Biennial Delegate Conference of the International Trade Union Confederation (ICTU)

Bundoran, 03/07/2007

To be checked against delivery


President, delegates, fellow guests, thanks for the invitation to again visit the biennal Congress of the ICTU.

In the two years since Belfast, much has happened. The North of Ireland can, I think, I hope, be said to be at peace with its communities moving forward together. That is an objective long sought by this Congress and the trade unionists of Ireland. Sometimes, indeed, the trade unions were the only working bridge across the troubled communities of the North. We can allow ourselves a quiet smile of satisfaction at the leading role we played in the reconciliation and claim fully the right to play a full part in the next phases.

The Irish economy has continued to boom, attracting migrant workers on a scale which, proportionately, is the highest in Europe. The speed of the change from country of emigration to country of immigration is breathtaking. The Irish welcome has in general been warm and generous and although the problems are considerable in terms of pressures on services, housing, transport etc., and there remain risks of large scale exploitation, the transformation in Ireland's fortunes is widely admired across the European Union. From the back of the field to leader in 17 years – congratulations on the central role played by the ICTU.

Congratulations too on making the deal “Towards 2016”. I have read this with considerable interest. I would have liked something similar in the UK in my time as General Secretary but we ended a national agreement in the 1970s and we've never had another chance since to re-establish such a comprehensive framework.

In all this Irish success story, Europe has played a role. The structural funds have helped but that's not the whole story. Other countries have had those without achieving the same success, although generally for me, the central story of the EU so far has been the way that it has helped poorer countries catch up with richer ones. Ireland and Spain are current exemplars of this but others like Slovenia, the Czech Republic, Cyprus and others are following the same path and there are encouraging signs in Poland, the biggest new member state. The single market across the EU has also played its part. Ireland's economy has benefited from the arrival of firms who want to operate Europe wide, not just serve the Irish market. And they have brought scale and size.

But the strains are showing. I see it every day. The Irish Ferries dispute was an indication of what happens in a huge single market which has outstripped its social dimension. And, as the report of your Executive shows, it is not the only case. The Swedish Laval case and another ferry case, the Finnish Viking case show the same thing – the tension between maintaining advanced labour standards against the free movement of workers, many from very poor countries.

The Bolkestein Directive in its original form would have made it worse. But the ETUC with the support of unions across Europe was able to knock out the worrying feature of that directive – the principle that businesses could act across the EU according to the principle of the country of origin. That would have triggered an acceleration in the race to the bottom but we, together, stronger together, stopped it. We took the offensive and we won.

But the conflicts wage on. We have won the first round in the Laval and Viking cases. But now there are elements in the Commission and some member states who want the EU to be the champion of enforcing economic liberalism across Europe.

The UK Government, sadly, is one of these, negotiating just over a week ago, an opt-out from the new Reform Treaty, concerning the Charter of Fundamental Rights. That Charter provides for a Europe-wide right to organise, to negotiate, to social dialogue, and crucially to strike. For the UK – my country, indeed for the Labour Party – my party, to protect the Thatcher laws on strikes in this way is absolutely deplorable, and I hope that you will lend your strength to the campaign against the opt-out.

Ireland seems very likely to have a referendum on the new Treaty. Overall, it is a complex piece of work but the alternative to a yes vote is a period where Europe will cease to work properly, and would be partially paralysed until it finds a way forward. The ETUC is taking a positive view of the progress made. We have secured our central objective that the Charter of Fundamental Rights is binding on member states – except, deplorably, for the UK, and we want to take advantage of that. So if a Treaty is concluded this autumn, this Congress will need to play its part in the Irish and UK process of ratification. It is not easy moving Social Europe forward but let's not miss this chance.

Other issues at the top of my desk are flexicurity and the Green Paper on labour law. Flexicurity is an inelegant word which originated in Denmark to describe how economic and social systems can provide security in change.

The Nordic countries are good at it, the rest of us less good. In this part of Europe, we are good at the flexibility, less so at the security, with the pressures on occupational pensions, with the relative ease of hire and fire laws, and with weaknesses in lifelong learning systems.

The flexicurity exercise is aimed at those countries which are different, where the unemployment pay and labour laws are very supportive of workers. And there are suggestions, for example, from President Sarkozy, that these security in change measures should be weakened. Flexicurity was in fact at the heart of the recent French elections.

The ETUC will be upholding the two principles of flexicurity – security in change – and combating all the economic liberals who see Europe's future based on weaker welfare states, less public services and not strengthening worker rights. And we will be campaigning too for the desperately needed Directive on Agency Workers. Ireland has regrettably joined the UK in blocking this but to regulate the flow of migration, to have better traffic rules, and to promote equality between workers, between the men and women and between migrant and indigenous workers, we need this.

There are many areas where we need to strengthen the European social model. I mention one more.

David Begg's thoughtful introduction to the report of the Executive Council mentions 'casino capitalism' – this huge rise in the scale of the wildest animals of financial capitalism, these new Pirates of the Caribbean who maraud in Europe and pay their taxes, if any, in the Caribbean. Today, private equity owns one sixth of the UK's private sector and the dominant model is acquire a business largely, by borrowing, sell assets and the weaker performing areas, and then sell off the main business – all within three to four years. Hedge funds are even more short term with assets, by the way, equal to value of Brazil.

This new capitalism cannot be right. There have been some superb union campaigns in the UK against these pirates, and I pick out the GMB for a special mention in despatches. Maybe there will be a change in the tax regime from Gordon Brown's Government. I certainly hope so. But just as the Irish Government are nervous about doing anything (for example on trade union recognition) which might put off Foreign Direct Investment, so private equity and hedge funds threaten to emigrate if their privileges are touched.

For me, this is where Europe should come in. Europe is big enough to get a grip. The German Presidency would have liked to have done so. When I saw Chancellor Merkel, she was critical of hedge funds in particular and, her deputy, Vice Chancellor Müntefering, has accurately called them “locusts”.

But others are opposing this. The financial interests of London and Dublin for one. Charlie McCreevy, the EU Commissioner, for another. This must be our next Europe wide campaign. Social partnership cannot thrive when employers' actions are being dictated by the rules of the racetrack and the casino.

Finally, I must mention the organising challenge. The ETUC is to step up its efforts to help reverse the decline in union membership in most EU countries. I notice the work that you are doing. I hope that in the years ahead, we will develop the capacity to help organise the migrants, the young, the workers in private services. They need us. Frankly we need them. And we must succeed in building strong unions and not leave the field open to the casino capitalists.

So in the words of the ETUC slogan at our recent Congress – on the offensive. For the workers of Ireland, for the workers of Europe, for the workers of the world – and, by the way, I like the recommendation to join the new ITUC. So, stronger together – let's hit back, let's take the offensive.