date: 25 May 2007

embargo: 00:01 hours Monday 28 May 2007

TUC call on PM for G8 action on private equity

The TUC has called on the Prime Minister to back an international regulatory framework for private equity at the G8 summit in Germany starting on 6 June.

In a letter to the Prime Minister, TUC Deputy General Secretary Frances O'Grady, says that the summit should support German Chancellor, Angela Merkel's call for an effective regulatory framework for private equity and hedge funds, that she repeated in a meeting with international trade union leaders earlier this month.

In addition the TUC says the G8 summit should support international labour standards such as freedom from child and forced labour, freedom from discrimination in the workplace and freedom to join a union and bargain collectively set out by the International Labour Organisation conventions.

The letter says: 'The eight core conventions that establish the core labour standards are basic human rights which must underpin sustainable development and moves to achieve fairer globalisation in general. We understand your concerns about protectionism and the need to ensure that core labour standards are not used to foster protectionism (although we have never been presented with evidence of that happening), and realise that this concern might need to be reflected in the text.'

The TUC is also calling on the PM to keep up the pressure on climate change and development issues.

TUC General Secretary Brendan Barber said: 'Tony Blair can be proud of real achievements at previous summits on climate change, debt relief and aid. But there is still one more opportunity to make a mark. This summit should get the world's leading economies to take action against the threat to economic stability caused by the growth of private equity. World leaders should also recognise that proper labour standards must be part of the agenda for aid, trade and development.'

Full text of letter

Further to Brendan Barber's letter to you of 8 May and the trade union statement to this year's G8 summit, I wanted to raise a number of issues which came up when I took part in a G8 union leaders' meeting with Chancellor Merkel in Berlin earlier this month.

Environment

First, we feel it is essential that the UK Government continue to push hard for strong targets in regard to preventing climate change; and support calls for the G8 countries to develop a green jobs strategy that will harness the need for technological change to the full employment and Decent Work agenda. We understand that this will require some tough arguments with your G8 partners. When David Miliband came to the General Council in April he emphasised that the TUC should use our international contacts to promote this agenda, and we have secured the unanimous support of trade union movements across the G8 for action on climate change. With ITUC colleagues we have also been increasingly active in the Kyoto Treaty processes. I hope that is of some use to you in your discussions.

Private equity

Second, I also hope that that the UK Government will support Chancellor Merkel's call for the development of an effective regulatory framework for private equity and hedge funds. Serious questions are now being asked across the world about the impact of the rapid rise of private equity and hedge funds on tax revenues, on jobs and growth, and on the long-term sustainability of economies increasingly based on very high levels of corporate debt. Only more detailed investigation followed by the necessary regulation will ensure that new asset classes of this sort benefit the whole of the economy and not just a handful of financial specialists.

Development

Third, whilst we are all continuing to work for a successful outcome of the Doha trade round we also feel that commitments should be secured at the G8 for an ambitious aid-for-trade package even if the Doha round is further delayed. Such a package would have a major impact on improving the ability of developing countries to trade, regardless of progress on broader tariff reform, and that would improve their ability to grow.

In that context, the TUC of course welcomes your work in seeking to ensure that the commitments made on development and Africa at the Gleneagles summit are fully honoured in particular in regard to increased aid flows, greater funding for the provision of universal education, funding for HIV-AIDS prevention and treatment programmes and support for other work to combat preventable diseases such as Polio and TB.

Labour standards and decent work

Finally, we were very pleased with the chair's conclusions from the Dresden Employment Ministers meeting earlier this month, which make specific reference to G8 support for the Decent Work agenda and for the universal implementation of the ILO's core labour standards conventions covering freedom from child and forced labour, freedom from discrimination in the workplace and freedom to join a union and bargain collectively.

As you are aware the eight core conventions that establish the core labour standards are basic human rights which must underpin sustainable development and moves to achieve fairer globalisation in general. We understand your concerns about protectionism and the need to ensure that core labour standards are not used to foster protectionism (although we have never been presented with evidence of that happening), and realise that this concern might need to be reflected in the text. But I would be grateful for your commitment to ensuring these sentiments are reflected in the final communiqué from the G8 summit.

Frances O'Grady

Deputy General Secretary

NOTES TO EDITORS:

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Press release (1,000 words) issued 28 May 2007