will carry on, they will just do it in China.
The shareholders of these big companies will go and do it anywhere else, they won’t hurt. People who will hurt are the people who don’t have any work.”
Whatever the evidence to the contrary, Jones is standing firm. Whether or not you agree with him, his stubbornness means he will be an important ally for business as unions continue to flex their financial muscle at the heart of government.
CBI security
Getting an interview with the jet-setting Sir Digby Jones is hard enough, but getting into the CBI’s headquarters is another matter altogether.
New security measures mean there are no buttons outside or in the lifts and it is all automated through the cards that staff use to swipe into the building.
One CBI employee said the confusion among staff was such that when the system was installed there was talk of taking on more personnel just to show people how to get into the office.
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