Multinationals offer best deal for workers

MULTINATIONALS operating in Britain offer better working conditions than their domestic competitors, according to an organisation of leading industrial nations. This casts doubt on claims that improving workers' rights would deter foreign investment.

The Organisation for Economic Co-operation and Development argued in its latest Employment Outlook that foreign multinationals paid higher wages, offered more stable jobs and were more likely to consult their workers on conditions of employment than British companies. The gap between high and low-paid workers, however, was greater in foreign multinationals than home-grown firms.

'There is no strong evidence that multinationals have sought to exploit the largely deregulated environment of labour markets in the UK,' the study concluded.

The study found little evidence that government regulation of labour standards had much impact on the economic performance of leading industrial nations. But it warned that such countries would be likely to try to boost competitiveness by cutting labour standards if Europe adopted a single currency so exchange rates could not adjust.

The Government has often argued that Britain is an attractive destination for foreign direct investment because labour costs, which include items such as employers' National Insurance contributions as well as wages, are relatively low. But the study found that Britain's ability to attract foreign investment was poor for a country with low labour costs.