Enterprise and Regulatory Reform Bill
Debate between Lord Marland and Lord Monks
Lord Monks
I support my noble friend in this amendment. He gave the statistics for the current situation and pointed out that the median award is just £4,500. Set against the mean annual salary or average salary, that is very low indeed. This is just a mechanism for transferring the costs of dismissal away from the employer and reducing the employer’s potential liability. I disagree with it and again it is the wrong signal to send. It is not a huge signal—I do not want to be accused by the Minister of gross exaggeration, as might have been the case once or twice earlier in our debates—but it is clearly the duty of the Committee to indicate that this is a transfer, a potential loss for the employee and a potential gain for the employer.
While I am on my feet, if at some point in the subsequent proceedings the Minister can explain the difference between the no-fault dismissal provisions of Mr Beecroft and the provisions in Clause 12, I shall be very interested to hear it. In practical terms, they are very similar.
Lord Marland
I am not going to get into that for the moment, but I am sure we will pick it up later. The Government take the matter of this cap seriously and that is why we are consulting on it. The consultation closed on 23 November and we will publish the response before we reach the Report stage, so we will be able to have a good debate on it. I thought that the noble Lords, Lord Young and Lord Monks, made some very poignant remarks, and we share their concerns. We also acknowledge the keen detail of the facts that have been presented. There are very few cases which get to the limit, but they are important. The average award is £5,000, of course, and the cap is £72,300. We recognise that, we understand it; we know that we have got to get it right. We are obviously sympathetic to a number of the cases that the noble Lord, Lord Young, has mentioned and, with that, I hope that we can revisit this in the spirit of co-operation because I think it is important, and that we can be conjugated—conjugare, which means to bind together in the same outcome—in time to come.
Lord Monks
That is not a constructive suggestion. Many of those million jobs were in the private sector. Unfortunately, far too many of them were in the south-east of England and not in the poorer regions. I accept that the noble Lord has a point in that the public sector was the major driver of the economy and of the regeneration of our cities in the north of England and in Scotland and south Wales. A large number of jobs were created. There have been some exaggerated claims about the possible effects of the national minimum wage and so on but that is probably another debate for another day and well beyond the scope of this clause. However, in the OECD league tables, the British labour market is ranked number three for flexibility. This country is the third easiest when it comes to employers being able to sack people. I wish that employers would stop moaning about this, look at some of the evidence from abroad and get on with seeking to help to increase employment by looking at what they can do themselves and at the changes that the Government can make, possibly in relation to national insurance and so on. That would boost employment opportunities far more than giving a licence to some employers—I think that they are a minority but they are not very good employers—who would take advantage of these kinds of provisions.
Lord Marland
My Lords, if we are to make any progress on this Bill, we have to take a more conciliatory position between ourselves. I believe that underlying all this is a conciliatory position, because ultimately we all want more jobs and more people employing others. We all feel passionately about that. We cannot always come at this from the polarised position of the TUC. Indeed, we as government are not coming at this by saying, “Beecroft says this, so we must do it”. In fact, as a department, we rejected quite a few things that Beecroft said because we did not think that they were in the interests of employees. Therefore, we are not taking a polarised position based upon part of the argument. In the end, we are all interdependent. Without the employer, we do not have employees, and without employees, we do not have a return to prosperity.
It was a pleasure to negotiate with unions in the north. Sellafield was my area of responsibility. I much admired the way in which they came to the table and to understand that they had to improve their working terms and conditions for Britain to become competitive again. It is to their eternal credit that after two rounds, three pinfalls and one submission, we got to a very amicable and successful direct contact where there was mutual respect. As an employer, the first company with which I was involved in setting up, the majority of people who worked there were shareholders. We believed that that community spirit was the best way forward.
I have already conceded on this matter and we do not really need to debate it, but we have a roaming brief on this issue. I think that all parties agree that we need to have a cap on awards but we need to make sure that we get it right and that it is fair. It should not be in favour of the employee or the employee: it should be fair and balanced. This House is good at being fair and balanced.
I am grateful for the contributions, which have been fair and balanced at times. When they have been fair and balanced, we have started to make progress. I think that in our hearts we all want the same thing. At the end of all this, we will have the same thing. It will leave this place a better Bill. It will have been challenged. It will not have been challenged by taking unreasonable, polarised positions. If we did, we would not end up with something reasonable at the end.
After all this, I hope that the noble Baroness will support this clause.
Employment: Rights
Debate between Lord Marland and Lord Monks
Lord Monks
To ask Her Majesty’s Government what are their plans for employment rights to be exchangeable for shares.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, in October, the Chancellor announced that he intended to create a new employment status called employee owner. This new employment status has different employment rights from employees. Employee owners could own shares worth between £2,000 and £50,000 in companies they work for and will not be subject to capital gains tax.
Lord Monks
I thank the Minister for that reply, but can anyone here imagine a decent employer trying to bribe workers to give up their employment rights in return for shares of questionable value? After all, some 50% of small firms fold within five years. Will not decent employers agree with Justin King, the boss of Sainsbury’s, who said that this is not what we should be doing? Will the Government stop once and for all encouraging employers to show a degree of contempt for workers’ rights and ditch this tawdry proposal?
Lord Marland
My Lords, I have obviously read the TUC’s views on this, and I am not surprised that the noble Lord should wish to propound them, but we must understand that this is a voluntary, not a compulsory, scheme between employees and employers. Surely that is the best way forward for employee relations, as the noble Lord must concede.