Public Bodies Bill [HL]

Lord Whitty Excerpts

Wednesday 9th March 2011 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, I will move the amendment in the name of my noble friend Lord Whitty. Passenger Focus plays an important role in protecting the interests of Britain’s rail passengers, England’s bus passengers outside London, coach passengers on scheduled domestic services and tram passengers. It is important that this function is not undermined and it is not appropriate that Passenger Focus is included in the Bill. I am very happy that the noble Lord, Lord Taylor, is joining me in support of this important amendment. I beg to move.

[Lord Whitty]

My Lords, my noble friend did not realise that I had arrived from the airport to move the amendment. I, too, am grateful to the Minister and I congratulate him. This is the first time that a Minister in this Government has added their name to an amendment of mine on any piece of legislation. What I am about to say should not undermine my gratitude. However, I have to ask two questions.

First, where does this leave Passenger Focus, because it achieved the distinction of appearing under three different schedules to the Bill and it remains in Schedule 3, which we agreed at an earlier stage? The piece of paper given to us for our debate on Monday, had we reached the amendment then, indicated that a much reduced role is envisaged for Passenger Focus. The document states that it would concentrate on its,

“core role of protecting consumers”,

that there was “scope for significant savings”, and that the body would be working under a “significantly reduced budget”. The reference to the core role is slightly sinister, because it implies that the organisation will focus on the complaints function and therefore act in processing and improving that function, but that it will not be allowed to be more critical of the train or bus companies and, more particularly, the department’s overall transport policy as regards the rail or bus network. If that is the intention, it will neuter Passenger Focus considerably. I should like the noble Earl, Lord Attlee, who I assume will reply, to provide reassurance on that front.

My second question is on a wider front. The various existing consumer bodies are being dealt with differentially under this legislation. Some are to be abolished, some are to be merged, some are to have their functions transferred and some, given the abolition of Schedule 7, will be retained—presumably in their present form. Passenger Focus will be retained in a modified form. The Government’s original intent, for which I had some regard, was to rationalise the whole structure of consumer representation. Instead of that, the danger is that they will leave a bigger hotchpotch than the aggregate of previous legislation on consumer matters and weaken the statutory base of a number of consumer bodies.

As the Committee knows, I have an interest as a past chair of Consumer Focus. On the one hand, it appears that that body will be abolished, while on the other hand the Government say that they will transfer the functions to Citizens Advice. It was BIS’s original view that other bodies, including Passenger Focus and the Consumer Council for Water, should also be transferred to Citizens Advice. Whether or not that was a good idea, at least it was coherent. It seems now that we will end up on the consumer front with greater incoherence than the Government inherited and were determined to do something about. Not only is regulation likely to be more incoherent, but it is also likely to be substantially weaker, with fewer resources. Therefore, although I very much appreciate the Government’s support for the amendment, I have serious misgivings about their specific and general intentions as regards consumer protection.

[Lord Bradshaw]

My Lords, I support what the noble Lord, Lord Whitty, said. There is certainly scope for economy. I did not agree with the previous Government’s decision to transfer protection of bus and coach passengers to the Rail Passengers’ Council. However, the work of the council is concentrated mainly on issues such as punctuality. It has produced extremely good reports on things that irritate users such as huge queues at booking offices and the way in which ticket machines baffle many users and often do not work. These issues are important to people and I cannot think who will regulate them for less money. Transferring the functions to the Office of Rail Regulation, which is full of lawyers, will raise the cost of doing this work.

I will say one further thing in defence of Passenger Focus. It has developed a system of statistical analysis by which it can take very little in the way of raw information and turn it into statistically robust results. I am all in favour of economy, but I am also in favour of having a body to look after the interests of passengers that is functional and that rests on a secure base. I and most passengers would regret anything that abolished this body.

[Earl Attlee]

My Lords, I was surprised when the noble Lord, Lord Whitty, did not move his amendment, so it is a great pleasure for me to respond to him. He and I have debated together over many years. He has accepted some of my amendments and taken others away. It is a great pleasure to continue our debate, albeit with our roles reversed.

The noble Lord’s amendment seeks to remove Passenger Focus from Schedule 5 to the Bill. The appearance in the Bill of Passenger Focus does not reflect the view that the interests of passengers are unimportant. We are clear that passengers are the only reason why we run a public transport system. This was reflected in the public bodies review, which concluded that Passenger Focus should be retained but substantially reformed to focus on the core role of protecting passengers, thereby allowing a reduction in the cost to the taxpayer.

Noble Lords may see this as a first step towards cutting the budget of Passenger Focus to the point where it is no longer capable of being an effective voice for passengers. I reassure them that this is not the case. We fully accept the need for a powerful and effective passenger advocate. This is reinforced by EU provisions that require us to have a properly independent complaints body to which rail passengers can turn. Passenger Focus plays that role.

The noble Lord, Lord Whitty, asked whether this was not simply an opportunity to weaken and abolish a body that has been critical of the Government in the past. The answer is no. We want to maintain an effective passenger advocate because that is the best way of ensuring that transport operators are held properly to account. This is an effective opportunity to ensure that that role is performed in a robust and cost-effective way.

The Government had originally listed Passenger Focus in Schedule 5 to enable possible changes to its functions. Further work and our discussions with Passenger Focus have clarified that we can significantly reduce the cost to the taxpayer without recourse to legislative change through Schedule 5. For example, efficiencies can be derived by reducing the scope of Passenger Focus’s research and survey work. My noble friend Lord Taylor has added his name to Amendment 98 on that basis to support the removal of Passenger Focus from Schedule 5, which we hope will be welcomed by the Committee. However, the governance changes that we intend require its inclusion in Schedule 3, so we cannot support Amendment 75, which the noble Lord, Lord Whitty, was unable to move on Monday. Amendment 160A, which would remove Passenger Focus from Schedule 7, is effectively redundant in the light of the Government’s decision to remove Schedule 7 from the Bill.

I hope that I have been able to reassure the Committee and the noble Lord that we are not planning to leave passengers without proper protection and I hope that the Committee will accept Amendment 98.

[Lord Whitty]

I am not sure that it is in order for me to reply, given that my noble friend moved the amendment. However, I am grateful for some of those reassurances about the future of Passenger Focus. It would be helpful if we could be told the nature of the changes in governance that the Government propose, but perhaps that is for another day. However, I think that the body’s removal from this schedule is important. The noble Earl was probably not in a position to reply to my other points, which concerned the broader landscape of consumer representation.

[Earl Attlee]

The noble Lord asked what reforms we plan under Schedule 3. That schedule can be used to implement changes to the make-up and composition of the Passenger Focus board. Although the details are still to be finalised, the intention is to streamline the board’s operation significantly, which will also result in significant cost reductions.

[Lord Whitty]

I thank the noble Earl. Of course, some of the make-up of the board reflects the structure of the railway industry and the structure of the company. I hope that we will not lose that geographical dimension in changing its composition. I accept what the noble Earl says in relation to Passenger Focus. Clearly, I am grateful for his support for the amendment, although I think that we will have to return to the wider issue of the consumer landscape as a whole either in this Bill or in some other context in this House.

Amendment 98 agreed.

--- Later in debate ---

Moved by

[Lord Whitty]

105A: Clause 7, page 4, line 4, at end insert—
“( ) In relation to a transfer of functions, duties or powers under section 1 or 5, or to mergers under section 2, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I.2006/246) apply to a transfer which relates to rights or liabilities under a contract of employment whether or not the transfer would, apart from this subsection, be a relevant transfer for the purposes of those regulations.
( ) In the case of an employee of any body whose functions, duties or powers are transferred or merged under section 1, 2 or 5—
(a) a period of employment with the transferor is to be treated as a period of employment with the recipient organisation;(b) the transfer to the recipient organisation is not to be treated as a break in service.”

[Lord Whitty]

In this amendment, I move away from the detailed consideration of individual bodies and their future to a more general principle. This relates to what happens to the staff of those bodies whose functions are transferred or merged. There is a clear-cut situation where, if bodies are abolished, although some of the bodies are Schedule 1, there has also been commitment by the Government to transfer the functions, duties or powers elsewhere and, therefore, the question of what happens to the staff who are carrying out those functions under the current arrangements does arise.

This amendment would make it clear that, in normal circumstances, the TUPE arrangements would apply as they would apply to mergers in both the private and the public sector, and across the private and the public sector where functions and duties are transferred. Under normal procedure concerning people’s entitlement to terms and conditions, including redundancy terms, pensions and other aspects of their employment, if the functions are moved into a receiving body, it would be for that receiving body to maintain both the continuity of service and the terms and conditions unless and until, either by collective agreement or by individual contract agreement, those terms are changed.

Because of the complexity of the bodies involved and the contractual terms which appear and have grown up in many of these bodies over time, it may not be all that clear, even to eminent employment lawyers, whether a TUPE applies or not. Even in the more simple past, when we were only dealing with one or two mergers of bodies or transfers of functions, it sometimes was not at all clear. The form of words here is almost exactly that which was included in the legislation in 2006 which set up the present Consumer Focus body—the National Consumer Council in legal terms—when we had the merger of the old National Consumer Council, Energywatch and Postwatch. The terms and conditions were preserved, albeit in some situations it was not entirely clear whether TUPE would apply or not.

In 2006 the regulations on TUPE came in. When Consumer Focus was created they were quite new, but similar forms of words have appeared in other legislation where there has been a merger or transfer of functions from one state body—NDPB or equivalent—to another. This Bill has a wholesale raft of such transfers. It does not have quite as many as it started out with but there are still quite a few left, and a few where it is not quite clear whether the transfer is occurring or not, and whether it is a function which normally comes under the TUPE regulations.

This amendment would make it clear, however, that if the function transfers or the duty and power transfers, the staff would go with them unless and until the receiving body decided it might wish to dispense with their services as the new employer. It is not up to the previous employer to declare them redundant until such a rationalisation has taken place by the receiving employer, which can happen more or less instantaneously in certain circumstances. The important point is that up until that point, the terms and conditions of the staff employed under the pre-existing bodies would be preserved.

This important point relates to quite a lot of staff, and there is quite a lot of uncertainty among the trade unions and staff bodies representing them. We need clarity on this and if the Government are unable to accept this form of words then, clearly, I am happy to discuss it with them. The principle needs to be established for all the bodies which remain within this Bill. I beg to move.

[Lord Hunt of Kings Heath]

My Lords, I would very much like to support my noble friend on this. It is timely to remember that thousands of people who work for the public bodies listed in this Bill are likely to be affected by its provisions. Many will lose their livelihoods; some will find their careers seriously damaged; some, as my noble friend Lord Whitty has said, will find themselves transferred to other employers. It is important that we recognise and acknowledge that those people have given dedicated service, in some cases for many years. Where they are transferring to another body, we must make the transition process as smooth as possible. That is clearly the intent behind my noble friend's amendment. It would ensure that, where a person is transferred to another body, TUPE will apply, with the implications and protections as described by my noble friend. I hope that the Minister will be able to provide the necessary assurances on that. The Government also need to take on board the point that my noble friend made about the complexity of the issue and the need for clarity, which is why his amendment deserves serious consideration.

[Lord Taylor of Holbeach]

I, too, am grateful to the noble Lord, Lord Whitty, for tabling the amendment, because it raises an important aspect of the reforms and allows the Committee to consider the impact of the Government's reform programme on the staff of the bodies affected. I take this opportunity to pay tribute to the work of the thousands of hard-working staff of public bodies across the country. Specifically, I put on record that our proposed reforms to public bodies are no reflection on the work of the staff.

I assure the Committee that the Government are working with the chairs and chief executives of public bodies and trade union representatives to ensure that necessary change is carried out as smoothly and fairly as possible. As the noble Lord said, that must be an important aspect of this operation. The Government have been diligent in acknowledging the needs of staff during the public bodies review programme, and we will continue to be so—for example, by exploring opportunities for redeployment where possible.

The Cabinet Office has been working closely with other departments since 2010 to ensure that the needs of staff are fully factored into the public bodies programme of work, particularly on the need to provide staff with clarity following reform decisions and the milestones along the route. The Cabinet Secretary has sent a message to departments on that very point. The Cabinet Office has also provided a checklist of considerations for departments which takes the needs of staff and stakeholders into account.

Those arrangements reflect a flexible approach that ensures that government departments can respond in the context of individual changes—based, of course, on the proper protections that are already enshrined in UK employment law. That is the right approach to support our public bodies’ staff. It also reflects the Cabinet Office statement of practice on staff transfers in the public sector. The guiding principles, as set out in the document state:

“The Government is committed to ensuring that the public sector is a good employer and a model contractor and client”.

The principles recognise that the:

“involvement, commitment and motivation of staff are vital for achieving smooth and seamless transition during such organisational change”.

On the specifics of the amendment, I should like to inform the Committee why the Government believe that the blanket application of TUPE is not appropriate. TUPE, and the European law which underpins it, was designed to protect staff where the business for which they worked, or the services to which they were assigned, would be carried out by a different organisation. Staff retain their jobs and conditions, and the new employer steps into the shoes of the old one. The definition of relevant transfer under TUPE is broad and will cover most transfer situations.

However, Clause 23 already provides the mechanism for equivalent protection to be confirmed in non-TUPE situations where that is appropriate. That is underpinned by the Cabinet Office statement of practice on staff transfers, to which I have already referred, which provides that the TUPE principles should generally be followed through a transfer scheme which addresses the imperatives of the particular transfer.

The blanket application of TUPE to all transfers conducted pursuant to this Bill seems likely to lead to inefficiencies and unintended consequences. For example, there may be circumstances where a body following an order made under this Bill is carrying out functions which have significantly altered and which require different skills and resources, with the result that there is no relevant transfer for TUPE purposes. If TUPE were nevertheless to be applied, staff would be transferred to the new body by operation of law, only to be potentially made redundant by the transferee. This would involve extra work and unnecessary expense and delay with no benefit to anyone, increasing uncertainty for staff and possibly disruptive relocation.

I appreciate the concern of the noble Lord, Lord Whitty, and I can assure him that the Government will continue to have a positive approach to TUPE regulations where they properly apply, and seek to make appropriate provision where this is not the case. I hope that, in the light of the assurances I have given, he will feel free to withdraw his amendment.

[Lord Whitty]

My Lords, I appreciate much of what the Minister has said about the approach of the Cabinet Office advice and what is going on in anticipation of various changes. Of course, we are not at a point, in most cases, where the exact format of the change is clear because we have to go through a period of consultation in association with the secondary legislation. However, I am slightly disappointed that he is not prepared to accept this amendment, because I had seen Clause 23(5), which referred to this, and my amendment was intended to be a rather clearer exposition of that principle and is the formulation that has been used on past occasions. It is true that people will find themselves employed by a new body and that there could be a redundancy very rapidly, but that has been the situation in both the private and the public sector, and is what is laid down in the TUPE regulations for a lot of situations and has happened in past public sector mergers.

The difficulty for me being able to be sufficiently reassured by the Minister’s words and by Clause 23(5)(f) is the question why, if on previous occasions, legislation has provided for a pretty unambiguous form of wording that I have outlined in this amendment, we could not use a similar form of words in here. I think that would be greater reassurance to the staff and trade unions that are having to deal with potential changes of employer. I do, however, accept the good intentions of the Government, and the Minister in particular, and will not press this amendment. I will consider his words carefully to see whether I need to bring it back at a later stage. I beg leave to withdraw the amendment.

Amendment 105A withdrawn.