Enterprise Bill [Lords]

Albert Owen Excerpts

Tuesday 8th March 2016 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

I congratulate my hon. Friend the Member for Cardiff West (Kevin Brennan) and the hon. Member for Aldershot (Sir Gerald Howarth) on the eloquent way in which they spoke to new schedule 1. I will not repeat what I said on Second Reading, except to reiterate the point that the people and companies listed in that new schedule are in no way fat cats. I think we need an apology from the Government about that because these are hard-working, ordinary people who have worked in difficult circumstances for many years, and signed up to agreements in good faith with the Government of the day.

I want the Government to honour their promise to safeguard the conditions of service that were agreed between companies and employees over many years, and I will touch on the definition of public sector workers. In no way are the people listed in the schedule public sector workers. Many of them work for private companies. If this cap is imposed on them, it will not benefit the Treasury at all; it will benefit the private companies that have taken on the contract. There will be no great saving, but there will be a breach of trust, and a considerable loss to those individuals who have been given protection.

I know that this Minister listens to reason and I am sure she agrees that many people will be caught unintentionally under the Bill. The protected status goes back to the privatisation of the electricity industry in the 1980s, and regulations were introduced in 1990 to protect many of the categories listed. More than 120 Magnox workers have written to me. As the hon. Member for Aldershot said, they were given protection, with other nuclear industry employees, under schedule 8 to the Energy Act 2004. When the recent pensions Bill was going through Parliament and their conditions were threatened when a vote in the House of Commons took away their protected rights, an amendment in the House of Lords restored that protection. Those protections were given to the workers by Mrs Thatcher and Cecil Parkinson in the 1980s, and they were honoured by other Conservative Ministers.

[Sue Hayman]

It is also important to point out that the Treasury did not actually allow the employees of those companies to remain in public sector pension schemes when they were privatised, so it is completely inconsistent now to call them in.

[Albert Owen]

There is huge inconsistency because the workers I am referring to were protected in 2004. They were given that protection in statute. The Government are using a crude analysis by the ONS that these are public sector workers and fat cats, and that they should be treated all the same, but they are breaking their own promises. That is the strong feeling I got in the letters I received from the employees. The safeguards given by previous Governments during privatisation are now being taken away on a whim. I say to Conservative Members that taking away the protected status of these people was not in the Conservative party manifesto. The opposite is the case: it talked about city hall fat cats. Many of us agreed that people should not be rewarded for failure, but the people we are talking about are doing dangerous work now. The measure is due to come in in October, and many private companies are refusing to put through redundancies now. They are holding them back until October so that the workers receive reduced conditions of service. That is wrong.

[Chris Stephens]

Surely the biggest safeguard of all is that an occupational pension scheme is deferred pay. The hon. Gentleman’s constituents could have made more money working for other companies, but they chose to stay where they were because they were going to get a good occupational pension scheme.

[Albert Owen]

That is absolutely right. The reality is that the Bill will take away the conditions of service that these people signed up to.

[David Mowat]

I am listening carefully to what the hon. Gentleman says and I have a lot of sympathy with it, but I do not follow one point he made regarding private companies versus public companies. If they really are private companies, how can the Bill apply to them? Am I missing something?

[Albert Owen]

It is very confusing. This has not been made clear, but my understanding is that if these people were to leave today, they would be given the full package, yet the companies have been told that the measure will apply from October and those very companies are now saying that people cannot go until then. That is what is being said by the hon. Gentleman’s constituents and my constituents who have been writing in.

The Minister could end the confusion today. She could say that she will honour, as Mrs Thatcher and other Tory Ministers did, the protected rights and status of these individuals, and we could have a vote. Lawyers will argue about whether people can be protected, but we should not leave it to the lawyers—the House of Commons has the opportunity to act today. I hope that Members across the House will support new schedule 1.

[Anna Soubry]

Government amendments 3 to 9 will enable Welsh Ministers to make regulations on exit payments that they feel are suitable and devolved to them through the Government of Wales Act 2006. That has been agreed with Welsh Ministers through the Welsh Assembly, and I am grateful for that.

The Conservative manifesto was very clear that we would introduce the cap and that we would set it at £95,000. It is extremely important to remember that this relates to redundancy pay. The cap will curb only the top end of exit payments—just the top 5% in value of all exit packages across the public sector. Amendment 15 is merely a device based on an article in The Daily Telegraph written by my right hon. Friend the Member for Witham (Priti Patel) back in January 2015. It was not part of the manifesto promise that was made. There is no honour, if I may say, in putting that forward as anything other than a junior Treasury Minister praying it in aid in an article she wrote in The Daily Telegraph.

I want to make it absolutely clear that the cap will not affect a classroom teacher earning the maximum of the upper pay range of £38,000 with a normal pension age of 60. It will not affect anyone working in the NHS earning below £47,500 or firefighters. I am told that police officers cannot be made redundant, and in any event no police officer earning below £54,000 would be caught by the cap. The Cabinet Office has confirmed that no civil servant earning below £25,000 will be captured. Some earning around £25,000 may be captured, but we can find no such example. A librarian earning £25,000 with 34 years’ experience could still retire on an unreduced pension at the age of 55.