Page last updated at 19:08 GMT, Saturday, 31 January 2009

Mandelson warns on protectionism

Lord Mandelson
Lord Mandelson says Britain cannot retreat from foreign competition

Business Secretary Lord Mandelson has said protectionism would be a "huge mistake" ahead of talks to end strikes over employing foreign workers.

Hundreds of employees across the UK have walked out in support of striking workers in Lincolnshire, who are angry at the use of foreign labour.

Lord Mandelson said closing local industries from foreign competition would turn recession into depression.

The Acas mediation service was talking to unions and employers on Saturday.

Protectionism would be a sure-fire way of turning recession into depression
Lord Mandelson

"Sympathy strikes" broke out across the country after workers walked out at the Lindsey Oil Refinery when Italian company IREM was awarded part of a 200m construction contract, and elected to employ workers from overseas.

Lord Mandelson said: "I understand people's concerns about jobs and it is important to make sure that both domestic UK law and European rules are being applied properly and fairly."

He added: "But it would be a huge mistake to retreat from a policy where within the rules, UK companies can operate in Europe and European companies can operate here.

"Protectionism would be a sure-fire way of turning recession into depression."

'Illegally excluded'

But Paul Kenny, general secretary of the GMB union, said: "No company should be able to discriminate against anyone on the grounds of where they were born.

"You simply cannot say that only Italians can apply for jobs as has happened in this case. No one is saying that different countries cannot bid for different contracts."

Map of protests by UK energy workers
1. Grangemouth oil refinery, Central Scotland
2. Scottish Power's Longannet power station, Fife
3. Scottish Power's Cockenzie power station, East Lothian
4. Shell gas processing plant, St Fergus, Aberdeenshire
5. British Energy power station, Torness, East Lothian
6. Mossmorran chemical plant, Fife
7. Npower Aberthaw power station, south Wales
8. South Hook natural gas terminal, Milton Haven, Pembrokeshire
9. ICI chemical refinery at Wilton, Teesside
10. Corus steel plant near Redcar, Teesside
11. Scottish & Southern's Fiddler's Ferry power station, Cheshire
12. AES Kilroot power station, County Antrim
13. Marchwood power station, Hampshire

The government called in Acas to look into claims that British workers were being illegally excluded from engineering and construction projects, while unions have urged Prime Minister Gordon Brown to meet heads of industry in the sectors.

Labour backbencher John Cruddas said the government should be "banging heads together" to urgently address the underlying causes of the resentment.

He told the BBC: "It's the employers in these instances which are culpable and we need to confront some of them who are notorious in this sector."

Total has said that there would be no "direct redundancies" as a result of part of the contract to construct a new unit at the Lindsey plant going to the Italian firm, and that the tendering process had been "fair".

IREM employs a specialist workforce and its 300 or more employees would be paid the same as existing contractors on the project, Total's bosses added.

Cleethorpes MP Shona McIsaac (Labour) said the decision to hire foreign workers was like a "red rag to a bull" to local unemployed people.

But the prime minister's spokesman said the contracts were awarded some time ago when there was a shortage of labour in the construction sector.

Mr Brown said he "understood" people's worries and that the government was doing everything it could help individuals back into work.

Workers have demanded he fulfil a promise he made at the 2007 Labour Party conference of providing "British jobs for British workers".

However, employment Minister Pat McFadden said this had not meant that UK firms would be encouraged to flout European laws on free mobility of labour.

And UKIP leader Nigel Farage said Acas would be powerless to help because European law barred countries from reserving jobs for its own workers.

Where is the humanity in ruining someone's local environment by building a massive industrial refinery and then bringing in people from around the world to work there?
Ben Platt, Liverpool

Acas chief executive John Taylor said: "So far, we've been getting in touch with interested parties at the Lindsey refinery site, with a view to establishing the facts behind the outbreak of unofficial industrial action.

"We hope to start a more detailed investigation on Monday."

Officials from Downing Street, the Business and Enterprise, and Energy and Climate Change departments are involved in talks with energy firms.

British Nuclear Fuels has also confirmed that 900 contractors at Sellafield station in Cumbria are to meet on Monday to discuss possible industrial action.

TUC general secretary Brendan Barber said refinery workers were "rightly angry" at employers denying British-based workers the chance to apply for new jobs.

"The employer will be in breach of the law if they restrict any future vacancies to workers of a particular nationality or location," he added.

In a statement, Total said it "recognised" the concerns of contractors, that it had been a major local employer for 40 years and had 550 permanent staff employed at the refinery.

Correction 3 February 2009: An earlier version of this story stated that IREM had been awarded a 200m contract to construct a new unit at the Lindsey plant - in fact, the Italian company was awarded only part of this contract.

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