Britain seeks investment from Europe Ad campaign draws criticism

June 16, 1993|By Richard O'Mara | Richard O'Mara,London Bureau

LONDON -- Is Britain trying to attract investment from Europe by selling itself as a place of low pay, weak unions and minimal social costs to employers?

Not so, says Barry Rogers of the government's Department of Trade and Industry.

"The purpose of an advertising campaign is to support your strengths. Your strengths may be others' weaknesses." That, he insisted, is what Britain was doing in its recent campaign aimed at Germany and Switzerland. Nothing more.

"If people interpret this as an attempt by the U.K. to poach jobs or as social dumping [encouraging companies to dump their employees on the continent and move to Britain], it is up to those people to justify that interpretation."

The campaign ran from October into April. During that time, the ** trade department placed ads in high-quality newspapers, mostly Germany, that compared the much higher labor and social welfare costs in Germany with those in Britain. The ad said 100 German companies had already settled in Britain.

To Chris Pond, this suggests something more sinister than a simple appeal to foreign investors. Mr. Pond runs the Low Pay Unit, an independent agency that does economic and social research.

"It could reflect a rational judgment [by the government] on theeconomic strength of Britain, a belief that we can not compete with First World economies," he said.

The Low Pay Unit has just released a report on the deterioration of the standard of living in Britain that suggests the country is sliding away from its more affluent European partners.

Among the unit's findings:

* 25 percent of the poor people in the 12 European Community nations live in Britain.

* 12 million Britons have incomes at or below the EC poverty line, up from 5 million in 1979; 8 million more live close to the line.

* 20 percent of Europe's unemployed are British.

* 25 percent of British children live in poverty, as defined by the EC, and a third of Europe's working children -- under age 16 -- are British.

* Britons work more hours than workers in most other countries of the community.

Mr. Pond accuses Prime Minister John Major's Conservative government of "pursuing a policy of social devaluation in order to give Britain a short-term competitive advantage over its European partners."

Though Mr. Rogers said he had not heard of any negative reaction to the British series of ads from Germany, others have. One EC official said resentment toward the British campaign has been growing in Europe.

Because he is involved in the preparations for the EC summit, the official declined to allow the use of his name or to be quoted. He said resentment was also stimulated by the way the British government has campaigned domestically to get its own Parliament to accept the Maastricht treaty on economic and political union -- by constantly emphasizing the advantage Britain had won by refusing to accept the Social Chapter of the treaty, the section governing such things as working conditions, vacations, hours, pay and maternity leave.

When Britain was granted the sole exclusion from the Social Chapter of the treaty in December 1991, most people in the Dutch town of Maastricht, where it was signed, expected Mr. Major would use that exception to keep British wages down, further weaken the unions, and advertise that to British employers and conservative Tories fearful of EC penetration in domestic affairs.

What the diplomats and other observers at Maastricht did not expect was that Britain would exploit low wages, weak unions and generally feeble labor laws against its own partners in the EC.

It is potentially a most divisive issue. In February, the Hoover vacuum cleaner company closed its plant in Dijon, France, and moved to Scotland, leaving 400 French unemployed. The Scottish workers in Strathclyde who got those jobs had to agree to a pay freeze, surrender their right to strike and accept other conditions forbidden by the Social Chapter.

The French government didn't like it and said so. Neither did the EC Commission president, Jacques Delors, who introduced the term "social dumping" into the vocabulary of the EC for the first time.

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