18 October 2002
Digby Jones urged the government to reject calls for business to be a 'carbon copy' employer. 'What's the point in that?' he told a PPP conference on October 16.
'The government needs to nurture a mixed economy. Business needs sufficient freedom to recruit, innovate and develop staff.' He added that the private sector should be given the flexibility to negotiate local pay awards.
He conceded that new staff, who often generate a two-tier workforce, should be entitled to reasonable terms and conditions but the public sector should bear some responsibility by vetting employers' track records.
Jones' comments illustrate the deep chasm between the private sector and the unions, with the T&G last week calling for a fair wages resolution and conditions for PPP workers 'no less favourable' than those of their public sector colleagues.
Deputy Prime Minister John Prescott was careful not to fully endorse Jones' comments in his address to the conference. 'We have to make a judgement about wages, conditions and pensions. We have been talking to the CBI about it and have made advances,' he said.
As union leaders prepare to meet ministers following the promise of a review of the two-tier workforce issue. Jones warned against overestimating the power and legitimacy of the unions. He accused them of 'politically misguided ideology' which was holding back the development and conditions of workers.
'The trade unions are a lobby group and they do a first-class job of looking after their members,' he said. 'But that's where it must stop. The trade unions are just the same as the CBI, no more, no less.'
He said unions in the private sector had 'jumped through hoops' to help reform sectors such as manufacturing. 'Other workers have to go through the same pain.'
Prescott used his platform to reiterate the government's commitment to PPPs following recent City jitters. 'It is our policy and we are committed to it. It would be absolutely crazy for a government to depart from a policy which has brought so much to so many.'
Geoffrey Spence, head of the Treasury's PFI unit, reassured the conference that the Private Finance Initiative was not dead. He revealed figures that showed that capital investment in PPPs would top £5bn in 2002/03.
He added that the Office of Government Commerce would be reviewing public sector comparators in the next few weeks. These were unlikely to alter the PFI market significantly, he said, but some projects would fail value for money tests when they would have passed before.
Office of Government Commerce chief executive Peter Gershon announced a new voluntary code which would allow the public sector to benefit from a 30% share in any gains from refinancing early PFI deals.
PFoct2002
