Infrastructure Bill [Lords]

Debate between John McDonnell and John Hayes

Monday 26th January 2015 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

Will the Minister clarify the difference between staff transferring under TUPE and under his proposal in amendment 115?

[Mr Hayes]

I am coming to that. In shorthand, let me assure the hon. Gentleman that I do not want staff to be disadvantaged in any way, as I said. We will honour TUPE principles in this transfer of staff.

Amendment 115 makes it clear that when existing Highways Agency staff transfer to the new company, their employment terms and conditions will not change. I recognise that the changes that are planned for the Highways Agency will cause anxiety for existing staff. The amendment confirms that the existing rights and liabilities of staff will not change following transfer to the new organisation.

[John McDonnell]

rose—

[Mr Hayes]

I will make a little progress and then let the hon. Gentleman come back.

The Bill provides that a transferring employee can terminate their contract if there is a substantial detrimental change to it if they transfer. That reflects regulation 4(9) of TUPE. Government amendment 116 supplements that by providing that where the employee claims constructive dismissal in those circumstances, no damages are payable in respect of any unpaid wages that relate to a notice period he or she has not worked. I should stress that the amendment does not prevent employees from claiming for damages for constructive dismissal, but seeks to establish a common-sense position that damages cannot be claimed for a period of required notice that has not been worked. I should highlight that the amendment ensures that the provisions in the Bill properly reflect TUPE in that regard.

[Mr Hayes]

The hon. Gentleman, with the courtesy he personifies, raised that with me before we came to the House today. I have committed to take another look at that through the parliamentary draftsman. There is no intention to disadvantage staff in that regard. I give that absolute assurance, but I will double-check the language, because language in such things matters. He and I are in discussion and I have committed to write to him as soon as possible, and certainly before the matter is discussed further, to clarify the use of the language to which he has drawn the House’s attention.

[John McDonnell]

Will the Minister clarify why he has used a formulation unused in any other legislation in the past? I have set out the various options in three amendments showing what the Government have used in past legislation to assure staff that they are transferring either under TUPE or under the Cabinet Office statement of practice, the TUPE-like agreement that the Cabinet Office agreed with the trade unions involved. Why are we not using the past formulations?

[Mr Hayes]

Originality and imagination are part of my style. I said style is as important as substance. The substance is in the Bill; the style is all my own. The important thing is that, having met staff representatives on 13 January, I am fully aware that there are other aspects they want me to look at. I fully recognise the concerns they raised. Some of those issues need to be considered further, and I have asked my officials to pursue those matters urgently. In the spirit that I have described, I will not allow staff to be disadvantaged by any changes. The House has my absolute assurance on that. Government amendments 115 and 116 reaffirm our commitment that existing Highways Agency staff terms and conditions should be protected, as I have described.

New clause 18 places a responsibility on the Government to report periodically to Parliament on the performance of Highways England. I have introduced this to reassure some who fear that Ministers will lose control of Highways England, and that they will have no accountability to Parliament if Highways England fails to deliver. It is absolutely right that the new body can get on and deliver the strategy that the Government devise, establish and agree, but let me be clear that should the implementation and delivery of the strategy require further involvement, direction or adjustment by Ministers, in concert with the House, the ability to make those changes must be established in the Bill. I am absolutely clear that Highways England must report to the House, and that Members on both sides of the House must have the chance to scrutinise its work. Ministers must have a role, indeed play a key role, in the delivery of the strategy.

It might be true to say that the greatest challenge we face is getting the delivery right. We have surmounted an important hurdle in developing a strategy founded on empiricism and backed with funding for the long term—more than £15 billion up to 2021—but it will happen only if we have in place the right resources, skills and partnerships, and the right range of other organisations, to make it happen. It would be inappropriate if Ministers and all hon. Members were not involved in that process. I expect directions to emanate from the Department for Transport periodically—it is not meant to be an exceptional power. I expect reports to be made to the House periodically. That, too, should not be a matter of exception. That was raised at length by the shadow Minister. The strong governance arrangements and framework we have put in place provide some of the measures he sought when he argued the case for greater accountability.

The use of directions in the licence will allow the Government to exert control over how the company exercises its statutory functions. In addition, as sole shareholder the Secretary of State can ensure that the company is properly led and governed. More detail is in the summary document published in December, but I will write again on some of those matters following today’s consideration.

Opposition Front Benchers and all Members of the House will be familiar with the new copy of the licence, which strengthens those provisions, and which was provided to hon. Members on 22 January and placed in the Library of the House. Let me say again that if there are problems with performance, I expect Ministers to make use of those directions; I expect Parliament to see the Highways monitor’s report on the impact; and I expect Ministers to ensure that Parliament is informed of how issues have been resolved.

It is obvious from the amendments that were tabled that I need to explain why we need to change the status of the Highways Agency and create an arm’s length body, and I am happy to repeat an argument I made earlier. Let me start with the point of view that some suggest—they suggest that we should do nothing more than implement a road investment strategy without changing the structure necessary to deliver it. Of course, the Highways Agency would make every effort to do so efficiently, and of course we would have some success in delivering that strategy, but we need to understand that if we are to deliver the strategy, we need to make significant changes to the existing arrangements.

The relationship between the agency and the Government has on occasions failed to reflect the wider interests of the economy and the long-term interests of taxpayers and road users. The measure is about providing a clearer, more strategic role for the Government, and providing a stronger, more certain framework, through the licence and the road investment strategy and the framework document, for the organisation mission to deliver those important infrastructural changes to our nation. By the way, those changes are not just about economic well-being; they are also about societal and communal well-being.

The industry is keen to see change both in the way funding is committed and in the way the Highways Agency is constructed. In the call for evidence for the Bill, the Civil Engineering Contractors Association said:

“Even with an apparently committed five year programme, not transforming the Highways Agency into an arms-length body could still leave it a target, should future Governments decide cuts to spending…The supply chain…has confidence that the creation of a Government-owned company would significantly reduce the likelihood of this happening.”

The CBI said that business welcomes the Government’s important decision to reform the Highways Agency to a more independent body, giving it greater funding certainty through fixed five to six-year funding cycles.

The road investment strategy provides a logical and credible commitment between two separate parties—the focus of the company is on delivering its operational objectives, and the focus of the Government is on providing a long-term funding stream. I know that some fear we will lose control of the reins of the company. That is why I have gone as far as I have in the framework document, the licence and the Bill. We will also of course have the monitor—the new body that will oversee the operation of the new arrangements. That is all in line with the conclusions of the Public Administration Committee’s recent report on the relationship between Government and arm’s length bodies, which said:

“Relationships should be high trust and low cost, but too often are low trust and high cost.”

On that basis, I resist amendments 5 to 42 which would remove the relevant clauses or reinsert the words “Highways Agency”.

Infrastructure Bill [Lords]

Debate between John McDonnell and John Hayes

Monday 8th December 2014 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I agree with every word that the right hon. Member for Hazel Grove (Sir Andrew Stunell) has just said. His speech follows on from the constructive work that he did when he was in the Department for Communities and Local Government.

Having learned that we are burning fossil fuels and bringing about climate change on such a scale that it could destroy our planet, I find it almost insane that we should be bringing forward proposals that would mean our relying on another form of fossil fuel. I totally oppose the development of fracking in this country.

I shall concentrate on part 1, which deals with the Highways Agency and the road network. Sometimes I feel like shaking people in this building. There seems to be a loss of collective memory. Part 1 is the first stage towards the privatisation of our road network and it is on the same scale as the privatisations of rail, water and energy under the previous Conservative Government. I have the same dystopian vision of what will happen: once a GoCo has been set up, it will be broken up into regional franchises and sold off, almost inevitably to foreign-owned companies, most of them state run, exactly as 80% of the rail industry has been sold off. The story of the energy and water industries has been similar. There will then be the introduction of tolls, exactly as laid out in the Government’s response to the Transport Committee, and the tolls will fund exorbitant profiteering by those companies.

The House needs to wake up and recognise that the Bill represents the privatisation of our roads. We should be honest with the electorate and warn people that that is the consequence of the Bill. Why am I saying that? It is evidenced by what has gone on throughout this Government and previously. There is a loss of collective memory of what happened when the Conservatives were last in government. Throughout the 1992 to 1997 Administration, there were proposals to build on the privatisation of rail, water and energy by also privatising roads. In 1992 the Government published “Paying for Better Motorways”, in which they said that they would establish a single Government-owned company funded by road levies—that is, tolls—and possibly break it down into a number of privatised regional franchises, as has happened with rail and water. That was the Conservatives’ plan when they were last in power; now it is being implemented under a coalition Government. I hope some of the coalition partners wake up to the consequences of the Bill.

What other evidence is there? The plan is evidenced by the appointments that the Government have made to the Highways Agency. They brought in Tom Smith. Who is Tom Smith? He has just been put on the Highways Agency board. He is the chief executive officer of the M6 toll road. The Government brought in Elaine Holt. What was she? She was headhunted by the Department for Transport to lead on the east coast railway line—first in public sector management, but then to prepare it for privatisation.

All the evidence is there of the Government preparing for the privatisation of our roads. We saw it with the A14. The more recent proposals for the improvement of the A14 included tolling on that road, but there was such public uproar that even the Government had to pull back. We saw the evidence in the Government’s response to the Transport Committee. Paragraph 79 states:

“The Government will consider tolling as a means of funding new road capacity on the strategic road network. New road capacity would include entirely new roads and existing roads where they are transformed by an improvement scheme”

—that is, the investment programme announced last week. The strategy, as far as I can see, is to invest as much public money as possible to bring the roads up to a certain standard in the current period so that they can be privatised under the new agency that will then be broken up into regional franchises.

I note that clause 1 refers not to “a highways company” but to “highways companies”, to enable the Secretary of State to amend the legislation, under the Henry VIII clause later in the Bill, to enable regional franchises to be set up. I warn all the travelling public—motorists, cyclists, pedestrians and others—that our road network is about to be sold off, they will soon be fleeced by tolls and the tolls will subsidise the private profits of foreign companies. If anything provides evidence of that, it is the example of what happened to rail, energy and water when the Conservative party was last in government.

Having said all that, I wish to raise a number of issues on which I would like a response during the debate. I am concerned about the 3,500 staff, who, until now, have been commended for their hard work, commitment and professionalism. What will happen to them? TUPE is not provided for in the Bill. We have argued for it time and again, and in the past four and a half years TUPE has been put into only one Bill. All we have been given, yet again, are assurances that the staff will be covered by COSOP, the Cabinet Office statement of practice on staff transfers in the public sector—the protocol agreement similar to TUPE, but not as enforceable. I reiterate that to give the 3,500 staff greater security we should insert a TUPE commitment in the Bill.

There are arguments to be made about the financial savings and the claim that they will be £2.4 billion. I note the debate over whether VAT is to be charged. First, the Treasury denied that the VAT would be saved and therefore the cost could be, over six years, some £2.4 billion—almost the savings the Government are seeking to find. Then, in the other place, we were told that there was a guarantee that VAT would not be charged. I think that is open to legal challenge. We need greater certainty, otherwise this whole operation will be jeopardised from the beginning.

We also need more details about the monitoring exercise, as we have a monitoring body that is not a regulator, no complaints procedure, and no information about the costings or the investment in the operation of the body. One of the worst aspects of privatisations in the past has been the way that remuneration at the top has gone through the roof while wages elsewhere in the organisations have not risen. We are told that remuneration will somehow be controlled through a central review. I do not think such constraints have worked elsewhere when these agencies have been set up—quite the reverse. I would like to see a ratio put in place between the highest paid and those who are on average earnings in the organisation. In that way we may be able to control the overall levels of remuneration in the future.

I am also concerned about clause 17, the Henry VIII clause, which puts such wide-ranging powers into the hands of the Secretary of State. We have now been assured that, through clause 46, the affirmative procedure will apply in respect of any changes in the legislation to be undertaken by the Secretary of State, but I am not convinced that that procedure gives those democratic protections of accountability to this House. I urge that the super-affirmative procedure be looked at.

[Mr Hayes]

I am reluctant to interrupt the hon. Gentleman but I want to make it perfectly clear that the Government and this Minister—I am the roads Minister, after all—have no intention of privatising our roads; have no intention of not having clear lines of accountability to both Government and this House for the work of the new agency; will set the priorities; will set the strategy; and will hold those responsible for delivering it accountable. I do not want to spoil the party, but I am afraid that he is fantasising.

[John McDonnell]

The Minister has not spoiled the party because I have no confidence or trust that this Government will not privatise. Assurances have been given on the Floor of the House about privatisation before and it has gone ahead. This Bill is the first step towards privatisation and towards introducing tolling on our roads—a new form of funding the road network that will be open to profiteering by foreign companies. I warn this House that if it passes this legislation, it will put at risk our road network in the future, our taxpayers and the future environmental policies that might be able to protect us against climate change.