This isn't labour on the cheap

Published on Saturday 31 January 2009 21:44

It would be a mistake to assume that the dispute over the use of foreign labour on major UK construction and engineering sites is about "cheap labour" versus British workers.

Indeed, it would be a lot easier to resolve if there was clear-cut evidence that Italian, Portuguese or other EU workers were being employed on inferior terms or conditions. However, that is not normally the case on well-regulated, high-profile sites. It is more likely that all the contractors' employees at power stations, oil refineries, nuclear sites and the like will be employed under conditions dictated by NAECI – the National Agreement for the Engineering Construction Industry. In other words, they will be paid exactly the same rate as their UK counterparts.

Despite this, an increasing number of employers prefer to use non-UK labour from within the EU. This is because they believe they get better productivity and also, where workers have to be drawn into the location of a major site, they can make substantial savings by providing basic accommodation for non-UK workers.

All of this has remained a dormant issue because the labour market was so buoyant. But times have changed rapidly and it is now apparent that, while the influx of EU labour has been acquiesced in, hearts and minds have never really been won for the "free movement of labour" principle.

The ACAS officials now dealing with the issue can only offer so much. They cannot wish away the fundamental principle that all men and women must be treated equally wherever in the EU they wish to sell their labour. That is why chauvinistic rhetoric about "British jobs for British people" was always high risk.

Trade unions will doubtless be able to quote cases in which they believe the same terms and conditions do not apply to imported workers as would be accepted by their own members. Parity of required qualifications can also be difficult to measure. And there are also legitimate questions to be asked, particularly for safety reasons, about language competence.

These grey areas will allow ministers to offer the unions assurances about more stringent inspection and enforcement action. That may be enough to draw a line under the present unrest but it will not address the more fundamental issue.

The uncomfortable fact is that many perfectly reputable employers prefer to employ workers from Italy, Portugal or wherever because they believe that they get a better bang for their buck – higher productivity, less absenteeism, better skill levels and so on. Alongside that is the equally difficult-to-shift fact that the free movement of labour within the EU is a good principle that is not going to disappear.

These two facts simply confirm that British workers will need to get used to the reality that a competitive labour market exists within the EU in bad times as well as good.

The other side of the coin is that tens of thousands of British workers benefit from that same regime and ply their trades on the same legal basis, in every corner of the European Union and beyond.

Brian Wilson is a former UK minister and was Tony Blair's special representative on overseas trade