Publications

The economic situation in Belgium was favourable in 1997, with growth rates
reaching 2.1%. This was largely achieved through export growth, as domestic
consumption remained weak. Inflation stood at 1.9%. According to the
Institute for the National Accounts (Institut des Comptes Nationaux/Instituut
voor de Nationale Rekeningen, ICN/INR), the 1997 budget deficit was 2.1 % of
GDP. The improved economic prospects, and the 1998 budget measures seem set
to reduce the deficit even further. The National Employment Office [1]
(Office nationale de l'Emploi/Rijksdienst voor Arbeidsvoorziening, ONEm/RVA)
reported the unemployment rate for 1997 at 13.3% for the total labour force
(10.3% for men and 17.2% for women).

[1] www.eurofound.europa.eu/ef/efemiredictionary/national-employment-and-placement-service

Further problems have been looming in the UK's troubled and much-diminished
mining industry for some time now, and came to a head at the beginning of
December 1997 when the industry's largest producer, RJB, issued calls to the
Government to step in to save the industry, with eight pits and some 5,000
jobs said to be at risk. The crisis was triggered primarily by the fact that
RJB had failed to secure enough contracts with power generators, which argue
that the company's coal is too expensive.

The introduction of a statutory National Minimum Wage (NMW) was one of the
commitments of the Labour Government that came to power in May 1997
(UK9704125F [1]), and the National Minimum Wage Bill was published on 27
November and received its first reading in Parliament. Margaret Beckett, the
President of the Board of Trade, who is responsible for the bill, said that
it would set the framework within which the Government would introduce the
NMW, once it had carefully considered the recommendations of the Low Pay
Commission [2] (LPC). The bill, she stated, will enable the Government to
introduce a NMW which is as simple and universal as possible (UK9711177F
[3]).

[1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/undefined-labour-market/the-industrial-relations-consequences-of-the-new-labour-government
[2] http://www.dti.gov.uk/lowpay/
[3] www.eurofound.europa.eu/ef/observatories/eurwork/articles/undefined-social-policies/the-national-minimum-wage-an-update

Compulsory competitive tendering (CCT) was one of the key privatisation
measures of the Conservative governments of 1979-97, which brought much
insecurity into the lives of those who provided services to local
authorities. Much to the joy of local authority workers and trade unions, in
June 1997 the new Labour Government announced that the rules on CCT would be
changed after a wide-ranging consultation exercise (UK9706141N [1]). On 21
November 1997, local government minister Hilary Armstrong laid before
Parliament new regulations which amend the existing framework for CCT to make
it more flexible, and encourage local authorities to move to a "Best Value"
based approach to service delivery, in which value to customers would take
priority over competition per se. She said: "In due course we will be
replacing CCT with a new legislative framework on Best Value. In the
meantime, I want local authorities to develop Best Value ahead of primary
legislation."

[1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/government-relaxes-compulsory-competitive-tendering-rules

Toyota, the Japan-based motor manufacturer, has a UK plant at Burnaston in
Derbyshire, which is said to have the third-highest productivity levels of
any car plant in Europe. It was widely expected that the company would
continue its investment in the UK by building a new plant aimed at production
for the small-car market in that country. However, on 10 December 1997, the
announcement was made that the GBP 400 million assembly plant, which is
likely to create over 2,000 jobs, will be built in Valenciennes, northern
France.

The 1997 /Warwick pay and working time survey/ shows, on the one hand, that
formal "benchmarking", or even measurement, of employee performance is not as
common in the UK as might be expected. Benchmarking against the international
competition is particularly infrequent, even where firms are experiencing an
internationalisation of market boundaries or in the nature of their
competition. On the other hand, the survey finds that employers do have
access to a wide range of other formal and informal networks through which
they can share and compare their experiences. The evidence shows that
managers do use these opportunities for information-sharing when making
changes to pay and working time systems. In practice, therefore, a looser
form of benchmarking might already be widespread, and this might be a useful
consideration to take into account when the Government - which regards
benchmarking as a vital tool for improving employment relations and business
performance - seeks to develop policy proposals in a White Paper in 1998.

There are two inter-related factors within UK workplace relations which,
arguably, are both caused by, and solvable by British managers. The first is
an increase in workplace stress - the Health and Safety Executive (HSE), for
example, has recently released figures (in its /Health and safety statistics
1996/7/) showing that half a million people believe that they are suffering
from work-related stress. The second is the need for high-performing
companies. Both of these are in large part dependent on the type of managers
within the workplace. All too often in the UK - according to some
commentators - job insecurity, work intensification and "bossy" management
are seen as the answer to improving performance, but are also the cause of
much stress.

Over the five years to 1997, growth and productivity levels in the UK have
shown above average figures for the EU. In 1997, GDP continued to grow at
between 3% and 3.5%. Average earnings growth fluctuated within the range of
4.25% to 4.75%, with average pay awards remaining at around 3% for most of
1997, but moving towards the 4% mark in the last quarter.

It was with confidence that the Social Democrat Government presented its
report on the Swedish economy in 1997. When it took office in 1994, Sweden
had one of the biggest public sector deficits in the European Union. In 1997,
it was reduced to 0.4% of GDP, measured by EU accounting principles, and the
consolidated debt ratio had fallen for three consecutive years. "This is a
signal to other countries that Sweden's decision to stay outside the monetary
union at the start is not because of a wish to pursue a less responsible
policy than other EU member states," the Minister of Finance, Erik Åsbrink,
commented.

At the beginning of 1997 the Minister for Equal Opportunities Affairs, Labour
Law and Working Hours appointed the director general of the National
Institute of Economic Research, Svante Öberg, as a special investigator with
the task of proposing measures to promote a satisfactory system of pay
determination (SE9704111F [1]). On 27 November 1997, he presented his first
results (Medlingsinstitut och lönestatistikSOU 1997:164).

[1] www.eurofound.europa.eu/ef/observatories/eurwork/articles/undefined/new-rules-for-pay-determination-claimed-to-lead-to-better-agreements