House of Commons
Prayers
00:00 - The House having divided: - Ayes: 3 / Noes: 336 - Question accordingly negatived.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Ian Lavery (Wansbeck) (Lab)
I beg to move, That the House sit in private.
Question put forthwith (Standing Order No. 163).
The House proceeded to a Division.
Madam Deputy Speaker (Dame Eleanor Laing)
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
Friday 22nd October 2021
(3 years, 2 months ago)
Commons ChamberRead Full debate Employment and Trade Union Rights (Dismissal and Re-engagement) Bill 2021-22 View all Employment and Trade Union Rights (Dismissal and Re-engagement) Bill 2021-22 Debates Read Hansard Text Watch Debate
Barry Gardiner (Brent North) (Lab)
I beg to move, That the Bill now be read a Second time.
This Bill is about making Britain the best place to work. It is about levelling up and treating people fairly. It is about better regulation to govern fire and rehire. I am grateful to hon. Members on both sides of the House. I know that Fridays are an important time for us all to be with our constituents. That so many Members have chosen to be here is, I hope, not simply testimony to the power of the Whips, although I have my doubts. I believe it is because Members of all parties recognise that the practice of fire and rehire is creating hardship and real distress for hundreds of thousands of families across Britain. We can end that misery, and we must. I will set out my remarks in answer to four key questions: what the problem is, how we can solve it, what my Bill does not do, and what it does do.
What is the problem? I believe that every Member of the House would do all they could to stop a key worker in their constituency having their wages cut by thousands of pounds. Each of us would want to prevent a constituent who has done nothing wrong and has given loyal service from being fired. If we could, we all would.
These people are workers who have kept us all going through the pandemic and are now being fired and rehired. They are loyal workers who have served their companies for years, such as bus drivers who risked covid to keep the economy going; gas workers who kept the heating on in our grandparents’ homes; and teachers who kept our schools going. They are being told, “You are fired, and you can only get your job back if you sign a new contract on worse terms and conditions.” That is wrong; it should not be happening in Britain today.
Over the past months, I have visited workplaces all over our country. In Loughborough, I met a man who told me that he was watching Saturday night TV at home with his son when his phone pinged. It was email telling him he would be fired unless he accepted £15,000 off his annual salary.
In the village of Street in Somerset, I met a man at Clarks shoes who told me of his feelings. He has a two-bedroom flat because he is separated from his wife, and his children stay with him every second week. “If I have to sign that contract,” he told me, “I’ll not just lose my home; I’ll lose my family as well.” The man could not then have afforded that property and would have had to live in a bedsit. That is fire and rehire.
In Banbury, at Jacobs Douwe Egberts, one of the 291 workers who were threatened with the sack there told me that her family had given over 100 years’ service to the company. Her father had worked there, she had worked there for 34 years, her husband had worked there and now her son worked there. She felt that all of them had been treated with contempt.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Member is making some very important points and this is a very important debate. He set out right at the start of his speech that he wants the UK to be the “best place to work”, and I agree with that. Does he agree that the UK should also be the best place to start and grow a business, because that is what creates the opportunities for work?
Barry Gardiner
I do agree with the hon. Gentleman, and that is why I was very keen to say at the beginning that this is about making Britain the best place to work. It can only be the best place to work if our businesses are thriving, and I believe our businesses can only be thriving if they have a well motivated workforce.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Does my hon. Friend agree with me that if we do not end this abhorrent practice, we the taxpayers pay instead? If people end up on lower wages, they are going to have to claim more universal credit, so instead of the companies paying their tax bill, it ends up being the taxpayer.
Barry Gardiner
I am not sure whether I am glad that my hon. Friend has made that point, because I was going to make it myself later on in my speech, but it is a really important point. It shows that this is not just a human cost; it is an economic cost to the whole country as well.
In Manchester, a former bus driver told me that he was on three separate forms of blood pressure medication. The emotional strain on that man was heartbreaking. He was going to lose thousands off his pay, and the managers actually sent someone to his doorstep with the new contract, pressurising him to sign. That gives a whole new meaning to doorstep selling.
In Livingston, I met a delivery driver who was called in and threatened with the sack. He said his mind was in turmoil, but Tesco expected him to go out in a 40-tonne lorry and drive through a snowstorm to Elgin after receiving that news.
Barry Gardiner
I will in just one moment, particularly because that is the hon. Lady’s constituency. This was a complete breach of health and safety protocol. When news like that is given to an employee, the regulations say that the person should be given the rest of the day off on full pay to think through what they have been told and to seek advice. That was Tesco.
Hannah Bardell
I thank the hon. Gentleman for visiting my constituency and meeting these Tesco drivers. I have also met them, and they have told me stories about the brutal fire and rehire tactics that Tesco has used, including people who have predicated their mortgages and their whole life plans on contracts that were given to them and have now been pulled from under their feet at a time when, exactly as he says, they have been keeping this country running. I commend him, and I commend his Bill.
Barry Gardiner
I am very grateful to the hon. Lady.
Fire and rehire is happening all over our country. We must act. Sainsbury’s, Argos, Asda, Tesco—they are all at it. Profitable companies are doing this to hard-working people. For me, the most upsetting of all was when a worker’s eyes welled up and he started to cry, as he recounted how he felt telling his family that he was to be fired. His voice faltered when he said, “It was just so humiliating.”
Richard Fuller (North East Bedfordshire) (Con)
The hon. Gentleman is being characteristically open and generous in the way he presents his Bill, but he just said that, “They’re all doing it”, which creates the impression that this is a widespread practice and that it is focused entirely on the private sector. In his speech, could he also address what I would argue are the limited number of circumstances in which this occurs, a large of proportion of which occur in the public sector? What are his thoughts on that?
Barry Gardiner
I am grateful to the hon. Gentleman for his intervention, and let me tackle it head on. The survey by Britain Thinks, of 2,321 people, showed that 9% of workers said that in the previous nine months they had either been fired or rehired, or they had been threatened with being fired and rehired. If one were to extrapolate that 9% across the workplace, which I do not seek to do, it would be 3 million workers. Let us say it is half that number—we are still talking about 1.5 million workers. Let us quarter it—it is still three quarters of a million workers in this country. This is a serious problem.
I also want to address the other element of the hon. Gentleman’s remarks. I have been on a demonstration picketing with workers outside a Labour council. A Labour council has done this in Tower Hamlets, and shame on it. Wherever this happens, it is wrong. It does not matter whether it is the private sector or the public sector, it is wrong and families are suffering because of it. That is why it is incumbent on us all not to play party politics with this, but to act.
Kevin Hollinrake
I think we should do something in this area. It is an unacceptable practice, and a good employer would not resort to it. But on quantum, the poll in the ACAS document shows that less than 3% of HR professionals reported this. The figures quoted by the hon. Gentleman are across the entire working population. Most employers are not making redundancies or downsizing. So the quantum is far lower than the numbers he quoted.
Barry Gardiner
Again, I am grateful to the hon. Gentleman. I am sure he will also have noticed that that survey was sent out by the institute to 160,000 of its members, and it asked whether those members had ever engaged in fire and rehire, how they had used it, and how they had sacked people in the previous nine months. Does he recall how many people replied to the survey? It is there—
Barry Gardiner
It was circulated to 160,000 members, and 225 wanted to reply. In my view, that says everything about the way this is being used by personnel departments.
Stewart Hosie (Dundee East) (SNP)
Whether it is 1,000 workers, 20,000, 100,000 or a quarter of a million, in a sense it does matter. Does the hon. Gentleman agree that this is a point of principle? No employee should ever see their terms and conditions ripped up under threat of menaces or losing a job they may have had for decades.
Barry Gardiner
I entirely agree with the right hon. Gentleman. It is a matter of principle. That is why I think Members across the House have said what they have about the evils of fire and rehire. The human cost of these tactics is acknowledged by everyone and every party in this House. I want to recognise the work and support of many colleagues who have long been battling against the inhumanity of the tactics.
Ian Lavery
May I say what a tremendous job you have done on this issue? The Bill is spot on. You mentioned the fact that people across—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We have to get back to proper procedure in this place, even on Fridays, so please would hon. Members address other hon. Members as “the hon. Gentleman” or “he”?
Ian Lavery
My apologies, Madam Deputy Speaker. Does the hon. Gentleman agree that we have seen the Leader of the House, the Prime Minister himself and the Minister who is sitting there now—the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully)—all say how bad fire and rehire is and that it is an immoral practice? Why is it that we are sitting here this morning with the Government looking to oppose this Bill?
Barry Gardiner
Madam Deputy Speaker, I have to say that that is the first time that hon. Gentleman has ever called this hon. Gentleman an honourable gentleman, so my congratulations to you.
I want to pay tribute to hon. Members across the House. The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) has fought as a constituency MP for the workers at Glasgow airport, where workers were facing new contracts that cut their take-home pay by up to 70%. He has long championed this cause, and I pay tribute to him. The right hon. Member for East Antrim (Sammy Wilson), the hon. Member for Edinburgh West (Christine Jardine) and the hon. Member for Bury South (Christian Wakeford) have all spoken out bravely against employers using this tactic and made sure that it is regarded as a moral issue rather than a party political one. I am grateful to them all.
Christian Wakeford (Bury South) (Con)
I thank the hon. Member for mentioning me. Does he agree that when it comes to an issue such as this, on which we all agree that something needs to be done, not only is it the popular and moral thing to be done, but it is the right thing to be done?
Barry Gardiner
Absolutely. I hope that the House will show its true colours and come to an accommodation to ensure that it is not just the right thing to be done but that it is done.
I must also pay tribute to my hon. Friend the Member for Middlesbrough (Andy McDonald), who is a dear friend. It might well be said that he has championed the issue of employment rights man and boy, except neither he nor anyone else can remember that far back. He will no doubt make his own excellent contribution, backed up by his technical expertise as an employment solicitor. Finally on this part of my speech, I thank Messrs Price and Torbitt in my team, who have been so helpful in supporting this campaign throughout the past month.
ACAS reported that recent survey that we discussed, carried out by Britain Thinks, which polled 2,231 individuals in England and Wales and recorded that 9% of employees had experienced the threat of fire and rehire in the previous nine months. Workers are vulnerable to the practice in almost every sector. The survey recorded particular patterns of discrimination against young workers between the ages of 18 and 24, workers who self-identified as being from a working-class background, and black and minority ethnic workers, who face the threat of fire and rehire at nearly twice the rate of white workers.
However, it would be wrong to think that fire and rehire is simply a social problem or an issue of morality; it is also an economic problem. Disputes around fire and rehire drag on, sometimes for months. During that time employees are often working to rule or refusing to do overtime. Where the dispute leads to strike action, there can be enormous loss of production. It is estimated that British Gas Centrica lost between £30 million and £40 million in productivity during the dispute. That is revenue that ultimately is lost to the country and to the Exchequer.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
When I met British Gas workers and their GMB representatives, they were not against having discussions with British Gas about restructuring that might be needed, but they were against having a gun put to their heads. The Bill does not prevent companies from having discussions with unions on reasonable grounds; the Bill prevents companies from pressing the nuclear option. All we are asking for today is to be able to debate those options in Committee.
Barry Gardiner
My hon. Friend makes a very eloquent point, both about the substance and the process. I entirely agree with him.
Mark Pawsey (Rugby) (Con)
The Business, Energy and Industrial Strategy Committee took evidence from British Gas Centrica. Its concerns were that its workers were being paid 30% to 50% more than other people in that sector. There was a question about the viability of the business. What the company wanted to do was to increase working hours by two-and-a-half hours per week. Does the hon. Gentleman agree that businesses should have the opportunity to discuss changes in conditions to ensure that as many jobs are retained by businesses continuing to be competitive?
Barry Gardiner
The hon. Gentleman is absolutely right to say we need to ensure that, from time to time, businesses can cope with the changes that they experience and can restructure appropriately. I think the point my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) was making is that, when they seek do that, it should be done through a proper process of consultation and negotiation, and not holding the sword of Damocles over the heads of their workers.
Geraint Davies (Swansea West) (Lab/Co-op)
My hon. Friend may know that in Germany workers are much better protected from being fired and that productivity in Germany grew between 2015 to 2020 at twice the level it has in the United Kingdom. Does he therefore agree that, given the option of either firing someone or increasing their training, productivity and technology, Germany chooses to train people and raise productivity and Britain, if we allow this to go on, will choose to sack people and reduce productivity? So it is imperative to increased productivity that this is agreed.
Barry Gardiner
My hon. Friend makes a very significant wider point about the productivity and the relative productivity of the UK. I think that is a matter of very deep concern to Members across the House.
Joy Morrissey (Beaconsfield) (Con)
Will the hon. Gentleman give way?
Barry Gardiner
I saw that the hon. Lady wanted to intervene on the intervention, but now she can intervene on that substantive. Please.
Joy Morrissey
I thank the hon. Gentleman for giving way. On the point made by the hon. Member for Swansea West (Geraint Davies), German productivity is high but that is because they cross-train and upskill their workers across different fields. That is why we are investing heavily in skills and uptraining for the future. [Interruption.]
Barry Gardiner
The hon. Lady’s point was somewhat drowned out on the Labour Benches, but I think it was by people who were agreeing about the importance of training and skills.
Geraint Davies
Does my hon. Friend agree with the Productivity Institute report of March 2021 that
“The widespread, one-sided flexibility of the UK labour market has locked in a low productivity mode of work”?
People in the gig economy simply have not got the security or the money to invest in themselves. Employers need to and they will do it more in the event that they cannot simply fire and rehire people willy-nilly, which they cannot in Germany.
Barry Gardiner
My hon. Friend has, again, touched on a really important point. It is about what sort of society we want and whether we want a society where work is an insecure fact of life.
Saqib Bhatti (Meriden) (Con)
I have a question on productivity. Over the summer, there were reports of the Labour party engaging in fire and rehire tactics. Hon. Members may say I have a self-interest in this, but will the Labour party be less productive in the future? [Laughter.]
Barry Gardiner
We all enjoyed the hon. Member’s contribution. All I would say to him is that, at this time of day, one should never drink on an empty head.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
I thank my hon. Friend for bringing this important debate to the Chamber today. Does he agree that it is a heavy, damaging and frightening environment for the public out there when they are being threatened and intimidated by unscrupulous bosses telling them not to go to their trade unions? They are being picked out individually and forced down that route because they are afraid of not being employed if they go to their trade union for support.
Barry Gardiner
Again, I am grateful to my hon. Friend. I think we in this place often have a very poor understanding of just how insecure people in the workplace really are. Most of us here have the comfort and luxury of being Members of Parliament. The point that she makes about how important it is to have support in that environment from a trade union is absolutely essential.
Barry Gardiner
I will just make some progress, if I may. All too often, a new chief executive comes into a business and announces that they are going to drive up shareholder value. What they do is drive down workers’ wages through tactics such as fire and rehire and that money is then siphoned off to increase the shareholders’ dividends. Often, those employees are left as the in-work poor and they become dependent on universal credit, exactly as my hon. Friend the Member for Swansea West (Geraint Davies) said. That means that the rest of us in society are making up the shortfall in those employees’ wages. We as taxpayers are the ones forking out to increase that shareholder value. The chief executive has done what they promised. They go off to another company, but morale in the workplace has evaporated. All the good will that was once in the company is gone and productivity remains low. In the long run, the business suffers because the workforce has lost all motivation.
Matt Rodda (Reading East) (Lab)
I am very grateful to my hon. Friend for giving way. Further to the points about the dreadful events at British Gas, my experience as a local MP speaking to highly skilled, long-standing employees who work for British Gas in Berkshire is that the mistaken policy of fire and rehire did exactly that: it damaged the morale of highly motivated, highly experienced people working for British Gas, who were highly trained in a respected business that traded on quality. The long-term effect of that was to harm the business. It damaged the reputation of the business and it may have also led to people leaving it. These are highly skilled staff who are often difficult to replace, so my hon. Friend is making an excellent point, and I hope he would agree that this is about the style of business in this country. As other colleagues have mentioned, we need a different approach that looks to the longer term for the good of the whole economy and the whole community, and not just the very short term.
Barry Gardiner
I am grateful to my hon. Friend. He makes a very important point that was reinforced when I met the British Chambers of Commerce. The lady I met said that before she came to meet me to discuss these issues, she had conducted a thumbnail survey of its chambers. She said that what came back from the chambers was, “It never ends well for the business.” So the economic argument is critical, and we need to understand that this is not only immoral, as the right hon. Member for Dundee East (Stewart Hosie) outlined, but a serious economic failing of this country.
Ruth Jones (Newport West) (Lab)
My hon. Friend is making a powerful speech, and an important one. Did not the researchers find that 70% of the companies deploying fire-and-rehire tactics were profit-making companies? They have not been driven to this as a last resort because of the pandemic; they are making profits, and healthy profits at that. Does my hon. Friend agree?
Barry Gardiner
Not only do I agree with my hon. Friend, but I agree with the statistics. The statistics are very clear: 70% of the companies that have engaged in these tactics over the last month were actually making profits. That is why I say that this is not just an ethical problem of bullying and unfair tactics, but an economic problem that even the most hard-nosed Treasury official should recognise. As the Leader of the House has said,
“All companies operate best when their employees are working there with enthusiasm, and these types of tactics are very bad for morale in businesses”.—[Official Report, 25 March 2021; Vol. 691, c. 1103.]
And, as he also famously said, “Fire and rehire is no way to do capitalism.”
Jo Gideon (Stoke-on-Trent Central) (Con)
The hon. Gentleman has given examples of large companies and talked about shareholders. We had a discussion earlier in the week, and I understand that the legislation he proposes would apply to companies with 50 or more employees. Can he give us an example of how that might affect smaller businesses such as small and medium-sized enterprises, and has he found examples of smaller businesses practising fire and rehire? I think that we need to put this in context.
Barry Gardiner
I am happy to respond to the hon. Lady’s question. We chose the figure of 50 employees, and the Bill refers to 15 or more employees being affected by these changes, because that marries up with the existing legislation on redundancy and other matters. Fifty is the figure that has been chosen by the Government in previous legislation. I have tried at all points to make the Bill technically proficient, so that it intersects with all the other legislation in this area.
The hon. Lady asked whether this was happening in smaller companies. Sadly, it is, and I would dearly like to see it outlawed there also. We have made the Bill commensurate with all the other employment legislation, which is why the figure of 50 was chosen.
Sally-Ann Hart (Hastings and Rye) (Con)
May I pick the hon. Gentleman up on the point about capitalism? Throughout the past few years, before Brexit, we had an influx of European workers, and that undermined the wages of British workers. Does the hon. Gentleman not agree that companies will now have to value their workers better? If they do not pay them properly—if they try to undermine our British workers—there will not be 10 cheaper European workers in the line to take their jobs. There will not be a surplus of workers, and a rebalance of capitalism will therefore ensue.
Barry Gardiner
May I just remind the hon. Lady that the comment about capitalism was not, in fact, mine but the Leader of the House’s? I understand her fundamental point, and from it I take that both she and I want to see wages in this country rise to an appropriate level so that every person and every family feels they can put a roof over their head and food on the table, and feels secure in their life—although she will have voted one way on Brexit, and I will have no doubt voted the other way, we would both welcome a move towards a society in which that is possible. The Bill is about levelling up and stopping the practice whereby, at the moment, many hundreds of thousands of workers in this country are seeing their wages levelled down, which is why it is so important that we get legislation.
I have set out that there is a problem of morality and economics. How can we fix it? Back in June, when I sat down with the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), he made it clear to me that the Government were “not minded to legislate.” That was even after the ACAS report “Dismissal and re-engagement (fire-and-rehire): a fact-finding exercise” was published, which may appear surprising given that ACAS reported examples of what participants in its survey
“regarded as employers using the crisis opportunistically as a ‘smokescreen’ to diminish workers’ terms and conditions; and the use of fire-and-rehire as a negotiation tactic to undermine or bypass genuine workplace dialogue on change.”
ACAS made it clear in the report that, although the Government were happy for it to outline the findings from such a fact-gathering exercise,
“Acas was not asked to present recommendations to government.”
If not legislation, what? The Minister advised me that the Government are now asking ACAS to recommend how they might strengthen the guidelines to business. I am a believer in guidelines, and good businesses tend to follow them, particularly if they are clear and if other businesses are doing the same. The problem comes when unscrupulous businesses are not adhering to those guidelines and gain a competitive advantage from that non-adherence. There then often follows a race to the bottom in which the good company feels forced into bad practice.
I do not believe that any manager goes into work thinking “I am going to do something noble and fine this morning: I am going to tell my 300 employees that they will be fired unless they accept a pay cut of 20%, even though our company is making record profits.” That is why I believe guidelines are not a solution. Managers at Jacobs Douwe Egberts, the coffee people in Banbury, made record profits during the pandemic, when coffee consumption increased by 40%. While the managers awarded themselves large bonuses, they demanded wage cuts of up to £11,000 from 291 staff. The truth is that guidelines are not going to change the practice of such managers. Only by putting good practice into statute will companies be prevented from bullying their workforce by using the threat of fire and rehire, and only if those tactics are outlawed will good companies not feel the competitive pressure to behave just as badly.
Kevin Hollinrake
The hon. Gentleman highlights a shameful example, and he is right to do so. As the road to hell is paved with good intentions, particularly in terms of legislation, I am interested in his intentions with this Bill. I have watched him talk about the Bill on television a couple of times, and I think he said on Sky yesterday that it does not outlaw fire and rehire but ensures that the right information is provided. Is it his intention that the Bill does not try to ban fire and rehire, because I think it does?
Barry Gardiner
Let me reassure the hon. Gentleman that we are not skipping down what Hamlet called the “primrose path of dalliance” to hell together. I have no intention in this Bill of banning, and there is nothing in this Bill that would ultimately ban, fire and rehire. There is an important reason for that and I will come on to it in my speech.
Christian Wakeford
There was a prime opportunity for a lot of colleagues to learn a bit more about this at the Conservative party conference, where the hon. Gentleman actually joined me on a platform. Does he agree that this policy is not anti-business, but anti bad business leaders? The main reason for that is that it is not banning fire and rehire; it is just saying that it is an absolute last resort and should only be used with that method.
Barry Gardiner
I am grateful to the hon. Gentleman for that. It is important that we clarify that on both sides of the House. There are other ways of addressing—
Barry Gardiner
If the hon. Gentleman will forgive me, I am conscious that there is a statement in half an hour and at the rate my speech is going—
Ben Everitt
The hon. Gentleman is too kind. I wonder whether he would agree with me on something, in the spirit of the agreement with which we are reaching out across the Chamber now. He mentions competition between employers to do the right thing. Does he agree that the best way to make employers compete to keep staff and to treat them well is by growing the jobs market and the economy? Does he not also agree that the economy is now growing at the fastest rate in the G7 and employment is up to pre-pandemic levels?
Barry Gardiner
Across the House, I think we can all agree that we want to grow our economy—there is no question about that. We want to grow jobs and the economy, but let us make sure that when we do grow those jobs, they are good, secure and well-paid jobs.
There are other ways of addressing this problem, one of which has been pioneered by a group of metro Mayors: using the procurement power of local authorities by scoring companies that seek contracts from local government on social as well as economic grounds. Councils are able to press local employers to engage with their good employment charters and to eschew bad practice. My good friends—some are former colleagues—my hon. Friend the Member for Barnsley Central (Dan Jarvis), Tracy Brabin, Andy Burnham, Dan Norris and Jamie Driscoll, have been particularly effective in using this form of community engagement and procurement power, and many other local authorities have followed suit. Mark Drakeford, in Wales, has shown just how effective this can be through his economic action plan, “Prosperity for All”, which has enabled the Welsh Government to develop a new and strengthened relationship with business and to drive inclusive growth and responsible business behaviours. I was delighted to talk to him recently about the success of that sort of engagement, but he was equally keen to say to me that it could never be a substitute for clear and effective legislation.
So turning to the proposed legislation, it is important to be clear about what my Bill does not do. I repeat that my Bill does not ban fire and rehire. It may surprise colleagues to know that there was a common view among the employers’ organisations I spoke with—the CBI, the Institute of Directors and the chambers of commerce—which was held equally right across the trade union movement, that banning fire and rehire outright could have perverse consequences and should not be attempted. It is essential that where a company is facing a collapse the law does not prevent what may be the only way of preserving those jobs and continuing the enterprise. Anything else would be a perverse outcome. I used to run my own business in the City. I entirely accept that businesses need to change and to adapt. In a competitive business environment, they have to restructure from time to time. My Bill will not stop that restructuring, it will not stop managers being able to manage the business and it will not burden business with new and additional bureaucracy.
Richard Fuller
I can understand the moral intent of what the hon. Gentleman is trying to do, but will he look at the practical circumstances? I refer to my entry in the Register of Members’ Financial Interests: I am the director of a number of companies. The hon. Gentleman should take himself back to the March last year, when the covid period started, and what was going through the minds of boards of directors and the timeframes they had to work with. Will he address the fact that, although it is not on the face of the Bill, as he has said, he wishes to ban fire and rehire? In circumstances like last year’s, many boards that faced the consequences of going through the process that the hon. Gentleman has mentioned would choose the option of fire and no rehire as the way to save their business.
Barry Gardiner
I am about to address those points. If, later on, the hon. Gentleman feels that I have not done so, he should intervene on me again, because they are important points and I do not want to leave them unaddressed.
Andy McDonald (Middlesbrough) (Lab)
The point about good businesses and bad business is exemplified by Ryanair and Michael O’Leary. That company is often pilloried and criticised in the House, but it took the opportunity, throughout the covid crisis, to engage with the workforce and consult, negotiate and agree a temporary diminution in the terms, and it committed to restoring them in the fullness of time. Should not that sort of practice obtain throughout the economic sectors?
Barry Gardiner
My hon. Friend speaks with such a wealth of experience on these matters and he is, of course, absolutely right. Good businesses need to be able to respond quickly to the pandemic, as the hon. Member for North East Bedfordshire (Richard Fuller) suggested, but they also need to maintain the good will of their workforce, to go with workers on that journey and not only to take the immediate measures necessary but restore the benefits in the long term.
Kevin Hollinrake
Will the hon. Gentleman give way on a technical point?
Barry Gardiner
I am just about to move on to the technical part of the Bill. Madam Deputy Speaker has caught my eye to suggest that I have been over-generous in giving way, so I shall defer to her rather than to the hon. Gentleman.
The Bill will enshrine good practice into law and penalise bad practice. It will put on a statutory footing the procedure that decent employers already follow. It will encourage both employers and workers to reach the best outcome, and will discourage bad employers from threatening to fire and rehire when no legitimate threat to the business demands it. If the restructuring of a company is required because it is at risk of becoming insolvent unless employees’ terms and conditions are substantially changed, my Bill will assist the speedy settling upon of an acceptable outcome.
Clause 1 would insert into the Trade Union and Labour Relations (Consolidation) Act 1992 a duty to consult employees in good time and to disclose to workforce representatives reasonable information about the risk to continued operation. That would make it easier for the employee representatives and the management mutually to agree, in good time, a variation of contract that represents the least disagreeable way forward. Such disclosures would be covered by confidentiality. If the employer failed to provide the necessary information or refused to engage in timely and genuine negotiations, the workers’ representatives would be able to apply to the Central Arbitration Committee for a declaration that identified the steps necessary to put right any such failures. They could also apply for a court injunction to compel the taking of those steps and for any downgrading of terms and conditions, or dismissal, to be rendered void.
The independence of the CAC cuts both ways, because if an employer had followed good practice, it would be entitled to pursue the dismissal and reengagement of employees even if the terms proposed were deemed unacceptable to the workers’ representatives.
Dr Luke Evans
Will the hon. Gentleman give way on that point?
Barry Gardiner
I will not.
The CAC could also refer the matter to ACAS if it thought that conciliation might assist in settling the dispute.
One of the more disturbing aspects of my visits to disputes around the country are the stories I have heard about the way managers have increasingly opted to issue notices to terminate the contract very early on in the process. The issue of a section 188 notice used to be a last resort. Recently, it has become a first-strike nuclear option. ACAS has also remarked on that.
Employers will set out their package of changes to terms and conditions alongside a section 188 and effectively fold their arms and say, “That’s all the consultation you’re going to get.” They then begin to demand that workers come in for interview one by one, often without any union representative accompanying them. Workers are pressured into signing the new contract. Employers say, “How are you going to pay your mortgage if you don’t have a job? How are you going to put food on the table? How many children do you have? Two, three, is it? You really should sign because, you know, we have got 40 people lined up out here who would love to come and take your job. You are one of the lucky ones, you’ve got a job.” This is how the threat of fire and rehire is used in practice. No wonder the Minister himself has called it bully-boy tactics in the workplace.
To fight back against this early issue of a notice of termination is actually very difficult. It takes a trade union between four and six weeks to comply with the law on notification, balloting of members, notification again and then strike action.
Barry Gardiner
No, I am concluding this section, then I will happily give way to the hon. Gentleman. These points are important.
For this reason, I have amended section 19 of the Trade Union and Labour Relations (Consolidation) Act 1992 to relieve a union of those duties where there is a fire and rehire situation. Clause 2 introduces amendments to the Employment Rights Act 1996 to give enhanced protection to workers who are fired and rehired.
Another insidious practice I have come across is where companies have come to realise that fire and rehire can be an effective way of avoiding redundancy payments. The law currently allows an employee to be dismissed for refusing to accept a variation in contract. Employers now consider that, by making the new terms so unacceptable, they can effectively force the worker to refuse the new contract. The job is still there; the employee has simply refused to do it on the revised terms so there is no redundancy. For this reason, the Bill ensures that, where an individual worker or a small section of the work force refuses to accept the variations that have been agreed with other representatives in the workplace, and that person is dismissed for refusing to accept the variation, they will be entitled to claim unfair dismissal. This allows the rest of the business to move forward in harmony, and does not result in closure and loss of all the jobs.
The primary remedy for unfair dismissal is, of course, reinstatement or re-engagement, to which the Bill has precluded a defence of impracticability. But this does not present a problem, because section 117(3)(b) and (4)(a) of the 1996 Act allows the defence of impracticability to an employer who refuses to effect a reinstatement or re-engagement order, and precludes the additional penal award of compensation, which is the usual consequence of non-compliance. Thus, only normal unfair dismissal compensation would be payable to a refuser. Such compensation is, of course, all that the company would be liable to pay, even where an employee would otherwise have qualified for many years of redundancy payment. As such, I believe that it represents a reasonable and proportionate solution for those who genuinely feel that they cannot afford to accept the diminution of pay, terms and conditions that are proposed.
I have tried to set out for the House five things—that the Bill seeks to address a genuine social and economic problem; that a legislative vehicle is necessary and desirable, even though other mechanisms can partially address the problem; that the Bill is a reasonable and sensible measure that substantiates good practice and discourages bad; that the Bill is fair and proportionate in the remedies that it proposes; and that the Bill is technically proficient in connecting up with all the other relevant legislation.
There is one final question, which concerns the politics surrounding this Bill. Given all that Ministers have said denigrating the practice of fire and rehire, it is remarkable that the Government have imposed a three-line Whip against it today. Why? In politics, it is rare to find something that absolutely everyone agrees on, yet all the way from Len McCluskey to the Prime Minister himself, everyone agrees that fire and rehire is wrong, so why are the Government determined to block this Bill?
Normal practice would be to allow the Bill to pass Second Reading and go into Committee, where it could be amended and any perceived deficiencies ironed out. If that proved impossible, the Government could kill it in Committee or on Third Reading. Why are the Government intent on talking the Bill out this morning? The tactic of filibustering to talk the Bill out is cowardly. It seems that the Government do not wish to be seen actually to vote against the Bill. They would rather pretend, under the cloak of a closure motion, that they want to go on talking about it so that it simply runs out of time.
Today, the Government are set to vote against not the Bill, but the closure motion—the effect is the same. The Bill will die. Nobody is fooled. British workers will know that this Government would rather play politics than look after British families. There is another aspect to the politics of this Bill. The Government have told their Back Benchers, who are rightly concerned that they will be blamed by their constituents for voting this Bill down, that they have tasked the hon. Member for Newbury (Laura Farris) with bringing forward a Bill of their own. She has considerable experience as an employment barrister, and I hope that she does bring that forward. I doubt it will be substantially different from clause 1 of my Bill, although I doubt that the worker protections will be as comprehensive as mine in the subsequent clauses.
What does that say about our politics? The House knows that I have run a cross-party campaign to support this Bill. I have welcomed MPs from all parties, and I value their contributions to this campaign. That the Government believe they must brand any solution with their own party political colours is something I find sad. We began this week by remembering our colleague and friend and by praising the cross-party manner in which he had conducted his politics for so many years in this place. How good it would have been had we been able to conclude the week in the same co-operative cross-party spirit.
Laura Farris (Newbury) (Con)
May I begin by saying what a pleasure it is to follow the hon. Member for Brent North (Barry Gardiner)? I am going to develop a number of points through my submissions, but it is important to say that in a number of regards, when I was listening to his speech, I found myself nodding along. He knows that I care about this issue as an MP because it has affected constituents of mine in Berkshire who were employed by British Airways and Centrica, and I care about it from a technical and legal perspective as an employment barrister.
There are a number of points on which I think we can all agree on both sides of the House. It is unacceptable for employers to use fire and rehire as a pretext to force through changes to long-standing workplace practice at a time when workers are vulnerable and less able to mount a challenge. We all agree that we saw some of that last year, and we all agree that there is scope to tackle the issue. Where I think we disagree is on how we do that.
I would like to pick up where the hon. Gentleman left off. One thing that we do not do enough of in this House is acknowledge that there is room for a legitimate difference of opinion on legal solutions. In fact, even outside the political domain, we know that there is a divergence of views on how to address fire and rehire, because, when the Department for Business, Energy and Industrial Strategy commissioned its call for evidence through ACAS earlier this year, one of the most striking features was how all the people who contributed to it did not agree themselves on how best to resolve the issue. I hope that what comment I have to make on this Bill will be understood and interpreted in that context.
My view is shared by other legal practitioners. I will develop these points, but I know that there will be an interruption in our debate quite shortly. I maintain the view that this Bill actually poses risk to workers’ rights. I also think that it exacerbates one of the deepest problems in industrial relations to have come about through this practice.
The wider point I want to make is that any opposition to this Bill today is not a Tory thing. It is not the Tory party against the Labour party. There is a body of professional legal opinion of mixed political persuasion that holds the same concerns that I do. I am grateful to the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), to the Secretary of State and to all their officials for the way that they have engaged with me and my proposals. I can tell from the serious scrutiny that they have applied and the questions that they have lobbed back at me throughout the summer that they are thinking carefully about this and that there is scope to address this issue.
One thing that I think has not been acknowledged by any Member of the Opposition, including the hon. Member for Brent North in his opening speech, is that there is already some protection in common law against this practice. It is important to spend a moment looking at what the common law says, because we cannot sensibly say where the law is going wrong until we have a proper look at where the tribunals might be failing. When the issue was first considered by the Employment Appeal Tribunal in 1990, it said that
“you simply cannot hold a pistol to somebody’s head and say: ‘henceforth you are to be employed on wholly different terms’
and remunerated
“‘at 50% of your previous contract.’ We come unhesitatingly to the conclusion”—
that, when that happens, there has been a dismissal.
In what circumstances would an employment tribunal find that dismissal to be fair? First of all, the employer must show that they have a “substantial reason” for that practice within the meaning in section 98(1)(b) of the Employment Rights Act 1996—that is usually interpreted as “sound, genuine business reasons”—and also that they have acted reasonably in accordance with
“equity and the substantial merits of the case”
within the meaning of section 98(4). For any employer to meet those thresholds, they will have to go to the tribunal and show, first, that there is a genuine necessity for the changes—that the changes are there not just to swell shareholder dividends, but to lead to a determinable advantage to the performance of the business. Secondly, there is the reasonableness test, which is really a proportionality exercise.
I refreshed my memory yesterday of the well-known case of Garside & Laycock, which was the last significant appeal court decision that I could find on fire and rehire—it was 10 years ago. In that case, the employee brought a claim for unfair dismissal because he would not accept a reduction in his wages. What questions did the appeal court ask itself? First, it asked why had the employer done it—was it in genuine economic difficulty? The answer to that question was yes. What was the size of the cut that they were asking the employee to take? It was 5% of wages. Had there been a proper consultation with the staff? The answer to that question was yes. Had they balloted the staff? The answer to that question was yes. Had those who had participated in the ballot agreed to the cut? Everybody apart from this employee had agreed, and, in those circumstances, his dismissal was fair.
That is an important yardstick to have in mind in considering whether we need primary legislation to deal with this point. So, why is there an issue? I know that hon. Members across the House continue to believe that there is an issue. The answer was captured very well in one solicitor’s evidence to ACAS. I will quote it because I enjoyed reading that report.
“From an employer perspective so long as you have followed the consultation you will be ok. If it gets to Tribunal, no judge looks very closely behind the reasons why an employer is doing it. It’s all about the procedure.”
Judges do not necessarily ask all the same questions,
“so, in that respect, an employee is not perhaps so well protected.”
It is a fair observation. I mean that with no disrespect to employment tribunal judges, but some of them have not previously run their own business and do not have that direct experience, so they are not always best placed to test the strength of the employer’s explanation.
Mike Amesbury (Weaver Vale) (Lab)
Clearly the status quo is not sufficient, hence the need for the Bill tabbed by my hon. Friend the Member for Brent North (Barry Gardiner), which many Members on both sides of the House support. That is the way to resolve it. Today, I should have been going to the funeral of my good friend Tony Murphy, who believed in fairness and doing the right thing. In the last conversation I had with him, not very long ago at the Bulls Head pub in Frodsham, we spoke about workplace bullying and the need for fairness. I ask the hon. Lady to do the right thing and support my hon. Friend’s Bill.
Laura Farris
I am still in the fairly early stages of what I have to say. The hon. Gentleman’s point about fairness is important and I hope the solution that I have come up with, which is not dissimilar to that of the hon. Member for Brent North, meets that threshold.
Dr Luke Evans
Before I came into the House, patients came to me who were under the threat of being fired. For me, that pending threat seems to be the issue, and I would be interested to know how many times it is actually gone through with. Would the legislation put forward by the Opposition or by my hon. Friend deal with that threat, rather than the outcome?
Laura Farris
I am grateful to my hon. Friend for the question, because that will inform some of what I have to say about clause 1 and the consultation obligations that the hon. Member for Brent North seeks to set.
I can see that we are going to stop shortly, but I will say that I found it striking, when engaging with constituents, that fire and rehire had been mentioned in their first consultation meeting. From the get-go, they did not feel that they had any reasonable opportunity to renegotiate their employment terms and conditions. They always felt that they had the sword of Damocles hanging over their head and that the alternative was the possibility that they would be dismissed.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The hon. Member will know the context in which we are having this debate. It is a time of great economic uncertainty. Thousands of aviation workers in my constituency have been affected by this issue, whether at Heathrow airport, British Airways, Dnata catering or others. Thousands of them are living on incomes reduced by up to £8,000 a year, which is having a massive impact. Other employers behave differently. Has she made an assessment of her proposals to come to a view about whether that practice, which has had an impact on my and her constituents, and those of others, will be prevented by her proposals?
Laura Farris
I considered the aviation sector specifically when coming up with my proposals. In fact, it was probably the leading sector that I had in mind, although not the only one, when considering an alternative route. I will develop that point.
The question is, why should we not simply pursue the course of action in proposed new section 27C of the Employment Rights Act 1996? I separate from the hon. Member for Brent North here because despite what he said, my concern is that it will have the practical effect of banning fire and rehire. I will say why.
It came through strongly in the call for evidence that ACAS published that an inherent tension exists between the trade unions and the employer, because trade unions wish to see evidence that the business is visibly failing before they are willing to accept any reduction in terms, but the business wishes to remedy the defect before it is on the brink of collapse. My concern stems from proposed new section 187B of the Trade Union and Labour Relations (Consolidation) Act 1992, which says that the information to be disclosed by the employer is
“all information relating to the employer’s undertaking…which is in the employer’s possession…without which the appropriate representatives would be to a material extent impeded in carrying on consultation with the employer, and…which it would be in accordance with good industrial relations practice that the employer should disclose”.
Members can hear how wide that is.
Several hon. Members rose—
Laura Farris
I will just take a moment more, because I have only seconds until we break. There would be almost no circumstance in which an employee would not be in a position to say, “The employer did not consult me. They did not show me this. They did not show me that.” Employers would be at genuine risk of being dragged to an employment tribunal on every occasion.
Proceedings interrupted (Standing Order No. 11(4)).
Health Incentives Scheme
(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Health and Social Care (Maggie Throup)
Mr Speaker, with permission, I would like to give a statement on our mission to help people live healthier lives. The covid-19 pandemic has exposed so many vulnerabilities in our nation’s health and highlighted stark inequalities that we must work hard to put right. As a Government, we want to do everything in our power to tackle these disparities and to help people live in better health for longer.
We know that regular physical activity and a healthy diet are strongly linked to a higher life expectancy and a lower incidence of many chronic conditions. However, two thirds of adults in England are currently living with excess weight or obesity, and obesity-related illnesses cost the NHS £6 billion a year. Not only this, but obesity is more prevalent among the most deprived areas, so a vital part of our mission to level up across the nation must be to level up the nation’s health, and give everyone the tools and support they need to make a positive change to their daily lives.
Earlier this year, we announced £100 million of funding to help those living with obesity move towards a healthier weight, and this month we have launched our Office for Health Improvement and Disparities, which has a relentless focus on prevention and tackling health disparities across the UK. Obesity policies cannot just be about sticks; we must also reward healthy behaviours. Today, I would like to update the House on the next step in our plans—our new health incentives scheme. The evidence shows that incentives can have an important role in improving rates of physical activity and encouraging healthier eating. For example, in Singapore, its national steps challenge has shown promising results, so we have been looking at what we can do here at home to encourage people to take the little steps that can make a difference and also to pursue a more personalised and data-driven approach to public health.
In England from next year, we will be piloting a new scheme to help people make positive changes to their diet, called Fit Miles. The six-month pilot will see users wearing wrist-worn devices to generate personalised health recommendations, such as boosting their step count, eating more fruit and vegetables, and lowering the size of portions. Users can collect points for making these healthy changes that will unlock rewards, which could include vouchers, discounts and gifts cards. We will be making £3 million of Government funding available for these rewards, and we will be releasing more information on the location of the pilot and how residents can take part in due course.
The app will be available to all adults within our pilot area, but will have a particular focus on those who are not physically active and have poor diets, as well as traditionally under-served groups—for example, those in areas of high deprivation. I would like to reassure hon. Members that the app will have the strongest standards of privacy and security, and we will make sure personal information is always kept safe. This groundbreaking new pilot offers a brilliant opportunity to explore how best to inspire people to make positive changes to their daily lives, and it is a fantastic example of how Government, business and the third sector can work together to make a difference.
I would like to thank HeadUp Systems for providing its international expertise in data science and health technology, and Sir Keith Mills, who has been advising the Government on how we can best make use of these incentives. We have been able to bring to bear his vast experience of working on reward programmes such as Airmiles and Nectar points, and I would like to thank him for his invaluable support.
There is no greater gift than the gift of good health, and we are determined to make sure that people across the country can live in better health for longer. If we get this right, it will be good for our NHS, good for our economy and good for our society. This is a mission that the whole House can get behind, and today’s important announcement is a great step forward for all of us. I commend this statement to the House.
Alex Norris (Nottingham North) (Lab/Co-op)
I am grateful to the Minister for advance sight of her statement.
We on the Opposition Benches have campaigned for many years against this Government’s short-sighted cuts to public health funding. A reduction in spending of a quarter in this area has led to growing obesity in our population, loss of smoking cessation services, a ticking time bomb of poor sexual health, and over-burdened drugs and alcohol services. Of course, any savings made by those cuts has been hoovered up by the impact on the rest of the health service.
Obesity is at crisis level in this country. Two thirds of adults are above a healthy weight; half are obese. One in three children leaves primary school overweight, and one in five is obese. We know that leads to reduced healthy life expectancy, poorer mental health, and worsened outcomes at school and work.
We are not going to argue against measures that attempt to help our public improve their health, but like the obesity strategy that precedes it, this latest pilot is tinkering around the edges. Of course eating better and getting more exercise is important for all of us, but the Government once again fail to adequately address a central point.
Tackling obesity is about tackling poverty. People in the poorest communities are twice as likely to be obese as those in the best off. Poverty limits someone’s food choices, their exercise choices and their time. Why does that not feature at the heart of the Government’s plans to tackle this scourge?
Let us be very clear: whatever this pilot achieves, and whatever the obesity strategy achieves, it will all get knocked into a cocked hat by the £20-a-week cut to universal credit, which will push millions of people on to cheaper, less healthy alternatives. That will happen to adults and to our children. Add that to the broader cost of living crisis and these plans really do look small beer.
At the very least, it is vital that this programme is targeted at those communities that will benefit the most from it, because those cuts to public health have been targeted disproportionately at the poorest communities. Will the Minister make a commitment today that those invited to join this pilot will come from those communities? Will she also commit that this scheme and the obesity strategy are to be followed with a restoration of moneys cut from the public health grant?
We will only tackle obesity once we start tackling poverty. This scheme offers the tantalising prospect of vouchers, merchandise, discounts and even gift cards. I think most people would settle for a Government who do not make them poorer, an economy that allows them a decent job on decent terms and conditions, and decent housing. Frankly, until we get that, this is just tinkering around the edges.
Maggie Throup
I thank the hon. Gentleman for his comments. We have a common purpose: on both sides of the House, we are determined to tackle obesity. The measures that the Government have already taken—we have allocated £100 million to tackle obesity—show that we are serious about this. That is a huge amount of money. It is important to realise that lots of different measures have already been put in place. This is not tinkering at the edges at all.
We began tackling the issue of obesity a number of years ago with the soft drinks levy. I was delighted that the money raised from that went to school sports. We then tackled inappropriate advertising and promotions, out-of-home calorie labelling and front-of-pack nutrition labelling. We have the weight management programme and numerous other activities. It is important that we look at the population measures that are in place, but now we are also looking, with this new pilot, at individual responsibility—personal responsibility. I am really encouraged by this new approach to tackling obesity.
The hon. Gentleman mentioned other public health issues. Once again, this Government are determined not only to halve childhood obesity by 2030, but to make our nation smoke-free by 2030. We are really committed to tackling the public health issues that, as he quite rightly says, are affecting some of the most deprived parts of our country. The fact that we have launched the new Office for Health Improvement and Disparities shows exactly where our commitment lies, and I will continue to fight for this cause as we move forward.
To address the hon. Gentleman’s question about who we will choose for the pilot, we are going to make sure that we choose the right area so that it can really make a difference. That is so important when we are spending public money.
Jeremy Hunt (South West Surrey) (Con)
When we came back from recess, I was hoping to ask the Minister one question this week, so to be able to ask her three questions in two days is an unexpected thrill. I am grateful to her for her statement, and I welcome what she says. No Government can stand by when there is a 10-year difference in life expectancy between the richest and poorest 10% in our society. These measures are important and will make a difference. But could I ask her about something even more worrying than adult obesity? On childhood obesity, we are still the second fattest country in Europe. Has she had any discussions with the Department for Education about one of the root causes of that, which is that for several decades we have not guaranteed daily sport and exercise to every child in every state school?
Maggie Throup
My right hon. Friend will be aware that, as the previous chair of the all-party group on obesity, this issue has been close to my heart for many years. Over my years as a Member of Parliament I have been delighted to join some of my local schools and run the daily mile. It is inspiring to do that as an MP and I encourage anyone who has not done it to do so. The kids get so excited by it, and I see the difference it makes to them. More specifically, I am yet to have a meeting with the Department for Education, but it is high on my agenda. Tackling child obesity is a No.1 priority for me, and it has been for a number of years.
Tony Lloyd (Rochdale) (Lab)
Like my hon. Friend the Member for Nottingham North (Alex Norris), I cannot oppose what the Minister tells us here today, but it is frankly on a very small scale. The point made by the former Health Secretary, the right hon. Member for South West Surrey (Jeremy Hunt), is fundamental. We need a recommitment to getting sports back in our schools for our children and young people. In particular, we have never been good at engaging girls and young women to stay in sporting activity, and that is now something of an emergency. Can the Minister give us more than her personal example and say what the Government will do to make that happen?
Maggie Throup
I am here today to talk about this pilot and how it will be taken forward, which is exciting news. This will be across the population to ensure that a mixture of people take part: different ages, males and females. That is so important. Some of the information from that will help us to look at policies in the future. There are good programmes to engage young women in sports. When female football teams or tennis players do very well that encourages even more people to take up sports—not just women but across the board. Such successes will help to tackle obesity in a soft way.
Virginia Crosbie (Ynys Môn) (Con)
I thank the Minister and welcome her news about this important pilot. Eating disorders can be devastating for so many families. On behalf of those families, can my hon. Friend confirm that the focus of this scheme is not weight loss, but encouraging people to adopt a healthier lifestyle?
Maggie Throup
My hon. Friend is exactly right. This is not stigmatising anybody. It is not about weight loss; it is about healthy choices and empowering individuals.
Edward Timpson (Eddisbury) (Con)
In welcoming today’s announcement, may I concur with my right hon. Friend the Chairman of the Health and Social Care Committee about the importance of ensuring that we start as early as possible in tackling obesity? In doing so, may I encourage the Minister to continue to support, through her Department, the funding of the primary PE and sport premium, which is worth around £320 million a year, as well to consider the core recommendation of a report by the Association for Physical Education, for which I chaired a taskforce, which looked at how we can ensure that PE is at the heart of school life and that every child leaves primary school able to swim and has PE as a habit for life, so that we tackle this as early as possible?
Maggie Throup
I thank my hon. Friend for his question and his work on the taskforce. This is something I believe in and have been working on across my Department and the Department for Education, too.
Suzanne Webb (Stourbridge) (Con)
I very much welcome this scheme. Does my hon. Friend agree that it is about not stigmatising obesity, but helping people to adopt a healthier lifestyle, and that part of that should be a seismic shift away from ultra-processed food, which is high fat, high salt and highly addictive?
Maggie Throup
I completely agree. A lot of the measures that have been put in place on the population side have resulted in reformulation by many manufacturers. That is so important. The soft drinks levy is a prime example. Just introducing that levy meant that so many manufacturers changed their formulation. Putting calories on menus and the traffic light system on the front of packaging once again encourages and pushes manufacturers quite hard to reformulate, and that will address the issues that my hon. Friend mentions.
Andrew Selous (South West Bedfordshire) (Con)
A few years ago the Food Foundation pointed out that healthier food is often cheaper in Europe than unhealthier food; perhaps we could look at that. The young people of Jamie Oliver’s foundation, Bite Back 2030, have identified that healthier options in schools are often more expensive and do not meet the proper standards, so will the Minister have a look at this issue?
Maggie Throup
Yes, that point has been raised with me, so I am aware of it. I am looking into it and will update my hon. Friend on the outcome of my investigations.
Duncan Baker (North Norfolk) (Con)
Eight months ago, I did very little exercise and had done very little running since school, but three weekends ago I ran the London marathon—[Hon. Members: “Hear, hear.”] Thank you. I raised more than £37,000 for my local charities in North Norfolk. Does my hon. Friend agree not only that is this a wonderful initiative that puts healthy eating at front and centre of one’s physical health, but that there are also untold benefits for mental health, as I have found in doing this job and running the London marathon?
Maggie Throup
I congratulate my hon. Friend on his great achievement, not just on running the marathon, but on raising so much money; that is amazing. He is quite right that feeling good about ourselves and getting exercise really does help our mental health.
Gary Sambrook (Birmingham, Northfield) (Con)
I do not know why, but I feel overwhelmed to declare an interest in this particular topic. Does the Minister agree that it is often community organisations that provide the best outputs? Organisations such as Beeches Martial Arts and the Cofton Park Runners do so much to promote healthier living and exercise choices across the Northfield constituency. There might even be a role for local Members of Parliament to take part too.
Maggie Throup
Of course, I would always encourage local Members of Parliament to take part in and enjoy every activity in their constituencies. Just yesterday, I was having discussions with people from the public health arena, who talked about the importance of community-based activities, which are often run by charities and volunteers, and what a huge impact they can have on people’s lives, including on activity levels and weight management.
Lia Nici (Great Grimsby) (Con)
Does my hon. Friend agree that this a fantastic new initiative and pilot, and that it is perhaps the forerunner to making everybody aware that the best way to protect the national health service is for us to have the healthiest lives possible and to make the healthiest choices possible, so that we have a national health service that is protected and that does not continue to be a national repair service?
Maggie Throup
My hon. Friend is exactly right. Obesity costs the NHS at least £6 billion. However, it is not just about the cost to the NHS, but the cost to individuals as well. People who are obese are more likely to have diabetes, cardiac disease and cancers, so this affects their lives. If we get it right for the NHS, we are getting it right for individuals as well.
Dr Luke Evans (Bosworth) (Con)
To pick up that exact point about diabetes, obesity is inextricably linked to type 2 diabetes, which can lead to damage to people’s feet, eyes and kidneys. What is even more concerning is that it is easily reversible with a healthy lifestyle. If this pilot is a success, will the Minister consider targeting it particularly at those who suffer with type 2 diabetes?
Maggie Throup
My hon. Friend has a lot of knowledge as a former GP.
The pilot will tell us so much. It will be fascinating and I am sure that there will be lots of learning points that we can take forward into different disease areas such as type 2 diabetes.
Mr Peter Bone (Wellingborough) (Con)
It is always good to have a Minister at the Dispatch Box making a statement. However, precedent says that on a private Members’ Bill day, statements are put on only if they are extremely urgent. It seems to me that this is about something for next year. There are 17 Bills to be debated today. Why was it urgent to have this statement in private Members’ time rather than Government time?
Maggie Throup
Obesity is a top priority for the Government and covid-19 has shown us the necessity of levelling up disparities in health. We know how important it is to update the House first and to allow it a chance to have its say, so I wanted to update it as soon as possible on this important issue.
Tom Randall (Gedling) (Con)
I offer my belated congratulations to my hon. Friend on her appointment to her role. In her statement, she mentioned Singapore’s national steps challenge, which has shown how to give small incentives to improve people’s lives. Will she confirm that her Department will draw on the best practice from around the world as it develops and pilots the scheme?
Maggie Throup
We have looked at schemes from around the world. Actually, if we get this right, we will be world-leading on this issue, although probably behind Singapore—I will give it some credit for being there first. We have looked at different schemes globally and we feel that this pulls together what has been tried in different areas, as well as having some uniqueness about it, which I am looking forward to developing as the pilot moves forward.
Sally-Ann Hart (Hastings and Rye) (Con)
I welcome the news that the scheme will be developed in partnership with businesses and the third sector—the private sector and charities—with that dream team of public, private and volunteers. Will the Minister confirm that her Department will look at outcomes and measuring them and will take robust anti-fraud measures to verify that users of the scheme who gain access to the rewards will have genuinely improved their behaviour?
Maggie Throup
I reassure my hon. Friend that many checks and balances will be put into the app and the scheme to make sure that they are used appropriately and effectively and that we get some good outcomes from them.
Alexander Stafford (Rother Valley) (Con)
Can my hon. Friend reassure the House that we will look at best value for money with the scheme to ensure that we are saving money for the NHS? The last thing that any of us want to do is spend more money and not get financial rewards to protect our NHS and ensure that we have healthier lifestyles for everyone.
Maggie Throup
My hon. Friend makes a very good point. We are investing some money in the new pilot and we are confident that it will give us some outcomes that we can work on to take measures forward. If we can save a fraction of the £6 billion, it will be still be a huge saving for people’s health, but, obviously, we want to make sure that this is about saving money and saving lives.
Mike Wood (Dudley South) (Con)
I am tempted to ask the Minister whether bobbing in this place might count towards the app’s incentives. I know that all Members will appreciate my hon. Friend’s courtesy in making a statement to the House rather than this being announced in a press conference later in the day. As well as the national steps challenge, the Singapore Government launched its Healthy 365 app around a year ago. Will the Minister be looking both at Governments around the world and at businesses and public sector organisations in the United Kingdom that already operate app-based fitness incentives to make sure that we learn from the best and avoid replicating others’ mistakes?
Maggie Throup
My hon. Friend makes a very good point. Yes, we know that there is a lot of experience out there and we want to pull everything together to make sure that we have an effective pilot and know how we move forward from that to help people to get healthy, get fit and enjoy good lives.
Shaun Bailey (West Bromwich West) (Con)
Sometimes the risk of such schemes is that they become a little bit siloed. We have heard, in contributions from other Members, talk about co-operation. Can my hon. Friend reassure me that any insights will be used to inform the response across Government, and that she will ensure that we take a collaborative approach to ensure a long-term gain, not a short-term success?
Maggie Throup
I reassure my hon. Friend that we want to ensure that this is a long-term success. It is a pilot, so we cannot pre-determine the outcome. However, tackling obesity and the disparities that come with it are a No. 1 priority for the Prime Minister, and that goes across all Government Departments.
James Wild (North West Norfolk) (Con)
Three weeks ago, I joined my hon. Friend the Member for North Norfolk (Duncan Baker) and other hon. Members in running the London marathon. Modesty precludes me from saying which of us finished fastest. Does my hon. Friend agree that running, particularly the daily mile, is great exercise? Will she join me in congratulating everyone involved in King’s Lynn park run, which has just celebrated its 100,000th finisher?
Maggie Throup
I am delighted to congratulate King’s Lynn park run on its achievements, as well as park runs across the whole country. I am not a great runner—I am more of a sprinter—so I tend to avoid them, but I know the enjoyment that can be achieved by going along and improving one’s fitness, as well as the sense of community they bring with them.
Kevin Hollinrake (Thirsk and Malton) (Con)
As somebody who is carrying a Westminster stone, I could definitely do with losing a few pounds myself. More than three decades ago, I was more than six stone heavier than I am today. I lost that weight without the need for airmiles and Nectar points. Does my hon. Friend agree that the most important factors in good health are personal discipline and personal responsibility?
Maggie Throup
I completely agree with my hon. Friend, who obviously has great motivation. We want to help everybody to have great motivation. If we can do that through an app, we will be able to find out what really helps people to make such changes to their lives.
Mrs Flick Drummond (Meon Valley) (Con)
I, too, welcome the pilot, which I hope will help to tackle growing obesity. As the Chair of the Health Committee commented, obesity often starts in schools—I think one in five schoolchildren are obese by the time they leave year 6—so would it not be a good idea to extend the pilot to schools? I know how excited children are when they wear gadgets. That might help them to start to work towards a healthy lifestyle.
Maggie Throup
My hon. Friend makes a very good point. Kids are excited by new technology, but the pilot will be for people aged 18 and over. I take on board her suggestion and perhaps we can look at other ways to encourage kids to use technology to improve their outcomes.
Simon Fell (Barrow and Furness) (Con)
I welcome this announcement. We cannot, unfortunately, all have the iron will of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but study after study shows that gamification really does drive positive behaviour. Can my hon. Friend confirm that this is just one part of the Government’s strategy and that we are also looking at changing physical infrastructure to improve cycling and walking access?
Maggie Throup
My hon. Friend makes a very good point. We cannot do this with one action alone. To me, it is very much cross-departmental. Whether it is through planning legislation or encouraging people to be more active, there are lots of different ways we can tackle obesity and the health disparities it brings with it.
Richard Fuller (North East Bedfordshire) (Con)
I am sorry to strike a discordant note, but with regard to the Minister’s justification for this measure may I remind her that it is not the role of life to support the NHS; it is the role of the NHS to support life? Many despair of an obsessive cult within the Department of Health and Social Care for nudging. Can the Minister advise me on how this proposal is different from a social credit system that is adopted in other countries?
Maggie Throup
We want to have a whole range of measures to tackle obesity. The important thing is that we know how much obesity costs the NHS—£6 billion is a huge amount. That money could provide for a lot of more operations. There are a lot of other ways to stop people becoming obese, or to help them to lose weight and become more active. That is better for the NHS and saves money for the NHS, but it also helps people’s lives as well.
Scott Benton (Blackpool South) (Con)
As the Prime Minister pointed out at the Conservative party conference, life expectancy in Blackpool is 15 years lower than it is in some areas just a few miles away. This scheme will help to reduce those disparities. Does the Minister agree that Blackpool would be the ideal location for this pilot scheme?
Maggie Throup
I am not going to give a one-word answer on this occasion, but obviously the location will be chosen carefully and will be announced in due course.
Paul Howell (Sedgefield) (Con)
The importance of engagement with the pilot survey has already been mentioned. Sedgefield, like most of our constituencies, has various demographics, but I am thinking of certain neighbourhoods in particular. The all-party parliamentary group for “left behind” neighbourhoods, which I chair, found that some areas do not have the capacity even to become engaged in programmes such as this. May I encourage the Minister to include people in “left behind” neighbourhoods in the survey? We have organisations such as Junction 7 in Newton Aycliffe, and if schools are likely to be involved, I have some fantastic ambassadors at Ferryhill.
Maggie Throup
Obviously we will be looking at ways in which we can engage people, and ensure that they are fully aware of the pilot and have ready access to it.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the Minister for her statement. We now return to the debate on the Bill.
Employment and Trade Union Rights (Dismissal and Re-engagement) Bill
(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
13:20 - The House divided: - Ayes: 188 / Noes: 251 - Question accordingly negatived.
Laura Farris
I was referring to what I consider to be the breadth of the proposed section 187B. I think, with respect, that it creates considerable scope for any employee who is faced with an instance of fire and rehire to challenge it through the employment tribunal. It creates, I think, an obvious and unsustainable tension with common law principles—the common law principles that underpin the entire law of redundancy.
Laura Farris
I will just finish this point.
There could be circumstances in which an employer had made the decision to change the terms of employment, to reduce wages, and the employment tribunal, applying every single correct common law principle, would find the decision to have been fair, but if the employer had breached one element of the consultation requirements—had not put one document or one meeting note before the trade union representative—the dismissal would be found to be unfair.
Clive Efford
I have listened carefully to the hon. Lady, and I am very respectful of her knowledge of this particular issue, but nothing she has said today suggests to me that her arguments could not be better deployed in Committee. My hon. Friend the Member for Brent North (Barry Gardiner) asked Conservative Members to work with him to improve the Bill in Committee. I wonder why the hon. Lady is not taking that approach.
Laura Farris
I thank the hon. Gentleman for his intervention. I will continue to develop this point.
Laura Farris
I hope that what I am going to say will answer the hon. Gentleman’s criticism.
There is another point that I cannot ignore. I invite every Member to turn to proposed section 187F, which deals with the proposed “Award of compensation” to be made by any employer who fails to comply with the proposed new consultation requirements. It states:
“ The amount of compensation awarded shall, subject to the following provisions, be such as the employment tribunal considers just and equitable in all the circumstances”.
That is exactly the same compensation measure that is used in whistleblowing and in discrimination law. It opens the door to uncapped compensation in the area of unfair dismissal, which has a cap, It therefore drives a coach and horses through the entire principle of compensation in unfair dismissal hearings. It would make fire and rehire the only form of unfair dismissal in which the employee could receive an uncapped compensatory award. If the employee had been dismissed for gross misconduct or for being bad at his or her job, the award would have been capped at 80 grand. That cannot be right.
What will all this do to the employer who is thinking about renegotiating terms of employment? The employer will be too nervous to do it, and will lay people off. Let us take the employer in the case of Garside & Laycock v. Booth 2011, who had proposed a 5% reduction in wages which every single balloted member of staff except one had accepted. Employers would not do that; they would lay off the whole workforce. Is it better or worse for people to take a less attractive variation in their terms of employment or to lose their jobs altogether?
Barry Gardiner
I am grateful to the hon. Lady for engaging so closely with the Bill. I think she knows she is over-egging it, because any tribunal would look at the situation in the round. The Bill is drafted as it is because it chimes with the legislation on redundancy. Again, to be technically proficient, the Bill has to merge with the other Acts.
Laura Farris
I am afraid the hon. Gentleman is incorrect. This concern was raised by my head of chambers and it is shared across the employment Bar. We cannot have a just and equitable jurisdiction in the law of unfair dismissal as it does not work.
The hon. Member for Feltham and Heston (Seema Malhotra) raised a point about the aviation sector. The conduct of British Airways was poor, but there is an important issue at stake. If in primary legislation the risks of fire and rehire are so great that employers are more inclined to lay people off, think what that would mean for airline pilots, for example. Airline pilots must fly within a two-year period to retain their flying licence. If they are sacked by British Airways at a time when the entire travel sector is struggling badly, they would be very unlikely to get a job and it could easily be two years. It is not just the loss of a job; it is the loss of an entire career. We need to tread very carefully when we consider primary legislation in the area of fire and rehire.
Kevin Hollinrake
My hon. Friend is making an excellent speech and some important points. She talks about the risk of moving to layoffs or redundancies, is there not also a danger that businesses will not recruit people in the first place or will not scale up because of the fear that employment legislation is so complex and is increasingly one-sided on behalf of workers? That would deter employment, which is the exact opposite of the situation we all want to see.
Laura Farris
We all know there is always a risk that we make employment relations so onerous that there is a temptation to engage consultants. What we are primarily looking at is employers that have larger, unionised workforces. I am not sure how many employers it would engage, but the short point is that Conservative Members want a solution that does not make an existing problem worse, drive redundancies or lead to more business failures. Fire and rehire must be a genuine option of last resort when a negotiated settlement cannot be reached, when the business is on the brink of insolvency and when the alternative is layoffs.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I am grateful to the hon. Lady for the conversations we had when I proposed legislation on this issue last year. She says that, had fire and rehire been banned, British Airways might have just made people redundant, and she cites the example of pilots. This has happened already, and Ryanair negotiated temporary changes. Why would British Airways not have done the same, had it not been allowed to fire and rehire?
Laura Farris
I will return to that point when I address British Airways in a bit more detail.
As I have said to the Minister, we need more than ACAS guidance. I want to see the rules on dismissal and re-engagement set out in an ACAS code of practice, with financial sanctions to back them up. Parliament specifically envisaged the possibility of doing this when it passed the Trade Union and Labour Relations (Consolidation) Act 1992. Section 207 gives the Secretary of State the power to introduce a code of practice in respect of anything in that Act. Parliament also considered and welcomed the possibility that the Secretary of State would have the power to impose legal teeth. Section 207A addresses the possibility that any compensation can be increased by up to 25% if the employer does not comply with an ACAS code of practice.
We know that ACAS codes of practice can be effective. The hon. Member for Middlesbrough (Andy McDonald) is an employment lawyer and will know that when we think about, for example, the ACAS codes of practice on disciplinaries or grievance procedures, it is vanishingly rare to get into an employment tribunal nowadays and find that the employer was oblivious to those codes of practice. Why do employers know about them? Because there is risk—financial risk. If they go down in the employment tribunal, there could be an uplift on compensation, and they want to avoid that, so we know that it is has the right effect.
What should the code of practice say? We have some of the answers already. The BEIS call for evidence, which was published through ACAS, gives us some clues. I think practitioners made such suggestions very well, including, in relation to paragraph 56 of that report, that employers should provide an analysis of whether changes are anticipated to last for more or less than five years with evidence to substantiate that answer, and, in relation to paragraph 76, that they should provide evidence of reasonable alternatives they have explored and evidence of their financial position.
Another point comes out of the excellent work of the Transport Committee, and I want to pay tribute to the very impressive session it had with Willie Walsh on 11 May 2020. Anyone who has read the transcript will recall that he was asked repeatedly by the Chair, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), whether, if British Airways returned to full profitability, he would restore workers’ wages to their previous levels, and he declined to confirm that he would do so. That created huge exposure for British Airways, and I do not think it is any surprise that, when Alex Cruz appeared before the Select Committee six months later, he gave a rather different explanation.
BEIS would then have the opportunity to require employers to set the criteria that they would exercise in deciding when to restore workers’ pay. I think it would enable the Government to give guidance on this distinct category of dismissals, how they should be treated and what the employment tribunal should be looking for. My final point on this is that it would give the Government real teeth, and it would incentivise employers to do the right thing and give employees more power to enforce their existing rights.
The point has been made, but most of the employers we have cited in this House are considering fire and rehire in relation to large proportions of their workforce. With British Airways, 12,000 people were at risk. If every single one of those people could get an uplift in a compensatory award of 10% to 25%, then—let us be realistic—that might be £10,000 or £20,000 times 12,000. That creates a huge incentive for the employer to do the right thing, because there will be a very significant financial penalty if they fail. That will mean that consultations are entered into with legal advice, which is a good thing, as well as with an open mind and an open spirit.
By the way, consultation is not a meaningless word, as all hon. Members will know. When it is approached in the right spirit, it can often lead to alternatives to the thing that is most feared by the employee. That is the suggestion that I have made to Ministers.
Sam Tarry (Ilford South) (Lab)
I was one of the members of that Select Committee, and I remember there was very much cross-party agreement that it was such a disgrace for that to happen that the company should not carry the British flag. The point is that the parent company, IAG, had profits in the region of £3.5 billion-plus, there in stages, that it could have used. IAG’s agenda—and this is why I am concerned that what the hon. Member is suggesting may not go very far in discouraging companies—was about driving profits, not about saving the jobs and livelihoods of people, particularly women in their 50s and those towards the end of their careers. It was a restructuring brought in under the guise of fire and rehire.
Laura Farris
The hon. Member makes an excellent point, and I just want to pick up on what he said. He points to the fact that the parent company had substantive profits, and that point was made by the Unite representatives who contacted me. I do not think that that case would have survived the employment tribunal in its early stages, as I do not think that it would have crossed the threshold of a sound, genuine business reason. I think the reason why Alex Cruz appeared before your Committee five or six months later and spoke very differently about his plans for pilots, cabin crew and everybody else was because the company was on thin ice, and I think some damaging concessions were made in that session. I think you are right, but I do not think that my solution fails to capture it.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I remind the hon. Lady not to use the word “you”.
Laura Farris
I do not think that my proposal is at odds with what the hon. Member suggests.
Just briefly, because I am coming to the end—[Hon. Members: “No.”] I would like to focus the remainder of my remarks on the detailed work that has gone into clause 1 and the extended duty to consult, which is proposed to go into the Trade Union and Labour Relations (Consolidation) Act as new section 187A. One of the things I think is most surprising about this, despite the fact that it is obviously very persuasive at first blush, is that it immediately takes the trade union, the employee and the employer into their very first meeting talking about fire and rehire. When I spoke to my constituents and the Unite representatives who were looking after them, the thing that had been the most stressful was that they had gone into these meetings and found that from the very start, dismissal was already being mentioned as an option. It was, “You will take this pay cut, otherwise we will sack you and get you back.” That seems to exacerbate the problem, rather than improve it.
The law in this area is not working. When I speak to employers about why they have been raising fire and rehire so early, they always cite section 188 consultation obligations, the “in good time” requirement under that, and the genuine fear that they will be hit with a punitive protective award if they have not put all their cards on the table at the start. A much more sensible route would be to take the heat out of these negotiations and make fire and rehire a last resort that only comes in when all other options have been explored.
That is why we should have specific language in a code of practice. It could say something like, “An employer who begins a section 188 consultation only after it has attempted to negotiate a change in terms and conditions consensually will be regarded as beginning that consultation in good time.” Alternatively, it could say, “Where an employer is attempting to negotiate new terms and conditions before any fire and rehire process, that amounts to special circumstances that rendered it reasonably practicable not to comply with section 188.”
Geraint Davies
The hon. Member is making some very interesting points. Given that she agrees with the spirit of the Bill, does she agree that fire and rehire should be a last resort? She is looking at this matter in detail. Does she agree that it would be better looked at in Committee? We appreciate that this area is complicated and she is a great expert in it, but would it not be better for her to be forensically evaluating this Bill with good time with my hon. Friend the Member for Brent North (Barry Gardiner) and others in Committee?
Laura Farris
I thank the hon. Gentleman for his intervention. I know that the hon. Member for Edinburgh West (Christine Jardine) wanted to intervene.
Christine Jardine (Edinburgh West) (LD)
The hon. Lady is making some excellent points and, like the hon. Member for Swansea West (Geraint Davies), I feel they might be better made in Committee. Does the hon. Lady agree that part of the motivation for the Bill is not to do away with the practice completely? It says that fire and rehire or change of contracts in exceptional circumstances can be done with negotiation, consultations and so on. The motivation was that several major companies appeared to be using the current crisis as something to hide behind and institute unfair fire and rehire practices at a time of already mounting stress and emotional trauma for a lot of people.
Madam Deputy Speaker (Dame Rosie Winterton)
The hon. Lady needs to answer the first intervention before taking another.
Laura Farris
Thank you, Madam Deputy Speaker. I will take those first two points in succession. The first was about whether these issues are not better raised in Committee. The answer, respectfully, is no, because I do not think an area as technically difficult as this belongs in primary legislation, and I have explained why the Bill is at odds with the Trade Union and Labour Relations (Consolidation) Act 1992, the intentions of Parliament when that Act was passed and the existing web of laws at section 98 of the Employment Rights Act 1996 dealing with unfair dismissal. The issues covered in the Bill belong in a code of practice backed up with financial penalties, rather than in primary legislation.
To take the point made by the hon. Member for Edinburgh West (Christine Jardine), I of course accept the stress that people were subjected to, and all the work that Members on the Government side of the House are doing is directed at minimising that, but the solution we are considering and discussing must not give employers leeway to abuse employment rights. We have been thinking about that just as much.
It is precisely because I do not think employees should have a gun to their head at the start of consultations that I cannot support clause 1 of the Bill, which requires employers to lay all their cards on the table on the issue of fire and rehire from the start. Rather than demanding full disclosure from day one, we should be much more sensitive to the legitimate desires of businesses to remedy defects before they have to reveal they are on the verge of failure, given what that might mean for their business at a stage before they would wish to disclose it.
Barry Gardiner
I agree that it really important to take the heat out of the situation at the very beginning. The hon. Lady is absolutely right—I mentioned it myself—about the importance of not having section 188 on the table immediately. That is why, starting at line 20, the Bill says:
“The employer shall consult with a view to reaching an agreement to avoid decisions being taken to terminate contracts of employment, or to introduce changes in work organisation or in contractual relations.”
The precise point that the hon. Lady has made is there on the face of the Bill.
Laura Farris
The hon. Gentleman knows that proposed new section 187B(2) says:
“The information to be disclosed is all information relating to the employer's undertaking”.
It would be almost impossible for an employer to comply with that without its having to put on the table the fact that it is considering dismissal in the first instance.
I hope that, if my speech has strayed into technical issues of industrial relations law, that reveals how difficult this question is and how any attempt to impose primary legislation runs significant risks of unintended consequences that would be much worse for workers’ rights and job losses. We on the Conservative Benches depart from the Opposition in that we think there is strength and flexibility in existing employment law, but we also think that it could do with being robustly reinforced through potential financial penalties. I hope the hon. Member for Brent North is reassured that we take this issue as seriously as he does. We are also thinking hard about it, and I am confident that we will deliver for workers’ rights.
Imran Hussain (Bradford East) (Lab)
I welcome the Bill and thank my hon. Friend the Member for Brent North (Barry Gardiner) for the incredible campaign he has fought up and down the country over recent months to stop fire and rehire. I also put on record the thanks of the whole House to my hon. Friend—
Dr Kieran Mullan (Crewe and Nantwich) (Con)
Will the hon. Gentleman give way?
Imran Hussain
I have yet to begin, so the hon. Gentleman might want to wait, but okay.
Dr Mullan
I wonder whether the hon. Gentleman can clarify something. The campaign is to end fire and rehire, which is what Unite says, but the hon. Member for Brent North (Barry Gardiner) has clarified several times that the legislation would not end fire and rehire, so I am a bit confused as to what he is seeking to achieve.
Imran Hussain
If Members intervene before someone has really started their speech, it does lead to confusion, so they may want to wait a little longer on occasion. There is probably a lesson there for the hon. Gentleman. My hon. Friend the Member for Brent North has made it absolutely clear that although he does not seek to ban fire and rehire, it should end. There is a difference, and I will come to that later.
First, let me thank my hon. Friend, who cited real examples of working people who are being impacted by this abhorrent practice. Sometimes in the Chamber, we move away from real examples and towards theses or even the law, which is important, but we must always keep in touch with the real impact on real people.
As I made clear in the Westminster Hall debate in April, fire and rehire is a deplorable tactic used by unscrupulous employers. Using the threat of permanent dismissal, employers bully their staff and force them to reapply for a job that they already had. They force them to sign away their pay, rights and conditions and rip up their original contracts. These bad bosses—these unscrupulous employers—do so knowing full well that staff cannot refuse without being cast out into an uncertain job market. Let me be clear: these are not negotiating tactics, they are nothing more than a form of legalised blackmail, with all the power in the hands of bad bosses. They are tactics that leave working people worse off to the tune of several thousand pounds a year while working longer hours on exhausting shift patterns. They leave working people with fewer days of annual leave, with no paid lunch breaks and with no protections when they fall ill. They leave working people without the dignity in work that they deserve, all while CEOs pay themselves inflated salaries and bumper bonuses worth millions of pounds.
So let there be no doubt. Fire and rehire is abhorrent, morally bankrupt and a stain on our economy. Put simply, these employers are employing bully-boy tactics—surprisingly, those are not my words but the words of the Minister.
Paul Holmes (Eastleigh) (Con)
The shadow Minister has used the words “abhorrent” and “deplorable” when it comes to the use of fire and rehire. Could I suggest that he has a word with his boss, the Leader of the Opposition, so that the Labour party stops using these practices itself? Perhaps he should look closer to home at his own party.
Imran Hussain
This is a serious debate, where working people are looking towards this House for guidance on an important issue. The hon. Gentleman, I have to say, may on occasion make a decent point, but today is not that day for him. He needs to look again at the point he made.
Anthony Browne (South Cambridgeshire) (Con)
I want to follow up on that point. The hon. Gentleman says we are fabricating news. Would he like to explain why a senior Labour MP is reported as criticising Labour’s employment practices? They have said:
“To learn that our party are now using what can only be described as fire and rehire appals me. It is everything we as a party should be aggressively opposing.”
That is after the Labour party made a whole load of redundancies and then appointed people in exactly the same departments. It is not fake news.
Imran Hussain
That point has already been clarified. Let me echo the point that my hon. Friend the Member for Brent North made earlier. Fire and rehire is an abhorrent practice, regardless of who is involved. I do not understand why Conservative Members seems to think this is an opportunity for them to stand up one after the other and make a point that has already been addressed.
Several hon. Members rose—
Imran Hussain
I have given way enough on this. [Interruption.] Let me make some progress and I will—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. It is up to the hon. Gentleman whether he wants to give way.
Imran Hussain
Thank you very much, Madam Deputy Speaker.
For those who seek to minimise the scale of fire and rehire, let us remember—the point was made earlier—that one in 10 workers, around 3 million people across the country, of whom a worrying proportion are young or from an ethnic minority background, face having their pay cut or their rights stripped away, or losing their job. What is most alarming is that fire and rehire is being used not by smaller companies but by big national names such as British Airways, British Gas, Tesco, Clarks, Argos and Weetabix, to name a few. All of them are established companies. Many saw bumper sales during lockdown. Workers at these companies, whether in the warehouse, in the factory, on the shop floor or in HGV cabs are also the workers who kept us moving during the pandemic.
Some companies threatening their staff with fire and rehire, such as Tesco and British Airways, even received Government handouts during the pandemic, only to take the money and then show their staff the door. That is scandalous. Rather than helping working people, the Government have subsidised their dismissal during the worst health and economic crisis in a generation. This is a national disgrace.
Laura Farris
Is not it the reality that it is not that big employers are unscrupulous or evil, as opposed to small employers? The truth is that it is only larger employers who are bound by the obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 and it is only they who are consulting with larger numbers, so, inevitably, the focus will be on large employers.
Imran Hussain
I agree in part with the hon. Lady’s point. The issue here is this. She made her points earlier. I accept that there are good employers and there are those who perhaps are not behaving in the manner that they should. Referring to one of her previous points, the issue is this: those employers that are acting in a just, proper and proportionate manner are actually worse off because they are being undercut by unscrupulous employers that are not acting in the manner that they should. The size is perhaps for illustration purposes, but I do take some of her points.
Faced with such scandalous and disgraceful behaviour by employers, the Government should have stepped in as fire and rehire spread through our economy like wildfire, but they did not. Instead, it has only been the Labour movement, trade unions and staff coming together to organise in the workplace that stopped the use of fire and rehire at places such as British Airways, Go North West and Heathrow. It was not Ministers and it was not the Government.
Let me make this point clear. The campaigns and victories of our proud trade unions fighting against fire and rehire, fighting against bad bosses, and fighting for their members and working people right across the country—whether it be Unite, GMB, Unison, the Union of Shop, Distributive and Allied Workers, Community or others—shows that, despite this Government’s every effort to diminish and grind them down, there is still power in the union.
Mark Pawsey
The hon. Member for Brent North (Barry Gardiner) accused my hon. Friend the Member for Newbury (Laura Farris) of overegging the cake. Is not the shadow Minister doing exactly that?
Imran Hussain
The hon. Member’s point does not even have a passing acquaintance with fiction, never mind fact, and does not deserve a response.
Trade unions and working people have been deliberately hindered in their efforts to fight fire and rehire as the Government put barriers in their way and bog them down in red tape.
Grahame Morris (Easington) (Lab)
Despite the hoots of derision from the Government Benches, does my hon. Friend accept the survey evidence that shows that three quarters of the British public back the Bill from my hon. Friend the Member for Brent North (Barry Gardiner)? Countries such as France, Spain and Ireland have already acted to make this appalling practice illegal.
Imran Hussain
My hon. Friend, as ever, makes a very valuable point. The most pertinent point that he makes is that many countries in Europe are already ahead of us and have already acted in this area. Let me say this to him: the reason that Government Members are loud and make points that go towards accepting in part that there is this need is that they understand that, when they go back to their constituencies, there is a different argument that they have to face there. I urge them today to seriously consider this very sensible Bill.
The Bill introduced by my hon. Friend the Member for Brent North, with the support of trade unions, working people and the Labour party, would rebalance employment protection so that it is no longer overwhelmingly weighted in favour of the employer, and put workers and trade unions back on an equal footing. It would place power back into the hands of the workers who create the wealth, rather than the chief executives and shareholders who hoard it.
The Bill would also reward those countless employers who are doing the right thing by their staff in ensuring that they are well paid, well protected and well looked after, but who are being undercut by unscrupulous competitors. Yet even as Ministers claim to oppose fire and rehire, they are clearly telling their MPs to vote against the Bill, as is evident today. The reality is that the Government have nothing to offer working people.
Alexander Stafford (Rother Valley) (Con)
In some ways, I am a bit disappointed, because the hon. Member for Brent North (Barry Gardiner) made a bipartisan speech, but unfortunately the hon. Member for Bradford East (Imran Hussain) is not. Fire and rehire is a cross-party issue that Conservatives in our constituencies are dealing with on the ground as well. In Rother Valley, Adam Tinsley, the councillor for Maltby East, fought against Sheffield University, which was going to use fire and rehire, as a Unite the union representative. I commend him for that. Let us take some of the partisanship out of the debate and work together to solve the problem.
Imran Hussain
The hon. Gentleman says that he supports a councillor who stands up against fire and rehire in his constituency. I say to him that he should stand up in the House and support fire and rehire [Interruption.]—support ending fire and rehire. Then he can take that message back.
Of course, neither I nor anybody on these Benches intend to make this a partisan issue. [Interruption.] Let me finish. Our issue is that the Government have instructed Conservative Members to vote against the Bill. [Interruption.] Well, in that case, I look forward to welcoming Conservative Members in our Lobby today.
Let us look at the Government’s shameful record. I am not surprised that they are voting against stopping fire and rehire, because over the last decade, they have done nothing but openly attack and undermine workers’ rights. They introduced the Trade Union Act 2016 that stripped away the power of trade unions and made it harder for working people to organise in defence of their rights. They preside over an employment tribunal backlog that means it is almost impossible to receive justice for mistreatment in the workplace. They leave the post of director of labour market enforcement vacant at a time when we are seeing more workers exploited in the workplace. They promised us an employment Bill that we are still waiting for almost two years later. Is it any wonder that we have a labour shortage when the Government could not care less about the rights of working people?
We all know that the Prime Minister likes to talk about levelling up and building back better, but the Government cannot have it both ways. They cannot talk about levelling up without levelling up employment protections. They cannot talk about building back better without building a better employment rights settlement. They cannot talk about fire and rehire being a “bully boy tactic” without voting for this Bill today.
Several hon. Members rose—
Imran Hussain
I have been very generous with my time.
I urge the Minister to back giving rights to working people, back an end to the disgraceful use of fire and rehire, and back the Bill today. If this Government will not, then the next Labour Government, as part of our employment rights Green Paper, will.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to speak after the hon. Member for Bradford East (Imran Hussain). [Laughter.] At least we have a Yorkshire heritage in common, which is always a pleasure.
It is quite daunting to speak after the eloquent speeches by the promoter of the Bill, the hon. Member for Brent North (Barry Gardiner), and by my hon. Friend the Member for Newbury (Laura Farris). They both made fantastic and constructive speeches. Prior to my being in this Chamber, my life was in business, and I feel like I am in some kind of mediation. We have heard the workers’ perspective, we have heard the lawyers’ perspective, and now, perhaps, we will listen to the business perspective, which is a very important part of the conversation.
It was great to hear the hon. Member for Brent North talk about the engagement that he has had with business, and about seeing the issue from their perspective. I can see why he has made sure that the Bill does not ban fire and rehire outright. I am not sure that all his colleagues would support that position, so he has taken a brave line on that. He said right at the start of his speech that he wants to make the UK the best place to work. I absolutely agree. We also want to make it the best place to start a business, because the relationship is symbiotic. The shadow Minister, the hon. Member for Bradford East, said that workers create the wealth and the chief executives and shareholders hoard it. I do not see it like that. It is a much more interdependent relationship than that.
Let me talk about a personal experience of mine. I have been in business for 30 years. I know that the situation would not have been quite the same, because my business would not have come under the legislation contained in chapter 1, but there are other elements that would have been the same. We entered the crisis of 2008 with a workforce of 200 people, so we would have come under this legislation in scale, although the legislation that covered our business would probably have been slightly different.
We were in the property sector, and we were faced with a 70% reduction in turnover that year. The first thing that happened was that all the directors of the company—all the people who ran the company—took a 50% pay cut. That was the first thing we did, before we made any redundancies whatsoever. Then, of course, we sat down and talked to our workforce about how we were going to get through this period. That was a very difficult period, because we had been in business for 26 years and a lot of those people had worked for us for over 20 years. We had to reduce our workforce from 200 people to 65. It was a desperate time. We were not trying, as was described, to coerce them into a certain situation; we were simply trying to get our business through a very difficult situation. We were under pressure from all directions.
The key thing for us at that point was pace. The bank was putting us under huge pressure. We did go through consultations. As part of the section 188 requirements—the 30-day requirement—we went through consultation with our workforce. The workforce were very supportive of what we did, and I think in many cases they felt more sorry for us than we did for them, although, as I say, the conversations were very difficult. However, if we had had to go through endless consultations and reviews, challenges through the committee and challenges through the employment tribunal, our business would have gone under. That is the reality behind that delay.
Andy McDonald
The hon. Member is making some excellent points. I do not think that anybody in the House is suggesting that the sort of practices that he engaged in, as a good and responsible employer, are the issues at play here. The issue that concerns us is employers that are making very significant profits using the cover of covid to deploy these dreadful tactics, not the sort of good practices that he is describing. He is making reasonable points about periods of consultation. If he finds that those are too onerous, we can address and debate those issues in Committee. We need to hear evidence directly from people, including his considerable experience.
Kevin Hollinrake
The hon. Gentleman makes a good point, and I should have clarified this. I am not a lawyer, but I can read, and subsection (1) of proposed new section 187A covers not just fire and rehire but, as set out in clause 1,
“reasons other than conduct or capability”,
which could cover a situation where someone was making redundancies simply to cut their coat according to their cloth. Is it possible to amend in Committee a Bill that is potentially so flawed? I defer to my hon. Friend the Member for Newbury, who said that guidelines and sanctions would be the better approach. It is only fair that we look at that. As legislators, it is important that we tread carefully when we legislate at all. Bill Shankly, a great Liverpool manager, said to his players before he sent them out on to the pitch that, “The score is 0-0, don’t let it get any worse.” Before we move down a path of legislation, we legislators have to think about whether there are unintended consequences—we must not make things worse, particularly for business, which is looking for stability, frameworks and certainty. I will also come to the retrospective nature of the Bill, which I am uncomfortable with.
I am of course totally opposed to fire and rehire where a profitable business that does not need to restructure is taking advantage of a particular situation. Opposition Members are trying to cover those situations, and who would not want to do that? Such conduct is absolutely wrong and a stain on business, and every Minister I have heard at the Dispatch Box has criticised it.
There is only one thing worse than fire and rehire, and that is fire and not rehire. That would be a concern if the Bill went through, instead of companies taking the opportunity to restructure in a way that keeps their business going and gets it through a difficult time. If the provisions were not in the Bill, companies would just make redundancies or dismiss staff in other ways.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The hon. Gentleman says that there is only one thing worse than fire and rehire, and that is just fire. But if this is about the option of an offer of redundancy with a redundancy payment, as opposed to someone having a gun over their head and being told, “Take these worse terms or you won’t be able to pay for your housing. You can have no job at all, with no redundancy pay-off”, I am not sure he is right. And the situation may even be worse than that. He needs to remember the stress that our constituents were facing when they were faced with fire and rehire.
Kevin Hollinrake
The hon. Lady makes a good point, but all these matters are covered under employment law. Whether on wrongful dismissal, unfair dismissal—constructive dismissal—or redundancies, an employer has to follow due process.
Kevin Hollinrake
My hon. Friend may be able to enlighten us better than I can.
Laura Farris
To pick up on the point about redundancy payments and that being a suitable alternative, does my hon. Friend agree that of course a business in financial trouble could dismiss in any case for “some other substantial reason”, which would not lead to a redundancy payment? It is all there in section 98(1)(b) of the Employment Rights Act 1996, and it would leave an employee as badly off as somebody who is subject to fire and rehire.
Kevin Hollinrake
I defer to my hon. Friend, who knows far more about this issue than I ever would. The principle behind our discussion is making sure that, where the question is a business’s survival, it can get through a very difficult time. There is no doubt that last year many businesses and many sectors were in a situation where there were question marks about their very existence, so in those times they must have the opportunity to sit down with their workforce and restructure, where that is the only way forward.
Geraint Davies
The hon. Gentleman professes to speak for business. My background is in business. I mentioned earlier that the productivity rate in Germany had been twice that of here because employers are required not to fire and rehire people easily, so they train people. Does he also know that the Government-commissioned research by the Department for Business, Energy and Industrial Strategy shows that, in terms of productivity, the return to training in Britain is about 24% compared with only 6% in Germany? In other words, they have done much more training but our returns are much higher. Does he not agree that this sort of Bill, which puts pressure on employers to train and tool up their workers instead of just firing them when times are tough, is very important for the economy? Will he not join hands with us and take this forward to Committee?
Kevin Hollinrake
I think that there are two separate things entirely. Who would not agree with skilling up our workforce? Of course we need to skill up our workforce and good employers will do that to enhance productivity, particularly if we move to a higher-wage, higher-skilled economy. It is absolutely right that we should do that. However, the key question on whether the Bill should go forward to Committee is: is the Bill in any shape or form amendable so that it can do what the hon. Gentleman wants? [Interruption.] I accept that Opposition Members may feel that it is, but there are cogent arguments from Government Members that it is not and that there are better ways to do this.
Tom Hunt (Ipswich) (Con)
I look to my hon. Friend for guidance, as a wise head. There are certain turns of phrase that I perhaps do not understand. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), said that this about not banning the practice, but ending the practice. Does my more experienced colleague, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), understand what he means by that?
Kevin Hollinrake
I was not legally trained, so I am struggling. The key point is this: if we can find a way to meet the objectives of the hon. Member for Brent North (Barry Gardiner) without legislation, I would prefer to see that, and I think we all would because life is tricky enough when someone is trying to run a business, so if there are better, non-legislative ways to do it, we should absolutely look at them. The danger is that this becomes hugely bureaucratic.
Shaun Bailey
My hon. Friend the Member for Newbury (Laura Farris) is a lot more learned on this matter than we are, but as a general point, does my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) not agree that the way in which we make good laws in this place is by ensuring that they are operational? Does he not share my concern that the Bill is very much open to legal challenge in its current form and that, if we want to make sure that it works, it has to be operational on the ground?
Kevin Hollinrake
My principal concern is the amount of bureaucracy in and the interpretation of the Bill. I have many good lawyer friends—this usually has a “but” attached to it, doesn’t it?—but there are bound to be different interpretations of this kind of legislation. My hon. Friend the Member for Newbury (Laura Farris) set that out very clearly. Let us take just the phrase “all information”—that can mean virtually anything. A process can be subject to challenge all the way down the line and there can then be a claim for wrongful dismissal on the basis of a simple document that was not provided. Who would decide whether all the information has been provided? The appointed representative, at any point, could challenge the fact that all the information was not provided. It could be a very small piece of information that the employer never considered relevant to the discussion. Again, there is a huge opportunity for interpretation and bureaucracy. That cannot be positive for a good business environment.
There is also the issue of capacity. We already have issues about capacity for employment tribunals. This also brings in a whole new set of responsibilities for the Central Arbitration Committee and there is no understanding of whether that capacity can be filled.
Barry Gardiner
There is much in what the hon. Gentleman has said that I agree with. I just point out that the Bill does not actually ask for the disclosure of “all information”. It asks for the disclosure of
“all information…without which the appropriate representatives would be to a material extent impeded in carrying on consultation with the employer, and… which it would be in accordance with good industrial relations practice that the employer should disclose”.
That is not a catch-all. It is specifically about the information necessary to conduct proper consultations about the future of the business. He is being very fair in the remarks that he has made, but he must not misrepresent the Bill in that way.
Kevin Hollinrake
I certainly do not seek to do that. Proposed new section 187B(2) of the 1992 Act says:
“The information to be disclosed is all information relating to the employer’s undertaking (including information relating to use of agency workers in that undertaking) which is in the employer’s possession, or that of an associated employer”.
There is a double requirement, so “all information” does seem to apply.
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker (Dame Rosie Winterton)
I hope it is a point of order and does not just disturb the debate.
Kevin Brennan
At what point does a debate on Second Reading, when we should be debating the general principles of a Bill, turn into a Committee debate in which we parse one or two words in individual clauses? I believe that is a reasonable point given how the debate is currently developing.
Madam Deputy Speaker
I thank the hon. Gentleman for that point of order. Basically, a Second reading debate is very wide-ranging and hon. and right hon. Members are entitled to raise issues that they feel might be problematic if the Bill were enacted. This is a very wide-ranging debate that on another occasion I am sure the hon. Gentleman would appreciate enormously.
Kevin Hollinrake
The hon. Member for Cardiff West (Kevin Brennan) makes a very good point, and I have a lot of time for him generally. My point is a general point, but there are specifics underpinning it that we have to consider. The definition of “all information” is relevant, as is the definition of “less favourable” when considering whether an employment contract is now less favourable. That interpretation will be left for the courts and lawyers to decide. I am looking at this from a business perspective. How would it affect the likelihood of businesses wanting to employ people? That is a big commitment for any business.
Clive Efford
If we refused to send legislation into Committee because of how lawyers might or might not interpret it in future, we would not pass a single Bill. The hon. Gentleman is going into minute detail on the wording of clauses, and that debate belongs in Committee. It demonstrates that Government Members have lost the argument. This Bill should go into Committee.
Kevin Hollinrake
The hon. Gentleman makes a fair point, but in my view it is better to have no legislation than poor legislation. It is important that we look at the Bill and decide whether it should go into Committee.
As I was trying to say in response to the intervention by the hon. Member for Brent North, it is about capacity. We would be giving the Central Arbitration Committee huge responsibility, not only for taking on lots more cases but for making lots more determinations about information.
Kevin Hollinrake
Yes, but it would require a huge scaling up of the role and there are no money resolutions attached to the Bill. [Interruption.] If I or any other person does not want to see this Bill passed, we have a perfect right to stand in this Chamber and express that opinion. That is exactly what I am doing. As I say, it is better to have no legislation than poor legislation.
The capacity of employment tribunals is another big issue. The ACAS document says that employment tribunals are under enormous strain today. The Bill would likely significantly increase the workload of employment tribunals. Additionally, it would require them to make all kinds of interpretations. The ACAS document observes that tribunals are not economists. Tribunals would consider the situation between businesses and workers and would have to make decisions that, in my view, they may not be capable of making. This might introduce undesired complexity, for example. There are all kinds of questions, not just about capacity but about the competence of employment tribunals.
I am also concerned about duplication, as it seems to me that there are provisions in the Bill about situations covered by redundancy.
Simon Baynes (Clwyd South) (Con)
Can my hon. Friend perhaps provide a little more information from his expertise about the additional costs, both financial and for staffing, that he estimates will result from the high number of employment cases that might arise from this situation?
Kevin Hollinrake
I would like to be able to, but I am not sure that is incumbent on anybody who opposes the Bill. It is right for somebody who introduces the Bill to state alongside it what extra capacity will be needed, and the cost of that to the taxpayer or the businesses concerned. To my knowledge, that work has not been done.
I am also concerned about clause 27D, on the unilateral variation of employment contracts. No doubt some of the evidence taken showed that some contracts of employment allow unilateral variation. That is not something I have never done in my business practice, but nevertheless the Bill seeks to make those provisions unworkable or not legal, meaning that employers will not be able to rely on that in future, and those elements of the contract will effectively become null and void. I do not blame the hon. Member for Brent North for seeking to do that. As an employer I would not involve myself in such a practice, but it seems to be retrospective legislation. It is bound to make businesses nervous if we legislate retrospectively about such matters, and I wonder whether he has considered that point.
Barry Gardiner
Indeed. The hon. Gentleman is right, and the courts find it disagreeable that such a clause, purporting to allow retrospective variation of the contract, should be embedded within the contract. I would support the hon. Gentleman’s objection if indeed it were retrospective legislation, but the precise point is that any such clause purports to give a right to one party in the contract, and in effect to dispense with the entire contract and simply change it at will. That is what is so objectionable about it, that is what the court found objectionable, and that is what the Bill seeks to change.
Kevin Hollinrake
It is an interesting point, and I appreciate the hon. Gentleman’s clarification. My final point is on clause 187E, which seems to say that in almost any circumstance where new terms are offered, the employee has an automatic right to go to a tribunal. That seems to me strange. If any of the things outlined in subsection (1)(a)(iii) happened and an offer has been made, the clause seems to give an automatic right for someone to go to an employment tribunal, without requiring the provisions in clause 187A or B. I might have read that wrong, but it is certainly seems to be the case. Admittedly, that kind of point could be picked up in Committee, but my overriding point is this that issue requires cross-party thought. I would much rather see the provisions become effective through guidelines, financial sanctions or other means, and I do not feel that I could support the Bill were it to be voted on today.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I am pleased to support, indeed to sponsor, the Bill of the hon. Member for Brent North (Barry Gardiner), and I am delighted that we are finally getting the chance properly to debate and vote on the merits of fire and rehire legislation. As hon. Members may be aware, I introduced two Bills on this subject in the last parliamentary Session, before the hon. Gentleman was wise enough to use his high private Member’s Bill raffle slot for this issue. I am grateful to him for seeking me out earlier to discuss my experiences. My Bills were sponsored by Members from every party in the House. Conservative Members have been talking about cross-party work, and with my Bills every party in the House that existed at the time was represented. An additional Scottish splinter party has since been formed, but that is neither here nor there.
I also engaged with the trade unions from the outset. Indeed, I invited Howard Beckett of Unite to lend his expertise on the issue at my first meeting with the Minister, and I am grateful to Hazel Nolan and Gary Smith of GMB for their support throughout that period.
My Bills were more straightforward than this Bill, in that they essentially did bin fire and rehire. I thought it important to put that at the heart of what was a presentation Bill. However, I said to the Minister, the hon. Member for Newbury (Laura Farris) and many others to whom I spoke that I would work with the Minister and others to progress a Bill to allow protections that might not end fire and rehire, such as the Bill we are debating today.
I mentioned the hon. Member for Newbury. I listened carefully to her speech, and I think most of us agree that she made some excellent points, but it struck me that the vast majority of the speech could and should have been made in Committee. She agreed with the principles of what the Bill seeks to do, and I therefore hoped and expected that she would support it.
Sara Britcliffe (Hyndburn) (Con)
In fact, my hon. Friend the Member for Newbury was suggesting that we did not need legislation for this. That is why she said that she was opposing the Bill.
Gavin Newlands
I fundamentally disagree—[Interruption.] It would be useful if the hon. Lady would allow me to finish my response to her intervention.
In fairness, most of the speech made by the hon. Member for Newbury was not setting out that view; that is certainly not how it came across at the time. I appreciate that that is the conclusion that the hon. Member for Newbury reached, but she could have worked with the hon. Member for Brent North and others across the House to help with legislation that would appease all of us, and the workers of this country.
Ministers, however, have done what they have done every time fire and rehire has been raised with them: they have clucked sympathetically, wrung their hands at how horribly ungentlemanly these companies are being, and said how much they sympathise with the workers who are being blackmailed, and have then proceeded to do absolutely nothing to address this in legislation. Every Minister from the Prime Minister down seems to have forgotten that it is the Government who speak from the Dispatch Box, and that they have the power to act to protect workers rather than murmuring sympathy for the benefit of Hansard and no one else.
The Government should understand that this issue is not going to go away. It will certainly not go away as a result of guidelines. My Bills failed to make progress; the hon. Member for Brent North is having another crack. Until and unless the law is changed to protect workers, this issue will come back to haunt the Government time and again.
Chris Stephens (Glasgow South West) (SNP)
Was my hon. Friend as surprised as I was that the Government did not propose an employment Bill in the Queen’s Speech, telling the media that it was not a priority at that time?
Gavin Newlands
The short answer to my hon. Friend is no, I was not surprised that the Government failed to propose such a Bill. That was to be expected from the Conservatives.
Unless and until the Government act to close this loophole and ensure that workers are protected from the likes of Tesco, British Gas and British Airways and their bully-boy tactics, the need to change the law will continue to be raised, at least from these Benches. The case of British Airways is a perfect demonstration of how UK workers’ rights are light years behind those in much of Europe. Its parent company, IAG, also owns Aer Lingus and Iberia. While BA was telling its UK staff to take cuts in pay and conditions last year, workers in Ireland and Spain were protected from the same tactics because their Governments over the years have ensured that employees are entitled to a level of protection in law from their bosses. Willie Walsh—who has already been mentioned today—and the IAG management knew that they could hit workers in the UK hardest and fastest, because this Government allow them to do so.
Ruth Cadbury
The hon. Gentleman is making an excellent point. As he says, fire and rehire is illegal in countries such as Ireland and Spain because it is in primary legislation. Does he agree, therefore, that the option proposed by Conservative Members—the introduction of an ACAS code of conduct to deal with the issue—is entirely insufficient?
Gavin Newlands
I could not agree more with my Transport Committee colleague. This has to be in primary legislation and that is what people on the Opposition Benches will continue to work for if the Government vote the Bill down today.
Many people across the country think—perhaps unfairly at times, but not so in my experience—that the Tories can be uncaring on these issues, because they do not see the poverty and the pain of not being able to provide for one’s family. [Interruption.] That is just not the case. I spoke to a number of British Airways employees who broke down in tears telling me of the fact that the airline they had served, in many cases for decades, was looking to give them what amounted to a pay cut of 50% or more, and that they had told their Conservative MP all about it, who did nothing. Nothing. Surely, we are here to represent our constituents, particularly in their time of need. If not, what exactly are we here to do?
Christine Jardine
Like me, the hon. Gentleman represents one of Scotland’s major airports. I had the same representations from very many staff who live in my constituency of Edinburgh West and work for British Airways at Edinburgh Airport. That was very much the feeling that came across. Does he agree with me that they were disappointed and felt that they had been there for so long that there was a moral obligation to offer them better than what they were getting from British Airways, and that there is a moral obligation on us, as Members of Parliament, to support that?
Gavin Newlands
Absolutely. I thank the hon. Member for her intervention. I agree with her 100%. I find myself in agreement with her far too many times these days. She is absolutely right: our moral obligation, as Members of Parliament, is to support our constituents when they are under attack in such a way.
Gavin Newlands
I will move on. I will come back to the hon. Gentleman. [Interruption.] Or not, if he is going to huff. It is up to him.
I do not believe that it is any coincidence that those countries with heftier employment rights around Europe have better and more robust economies. We can see the results of precarious employment around society right now: labour shortages in all sorts of sectors of the economy and lacklustre demand experienced by retailers. If our economy is 80% centred on the service sector, we need people spending money on those services. Leaving workers with the fear that tomorrow could see their employer slash their wages or show them the door is a sure-fire way to depress spending, demand, and ultimately hinder economic recovery. Workers in Europe have no such fears, and it is surely a factor in their continued long-term outstripping of the UK that employment rights are given such importance and credence by their national Governments.
Whatever ideological objections some Members on the Tory Benches have to improving workers’ rights—I have no doubt a few of them consider the factory Acts a gross impertinence—they can surely see the economic self-interest that protecting workers from fire and rehire would mean for employer, employee, and our society and economy as a whole. It is no wonder Ministers want to isolate the UK further and further from Europe; they want the UK isolated from the norms of employment rights that apply there. They want workers in the UK isolated from the economic benefits that enhanced rights would bring. They want the UK isolated from the basic standards of decency that apply across the continent. On decency, I will give way.
Alexander Stafford
Is not one of the big differences between what we are doing in the UK and what they do on the continent, that on the continent they have mass immigration across the EU, which is driving down wages, whereas in this country, now that we have left the EU, we can look after workers better, not rely on poorly paid labourers and actually get high quality high-skilled jobs? That is the fundamental difference: we want better jobs and better pay for people, rather than relying on cheap labour.
Gavin Newlands
Well, I find that rather astonishing. The hon. Gentleman talks about improving workers’ lot, yet they are voting down this legislation today. The lack of self-awareness in some Conservative Members is astonishing. They are very fond of talking about levelling up, but not, mysteriously, when it comes to levelling up workers’ rights against the power wielded by multibillion pound corporations and their multimillionaire managers. The idea that the UK should level up to European standards is anathema to them.
I am coming to my conclusion as I appreciate that there are many Members who want to speak today, but I would like briefly to take this opportunity to mention my own Devolution (Employment) (Scotland) Bill, which is on the Order Paper today. It is an unlikely contender for Royal Assent, given that it is at the bottom of the Order Paper today, but it is an attempt to prise employment law from the clammy grip of the Treasury Bench as far as Scotland is concerned. Do not worry, Madam Deputy Speaker, I will not speak to it; I mention it only because I fear that the Tories will vote down the Bill before us today. To my mind, that will be the straw that broke the camel’s back. No more should Scottish workers be forced to suffer the consequences of unthinking and uncaring Tory Governments. Dovetailing nicely with that is the fact that the Scottish Government supported my legislation last year and that banning fire and rehire was also in the Scottish National party manifesto for the Scottish elections in May, in which we received our record vote.
If this UK Government continue to stick their head in the sand and depress workers’ rights below the level seen in most other civilised countries, they should not be surprised if Scotland chooses civilisation instead of the race to the bottom that seems to be happening to workers here. Workers across these isles should all be accorded the respect and dignity they deserve, and have that backed up with the force of law where required. I commend the Bill to the House.
Richard Fuller (North East Bedfordshire) (Con)
It is a pleasure to follow the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), who, through his commitment to his own Bill and through the amity he has shown to his colleague the hon. Member for Brent North (Barry Gardiner), who is bringing forward similar legislation today, demonstrates that he has a keen commitment to dealing with this problem. Although, as I will outline, I have a different approach to how we should tackle it, I believe the principle is shared across the House.
It is a shame that the hon. Member for Brent North chose the time I stood up to walk out of the Chamber—I shall not take it personally, whether or not it is personal. I wanted to commend him for the way in which he presented his argument and case today. He has undoubtedly done a tremendous amount of research and gained tremendous understanding about this issue, and in taking so many interventions from Members on both sides of the House he demonstrated that he was prepared to debate, understand and move forward. I will return towards the end of my contribution to how we might continue the progress of this amity between the hon. Members for Paisley and Renfrewshire North and for Brent North and my hon. Friend the Member for Newbury (Laura Farris), who outlined a substantial alternative approach and a better one to achieve the goals that are shared across the House.
It was a shame, and perhaps a disappointment to the hon. Member for Brent North, that what was the oratory of Cicero from him descended into the mosh pit of Westminster debate with the contribution from the shadow spokesperson, the hon. Member for Bradford East (Imran Hussain). It was a metaphorical head in the hands moment for the hon. Member for Brent North, but he did endear himself to many on the Government side of the House with his contribution. He was at one moment in danger of talking out his own Bill. Ironically, the fact that, unusually, there was a statement today gave him some latitude to come to a close.
I wish to pick up on two points the hon. Gentleman made. First, he said that his Bill would make the UK the best place to work, but the UK is already the best place to work, in large part due to measures that this Government have undertaken, particularly in their commitment to the living wage and in continuing the progress on reducing the gender pay gap by ensuring that there is enhanced reporting by boards about the treatment of employees. This Government are continuing to make the UK the best place to work, not least—I say this as much of this debate relates to actions that took place during the covid period—with the exceptional response of the Chancellor to support businesses through the furlough programme and other UK Treasury measures. So I gently make that point to the hon. Gentleman.
Chris Stephens
The hon. Gentleman and I share a passion for American football, but may I ask him why, if he believes the UK is the best place to work, the Government have not yet responded, formally, with legislation, to the Taylor report of four years ago on unscrupulous working practices in the UK?
Richard Fuller
That is an interesting point. Unfortunately, I am not a member of the Government. The hon. Gentleman probably wants to direct that question to those on the Front Bench. I am familiar with Matthew Taylor, who, apparently, is back in the news this week with a different hat on telling the Government what they should or should not do, and I am not sure whether I agree with him in that particular case.
The hon. Member for Brent North also said that the Bill was about better regulation, and that perhaps gets to the nub of the difference of approach between those on the Labour Benches and those on the Government side of the House. Our approach is not about making better regulation, but about making better business. We understand that in doing that, Government and others can take a variety of tactics and approaches to achieve a shared objective.
Let me point Members to my entry in the Register of Members’ Financial Interests, because I want to refer to a couple of pertinent examples from last year. This debate largely relates to an exceptional time and an exceptional practice, both of which remain exceptionally rare. For those who have quoted many statistics, let me just add a comment from the Chartered Institute of Personnel and Development. It said that the
“use of ‘fire and rehire’ remains low”
despite the “upheaval of Covid.” It was covid that created those exceptional issues for people. The part that was exceptional and that differentiated companies’ response from the one during a different time of distress, the 2007-08 financial crisis, was that the Government themselves had stopped commerce. This was not just a matter of overcoming financial considerations—the shortage of access to capital to support a business or a downturn in demand in the economy—but a direct intervention of the state, both in this country and in Europe and across the world, which said, “No, you cannot do business”. When we frame legislation, it is important to understand that, if the context for that legislation is primarily driven by such an exceptional event, we are wise to be very cautious indeed about what we put on the statute book for fear that it will have uses in less exceptional times that perhaps we cannot foresee today. That is one of the primary reasons why I will not be supporting the Bill in a vote later today.
Let me reflect on what was on the minds of companies at that time. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) talked a little bit about his broad experience, but I want to talk specifically about what was going on this time last year. Before coming to Parliament, my career was substantially in venture businesses. The businesses to which I still have relations would be covered by the provisions of this Bill. They are largely in the categories of businesses larger than microbusinesses, but they are all businesses for which the availability of cash and the support of capital, both shareholder capital and of loans, are always treated very seriously and quite tightly to achieve growth.
Growth is those companies’ main objective. They do not have a cushion of resources to fall back on, so when the exceptional events of covid and the closedown of the economy occurred, the amount of pressure on their boards and senior executives was beyond exceptional. There was the responsibility to understand where on earth money was going to come from to support ongoing operations. There was their duty of responsibility to make sure that they were not trading fraudulently because of insolvency concerns about the business. There was a desperate search for loans, and an approach to shareholders to gain additional liquidity through additional investment. Many senior executives voluntarily cut—and in at least one instance eliminated—their pay during that period. There was a tremendous focus on employees, and primarily on employee safety.
Let us all remember that the experience of covid was not a shared common experience for everyone in the country. There are those of us in the country, such as Members of Parliament, who were facilitated to continue to take 100% of our pay, to have 100% certainty of employment, and to have the opportunity to work from the safety of our own home, but there were many others who were facing: cuts in their pay, a 100% certainty of the loss of their business and the requirement that, if they wanted to stay in employment, they had to go to work. For any Member to say that senior executives and company boards were not intently focused on ensuring the safety and security of their employees does a gross disservice to what companies were going through.
Boards and senior executives were substantially challenged to make changes. In the process of looking at all the alternatives that could maintain the survival of the company, they would have due regard to the law at the time. As my hon. Friend the Member for Newbury stated, one of the issues with the existing legislation is that companies will defer putting all their cards on the table, including the option of fire and rehire if that is one of their considerations. Perhaps we can make some change in that regard that would be helpful for companies and employees.
Companies would also have due regard to maintaining the solvency of their business. To do that, consideration has to be given to what a company will do to manage its costs in the year ahead. If it is looking to access capital, loans or additional equity, questions will be asked by the banks, creditors and shareholders about what it is doing to manage their future costs. It would be a deterrent to gaining the investment and support needed to maintain the business if it was unable to outline what angles and opportunities it was investigating to reduce costs.
For many of the executives in business with which I have worked, consideration of employees is front and centre in their mind. It is exceptionally difficult for them to balance in their own heads the idea that, “I know I need this additional capital,” with, “I want to make sure I can protect the employees and the skills that I have within my workforce.” In my experience, most people involved in business who are entrusted with authority would undertake measures covered by the Bill only as a last resort, if ever.
Geraint Davies
The problem is that the hon. Gentleman is conflating the extraordinary situation of the pandemic, when the Government, to their credit, intervened with furlough, loans and other measures, with a normal situation when a business needs to adjust to economic pressure. That is what we are talking about today—a Bill that, to a certain extent, limits fire and rehire so that it is not the first but the last resort. I feel that he should support it.
Richard Fuller
I understand where the hon. Gentleman is coming from, but I do not think the facts of history indicate that what he suggests is the right approach. The truth is that throughout the period of the last Labour Government it was not seen fit to bring forward such legislation. As I mentioned earlier, there were no calls for it when we went through a severe financial crisis, although there was widespread fire and rehire. It is precisely because there was an exceptional event last year that I am conflating that with this legislation. In my view, the Bill has been stimulated by that experience but will sit on the statute book for the future of more regular business, though I am not sure what that will be.
Furthermore, there is a little confusion about the intent of the Bill, which perhaps the hon. Member for Brent North can help to clarify now he is back in his place. Many of us have seen Labour MPs—socialists—campaigning to outlaw fire and rehire, and one would anticipate that many of them have turned up today to vote to do that, yet we heard from the Bill’s sponsor that it does not do that. It got so confusing that the shadow Front-Bench spokesman, the hon. Member for Bradford East, urged hon. Members to “support fire and rehire”. Between those on the Opposition Benches who say that they want to ban it, the promoter of the Bill who says that his Bill does not ban it, and the shadow Front-Bench spokesman who wants us to do more of it, I wonder whether they know what indeed they are doing.
Barry Gardiner
I am grateful for the hon. Gentleman’s good humour. The Bill does not ban fire and rehire, but we want—I think all hon. Members want—to end it as a tactic. That is the point. When people say, “Let’s end fire and rehire,” they mean, “Let’s end it as a tactic, as a bad practice used by disreputable employers to do the wrong thing.” I hope that that clarifies it.
Richard Fuller
I am very pleased that the hon. Gentleman is back. He is showing the steps that he is taking to create consensus. I think he will find that as we move forward, perhaps with an alternative approach. I would gently mention that only on 6 May this year 145 of his colleagues signed a letter to the Prime Minister urging that fire and rehire be outlawed, and he must accept that his proposal must be a severe disappointment to them, given what he has said today.
There is an important reason why I would urge the hon. Gentleman to continue his journey, perhaps towards a code of practice approach. For me, and I think for many, the work of business, the work of capitalism, is a good for society. Capitalism is good. Capitalism creates. Capitalism creates higher wages, better skills, stronger businesses and a more global Britain. It is through capitalism that this country has grown the strength to provide public services for so many of our people. It is through capitalism that we have been able to have the highest increases in wages for the lowest paid that we have had for decades. It is capitalism that gives hope to people who want to start their own business. It is capitalism that is going to close the gender pay gap and the discrimination against people based on colour, because capitalism seeks out talent. It is upon the captains of capitalism—the women and men who lead our businesses—who understand how to get that great concoction of people and investment to create wealth and security, that we should be entrusting the responsibilities to act ethically and responsibly.
In my view, that purpose is best accomplished through a code of practice that works with the best grain of business rather than against it.
Kevin Hollinrake
My hon. Friend’s points on capitalism were not totally accepted by those on the Opposition Benches. I think we all concede that capitalism is at times not perfect, but has the alternative ever been shown to work anywhere?
Richard Fuller
Certainly not, which is why Labour Members are on the Opposition Benches, and the Conservative party, which supports working people, is in government.
I should like to say a few more words about the detail of the Bill and to support some of the points made by my hon. Friend the Member for Newbury.
Anthony Browne
The shadow Front-Bench spokesman said earlier that various European countries were ahead of the UK, citing Germany, Spain and Ireland. I actually agree with him—they are ahead of the UK in unemployment. In Ireland, unemployment is 50% higher than in the UK. In France it is twice as high. In Germany it is three times as high. Youth unemployment in Spain is about 30%. It is a real tragedy for young people. Does my hon. Friend agree that there is a connection between the flexible labour market and the low unemployment in the UK?
Richard Fuller
Well of course I do. Who would not agree with my hon. Friend? He will accept that, should we as a House decide that the better approach is through a code of practice, that places great responsibilities on boards of directors and chief executives to abide by that code of practice. It is a better approach. When pressures require extraordinary measures to be taken, time is critical, and everyone is busy—not just within the business, but the advisers and so on, too. That is why the legal approach proposed by the hon. Member for Brent North would in those circumstances be too bureaucratic, not flexible enough and would end up with a worse outcome for employees than is his honourable intention. A code of practice gives those entrusted to make those decisions the right set of things that might otherwise miss their attention. Directors are absolutely aware of their responsibilities under certain aspects of law, but also of their responsibilities under a code of practice.
Sam Tarry
Does the hon. Gentleman agree that it is beyond belief to think that a code of practice is enough? We are talking about firms such as Clarks, where workers who make kids’ shoes are currently on strike. It was recently bought up by a Hong Kong-based private equity firm. Are such firms going to pay any attention whatever? It is just the same as BA. Its parent company IAG had £3.5 billion in the bank and it did not pay any attention even to British laws at that particular time. It was trying to circumnavigate them. It seems to me that a code of practice will not even be worth the paper it is printed on. Does he agree?
Richard Fuller
The hon. Gentleman makes a fair point. I am not particularly aware of the particular circumstances to which he has spoken, but the intention of the suggestions of my hon. Friend the Member for Newbury is that there would be some form of power behind that code of practice to encourage businesses so that we can eliminate those limited examples where companies are misusing fire and rehire. Perhaps the hon. Gentleman would like to speak to the junior—sorry, the Minister, my hon. Friend; I should never call him junior, he is very senior. The hon. Gentleman may wish to raise that point directly with the Minister, if he has not already.
In closing, I say to the hon. Member for Brent North and the SNP spokesperson that through their diligent efforts, they have raised an issue where some measured change is required. The hon. Member for Brent North might find that the approach of my hon. Friend the Member for Newbury is a better approach, but with the dignity with which he has proposed this Bill today and the way in which he has shown his willingness to speak to others, there is no dishonour in proposing and pushing something if ultimately there is a different way for us to achieve that objective.
Sarah Owen (Luton North) (Lab)
It is a pleasure to follow the hon. Member for North East Bedfordshire (Richard Fuller), a fellow Bedfordshire elected representative, but it will not come as any surprise that we do not agree on all the points he has raised.
People have had their lives changed since 2020, with people going months without hugging loved ones, jobs lost and food bank use rocketing. So many people in Luton North have been worried about where their next pay slip is coming from—people who never thought of their job as insecure are now experiencing that their job and their wage is only as secure and reliable as their employer allows them to be. That is not inevitable, even during a pandemic.
We have seen big businesses—British Airways and British Gas, to name just two—trading under this country’s name but not in our country’s interest. They have used the pandemic as an excuse to get rid of thousands of workers and replace their old contracts with worse pay, worse terms and conditions and fewer rights at work for very similar roles. We have heard today that few of us disagree that the practice of fire and rehire is wrong, so why not vote to stop it?
I am so proud to stand with working people and our trade union movement, including GMB and Unite—I declare an interest as members of both, as well as of the Communication Workers Union—the Union of Shop, Distributive and Allied Workers, Unison, the Transport Salaried Staffs Association and many others. They are backing the private Member’s Bill of my hon. Friend the Member for Brent North (Barry Gardiner), whose campaigning fervour has got it to this point in just a few short weeks. We know from the TUC that one in 10 workers has been told to reapply for their job since the start of the pandemic. We know that black and minority ethnic workers, women workers, young workers and working-class people have been hit even harder by the pandemic. And we know that when restrictions were lifted in July this year, millions of people in constituencies across the country were less secure in their workplace than they were in March 2020.
I am going to say something that I am probably only ever going to say once. I do not disagree with the Prime Minister—just once. I agree that we must build back better, but after 11 years of austerity and weakening of workers’ rights, better is anything but more of the same.
Dawn Butler (Brent Central) (Lab)
I thank my hon. Friend for the powerful points that she is making. Is it not fair to say that if Members believe that fire and rehire is an unfair practice, they could vote for the Bill and then, in Committee, make any amendments that are needed to make it stronger?
Sarah Owen
I absolutely agree. We have heard today a collective understanding that the practice of fire and rehire, and its misuse, is an abomination for workers and is against our country’s values, so why not vote the Bill through today instead of talking it out?
After 11 long years of austerity and weakening of trade union and workers’ rights, we need to build back people’s working lives with better rights at work, stronger foundations and more security in jobs. No one can disagree with that.
Margaret Greenwood (Wirral West) (Lab)
My hon. Friend is making an excellent speech. Does she agree that we have devastating levels of child poverty in this country, and that unless the Government take action on fire and rehire, they will just leave families in insecurity? The Government talk about levelling up, but they need to act on it.
Sarah Owen
Absolutely. We hear terms such as “levelling up”, but what we need is action, for exactly those people—those who are suffering from the horrific levels of child poverty and the insecurity of work. That is having a physical, mental and economic impact on constituents across the country. We need to see some action, and today would be a good time to start.
People in Luton North need jobs to be protected and created, and they need that now. We have been hit harder than most places, with our airport and proud manufacturing industry bearing the brunt of the pandemic. But these bad employers hurt the good ones, and therefore they hurt our economy and our constituents.
We had a statement earlier today—one that apparently could not wait—about improving the health of our nation. What better way could there be to improve our country’s health than giving people peace of mind, money in their pockets and security in their jobs?
Rachel Hopkins (Luton South) (Lab)
My hon. Friend is making an excellent speech. On improving health, does she agree that having employment rights from day one would go a long way to improving workers’ rights?
Sarah Owen
I absolutely agree with my fellow Luton MP. We are talking about how we cannot go back to where we were, and about building back better. I think all of us represent constituents whose priorities are different from their priorities before the pandemic. What we hold dear and take for granted has changed. Workers’ rights must be at the heart of that, and providing security in the workplace—providing a secure job, a secure home and a future that we can all look forward to—is key to that. That is why I ask the Government and their Members to put their votes where their mouths are and vote to end the practice of fire and rehire.
Mark Pawsey (Rugby) (Con)
Madam Deputy Speaker, I hope you will excuse me if I am a little disengaged from my speech today. I have just been sent a photograph of my newly-born grandson—[Hon. Members: “Hurray!”] —at 7 lb 3 oz, and mum and son are doing very well.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I am sure the whole House joins me in congratulating the hon. Gentleman on his newly-born grandson, and sends its congratulations to our former colleague, his father, on being a great-grandfather. [Hon. Members: “Hear, hear.”]
Mark Pawsey
Thank you, Madam Deputy Speaker. Your remarks are most appreciated.
I want to participate in today’s debate for much the same reason as my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I ran a business before coming here and I am also a member of the BEIS Committee, which considered the dispute between British Gas and the GMB union.
I want to start off by considering the term “fire and rehire”. I think the term “fire and rehire” is emotive. It has not been helpful in a number of instances of use in this debate, which has been fairly consensual. I have to say that I think the shadow Minister, the hon. Member for Bradford East (Imran Hussain), did not help the tone of today’s debate with his remarks. But there is an understanding that, where it is used as a negotiating tactic, fire and rehire is wrong and we do need to work hard to deal with that.
I want to look at the terms “dismissal” and “re-engagement”, because as an employer and someone who ran a business, the term “re-engagement” filled me with profound happiness: it was often a member of staff who had left my business and wanted to rejoin us, and often people who had gone away, broadened their experience and came back to our business with additional skills and additional knowledge. That was really quite encouraging and happened fairly often.
As an employer and a business owner, the term “dismissal” caused me a massive amount of grief. It was an issue we would never take lightly, but occasionally there would be a need to carry out dismissal on the basis of poor performance or unacceptable behaviour. But if ever my business went down that road, we knew that there were very strict rules of procedure laid down. We had to go through the correct processes, we had to be entirely sure of our facts and we had to build a case in the sure knowledge that that could be subject to a tribunal case and my business could be found to have behaved inappropriately or unfairly. I do think that, on occasions, the burden on business, and what it has to go through in the very sad cases in which that happens, is forgotten. I have to say that, at that time, the advice and guidance of ACAS in ensuring that my business behaved appropriately was incredibly helpful and very valuable.
Mary Kelly Foy (City of Durham) (Lab)
I would like to thank the hon. Member for highlighting the plight of those smaller businesses. Would he agree that Heathrow airport, British Airways, British Gas, Weetabix, Clarks, Argos and Sainsbury’s all are iconic British businesses? They have not engaged with their workforce, but they have engaged with that practice of fire and rehire. They are not struggling businesses. They are not just trying to get by. [Interruption.] They are not just trying to get by. They are powerful combinations—
Madam Deputy Speaker
Order! Did the hon. Lady not hear me? She cannot make a speech. She can make an intervention. That is absolutely fine—[Interruption.] No, no. It is becoming a speech. If she has an intervention to make, then make an intervention, and she should not have to read an intervention because it should be really short.
Mary Kelly Foy
Thank you, Madam Deputy Speaker. Would the hon. Member agree that these big, iconic British businesses are not engaging with their workforce like him, but they are engaging in fire and rehire practices, and they are a disgrace to British workers and to the name of Britain—
Mark Pawsey
I think I understand the point, and I think the hon. Lady, if she has been here throughout the debate, will understand that there is a desire from this side for that not to happen, and for discussions and negotiations to take place at a much earlier stage.
We have had reference to the ACAS paper that was published in June 2021, which of course makes interesting reading. It tells us that dismissal and re-engagement is not new and has been around for some time, and it sets out the scenarios where it has been applied. Those of course include the harmonising of terms and conditions. There are many businesses that make acquisitions and find that they have staff on different terms from businesses that have come together over a number of years, and it is not appropriate for one set of employees in a business to be operating on different terms and conditions from those elsewhere in the business. There is a prima facie case, an immediate case, for why there should be some standardisation. During the pandemic, businesses have been required to introduce temporary or permanent flexibility in respect of hours worked, shift patterns and the security of hours. Covid has substantially affected—
Barry Gardiner
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
On a point of order, Madam Deputy Speaker. Given the feeling on this side of the House about fire and rehire, I wonder whether you can inform those Members who find this a profoundly disagreeable position whether the House authorities, or contractors providing services on behalf of the House, are utilising the policy of fire and rehire for the delivery of services within the Palace of Westminster.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Gentleman for his very reasonable point of order. He has asked a question to which I cannot give him a direct answer, because I do not know the answer, but I would say to him that it is of course not a matter for the Chair. It is, however, a matter for the House authorities. When I say it is not a matter for the Chair, I do not mean to imply that it is a matter about which the Chair is unconcerned. I will therefore endeavour to find out the answer to his question and let him know as soon as I possibly can.
Mark Pawsey
I was in the process of setting out the scenarios identified by ACAS in its paper of June 2021 on where dismissal and reinstatement had been used. The final point, which has been made by Conservative Members in particular, is the challenge of business survival in the current circumstances, with covid, and the need for businesses to get through an incredibly difficult time.
The ACAS paper also identified a number of differing attitudes to the reasonableness of using dismissal and reinstatement in dealing with one of those scenarios. It set out a series of positions, including, at the very top, the view that this should never be used. Before arriving in the Chamber this morning, I believed that that was the attitude of the Member promoting the Bill; I believed that he would never permit dismissal and reinstatement to take place. However, he told us today that in certain circumstances it can exist and that he is seeking not to ban it but to ensure that it is never needed to be used. I am sure that a number of his Opposition colleagues do not agree with that approach and would be in the “never” camp. Others see it as being a matter of concern when it is a negotiation tactic, which I think is a view common on this side of the House. There are those who see it as an option of genuine last resort, a view again sympathetically understood by those on this side. Others think it is not at all contentious—I do not think that anybody here believes that—and there are some who believe it is perfectly acceptable at any time, and the House has made its view clear on that.
I now wish to turn to the issue of Centrica, because the Select Committee on Business, Energy and Industrial Strategy looked at that. We heard in Centrica’s evidence to the Committee that the costs of its services were between 30% and 50% more expensive than the use of contractors. The senior management had real concerns about the viability of their business ongoing. They sought less to deal with the issue of pay, but more to deal with the number of hours on a standard contract. They wanted to increase that from 37 to 40 hours. Indeed, in their restructuring 20% of their staff would receive a pay rise. One thing that the chief executive reminded us of in his evidence was the need for businesses to keep sight of what the customer wants and what their needs are. Those of us who have been in business will know that the customer is king and that those of us who disregard the needs of our customers put their businesses at a significant disadvantage. Where businesses are uncompetitive, it is important to deal with these things at an early stage, because otherwise, as we know, the danger is of long-term redundancies and business failures, which are not in the interests of anybody.
Gavin Newlands
I take the hon. Gentleman’s point about business requirements, but would it not be a more productive approach to seek that agreement with the union, rather than holding a metaphorical gun to its head at the start of negotiations?
Mark Pawsey
I, and the majority of Conservative Members, are in agreement with the hon. Gentleman. We want those discussions to take place at an earlier stage. Centrica believed that it was a requirement to issue a section 188 notice at an early stage, because redundancies might be necessary. That was a matter of the interpretation of law.
Andy McDonald
I congratulate the hon. Gentleman on his wonderful news. We are discussing Centrica. Have he and his colleagues on the Committee committed the calamitous acquisitions by British Gas Centrica in America, which brought on it the financial pressures that it had to deal with? Its choice was to instigate section 188 notices and start the process, rather than to begin consultation, which is what Labour Members are trying to achieve with the Bill.
Mark Pawsey
I thank the hon. Gentleman for his contribution. I think we are in agreement—we want that to happen. The legal advice that a substantial UK corporation received was that that was necessary, and he and I will need to look again at the contribution of my hon. Friend the Member for Newbury (Laura Farris), which sets out an alternative way of dealing with such issues. From the Centrica evidence I also got the need to modernise terms and conditions. This long-established organisation had gone through many iterations. It employed a number of businesses, there were 7,000 variations in its terms and conditions, and it needed to bring those together. I think the matter is now resolved, with 98% of engineers at Centrica having signed a new contract by May 2021. We all understand the need to add to existing protections, and my hon. Friend the Member for Newbury has set out a clear alternative for the way forward. She spoke authoritatively about the dangers of unintended consequences from the Bill, and for those reasons I shall be later joining my colleagues in the Lobby to oppose it.
Jack Dromey (Birmingham, Erdington) (Lab)
I pay tribute to my hon. Friend the Member for Brent North (Barry Gardiner) for his outstanding advocacy of a necessary measure to ban from our country practices that have no place in modern Britain.
No one today has argued other than that there are circumstances in which profit-making companies put workers up against the wall and tell them that they will be fired and rehired unless they agree to major changes to their terms and conditions of employment. Whether that is British Gas on the one hand, or British Airways on the other, employers who have flown the flag of Britain have treated British workers shamefully. I have met weeping workers who have worked for a company for decades and who loved the job they were doing, but who feel they have been treated disgracefully. Across the House there has been consensus that there is no place for such treatment of workers in modern Britain. The question is whether we mean it, for this is the opportunity to end it.
Paul Howell (Sedgefield) (Con)
One thing that has been debated a few times is whether the Bill actually removes fire and rehire. Cleary—from the intention of the hon. Member for Brent North (Barry Gardiner)—it does not. We have also heard that a lot of employees are concerned not just about the risk of fire and rehire, but about the threat of that. If we do not remove fire and rehire, the threat will still sit there, and we will still have that problem. What is the point of the Bill?
Jack Dromey
The danger to workers will be significantly lessened if my hon. Friend’s Bill passes into law.
Following on from the hon. Gentleman’s intervention, I have two points. First, some Members have asked whether a private Member’s Bill is an appropriate vehicle. I will give a good example in just one moment as to why it is. Secondly, it has been said that the proposed Bill is not perfect. In what I thought was an interesting contribution, the hon. Member for Newbury (Laura Farris) said that it is clear that the law is not working. It should be a matter of last resort, but it is not. If that is right, then, in those circumstances, we should send an unambiguous message on the principle that we are seeking to secure and see the Bill go into its next stage in Committee.
Let me turn now to the use of a private Member’s Bill. In my former role as deputy general-secretary of the Transport and General Workers’ Union, I chaired a coalition that took the Gangmasters (Licensing) Bill into law to establish the Gangmasters Licensing Authority. I saw at first hand the shameful treatment of those who worked for gangmasters in agriculture and in fisheries. What was so fascinating about that experience was that we built an extraordinary coalition from plough to plate—from the supermarkets to the National Farmers’ Union. One would hope that there would be a read-across in modern times. We had progressive gangmasters who were saying that they wanted fair treatment for all in the industry, because, without it, they would be unable to secure fair competition. I have had employers say to me, “We do not accept that the rogue should be allowed to undercut the reputable as well as treating workers shamefully.”
Another characteristic of that whole remarkable process was the cross-party approach. I pay tribute to Gillian Shephard, a former Minister of Agriculture, Fisheries and Food, for the work that she did and for working with us. She would say, “I am not sure about that, Jack.”, or, “I would like to propose that.” Sometimes, there was vigorous debate, but we were united on the principle and, as a consequence, what we saw was the most complex private Member’s Bill in 30 years pass into law. It saw the licensing of gangmasters, making it a criminal offence for anyone to use an unlicensed gangmaster. Ultimately, the consensus was buttressed by the tragedy at Morecambe bay. To this day, all of us remember that as one of the most grotesque examples of the exploitation of working people in the history of this country.
I tell that story because, as we are seeing today, there was a consensus. People said, Hang on a second, this is not right.” There was a determination to act on it—to do it. Indeed, a Conservative colleague said to me, “Dammit, do it.” Why is there resistance to this Bill going forward to the next stages? It is the vehicle that permits that very necessary debate to take place.
Let me say two things in conclusion. I have 40 years’ experience in the world of work. I have been personally involved in the striking of very difficult deals to protect workers and to secure the long-term interests of their workplace: a four-year-pay freeze at one particular car company; and major changes to terms and conditions of employment at an engineering company. There were also significant changes in an aerospace company, but they were made as a consequence of dialogue, debate and necessity. A consensus was created and, ultimately, some big changes were made.
I live in the real world where, sometimes, we face immensely challenging sets of circumstances where action is necessary. That has been the history over many years in the world of work, and in the practice of the union in particular. I distinguish between that on the one hand and this practice that we are discussing today, which no one has defended. Currently, as things stand in British law, there is an ability to put workers up against the wall and say, “Dammit, we will cut your terms and conditions of employment. If you don’t like it, we will fire you. If you then want to be rehired, we will take you back, but on very different terms and conditions of employment.” That is fundamentally wrong. There have been some interesting contributions today, but I say to Members on the Government Benches: how do we begin to justify not taking this opportunity to act? What kind of message does it send to our constituents and the country? If we believe there is that which is wrong—practices that I think are downright immoral—let us send that message, see the Bill go forward today, debate it during the next stages and do the right thing by our country and British workers.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I congratulate the hon. Member for Brent North (Barry Gardiner) on securing the Second Reading of his private Member’s Bill and on the way in which he has engaged with both sides of the House, as well as with unions, workers and employers. I met him twice over the summer, and indeed, again this week, to discuss his ambitions for the Bill. In a slightly surreal surprise moment, he leaped out of a bar in Manchester at our party conference to lobby me as I moved from event to event. I know that he wants to be associated with the party of workers, but that was an extreme way of doing it. However, I welcome his approach and I jest, because I know that he has engaged on this issue and is committed to finding a workable solution to address the issue of fire and rehire, which is clearly important for Members of the House. I have stood here many times before to address the House on this issue.
Let me answer the charge from the hon. Member for Birmingham, Erdington (Jack Dromey) about sending out an unambiguous message. We do send the message out and we have been really clear. We do not have to do it through this particular Bill. I was really attracted to the approach of my hon. Friend the Member for Newbury (Laura Farris), when she talked about not having primary legislation to address this, but looking at other ways—including the code of practice that she proposes—for the reasons that she talked about relating to not having unintended consequences.
Alexander Stafford
Can we make it fully clear that Government Members, regardless of what is going on, are against the abuse of fire and rehire? I stand against it for the residents of Rother Valley and I am sure that the Minister does. Will he clarify that once and for all and make it clear for everyone listening at home?
Paul Scully
My hon. Friend is absolutely right. The unambiguous message is that using fire and rehire as a bully-boy negotiating tactic is absolutely inappropriate. However, and I will develop this point later, I do not believe that the Bill as it stands—even if it is amended, because we do not believe that we need primary legislation to achieve these ends—will have the intended effect, because it will not ban fire and rehire, as the hon. Member for Brent North said. I think he needs a bigger badge to explain what it actually does do, in his opinion. However, we want to get rid of using fire and rehire as a negotiating tactic, as a bully-boy tactic, and that is what the other measures that we are proposing seek to achieve.
Gavin Newlands
The Minister says that we are sending an unambiguous message, yet he refuses to legislate. I am not sure how that is unambiguous, but let me ask him this question: does he intend to talk out the Bill today?
Paul Scully
The hon. Member talks about being unambiguous and says that we are refusing to legislate. As we heard from my hon. Friend the Member for North East Bedfordshire (Richard Fuller), legislation that comes from the fact that we are coming to the end of a pandemic is not the right way to reflect the concerns about the long-term issue of workers’ rights. We need to make sure that we can address the situation. We will legislate if we need to, but as a last resort, not a first resort. A fundamental difference between Government and Opposition Members is that Opposition Members immediately look for primary legislation rather than other ways of incentivising employers to do the right thing, with the carrot of incentivisation and the stick of making sure that there are financial penalties and clear downsides for businesses that do the wrong thing.
Chris Stephens
The Minister says that the Government’s position is that they will legislate when they need to. We waited four years for the Taylor report, and there is still no legislation. When do the Government intend to introduce any kind of employment Bill to deal with unfair practices in the workplace?
Paul Scully
We published the “Good work plan”, in which we accepted many of Matthew Taylor’s reviews, but we did not have to wait for an employment Bill to begin progress on this. We have closed the loophole which saw agency workers employed on cheaper rates than permanent workers, we have quadrupled the maximum fine for employers who treat their workers badly, and we have given all workers the right to receive a statement of their rights from day one. We do not have to always reach for primary legislation first when we can be doing other things to make sure that we can stand up for workers across the UK.
Andy McDonald
The Minister says that he does not have to reach for primary legislation, but when is he going to do anything at all? He has stood at that Dispatch Box for years, wrung his hands over the pernicious practice of fire and rehire, and done diddly squat. If we are going to have to wait for some other document from a new Member of Parliament, where is it and when are we going to get it? The only message that is going out from this place is that this Government will do nothing about fire and rehire, and bad bosses can carry on as before, continue these practices and cut people’s wages—it is either that or they will lose their jobs. That is the message that leaves this place today.
Paul Scully
I am sorry if the hon. Member feels that I have been here for years. I think I have been here for only 18 or 19 months, but it does seem like years, so perhaps I am boring for Britain in talking about workers’ rights and standing up for those rights. None the less, we are acting on this, and I will develop my speech to show exactly how we are doing so.
Bob Stewart (Beckenham) (Con)
I take another message away from this debate. I take away the message that the Government understand that there is a real problem, and are going to get it fixed as soon as possible.
Paul Scully
My hon. Friend is absolutely right. We have heard about reaching for primary legislation. We have had a very reasonable debate which, as I have said, was opened in a very reasonable way by the hon. Member for Brent North. We heard a forensic response from my hon. Friend the Member for Newbury, who brought her expertise to the debate with such élan and showed how we can keep the flexibility of employers to be able to restructure and reconsider their future, while making sure that we can cover the most egregious cases of bully-boy tactics from rogue employers.
Shaun Bailey
First, I am sure the Minister will agree that the hon. Member for Newbury (Laura Farris) is not just some “new Member”, but an experienced employment barrister who has practised in this field for some time. Secondly, let me return to a point that has been articulated by my hon. Friend for Newbury in particular. If we are going to make law, it has to work on the ground, because otherwise the only people whose pockets we are putting money in are the lawyers. It is as simple as that, is it not?
Paul Scully
My hon. Friend has hit the nail on the head. What we have on this side of the House is the expertise that we are bringing to bear to try and solve the problem, rather than just throwing things around. Earlier, someone accused the hon. Member for Newbury of over-egging the cake; in one of the other Front-Bench speeches, we heard, basically, no cake but a lot of egg. We cannot take a Poundland Arthur Scargill approach to this; we have to get it right. I hope that Pepco, the owner of Poundland, will forgive me, as the retail Minister, for dragging down its reputation.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
Reference has been made to messages going out from the House. It is important to make one thing clear to those who have been potentially misled by some of the remarks made by Opposition Members. There are already steps that people can take if they are dismissed unfairly. We should not lead people to believe that they have no legal protection if an employer dismisses them claiming a business need that was not really there.
Paul Scully
My hon. Friend is right. We heard another accusation, in relation to whether or not those on this side of the House are uncaring when it comes to workers’ rights. What it boils down to is this: would an employee facing a rogue employer using a bully-boy tactic rather have a solution that protects their rights, or would they rather have a jabbing-finger Opposition politician who relies on an unstable future for such workers for his or her political future?
Apsana Begum (Poplar and Limehouse) (Lab)
Ethnic minority workers have faced hire and rehire tactics at a disproportionate rate—nearly twice the rate of white workers. They have also disproportionately borne the brunt of the pandemic. Does the Minister not believe that the message he is giving today does not show the urgency needed to address the fact that they are literally dying in the pandemic without adequate protections?
Paul Scully
The hon. Lady raises very important points about the situation facing ethnic minority employees, but that is why we are acting. It is why we sought quantitative evidence from ACAS. It is why we charged ACAS to come up with guidance in the first instance. There are plenty of other things we can look at, but as well as giving employers certainty in knowing how they should approach the situation, the guidance allows employment tribunal judges to make sure they are consistent with their judgments, too.
We receive lots of correspondence—I get a lot, not least from Members of this House sharing their constituents’ concerns—and I can see how deeply distressing it is for those who face changes to their pay, working hours, sick pay or other benefits. That may happen after years of service to their employer or to those new to the world of work. Losing one’s job through redundancy and dismissal is clearly something everybody wants to avoid. I speak to businesses every day and I know the vast majority of employers want to do the right thing by their employees. For most employers, decisions to change terms and conditions are not taken lightly, nor is the choice to let members of their workforce go. Good employers know that investing in their workforce and not treating them badly is the best way to increase productivity.
Jerome Mayhew (Broadland) (Con)
We have heard in the debate, from right across the House, that the Bill is aimed at bad employers and at removing this as a negotiation tactic. The problem with the Bill, however, is that it would actually damage the ability of every single company—every good company—to survive when faced with an emergency. It would lead to higher unemployment, as this has where it has been tried, both in Ireland and in Spain. Does the Minister agree that the high youth unemployment in Ireland of 31.7%—[Hon. Members: “Speech!”]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Ladies who are heckling me from the Labour Benches are quite right. The hon. Gentleman should not be making a speech. He is making an intervention. He can make two or three interventions, but he cannot make one long speech.
Paul Scully
Thank you very much for that clarification, Madam Deputy Speaker. My hon. Friend makes a really interesting point about unemployment.
Steve McCabe (Birmingham, Selly Oak) (Lab)
On a point of order, Madam Deputy Speaker. It appears to me that there are considerably fewer Members in the Chamber now than voted against the closure motion you granted earlier. That would tend to give credence to the idea that the Government Whips have deliberately organised their Back Benchers to wreck the Bill by voting against the closure motion and then sent them home. Is it in your gift to grant a second closure motion, so that we can now test the will of those here in Parliament?
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order, which is a perfectly reasonable one and one that had crossed my mind. However, I have come to the conclusion that, with everyone in the Chamber having been sitting here since 9.30 am, the Tea Room is probably full to overflowing at present. I am therefore not inclined to consider a second closure motion, having taken the will of the House less than an hour ago. That does not create a precedent for not doing so, but I am giving the hon. Gentleman a straight answer to his straight question.
Paul Scully
Thank you for that clarification, Madam Deputy Speaker. Indeed, I think Members from both sides of the House are taking advantage of the Tea Room, because both sides are lighter in numbers at the moment, but I always bow to your perspicacity. I would have thought that, in the last 20 minutes or so of the debate, Members pushing the Bill would want to hear the Government’s response to the merits or otherwise of the Bill, and what we are trying to do about the issue.
Peter Dowd (Bootle) (Lab)
The House of Commons Library has produced an excellent report on this subject, which says:
“Professor Alan Bogg, a Professor of Law at the University of Bristol, argued that under the current law the balance of power lies too much with the employer”.
Does the Minister agree?
Paul Scully
I think it depends on which employer. We are trying to make sure that we can root out bad employers who fail to understand that investing in their workforce and respecting their workforce is good for business as well as good for the workers. As Business Minister, I speak to businesses every day and I know that the vast majority of employers want to do the right thing. When it comes to fire and rehire, I have always been very clear that we expect all employers to treat employees fairly and to consider dismissal only as a last resort when all other options have been exhausted. It is completely unacceptable to use threats of fire and rehire as a negotiating tactic.
Paul Scully
I will not for a minute, because I want to make some progress.
It is right and proper, however, that we consider the evidence before we act, rather than just jabbing our finger, so that we avoid any course of action that runs the risk of doing more harm than good. I assure the House that the Government are taking the issue seriously, considering the evidence available from different perspectives and then taking appropriate and proportionate action.
It has been an extraordinary and difficult 19 months for all of us. The impact of the covid-19 pandemic on the whole country has been profound. Millions of people were on the precipice of losing their jobs, livelihoods and homes, but the forecast was wrong and the unemployment rate in the UK is at less than 5% and falling. That is 2 million lower than some of the forecasts and it is lower than France, the United States of America, Canada, Italy and Spain. As we heard from my hon. Friend the Member for Broadland (Jerome Mayhew), the high levels of youth unemployment in Spain and Ireland compared with the UK show that we are getting things right here.
We are making sure that bouncing back better means growing our economy, creating opportunities and creating jobs. I know how hard it has been in the past couple of years, despite the fact that we are now on our way to recovery, especially for the many businesses that have had to shut their doors and take a significant economic hit to protect the public’s health.
Mrs Natalie Elphicke (Dover) (Con)
During the pandemic, I worked closely with the National Union of Rail, Maritime and Transport Workers, which was excellent in the negotiations with P&O Ferries in my constituency of Dover and Deal. Will the Minister consider that kind of positive and collaborative working, which is clearly possible within the current framework, as a good example when looking at the balance of rights and interests of employers and employees in his work?
Paul Scully
My hon. Friend is right that good work should be done collaboratively by employers and employees, with Members of Parliament leaning into that as well. That is what happened in the case that was cited earlier of JDE and the Kenco factory in Banbury. Although the hon. Member for Brent North launched his campaign there, the situation was resolved through talks and negotiations within the current structure and without this legislation.
Sir George Howarth (Knowsley) (Lab)
If the Minister considers the history of employment reform, the abolition of child labour, health and safety at work and equal pay for women all required primary legislation. What is his alternative to primary legislation for this issue?
Paul Scully
I will cover that as I continue with my remarks. I am not sure that we should equate child labour with fire and rehire, but I will develop that argument.
Barry Gardiner
The Minister referred to JDE at Banbury and the fact that, ultimately, an accommodation was reached about the least disagreeable way forward. He must know, however, if he has spoken to any of the 291 workers involved in that dispute, about the huge stress that was placed on their families and the complete disregard that they felt they were shown by that company for all the loyal service that they had given it for years. To hold it up as an example of a resolution of a dispute is beneath him.
Paul Scully
I raised it as an interesting point. I do not underestimate the stress, and I will cover that later when I talk about the solution we have come up with. It was a resolution, but none the less we want to get rid of the bully-boy tactics—the use of fire and rehire as a tactic of negotiation—because that should never be able to happen. As we have said, it has been exacerbated by the pandemic, but we want to make sure that we get our resolution and our approach correct so that it does what it says on the tin rather than have some of the unintended consequences that we have heard about today.
I was talking about the recovery. We have one of the fastest recoveries of any major economy in the world, thanks to this Government’s will to act and plan to deliver. My right hon. Friend the Prime Minister said at our conference that we were embarking on a change of direction for the UK economy, away from the broken model of low wages, low growth, low skills and low productivity; away from a broken model underpinned by reliance on uncontrolled immigration to keep wages low. We want to build back better in a new direction towards a high-wage, high-skill, high-productivity economy, which the people of this country—workers and employers—need and deserve.
A key part of the building of that economy will be to continue to champion a flexible and dynamic labour market, creating the conditions for new jobs, protecting existing ones and maintaining the UK’s excellent record on workers’ rights—one of the best records in the world.
Aaron Bell (Newcastle-under-Lyme) (Con)
Is it not the case that now, with unemployment lower than before the pandemic, the bully-boy employers that mistreated their workers will find that those workers—this is the genius of capitalism—will go and look for jobs with better employers?
Paul Scully
My hon. Friend is absolutely right. We are taking proportionate and appropriate action on the issue of fire and rehire, but that must avoid any course of action that runs the risk of doing more harm than good, increasing the risk of collapsing businesses and subsequent increasingly redundancies and unemployment. I have real concerns about the approach in this Bill, as it would significantly increase administrative burdens and costs to employers, when they are already facing challenging circumstances.
I want to assure the House that the Government take reported misuse of fire and rehire really seriously, and we are continuing to assess the evidence available from different perspectives. I will set out today what I believe to be a proportionate response to the available evidence on the practice of fire and rehire. It is an approach that encourages best practice by employers, protects workers from unscrupulous employers and, above all, protects jobs and livelihoods by not forcing employers into a situation where they need to make redundancies or close entirely. That is an approach which, in line with the Government’s actions over the past two years, has supported businesses, livelihoods and jobs through the profound impact of the covid-19 pandemic on the whole country.
Brendan Clarke-Smith (Bassetlaw) (Con)
I thank the Minister for being generous with his time today. He mentioned burdens. We have spoken about ACAS today and there is also the employment tribunal system, which currently has a burden to get through. Does my hon. Friend share my concern that one of the unintended consequences of the Bill is that it could add to that burden and lead to more workers not being able to resolve their problems?
Paul Scully
My hon. Friend, typically, is absolutely right. One of the unintended consequences of the Bill is that it adds extra layers within the process. It risks adding pressure on the employment tribunal service.
Let me set out what we know about the practice of fire and rehire. During the coronavirus pandemic, the issue started gaining attention through high-profile cases, many of which we have heard about today. I was deeply concerned by reports over the last year that some employers might be turning too soon to firing and rehiring employees and were using this as a tactic in negotiations to put undue pressure on workers to rush into accepting new, and often worse, terms and conditions, or face losing their jobs. That is why we asked ACAS to conduct an evidence gathering exercise to learn more about the use of fire and rehire. We wanted ACAS to do this because of both its expertise and its impartiality. Businesses, employee representatives and other bodies were all included in that report. I want to take this opportunity to set out the key findings of the ACAS report, which was published on 8 June.
Much of the attention given to this issue was driven by high-profile cases with large employers and unionised workforces. Those cases include instances in which fire and rehire had been threatened, in some cases leading to dismissals; in other cases agreements had been reached. However, ACAS found that fire and rehire is neither a new phenomenon nor concentrated in a particular sector or type of employer. It seems to have been used by employers in the years before covid-19 as well as during the pandemic. Fire and rehire is used in a range of circumstances, including in redundancy scenarios, both to minimise redundancies by cutting payroll costs and to enable the maximum reduction in headcount, for example by changing the working hours of remaining staff, as we have heard.
ACAS suggested that there was a sense that employers’ ability to fire and rehire was being used earlier in contractual negotiations than before, but it was unable to establish whether that was linked to business challenges due to covid, or whether the timescale available to reach agreed solutions was shorter than at other times.
The parties that ACAS involved in the evidence gathering agreed that the use of fire and rehire should be limited. Views on less acceptable use focused on three areas. The first was whether negotiation was conducted fairly and in good faith, with concerns focusing on fire and rehire being used as a threat, as I have said. Secondly, while some employers may have a genuine business need to vary terms and conditions, there are concerns that some are exploiting the circumstances of the covid-19 pandemic to drive through disproportionate or longer-term changes.
Paul Scully
I have 15 minutes; I will give way in a second.
The third area was whether fire and rehire is being used deliberately to break continuity of service, to restrict access to employment rights and protections among employees and workers. We share those concerns, and I will set out in a second—as long as I have time—the existing protections, as well as further steps that the Government have taken to prevent the misuse of fire and rehire.
Grahame Morris
A number of Conservative Members have referred to the ACAS code, and in particular section 1, and the fact that there is an alternative means of redress for workers who have been unfairly dismissed. During the debate, someone sent me a very long list of companies, including British Airways, where tens of thousands of workers were affected. I wonder how many people in the cases the Minister referred to have been able to achieve redress through the existing arrangements and how many would benefit from a Bill to end fire and rehire.
Paul Scully
I would be interested to see that list. As I said, we want to make sure that we can tackle that early basis, which I outlined earlier.
As I said, we are considering fire and rehire from all angles, and we have continued to gather and review evidence beyond the ACAS report. It is difficult to find robust evidence on the practice, because what is seen by workers as a threat or tactic can be seen by employers as necessary behaviour to move negotiations forward and out of deadlock. What is a reduction of terms and conditions for workers can sometimes be necessary organisational change for employers.
We heard a bit about the various surveys that have been going on. The hon. Member for Brent North referenced an earlier CIPD survey. We now have further survey data based on a sample of more than 2,000 senior HR professionals and decision makers in the UK. Fieldwork for that CIPD employment outlook survey was undertaken during the summer, and it found that 3% of employers with two or more employees used fire and rehire to reduce employment terms of some or all of their staff, and a further 19% of employers said they had changed terms and conditions through consultation, negotiation and voluntary agreement. Around half of those who said they had made changes to pay, location or enhanced entitlements said that they had improved those terms.
The Office for National Statistics business impact of covid-19 survey found that around 3.1% of businesses had reduced terms and conditions since 2020. While the evidence does suggest some use of fire and rehire, it does not allow us to fully understand the circumstances of the employer and the rationale or proportionality of the use of fire and rehire. It is important to consider those business circumstances as we look to draw up solutions.
I would like to draw the House’s attention to the voice of employers, about which we heard much from my hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake), for North East Bedfordshire and for Rugby (Mark Pawsey). The CIPD has shed light on how the
“impact of COVID-19 has had a huge effect on employers, causing operational disruption, increased supply costs, loss of revenue, reduced productivity. They have had to react, adapt and effect change to their processes.”
The context of heightened disruption and business challenges has also meant that some employers have been forced to consider firing and rehiring their employees where an agreement cannot be reached to vary the employment contract. We have said that that should be considered as an absolute last resort if changes to employment contracts cannot be found through negotiation.
The evidence I have just set out shows there is some use of firing and rehiring, or the threat of doing so, by at least 3% and potentially up to 9% of employers to reduce the terms and conditions of some or all staff. Although the evidence does not provide a full understanding of the employers’ circumstances, this House should be left in no doubt that the Government will always continue to stand behind workers and to stamp out unscrupulous practices where they occur.
Existing legislation already provides employers with the right baseline for setting terms and conditions for their workforce, including on the minimum wage, annual leave, statutory sick pay, parental leave, pay entitlements and pension contributions. Above that statutory baseline, employers are rightly free to offer the terms and conditions of employment that best suit their business needs. In doing so, they must always act fairly and not discriminate unlawfully on the basis of a protected characteristic such as race, sex or disability. The valid variation of contractually binding terms and conditions usually depends on mutual agreement between the employer and workers as two parties to the contract.
The employment contract itself may contain a clause expressly allowing variation. Such clauses are usually limited to specific circumstances, and they tend to be interpreted narrowly by courts and tribunals. Should an employer seek to enforce contractual variation without agreement, there are a number of legal obligations and protections with which they may need to comply, depending on the circumstances.
A dismissal may be wrongful if the employer fails to provide the relevant statutory or contractual notice period to terminate the contract. There may be a breach of contract or constructive dismissal if changes are imposed unilaterally by the employer. As we have heard, there are also collective redundancy consultation requirements that apply where there are proposals to dismiss 20 or more employees at one establishment within a 90-day period for reasons not related to the individuals concerned.
These all require an employer to provide certain statutory information and to engage in discussions with a view to reaching agreement either with trade union representatives, where there is a recognised trade union, or with other elected representatives. In workplaces where there is a recognised trade union, employers are prohibited from making offers to workers with the sole or main purpose that any terms of employment will not or will no longer be determined by collective agreement with the union.
It is not all about what the law requires. It is in businesses’ own interest to have committed, motivated staff who are properly engaged in decisions about the future. We have seen in the press and the media the considerable reputational and practical risks, many of which have been cited today, to companies that look to pursue this route. The CIPD wrote:
“Employers must recognise that this approach creates a high risk of legal claims, reputational damage and an adverse effect on employee relations. It should only be undertaken after extensive consultation and consideration of all other alternatives.”
As we have heard, in the vast majority of cases, businesses want to do the right thing by their employees. I am determined to help them do this and to make sure that we find the best approach for both employers and employees. Although I do not believe we should legislate to stop the practice of fire and rehire, and certainly not in the heavy-handed way proposed by the Bill, the Government are taking action.
Earlier this year, we asked ACAS to produce more comprehensive, clearer guidance to help all employers to explore other options before considering fire and rehire. ACAS is well placed to provide that guidance, being an independent Crown non-departmental public body that plays a vital role in promoting and maintaining good industrial relations between employees and employers. We are all well aware of the potential pressures on business as we continue to undergo the impacts of covid-19, but that ACAS guidance will help to set out best practice to employers who are considering how to solve problems that might require contractual changes.
The Government are also taking action in one of the areas where ACAS found that fire and rehire was being used, which is to interrupt the continuity of service. Certain employment rights in the UK require a period of continuous employment, so it is right that we find the right balance between worker protection and flexibility in the labour market. Continuous service is where an employee has worked for one employer without a break, and we will be introducing a measure to extend the permissible break in service from one week to one month as soon as parliamentary time allows. That measure will make it easier for those with intermittent or flexible working patterns to access employment rights, and it will deter businesses from engineering breaks in employment to deny individuals their important employment rights.
To address the Bill specifically, it seeks to amend the law relating to workplace information and consultation, employment protection and trade union rights. [Interruption.] I am glad that the right hon. Member for Islington South and Finsbury (Emily Thornberry) wants to hear my thoughts, as she has turned up for the last 20 minutes of the debate. She did not feel the need to hear the debate itself.
I have met Members of the House and trade unions to discuss the issue, and the discussions have made plain to me the anxiety and distress that has been caused. As the Bill covers a lot of ground, I make it clear, for those Opposition Members who are wearing the badges, that it will have the effect of banning fire and rehire, if enacted. It will leave us in a space where employers may be forced to make redundancies. It will also significantly increase the pressure on the employment tribunal system, as we have heard, when the right priority is to reduce the backlog.
Proposed new section 187A would introduce new consultation requirements for establishments and undertakings where there is a real threat to continued employment. The Government are perfectly clear that, should employers seek to change terms and conditions, they must seek agreement. The threat of fire and rehire should never be used as a negotiation tactic.
In addition, collective redundancy law already provides that, should an employer propose to make 20 or more people redundant in a single establishment within a 90-day period, it must consult with employee representatives. However, this legislation would introduce onerous new requirements on employers in situations where they need to make business-critical decisions. Those requirements would be additional to the collective consultation requirements already in place.
The legislation includes situations where decisions may have to be taken to terminate the contracts of 15 or more employees for reasons other than conduct or capability, or where anticipatory measures are envisaged that are likely to lead to substantial changes in work organisation or contractual relations affecting 15 or more employees.
Proposed new section 187B would place a higher duty on employers to disclose information to allow employee representatives to engage in consultation. The Government already have clear guidance that, if an employer needs to change a contract, the first step is to talk with employees or employee representatives, such as a trade union. The guidance that ACAS is producing will help to set out the best practice for employers considering how to solve problems. In addition, the ACAS code of practice on the disclosure of information to trade unions for collective bargaining purposes sets out the respective responsibilities of employers and employee representatives in matters related to collective bargaining.
Proposed new section 187C would introduce a right for employee representatives to complain to the Central Arbitration Committee about an employer’s failure to consult or disclose information. The CAC is an independent body with statutory powers, but under the Bill, should the CAC find that an employer had been remiss, it could refer it to ACAS for conciliation. If ACAS was of the opinion that further attempts at conciliation were unlikely to result in a settlement, it could then refer it back to the CAC. For complaints referred and returned through ACAS, and where settlement had not happened, the CAC could hold a hearing and determine the complaint. It could then make a declaration stating whether it found the complaint well-founded, wholly or in part, and the reasons for its findings. While the CAC could choose not to recommend a course of action, such as referring to ACAS for early conciliation, it could set out steps to rectify the error and the timeframe in which that should be done.
The House can see that the Bill would add extra layers, which would affect the flexibility of the situation for employers seeking to make business-critical decisions. It is an incredibly complex situation, and we would be adding bureaucracy and extra process when they need to make a decision quickly to protect the jobs and livelihoods of those people who have been mentioned throughout the entirety of this debate. I have real concerns about the approach in the Bill, as it would significantly increase administrative burdens and costs for employers in a situation where they are already facing challenging circumstances.
Proposed new section 104H would disallow an employee not agreeing to reduced terms and conditions as a substantial reason for dismissal and remove the qualifying period of two years to bring forward an ordinary unfair dismissal claim. That would remove the legal ground on which employers may be able to dismiss and re-engage an employee who has not agreed to changing their terms and conditions.
While these measures could result in a decline in the use of firing and rehiring, they would present a significant change to the current framework and could have unintended consequences for businesses and employment tribunals. The hon. Member for Brent North has couched this Bill as proportionate to the issue, but it would have the effect of banning fire and rehire and the unintended consequences of such actions could be severe. For instance, setting that higher threshold for dismissal and for consultations with trade unions on changes to terms and conditions may mean that the cost for employers is so high that they choose an easier route, such as redundancy; in effect, if you get rid of fire and rehire, you end up with fire, which is no good to employees up and down this country.
In the last six seconds available to me, may I just say that we are looking at this Bill, we will act and we do not need primary legislation to do so?
Business without Debate
Friday 22nd October 2021
(3 years, 2 months ago)
Commons ChamberRead Full debate Local Government (Disqualification) Act 2022 View all Local Government (Disqualification) Act 2022 Debates Read Hansard Text
Hon. Members
Object.
Bill to be read a Second time on Friday 26 November.
Energy Pricing Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 25 February 2022.
General Election (Leaders’ Debates) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Workers (Rights and Definition) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 26 November.
Immigration (Health and Social Care Staff) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 21 January 2022.
Planning and Local Representation Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 21 January 2022.
Motor Vehicles (Compulsory Insurance) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Covid-19 Vaccine Damage Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Public Advocate Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 19 November.
Wellbeing of Future Generations (No. 2) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 10 December.
Hospitals (Parking Charges and Business Rates) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Voter Registration Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Asylum Seekers (Return to Safe Countries) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Planning (Street Plans) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 29 October.
Devolution (Employment) (Scotland) Bill
Motion made, That the Bill be now read a Second time.
Rail Service Reductions
(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Sarah Olney (Richmond Park) (LD)
Thank you very much, Madam Deputy Speaker—[Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady has to be heard, so please leave quietly. It is the first time I have had to say that in nearly two years. I think we have achieved that.
Sarah Olney
Thank you very much, Madam Deputy Speaker, for granting me the opportunity to have a debate on this issue and also for ensuring that I can be heard.
This is an issue of specific importance to my constituents, but it also has broader implications for our country’s approach to climate change, infrastructure and the recovery from the covid pandemic. I asked for this debate in response to South Western Railway’s recent consultation on the future of its services. Like all our rail operating companies, SWR has run a reduced service during the period of the pandemic, and has been supported by considerable public funding. That has been essential for keeping our public services going and to supporting the economy, both through the lockdown and as we move forward.
SWR is, understandably, looking ahead to its post-pandemic operation, and has put forward a revised timetable for consultation. The revised timetable proposes to cut services from many of the stations in my constituency. It will be cutting trains from North Sheen and Mortlake stations from once every fifteen minutes to once every half hour, and removing peak hour services from Kingston and Norbiton. The proposals have been strongly resisted by me and by my neighbouring MPs in Kingston and Twickenham, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) and my hon. Friend the Member for Twickenham (Munira Wilson), and by many, many residents across my constituency and beyond.
SWR has justified the proposals by asserting that commuter travel is likely to recover to just 60% of pre-covid demand. That seems extremely unlikely. In April to June this year, passenger numbers on SWR, according to the Office of Rail and Road, were 45% of the level that they had been before lockdown restrictions began. This was a period where there were still many restrictions in place and workers were being asked to work from home if possible. It is ridiculous that SWR thinks that it can make long-term forecasts of commuter demand when it does not have any post-lockdown demand figures to look at.
Transport for London figures for Overground journeys on their network were already showing 55% of pre-lockdown demand by August, and anecdotal evidence—from me and from many other commuters who are using the train services more regularly now—shows continued growth in rail journeys both in the centre of London and on suburban services since that time. I suspect that somebody in SWR has just assumed that all commuters will make a choice to work in their offices on Tuesdays, Wednesdays and Thursdays in future and have extrapolated a post-covid demand of 60% from that assumption. However, it is ignoring the large numbers of schoolchildren, for example, who depend on suburban services to get to and from school, not to mention their teachers and other school staff, and the large number of workers across many industries and the public sector who will need to be in their workplace five days a week.
The Government have been most insistent in recent weeks that they expect to see civil servants back at their desks on a full-time permanent basis, for example, and we know that many younger workers prefer to be in the office than stuck in their bedrooms at home. It is much too soon to be making assumptions about how people will carry out their working lives once the fear of covid and contracting covid has disappeared. For example, in the past few weeks—as we know, covid numbers are on the rise—we have started to see a slight tailing off in the growth of rail users, perhaps in response to the understanding that we are not yet out of the woods in the pandemic, that people still need to take care and that we still need to be cautious. I do not think it is possible to make any forecasts of post-pandemic railway usage until such a time as we can be confident that we are completely out of the pandemic.
The assumption that demand for services will reduce highlights the great challenge facing commuter services. For many decades, rail operators have assumed that commuters are a captive customer and, because they are forced to make the same journey five days a week, that demand for rail services will continue and grow and be inelastic to price increases. They have assumed that ever-increasing fares will continue to be paid by commuters who have no alternative other than to use the rail services that they are offered by their local rail operator.
However, the pandemic has revealed to us that we can continue to work successfully from our homes and other locations, and that we therefore have a choice. We have a much greater range of commuting options to choose from. If we want, we can stay at home and work just as successfully, in many industries and sectors, as we could if we were in the office. We may need to go into the office only for a few hours. We may choose to travel later. We may choose to come home later. We may choose to adopt any kind of working pattern and to be based somewhere between home and the office. There is one assumption that we might be able to make with some confidence: it will no longer hold true, particularly for people living in the suburbs, such as in my constituency, that there is a huge number of people who will require train services to get them to their offices before 9 o’clock in the morning and who will therefore be captive to price rises on the trains.
I think that South Western Railway’s mistake is to assume that the increased range of options will necessarily mean that fewer people will choose to travel at peak time and to plan accordingly. It betrays an extraordinary lack of confidence in its service to assume that once people have more options, they will not willingly choose to use trains. Instead of seeking to persuade people to use trains, South Western Railway has decided to cut supply. That is not the entrepreneurial spirit that railway privatisation sought to inspire.
The challenge that the country faces now is not just from covid. We also face the far greater challenge of cutting our carbon emissions, and much of that reduction needs to come from changing the way we travel. Government have made a clear commitment to modal shift as part of their strategy to reduce transport-related emissions and that means encouraging travellers to use trains, buses and active travel instead of motor cars. There is no doubt that people have continued to use their motor cars. We see motor car journeys now at similar and even greater levels than before the pandemic. If we are to meet our carbon emission goals, we need to redouble our efforts to encourage people to travel by train.
How would a free market in rail travel respond to the challenge presented by home working and car use? It would cut prices to stimulate demand, and yet, we can see that the cost of rail tickets has increased by 36% over the past 10 years compared with just a 9% increase in the costs of motoring. What would be the impact of cutting services on rail operator income? It would decrease demand for rail services and cut fare income. Rail operators would then be forced to increase fares on remaining services to cover their costs. With a greater choice of how and when to travel—indeed, of whether to travel at all—more and more commuters will choose not to use a train service that offers ever-increasing prices for fewer and fewer services. That will have a knock-on impact on our rail network as a whole. We will see underused stations gradually closed and fewer and fewer services. Rail operators will find it harder and harder to cover routine maintenance costs. Even if we do not think that we can yet forecast user numbers, I confidently forecast that reduced rail services and reduced income will result in a spiral of fewer and fewer services, eventually cutting off those services entirely. The Rail Minister and I are both united in very much wanting to avoid that.
It is clear that now is not the time to be thinking about cutting services. While commuters are thinking about how to structure their working lives, we need to incentivise rail travel and encourage commuters and other travellers to use it. The rail industry has already identified that there are great opportunities for growth in leisure travel. Let us improve the offering—more comfortable seats, better catering options, more space for luggage, and more reliable wifi—and offer competitive pricing to make it a more economical option than travelling by car.
I love trains. They are, by far, my preferred way to travel and, although there are many advantages to working from home, I was surprised to discover how much I missed my commute during lockdown. The growth of our suburban train network during the 20th century created new towns and neighbourhoods, and enabled many more people to enjoy life away from the cramped housing of the city, but our city centres depend on being accessible to a large number of people. We cannot maintain the unique economic, cultural and social life of central London if we discourage people from travelling into the city. We cannot tackle the challenge of climate change if we do not invest in affordable and accessible alternatives to the motor car. I call on the Minister to act to stop these proposed cuts in railway services and instead encourage people to use them.
Munira Wilson (Twickenham) (LD)
I start by congratulating my hon. Friend the Member for Richmond Park (Sarah Olney), my constituency neighbour, on securing this important debate and thank her and the Minister for allowing me time to speak.
As my hon. Friend has already laid out so eloquently the economic and environmental case for incentivising and supporting rail travel, I want to focus specifically on the South Western Railway consultation—how it has been run, the rationale behind it, and the impact on my constituency.
Let me be clear, my constituents and I absolutely understand the dramatic impact that the pandemic has had on passenger numbers and the huge fluctuations that this has caused as a result of the lockdowns. We recognise the need for emergency and temporary—I repeat “temporary”—timetables, which have been in operation for the past 18 months. However, the proposals to permanently slash services by up to 50% for some stations are fundamentally flawed. They are flawed in terms of timing and they are flawed in terms of rationale and how the consultation was conducted. The impacts for busy suburban stations where there are no tube alternatives to reach central London—as in my constituency—are unacceptable.
On the timing, as my hon. Friend has said, we still have no idea what long-term travel patterns will look like—we are still in a pandemic. My constituents are bemused as to why decisions are being taken now on permanent service levels. It is my understanding from the emergency measures agreement between SWR and the Department for Transport that the DFT suspends the performance and financial arrangements from the original franchise agreement and that, during this period, it is up to the Secretary of State to set these targets. These extraordinary measures have been taken precisely because the impact on passenger numbers could not have been foreseen and continue to be volatile.
It is for that very reason that now is the wrong time to be using passenger numbers as the basis for long-term decisions about timetables. SWR has itself described the future passenger volume projections as “a guess” and conceded that more analysis is needed. Therefore, SWR needs to continue running its current temporary timetable, adjusting the number of services as demand increases, conduct more analysis on changing passenger numbers and undertake a consultation on any permanent changes once new travel patterns are better understood—probably in six to 12 months’ time.
On the rationale, it beggars belief that the central argument deployed by SWR is because punctuality and service levels have increased during the pandemic. I cannot use unparliamentary language here, but it seems as though SWR has only just discovered that bears do indeed relieve themselves in the woods. Of course, fewer services mean more punctual services. That is blindingly obvious. It should not be a case for slashing services. Importantly, at the time of the contract award, SWR promised improvements in punctuality without the need for service reductions, so it must fulfil these previous commitments and provide a punctual and reliable service without the proposed drastic cuts.
This consultation was run over the summer holiday period with only strategic stakeholders, not the people who use the services. The commuters themselves have not had a chance to have their say, and they will only be consulted once the timetable has been decided just before it is implemented. That is no consultation at all.
On the impact for my constituents, I have made it clear both to the Minister and to SWR management that the proposed cuts are wholly unacceptable. Not to reinstate the Hounslow loop service off-peak will slash direct services to London by half for residents of St Margarets and Whitton, resulting in only a half-hourly service to and from Waterloo for much of the day in comparison with every 15 minutes or so prior to the pandemic. That is certainly so for St Margarets; there is a spacing issue at Whitton that I think can be tackled in a different way. A reduction of services by 50% at these zones 4 and 5 London train stations is inconceivable, particularly as leisure travel is due to return, or projected to return, to 105% of pre-pandemic levels.
Peak-time service reductions through Hampton Wick and Teddington will result in 15% capacity reductions. Those stations are already back to being very busy in the morning, and there is great concern about overcrowding if these cuts are implemented.
On the impacts, it would be remiss of me not to mention the Shepperton line, which affects Hampton and Fulwell in my constituency. There are no proposed cuts, but, frankly, if it is cut any more, there would not be a service left. I would ask the Minister to comment on whether he thinks, in 2021, it is acceptable to have one train service an hour from Hampton, which is a busy residential area. It also has a growing life sciences business, which is doubling its workforce on an annual basis at the moment. We should be boosting those services.
I will finish by saying that here we are, on the eve of COP26, and we cannot have a car-led recovery. We need to be incentivising rail travel—these cuts will simply push people into their cars—and we need a clear plan to boost rail travel post pandemic. It is clear that these cuts are financially driven, but they are financially illiterate, because we will have all the fixed costs of the network remaining in place while passenger numbers are depressed and revenue is therefore reduced.
I would be grateful to the Minister if he confirmed what level of savings the Department for Transport and the Treasury hope to gain from these cuts. The local and London-wide economy cannot afford these cuts, our planet cannot afford these cuts and residents in Whitton, St Margarets and Teddington cannot afford these cuts. I ask the Minister to intervene and stop these plans, or at the very least delay them.
The Minister of State, Department for Transport (Chris Heaton-Harris)
I congratulate the hon. Member for Richmond Park (Sarah Olney) on securing this important Adjournment debate, and I thank her hon. Friend the hon. Member for Twickenham (Munira Wilson) for contributing. Lots of hon. and right hon. Members have made me aware of their interest in this subject, including my right hon. Friend the Member for Epsom and Ewell (Chris Grayling). I would not say he is constantly talking to me about it, but every time I see him he does mention this particular subject. I do know how important it is to Members affected by the consultation.
Thank you, Madam Deputy Speaker, for keeping us to time today, which is an excellent reminder that Parliament, much like the railway, functions at its best only when things run smoothly and efficiently. That is really the crux of the matter today—the need to make sure that our railways do actually run smoothly and efficiently, and put passengers first.
Let me put try to put this debate into some sort of context. In February 2020, before the pandemic, our railways had one of their busiest months on record, and the commuter services in the morning from the constituency of the hon. Member for Richmond Park were busier than ever, too. It was standing room only on nearly all—or, in fact, on all—early commuter, morning peak services into London, and indeed on the vast majority of morning peak services around the country.
However, there were issues, too. The lines into Waterloo, for example, were at capacity, and any delay in the morning would cascade through the services for the rest of the day, often creating delays on other services, as well as having staff and trains in the wrong place at the wrong time, or where they crossed lines and all things got excited. Huge amounts of delay minutes, which is how the industry measures these things, were created by those issues.
Indeed, in May 2018, the whole system nearly keeled over. Unachievable timetables bid for in very complicated franchise competitions combined with infrastructure not being delivered on time and industrial action created a toxic mix and delays up and down the country, where millions of journeys were disrupted. Action was called for in this Chamber very loudly, and indeed by consumers, punters, passengers up and down the land, and a comprehensive review was started, led by a gentleman called Keith Williams.
Going back to my story, the pandemic followed that very busy February on our railways. In April 2020 passenger numbers were down to 4% or 5% of what they had been a year earlier—almost Victorian levels of carriage. When Keith Williams’s work came to fruition in the “Great British Railways: Williams-Shapps plan for rail” White Paper this May, we not only had to take account of the issues that were there pre-pandemic but obviously had to have an eye on what had happened over the previous 15 months. I am very pleased to say that the White Paper received cross-party support, and I thank the hon. Lady and her party for being so positive about the need for reform.
Everyone in politics and across the rail industry realises that, with passenger numbers still stuttering, these reforms were required more than ever, and we needed to ensure that our national timetable is reliable and fit for the future. It had to be an integral part of those reforms to ensure that passengers get the reliable, clean trains they deserve—that is a key reform.
Ensuring we have a timetable that allows freight operators to take lorries off our roads, helping to decarbonise journeys and get goods to places in a much more environmentally friendly way, is also part of those reforms. That is why this debate is so timely and so important.
The challenge for the railways is not an easy one. The industry must rethink its offer to passengers and to freight while carefully balancing the need to preserve the excellent performance that the hon. Member for Twickenham talked about. It must deliver reliable passenger services and provide good value for money for the hard-working taxpayers who use it, and for those who do not. The industry needs to ensure that timetables are attractive, efficient, reliable and fit for purpose.
South Western Railway routes have historically seen very high patronage. I used to commute on those lines, and this House will be aware that SWR and Network Rail have historically responded to ever-growing customer demand by increasing the number of trains on the network, often at the expense of the performance and reliability of the services and the infrastructure on which they run. I am sure the hon. Member for Richmond Park would agree that it is no use having frequent services if they do not run reliably because the network is too busy, and it is no use advertising trains if they have to be cancelled to recover time in the timetable. It is infuriating when something is promised to passengers that cannot be delivered. I am keen to ensure that any future timetables do what they say they will do and can be completely relied upon.
As we all know, passengers are slowly returning to the railways, but behaviours have changed. The morning peak hours are back to being the busier trains of the day. I was shown data earlier this week demonstrating that only one train coming into Waterloo on a new normal midweek day was at or over capacity.
Sarah Olney
Will the Minister reflect on what I said about how we are not yet over the pandemic and how we cannot start measuring what post-pandemic behaviour will be like? As I said, we are starting to see another quite large increase in cases, which will have made people nervous about coming back to work and coming back into their offices. It is therefore too soon to start measuring how many people are on the trains and whether we can expect the number to be constant in the future.
Chris Heaton-Harris
I agree with the hon. Lady, but we need to have timetables on which to base things. We also need the flexibility to respond to demand.
As the hon. Lady describes, the pandemic has changed how people use our railways, and the railways need to respond. As I have said to industry audiences many times, the rail industry has never had to compete for its market, which has always come to it. Lots of commuters in her constituency and mine will have stories about having to stand for long distances on journeys because there was no alternative. Now, however, trains are having to compete to win their market back for the first time ever. We need to get it right, but it is a time of flex. We need the certainty of timetables so that people come back to rail as and when they feel comfortable, which I hope and expect they will in big numbers.
SWR and Network Rail have started to plan for a baseline timetable that can balance three important considerations: the performance of service, the attractiveness of offer, and the efficiency of cost. It is right and proper that they should have consulted stakeholders when embarking on such an ambitious endeavour.
Munira Wilson
On the question I asked in my speech, what cost savings are the proposed cuts expected to deliver?
Chris Heaton-Harris
I am not sure that I have the exact figure in pennies. If I have not, as I flick through my notes at the same time as reading my speech, I shall respond to the hon. Lady in writing.
Working in partnership with Network Rail, SWR is proposing changes that will deliver 89% of pre-covid levels of service and 93% of capacity. That is an uplift from today’s 85% of pre-covid service levels and 85% of capacity, against a backdrop of a forecast 76% of pre-covid passenger footfall returning by December 2022. To put that in a different context and perhaps give it some colour, there are currently 1,164 trains departing Waterloo on a normal weekday, but if the plans in the timetable consultations go through, that will rise to 1,338.
I am sympathetic to the concerns of both hon. Ladies about the level of service on public transport, especially from an environmental perspective. We had a conversation earlier about air pollution and the consequences of more car journeys. That is why having a high-performing railway is important, because only by ensuring that the rail offer is a quality one that is as reliable and attractive as possible will we get passengers back on to the railway, which we all know is one of the greenest ways to travel.
SWR tells me that the service levels set out in the consultation leave enough flexibility for it and Network Rail to introduce additional services in future as and when demand returns. I cannot stress enough that I am keen to see that that level of flexibility based on demand is ensured and can be articulated and demonstrated in some way to hon. Members so they can see what is going on with services.
I am sure that the hon. Member for Richmond Park will agree that reliability is the most important aspect of a good timetable, which is why I am keen for SWR to introduce the new class 701 Arterio train at the earliest opportunity. That new fleet of trains will offer even greater capacity than we have now and a promise of even better reliability, which will mean an even more robust train service.
Consultations are an exercise in gathering thoughts from stakeholders. They are only the beginning, not the end of the process. SWR and Network Rail will continue to work with stakeholders to make sure that their passenger offer is fit for purpose. If it is not, I will ask them to adjust it.
Munira Wilson
On the point about being flexible in response to demand, will the Minister commit to publishing passenger figures as the new timetable is implemented?
Chris Heaton-Harris
That is a sensible idea. It is not something we do regularly, so I will endeavour to make sure that we publish passenger figures as quickly as possible so that people can see the level of demand as it, hopefully, increases massively and services can therefore be brought back.
I will ensure that SWR and Network Rail continue to work with customers, communities and stakeholders. Where the business cases stacks up and there is a need for additional capacity, I will ensure not only that those arguments are carefully assessed but that the railway is flexible and responds to demand.
Question put and agreed to.