Post Office Board and Governance

Andy McDonald Excerpts

Wednesday 28th February 2024 Commons Chamber

[Kevin Hollinrake]

Thankfully, not me. I have nothing against Mr Staunton personally. He had a strong track record as the chair of various large organisations, as he said yesterday. I think we would all agree that the Post Office is a specific organisation with specific challenges. Yesterday’s evidence from Ben Tidswell, the senior independent director, was interesting. He felt that Mr Staunton’s behaviour changed in November last year and became far more “erratic”—his word. I do not know the reasons for that specifically, although Mr Tidswell suggested some yesterday. Whatever the reason, Mr Staunton’s recent conduct is not consistent with remaining chair of the Post Office. That is why we decided to act.

[Andy McDonald (Middlesbrough) (Ind)]

I thank the Minister for his work in this area. He has been assiduous in his attention to detail—I cannot say the same of the Secretary of State. Nevertheless, yesterday was unedifying, and we are sick to death of the “He said, she said” business—we are not interested, except that two witnesses yesterday took the oath and spoke to the same issue: as to whether Mr Read had ever tendered his resignation or threatened to. It was totally conflicting evidence from the two people; they both cannot be right, so I suggest that one might have been a little economical with the truth. From Dr Neil Hudgell, though, the message came loud and clear: these schemes are way too “over-engineered” and far too “bureaucratic”, and that has led to the delay in getting the money out of the door. I have to correct the Minister—only 20% of the fund is out of the door as yet. We have to speed it up.

Finally, I ask him to take on board the words of the predecessor Select Committee, the Business, Energy and Industrial Strategy Committee, in February 2022, which said that the best way through this was to remove the Post Office from the system. Now, it may be too late to do that, but my goodness, was not the Committee right to say that? Can we find ways to relegate the role of the Post Office, because that is the only way we will get justice for postmasters? Ultimately, that is what this is about—getting them compensated.

[Kevin Hollinrake]

I totally agree with the hon. Gentleman’s final point, and a number of the points he made. It is fair to say that on the compensation schemes, we could use the old phrase, “If you were going there, you wouldn’t start from here.” I think that Sir Wyn Williams has said that, but the best way now is to say, “When you’re going through hell, keep going.” We have to improve the schemes we have got. The hon. Gentleman made an interesting point about the Post Office, and he will have heard what I said earlier. I think the fixed-sum awards do take the Post Office out of the schemes completely, because no disclosure is required for them.

On tendering resignation—again, I thought it was extraordinary that a chair would disclose confidential and private conversations that he has had with the chief executive. I have to say for the record that Mr Read has never tendered his resignation to me or to the Secretary of State. Others would be better than me to comment on the nature of those conversations, but I do not think that it was right for Mr Staunton to comment at all.

I assure the hon. Gentleman that the Secretary of State has given me 100% support in everything I have done in trying to address these matters. I accept what Neil Hudgell said—I spoke to him afterwards, and we have spoken before about the schemes being over-engineered—and he suggested some ways to try to accelerate compensation. We are of course looking at those to see what the best way is to ensure that they are not over-engineered, but deliver rapid and fair outcomes as quickly as possible.

Post Office Horizon: Compensation and Legislation

Andy McDonald Excerpts

Monday 26th February 2024 Commons Chamber

[Kevin Hollinrake]

I thank my hon. Friend for her engagement with this issue and for her work on behalf of her constituent, whose case I am very aware of. Yes, we absolutely should be taking a view where evidence is impossible to obtain. Of course, it is fair to request certain bits of information to support a claim, but where such information is not available because it pertains to 20 or 25 years ago, it would be unreasonable to expect that as the basis for a claim. As I said earlier, where there is an absence of evidence but a broader claim that is compelling, there is no doubt that the claimant should get the benefit of the doubt, and I am very keen to make sure that her constituent gets compensation as quickly as possible.

[Andy McDonald (Middlesbrough) (Ind)]

I thank the Minister and his predecessor for their work on this. I know that he has been paying a lot of attention to it. On the issue of full and fair compensation, may I express a worry about the £600,000 option? It has been said that this is a complicated process, but it does not have to be. Schedules of past and future loss are regular events when calculating these matters, and if ever there were a case for aggravated and exemplary damages, surely this is it. My fear is that people who are up against time limits and perhaps getting older will want to accept the £600,000, which will be a vast undersell of the true value of their claim. What mechanisms is the Minister putting in place to ensure that people do not undervalue their claim and take that easy option to bring the matter to a close?

[Kevin Hollinrake]

The hon. Gentleman makes a fair point. Full and fair compensation lies at the heart of this matter, and we do not want people to feel that the £600,000 is the only option for getting compensation in quick time. It is there for those who want to take the money, walk away and draw a line under the matter, particularly where they think their claim is below that figure. As the hon. Gentleman might have heard me say earlier, on the recommendation of the advisory board and others involved in the process, as soon as a full claim is received, individuals in the overturned conviction cohort will get their interim compensation of £163,000 topped up immediately to £450,000. That will ease the financial pressure and reduce what he suggests might be an incentive for people to take a lower amount than they deserve. A significant amount of money will be paid forward on that basis while the remainder of the compensation claim can be properly assessed.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 14th September 2023 Commons Chamber

[Ms Ghani]

I am responsible for supply chains and critical minerals too; several months ago, I refreshed our critical minerals strategy. We are looking at how we ensure that we are building resilience and ensuring that our supply chains are stable.

I am also working with a number of industry representatives to put in place an import supply chain strategy as well. We know that there are kinks in supply chains and that there are issues of economic coercion around the world. We want to ensure that we have stable supply chains to protect our advanced manufacturing sector. [Interruption.] From a sedentary position, my right hon. Friend the Secretary of State points out that I am also the sanctions Minister. We are ensuring that that work is now co-ordinated, not only across Whitehall but internationally.

[Andy McDonald (Middlesbrough) (Lab)]

Those of us on the Business and Trade Committee are very much aware of the sterling work done by officials in furtherance of the trade deal with India. However, in the revelation at the G20 summit of the Partnership for Global Infrastructure Investment—the counter to China’s belt and road project through a US-backed trade corridor to speed up links between Europe, the middle east and India—there was no mention of the UK. Did our Government decline to be involved or were we not invited?

[Ms Ghani]

I was in front of the Select Committee; that session would have been afterwards. I have just been informed that the Prime Minister is very much focused on securing a trade deal and on the other details that the hon. Gentleman raised. Because it is a Select Committee issue, I will make sure that he gets all the details in writing.

--- Later in debate ---

[Kemi Badenoch]

The hon. Gentleman is right—there is one thing that I find regrettable, and it is the fact that he continues to bang on and on about this even after the rest of the world has moved on post the referendum. The fact is that we have left the EU and we are not going back into it—certainly not under the terms that would require us to do so. He should be focusing on the benefits of Brexit, such as having more control over our laws, our borders and our money, as well as being able to deregulate, including through our smarter regulation programme. If he looked at that, there might be opportunities he could deliver for the people of Scotland.

[Andy McDonald (Middlesbrough) (Lab)]

As the UK automotive industry wrestles with the looming increase in the rules of origin thresholds, European Commission President Ursula von der Leyen has just announced a probe into the flood of cheaper Chinese electric cars coming into the market. Although there has undoubtedly been much for the UK to welcome, with announcements from Jaguar Land Rover and BMW, what additional measures are the Government taking to ameliorate the impact of cheaper and heavily subsidised Chinese imports?

[Kemi Badenoch]

That is an excellent question, because it raises something fundamental. The transition to net zero will change the nature of the UK supply chain and, as I said earlier this week, China poses a systemic challenge here. The path to net zero creates a risk of even greater reliance on China, especially when it comes to the battery manufacturing needed for zero emission vehicles. We cannot be naive about that. That is why I am working hard to ensure not only that business competitiveness is at the heart of our transition, but that British national interests come first. We cannot depend on a single country. We must protect our national security, so we are working with like-minded allies. My hon. Friend the Minister for Industry and Economic Security has spoken about our critical minerals strategy and we are working to diversify and build those supply chains. That is what the Atlantic declaration, which I mentioned earlier, is also about. We are very aware of this point, but I think it is important to reinforce it.

Strikes (Minimum Service Levels) Bill

Andy McDonald Excerpts

Consideration of Lords message
Monday 17th July 2023 Commons Chamber

[Alan Brown]

It is a pleasure to follow the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders). I agree with all his comments, but I hope that Labour stays resolute on this. If it comes into government, we do not want to see another U-turn, given what we heard at the weekend.

The Minister put forward the myths again about how this Bill is about saving lives and livelihoods. I do not know how he can talk about saving livelihoods, as he is bringing forward a Bill that is going to allow workers to be sacked more easily. Workers’ livelihoods are at stake because of the Bill and the intentions behind it. I would like to put on record my thanks to the Lords for the fight they have brought on this, but I am a wee bit disappointed that the Lords amendment is only about the consultation. Even if we manage to defeat the Government tonight, the Lords amendment does not provide any additional proper protections for the unions or the workers, because it is all about consulting. At least consulting would draw out some transparency, because the Government would need to publish responses and allow the House or a Joint Committee to debate those. In itself, however, the amendment does not provide any additional protections.

[Andy McDonald (Middlesbrough) (Lab)]

Does it not speak volumes about the way in which this Government conduct their business that they go through a consultation process and are not prepared to publish the results of that consultation? What have they got to hide?

[Alan Brown]

That is a fair point. Obviously, I cannot answer on what the Government have to hide, other than to say that we know about a raft of answers that show how unworkable and prejudiced this Bill is.

Subsection 5(b) in the amendment is about consulting the ILO. The Government keep telling us that this Bill brings the legislation in the UK into line with international norms, but it clearly does not; the ILO has said that the UK already has some of the most draconian strike legislation, even before this Bill. So there is no doubt that the Government are frightened to consult the ILO because they are frightened about the answers that will come back and the evidence about how draconian this really is that will be put into the public domain when it is published.

As I say, it looks as if the Lords are going to back down after this. There is no more scheduled business to allow further consideration of the Lords message, which suggests they are not going to push the amendment beyond that. That is disappointing, especially given that the Government have tried to argue before that this is a manifesto commitment. The actual manifesto commitment was to require a minimum service for transport. That commitment is not as wide ranging, so the Lords would be completely justified in continuing to resist for as long as possible.

As the shadow Minister said, because the amendment is to consult, as opposed to what was set out in previous amendments, unions are still at risk of facing big fines. Unions are still going to comply, effectively helping employers disrupt strikes and single out workers. Worst of all, workers can now get sacked for not complying with a work notice that they have not received.

Why the Government would not even consult and publish an impact assessment on that is beyond me. Again, they know that it allows employers to unfairly discriminate, pick out the awkward squad, then discipline and sack them, with no recourse to a tribunal. Welcome, Madam Deputy Speaker, to 21st century authoritarian Britain, where sacking workers like that brings the UK in line with Russia and Hungary, not the international norms, although the Minister and Government try to tell us otherwise.

I will be voting against the Government motion to disagree with the Lords. I hope the Lords do not give up the fight, but I am frightened they will. That is why we want away from this Union, because it is certainly not working for anybody.

Oral Answers to Questions

Andy McDonald Excerpts

Thursday 29th June 2023 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

12. What steps her Department has taken to ensure that the free trade agreement with Israel complies with international law.

[Nadia Whittome (Nottingham East) (Lab)]

14. What steps her Department has taken to ensure that the free trade agreement with Israel complies with the UK’s obligations in section 5 of United Nations Security Council resolution 2334.

--- Later in debate ---

[Nigel Huddleston]

Under our existing agreement, Israeli goods from the state of Israel receive tariff preferences under the UK-Israel partnership agreement. Palestinian goods, from the Occupied Palestinian Territories, benefit from trade preferences in the interim UK-Palestinian Authority bilateral agreement. To be clear, only goods originating from the state of Israel are covered by our current FTA, and that will not change in the upgraded FTA.

[Andy McDonald]

Last week, it was reported by The Jerusalem Post that Israel’s National Security Minister Ben-Gvir, who just 15 years ago was convicted of inciting racism and supporting a terrorist organisation, had told settlers in the illegal west bank outpost of Evyatar:

“The Land of Israel must be settled and at the same time as the settlement of the Land a military operation must be launched.”

He then spoke of demolitions and the killing of “thousands” of Palestinians, in order to “fulfil our great mission.” Will the Minister condemn those genocidal remarks about Palestinians, and ensure that any trade deal with Israel explicitly bans UK trade with those illegal settlements and makes binding regulations for companies to uphold human rights standards?

[Nigel Huddleston]

The hon. Gentleman will be aware that the UK is a leading advocate of human rights around the world. We have very frank conversations with our allies and we have frank and honest discussions across Government. In answer to the trade element of his question, as I said previously, only goods originating in the state of Israel are covered by our current FTA, and that will not change under the upgraded FTA.

Strikes (Minimum Service Levels) Bill

Andy McDonald Excerpts

Consideration of Lords message
Wednesday 21st June 2023 Commons Chamber

[Kevin Hollinrake]

We have been clear that there is a balance between people being able to seek industrial action and being able to go about their daily lives. That is the balance that we are trying to strike. He asked if we fear scrutiny; not at all. What we fear is delay. That is what the Opposition parties are trying to bring about: delay in wrecking amendments.

[Andy McDonald (Middlesbrough) (Lab)]

Will the Minister expand on the point made by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and give us a list of the people whom he thinks should be able to go on strike? Who are the ones he approves of?

[Kevin Hollinrake]

Any person who is legislated for in these measures should be able to go on strike, subject to minimum service levels. It is quite clear, and we have been consistent all the way through.

In response to the hon. Member for Kilmarnock and Loudoun (Alan Brown), our objection to the amendments is the delay that they will cause. We want to ensure that people can go about their daily lives. The right hon. Member for Hayes and Harlington (John McDonnell) raised some points about reasonable steps. Unions will not somehow have to compel people to go to work; we are asking them to undertake reasonable steps to ensure that people comply with a work notice. In fact, we were willing to set out in the Bill what those reasonable steps would be, but the right hon. Gentleman’s counterparts in the other place rejected such measures.

The hon. Member for Leeds East (Richard Burgon) talked about the independence of unions; of course we respect that. It is true that if a union fails to take reasonable steps, the strike would be unprotected, as it would if the trade union failed to meet other existing requirements in the Trade Union and Labour Relations (Consolidation) Act 1992, such as balancing requirements. This is not a departure from the existing position.

Strikes (Minimum Service Levels) Bill

Andy McDonald Excerpts

Consideration of Lords amendments
Monday 22nd May 2023 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab)]

Let me start by drawing the attention of the House to my entry in the Register of Members’ Interests, which reflects the fact that I am a proud trade unionist, and have been for a very long time. As the Minister outlined, today we return to the Conservatives’ sacking nurses Bill because the other place has reached the same conclusion as us: this Bill is as unworkable as it is unnecessary. It is not just an almighty, anti-democratic attack on working people, but a threadbare Bill that does not stand up to a shred of scrutiny. Today we consider a number of Lords amendments.

Let me be clear: Labour Members oppose this Bill in its entirety, and we stand ready to repeal it when in government. That said, we thank Members of all parties in the other place who made the thoughtful and sensible amendments that we are considering tonight. They do not solve all of the very long list of issues with this legislation, but they take the sting out of its worst elements to a significant extent. For that reason, Labour Members will reject all attempts by the Government to remove the amendments.

This evening, we will hear a raft of excuses for the Bill, and for why we cannot uphold the Lords amendments. We will hear that the Bill is about protecting public safety—well, I don’t know; there are not many Government Members here and willing to defend it. We will hear that Government Members all want minimum service levels all the time, but it is Tory Ministers who are failing to provide the minimum service levels that we need in our public services.

[Andy McDonald (Middlesbrough) (Lab)]

Does my right hon. Friend agree that nurses are taking action in order to protect patients? We hear continually about cases in which there are only two nurses on a night shift, trying to manage a ward of 30 patients. Is that not evidence that nurses are taking action because they have been pushed to the brink? Are they not doing the right thing by holding the Government to account through their actions?

[Angela Rayner]

I absolutely agree. I worked alongside my hon. Friend on workers’ rights for many years. I was a care worker for many years, and had to take industrial action once. People, especially in public service, do not do that lightly. The nurses’ union took its first ever industrial action recently. We have seen an unprecedented amount of strike action, and there is an absolute crisis in vacancy numbers in our public services because of this Government. The real risk and danger to public services at the moment is from this Conservative Government. After 13 years in office, they have really run down our public services, and they are not listening to the people who are trying to deliver those services.

--- Later in debate ---

If someone working in any industry who is a member of a trade union, and who has a ballot—with this country’s restrictive legislation—and jumps through the hoops of the threshold and wins that, they have a majority for industrial action. The issue might be pensions, or it might be health and safety, for heaven’s sake. In an attack on working people introduced in this place, this legislation states that regardless of the ballot result from that democratic process, they are expected to ignore it. They could be under pressure from the boss, the employer and then the Government. Under the new legislation, if I was at a workplace and I had been advocating action—as a last resort, as it always is—I would break the law.

[Andy McDonald]

Does my hon. Friend agree that, given the significant amount of industrial unrest over the last several months and, indeed, years, where people do not think they are listened to, the introduction of this legislation will deepen their resolve? They will show by their actions that they will not tolerate an attack on their freedoms and their basic employment and human rights.

[Ian Lavery]

It is extremely important that people understand that once we see nurses, doctors, teachers and key workers facing the sack, there will be resistance in this country. I kid you not, there will be resistance in this country like we have never seen before, because these are basic human rights. We cannot instruct ordinary hard-working people; key workers; the people who got us through the pandemic; the people who put the Great in Great Britain. We cannot, under any circumstances, allow this legislation to sack individuals.

Lords amendment 4 refers to the work notice. My friend, the hon. Member for Glasgow South West (Chris Stephens), eloquently made the point about the notification of a work notice. If someone has not had notification of a work notice, how could they ever be accused of breaching it if they are not aware that they have it? This is pretty simple stuff. I am not a barrister or a solicitor, but I understand it. And you know what, Mr Deputy Speaker, the Members on the Government Benches understand it, too. There is no doubt about that. When those people are asked the following day, “Why weren’t you here? You had a work notice,” and they reply, “I didn’t have one”, they will be told, “You did. How did you not understand that?” They can be sacked for that. Under this legislation, they can be sacked for not adhering to something that they did not even know they were part of. How bad is that?

P&O Ferries Redundancies

Andy McDonald Excerpts

Tuesday 28th March 2023 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. I thank the Minister and my hon. Friend the Member for Wansbeck (Ian Lavery) for his forensic speech, and for granting me permission to say a few words about the appalling redundancies of those 800 seafarers, and the lessons that have not been learned from the experience.

My hon. Friend outlined the outrage we all felt when Peter Hebblethwaite, the CEO, made an incredibly shocking admission in Parliament that he knowingly decided to break the law. I was on the Joint Committee when he told us:

“There is absolutely no doubt that we were required to consult with the unions. We chose not to do so.”

They made a calculated decision to break the law because they reckoned, rightly, that the unions would not accept an offer that would slash workers’ wages. They considered it more expedient to absent themselves from their legal obligations and price in the cost of law-breaking, and engage agency staff on pay as low as £1.80 an hour. They did that safe in the knowledge that any compensation that they would have to hand out to former unionised workers would be offset by the benefits of paying poverty wages to their replacements. They belong in the pages of a Dickens novel, not in 21st-century Britain. The fact that Mr Hebblethwaite remains in post at P&O is staggering. He should be disqualified from being a company director.

[Margaret Greenwood (Wirral West) (Lab)]

Does my hon. Friend share my concern that agency crews are working unsafe roster patterns, being at sea for up to 17 weeks? That has implications for everybody who travels on those ferries.

[Andy McDonald]

My hon. Friend is absolutely right. It is utterly staggering that those are the terms and conditions that these major companies are prepared to inflict on workers. It does not matter whether they are from Britain, Poland or wherever in the world. That they would treat human beings in that way is beyond barbaric. Sadly, the Government have simply not learned the lessons from that scandal. The action taken has been insufficient. The Secretary of State passed the buck to the Insolvency Service, which, after months of prevarication, said it would take no further action.

In lieu of that, Ministers could have imposed an unlimited fine on the company. The Opposition made it clear that we would have supported any necessary changes to legislation, but the Tories let P&O off the hook, I am afraid. Thanks to that inaction, we are witnessing a race to the bottom, which is likely spelling the end of any residual UK maritime workforce. All the while, P&O’s parent company, DP World, announced earlier this month that it had received record profits and a £3 billion final dividend for 2022. It also gets financial help from the Government for the berth at London Gateway.

I fear it is not just companies in the maritime industry that will follow suit; there will be others. Businesses across the economy will know that they can blithely commit such crimes of corporate thuggery, and decimate workers’ rights and protections in the process. I am going to finish, because I want to give the Minister the opportunity to respond. The events of the P&O Ferries scandal serve to underscore how much we need reform of employment rights and protections in this country.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to speak with you in the Chair, Sir Gary. I thank the hon. Member for Wansbeck (Ian Lavery) for bringing forward this important debate.

G. K. Chesterton said:

“Too much capitalism does not mean too many capitalists but too few capitalists”.

I absolutely agree with that. I think there is agreement across the House that the vast majority of employers are decent people who treat their employees properly. However, some of the egregious behaviour we have seen in this case, and in others as well, happens when there is too much power in the hands of a few very large operators that dominate certain sectors. The title of this debate is absolutely right, in that there are lessons we can learn from the case of P&O.

The hon. Member for Wansbeck made lots of points. He said to me before that he did not expect me to respond to them all today, and I probably cannot, but I will write to him about the ones I do not pick up on. Some are dealt with by other Departments such as DFT, but I am keen to facilitate responses on all his points where I can. We are in total agreement here: the behaviour of P&O and its chief executive was disgraceful and gratuitous, running roughshod over UK legislation, as I saw in the testimony referred to by the hon. Member for Middlesbrough (Andy McDonald). That is absolutely appalling, and we must deal with it. Yes, we need to learn the lessons, and we have learned some already. We are determined to look at this issue carefully and to go further where we need to. I think the hon. Member for Wansbeck knows that we have taken some action already, but I fully understand that he might want us to go further.

So much attention has been drawn to this appalling behaviour because it is very unusual. I was an employer for 30 years, and most employers would never have considered not carrying out the requirements around consulting the workforce. That is because it was the right thing to do and because we wanted to have a good reputation as an employer with our existing staff and any staff who would join us in future. There is something fundamentally wrong when an employer can set aside the clear requirements to consult the workforce in these instances.

It is fair to say that the Government were very clear in their condemnation early on. The Secretary of State wrote to P&O to ask it to reverse its decision and asked the Insolvency Service to investigate whether the law was complied with. That investigation has not yet concluded. The criminal side of the investigation has reported back. A senior prosecution barrister looked at the matter and decided there were not sufficient grounds to take forward a criminal prosecution. The civil investigation is still live, and it is important we give it the opportunity to run its course.

We all believe in the principle of due process in these cases. Certainly, there is still a chance, as the hon. Member for Middlesbrough noted, of an up to 15-year ban of a director if there are sufficient grounds, so we should let the Insolvency Service conduct its work. Like others, I urge the service to do that work as quickly as possible so that it can come to a resolution and more lessons will hopefully be learned. Indeed, if lessons are learned, I am keen to take further action where necessary to clamp down on such behaviour.

[Andy McDonald]

Does the Minister accept that we were told that action would be taken urgently and it was not? In that vacuum, there is no reason why DFDS, Stena and other ferry services could not do the exact same thing and more seafarers could lose their jobs.

[Kevin Hollinrake]

The hon. Gentleman raises an important point. I do not accept that no action has been taken, and we are consulting on some things now to try and beef up the requirements in terms of consultation. We have already done some things.

The hon. Member for Wansbeck referred to the Seafarers’ Wages Act and the requirement to pay a minimum wage in UK waters. He is right to say that the seafarers’ charter is a voluntary code for now, and we want to see how that operates. I fully respect his perspective that this should be mandatory across the piece, but when there is a proportionate approach—we do not feel at this point that it is. Nevertheless, we have legislated in that area. That legislation has received Royal Assent and is now law, but the hon. Member for Wansbeck is right that some secondary legislation is required for it to be fully and effectively implemented.

On the Thames freeport, let me clear: we have not given any money to DP World, but we have given money to Thurrock Council. However, some of the land needed to operate a Thames freeport includes land owned by DP World. It would be cutting off noses to spite faces if we said, “You can’t use that land, because of its ownership,” and we do not believe in compulsory purchase, except in certain circumstances. I think that would be the wrong—

[Andy McDonald]

You’ve just done that on Teesside!

[Kevin Hollinrake]

Well, that is a slightly different case.

It was interesting that none of the contributions suggested that we would ban fire and refire. Interestingly, the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said Ministers would not ban the behaviour, judging that it is “acceptable in some circumstances”. So I think we are probably all on the same page in terms of making sure the bar is high on the requirements for anybody using these kinds of tactics and making sure that people cannot just run roughshod over them.

New guidelines from ACAS in 2021 were clear that this kind of action should be taken only as a last resort. In terms of a statutory code of practice, there is a 12-week consultation from January 2023. The principle behind that is that there is a 25% compensation uplift in employment tribunals if consultation requirements are not adhered to. We think that sets a sensible balance between the two. Having said that, I am keen to go further, where we can, and to look at the different provisions we can put in place to make sure that the requirements on employers work in practice. It is clear that has not been the case in this case, which is why we have gone further.

To conclude, I thank the hon. Member for Wansbeck again. He knows I am as incensed as he is by the actions of this employer because they bring into disrepute the good name of many other employers, which cannot be right.

[Andy McDonald]

Just briefly, on fire and rehire, we have to be clear about what we are talking about here. This was not firing and rehiring the same workers; this was firing workers and replacing them with cheaper workers. That is the point that concerns us. If companies get into financial difficulties, there has to be a proper mechanism for protecting people if they have to have lower terms and conditions. That is the point we are making.

[Kevin Hollinrake]

We are totally on the same page. The fire element is the worry here. Setting aside the consultation requirements, hon. Members will remember the case of British Airways, which threatened fire and rehire during the pandemic. It did not go ahead with that tactic, as P&O did, but consulted the workforce and found a way through. That shows why the consultation period is so important. Making sure that the provisions we have work in practice is key.

As I say, we already have the Seafarers’ Wages Act. We will keep the issue under review. We are keen to see the outcome of the Insolvency Service investigation and, as far as I am concerned, where action can be taken, it will be taken. We should bear it in mind that we want to act in a proportionate way. Most employers do the right thing. I have never heard of a case like this one before. Most employers do adhere to consultation requirements. We should celebrate the good employers we have in this country, as well as clamping down on the bad ones, and I am determined that we do so.

Question put and agreed to.

Draft National Minimum Wage (Amendment) Regulations 2023

Andy McDonald Excerpts

Monday 6th March 2023 General Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I beg to move,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2023.

It is a pleasure to speak with you in the Chair, Mr Hollobone. The regulations will raise the national living wage and the national minimum wage on 1 April 2023. We remain proud of the strength of the UK labour market. There are now 1 million more people on payrolls compared with pre-pandemic levels, and demand for workers remains close to record levels. However, we recognise the continued impact of the cost of living pressures, which is why the Government have taken, and will continue to take, robust action to protect the most vulnerable in society.

The national living wage and the national minimum wage act to put more money in the pockets of the lowest-paid workers. This year will be no different, with the largest cash increase in the 24-year history of the minimum wage. We are also increasing benefit payments by 10.1%, in line with September’s consumer prices index inflation rate. Almost 12 million pensioners will benefit from the triple lock, as the state pension will also increase by 10.1%.

Our package of measures includes the energy price guarantee, which has saved a typical UK household around £900 since its introduction in October, and a series of cost of living payments worth hundreds of pounds for millions of eligible households on a means-tested basis. Our commitment to a high-skilled, high-productivity, high-wage economy will further address the cost of living, as well as level up every part of the UK and hasten the transition to net zero.

The regulations will increase the national living wage and national minimum wage rates and will come into force on 1 April. Following a comprehensive impact assessment, we estimate that they will give a pay rise to 2.9 million workers across the United Kingdom. I am pleased to confirm that the Government have accepted all the rate recommendations made by the Low Pay Commission in October. I place on the record my gratitude to the commission; I also gave my thanks personally in a meeting last week. As ever, it has worked tirelessly to bring together the views of business and worker stakeholders and remaining informed by expert research and analysis.

The regulations will increase the national living wage for those aged 23 or over by 9.7% to £10.42 an hour, which is an increase of 92p. After this year’s rise, the national living wage will have increased more than twice as fast as inflation since its introduction. The regulations will also increase the national minimum wage rates for younger workers and apprentices, as well as the accommodation offset. Workers aged 21 and 22 will receive an increase of £1, or 10.9%, to a minimum hourly rate of £10.18. Workers aged between 18 and 20 will now be entitled to an extra 66p an hour, taking their rate to £7.49, while the rate for under 18s will reach £5.28, which is a rise of 47p an hour. Those changes represent an increase of 9.7%.

Apprentices aged under 19 or those in the first year of their apprenticeship will also receive an increase of 9.7%, as their rate rises from £4.81 to £5.28. Meanwhile, the accommodation offset, which is the maximum daily amount that an employer can charge a worker for accommodation without it affecting their pay for minimum wage purposes, will increase by 4.6%, from £8.70 to £9.10.

The Government have continued to take action to fulfil their manifesto commitment to enhance the rights of workers and support people to stay in work. We are backing six private Members’ Bills in this Session to deliver on our commitments. Once passed, those measures will ensure that all tips, gratuities and service charges are allocated to workers; create a statutory entitlement to neonatal care leave for workers with caring responsibilities; protect workers from redundancy during or after maternity; and grant workers the right to request flexible working from day one.

[Andy McDonald (Middlesbrough) (Lab)]

On the right to request flexible working, what happens when the employer says no?

[Kevin Hollinrake]

The employer can say no when they have considered the request properly, and they need to set out their reasons. It is important to note that there are eight different business reasons. We want to ensure that businesses can also cope with the six new key measures, as well as the £2.5 billion of extra cost for business organisations throughout the country, of the national living wage increases. We want to ensure that any burdens that we place on businesses are proportionate, and a right to request delivers that balance.

[Andy McDonald]

If the answer is no because the business is exempt through the various ways to get out of it, what is the cost?

[Kevin Hollinrake]

I do not quite follow the hon. Gentleman, but according to our research 83% of flexible working requests are granted. The right to request flexible working, which is not related to the regulations, creates the opportunity for a conversation between an employer and worker about flexible working. That is its purpose. I understand that the hon. Gentleman would want to put a burden on business—I suppose he is saying there should be a right to insist—but we think that would go too far.

We are also looking to grant workers, including agency workers, the right to request more predictable terms and conditions of work. The private Members’ Bills will further strengthen our flexible and dynamic labour market and ensure that businesses have the confidence to create jobs and invest in their workforce, which will allow them to generate long-term prosperity and growth.

The Government set the ambitious target for the national living wage to equal two thirds of median earnings by 2024, provided that economic conditions allow. We remain committed to that target, and this year’s increases keep us on course to reach it. We also aim to further reduce the age threshold for the national living wage so that it will apply to those aged 21 and over by 2024.

We recognise that this is a difficult time for many businesses, workers and consumers, and we know that sustainable rises in the minimum wage rates depend on the wider economy. In making its recommendations, the Low Pay Commission will continue to take the wider picture into account, alongside extensive stakeholder engagement. I thank the commission for making additional recommendations relating to the accommodation offset in its recent report. We are considering them carefully and will respond in due course.

The regulations aim to protect the lowest-paid workers across all sectors and regions and reward them for their contribution to our economy. I commend them to the Committee.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this evening, Mr Hollobone.

I thank the Minister for setting out the regulations. Their purpose is to update the National Minimum Wage Regulations 2015 for the various age groups and categories of worker that the Minister set out, as well as to make adjustments for apprentices and the daily living accommodation offset rates. To be clear, we will not oppose the regulations; any rise in the minimum wage is a welcome step, particularly in the context of the spiralling inflation of the past year. I am sure that many workers are anticipating—indeed, counting on—the rises that we have heard about today.

The Minister said that this is the most generous increase in cash terms that we have seen. Obviously, that has to be looked at in the context of an inflation rate at a 40-year high. Last year, I raised concerns that the increases then were not calibrated to the cost of living, which had sharply increased in the weeks before the relevant regulations were announced, so it is welcome that the Low Pay Commission was able to factor in the high inflation on this occasion.

However, I am concerned that only the rate for 21 and 22-year-olds has been increased at a level comparable to inflation, with the 10.9% increase. The other wage categories have increased by 9.7%, which is actually 0.4% below the 12-month inflation figures released by the Office for National Statistics in January. We know that the cost of living for many people is significantly higher than that. Food, fuel and housing costs have increased at steeper rates. Food inflation is at about 17.6% and, according to a House of Commons Library report published two weeks ago, domestic gas and electricity prices have risen by 129% and 67% respectively.

On top of all that, private rents have reached a record high, including through a 16.1% rise in London rents in the last 12 months. On average, monthly mortgage payments have increased by £500 because of the Budget last autumn. The cost for people of sustaining the basics of everyday life, be it food in their stomach, a roof over their head or keeping warm, has skyrocketed. We agree that the regulations will take some steps to address the situation, but there is still quite a gap.

The Minister referred to the intention to have the national living wage reach two thirds of median earnings by 2024; in the current economic climate, does he still consider that aim to be achievable? He said that the target is subject to the prevailing economic conditions; does he consider the outlook over the next 12 months to be conducive, or otherwise, to meeting that target?

It is disappointing that the Government have once again not addressed the inequities of the minimum wage age limits. People’s age should not determine the price of goods and services, and it certainly should not determine their income. The decision to retain the different age rates is even more unfair given the cost of the basics that I have outlined, particularly the cost of energy, food and fuel. It should be noted that the number of young people on zero-hours contracts has risen again, with the proportion of 16 to 24-year-olds on zero hours contracts now at the highest level since 2013, and with a 4% increase in the last year of people in that age group looking for additional work. It seems that the younger generation is once again bearing the brunt of the current inequities in the workplace.

The Opposition value equally the contribution of people in work. It does not seem fair that two people who perform the same role should be paid differently because one is 24 and the other is 21. It is not fair that the year of someone’s birth will determine the rate of a wage increase or, as we have seen in respect of inflation, a real-terms cut in pay. Only 21 and 22-year-olds will see their pay rise at a rate equivalent to inflation; those on the national living wage aged between 18 and 20, and 16 and 17, as well as those on apprentice rates, will see a smaller increase. I understand that the purpose of giving 21 and 22-year-olds a higher rate of increase is to smooth their transition to the national living wage, but it means that is the only group to see a real-terms pay increase this year.

[Andy McDonald]

I wonder whether my hon. Friend can help me. Does he find it as inequitable as I do that there is prejudice against young people in the workplace? They do not go into supermarkets and find that goods are priced at a lower level because of their age, so how on earth can it possibly be justified that they should receive a lower rate of pay for the work that they do opposite somebody 10 years their senior?

[Justin Madders]

That is exactly the point: the expenses faced by people who live independently are the same regardless of their age. That is why the current differences are indefensible.

On the differences in the increase, will the Minister say a few words about why the accommodation offset is going up by only 4.6% this year? That is considerably below the other rates. I understand that there is a review going on in that respect.

The impact assessment states that the tight labour market has caused nominal wages to increase, particularly among the lowest paid. It says that many businesses consulted by the Low Pay Commission said that better wages are used to attract and retain their workforce. Alongside good working conditions, we believe that is central to good employment practice. However, I have heard from representatives of certain sectors that some do not treat the minimum wage with the importance that others do. When we met in Committee to discuss the relevant regulations last year, it was noted that non-compliance was greatest in the hospitality and care sectors. Will the Minister tell us what steps have been taken to deal with non-compliance in those sectors?

There is a particular concern that domiciliary care workers are not being paid for the time spent travelling between locations, thus causing their wages to fall below the minimum wage levels. I hear—a recent Unison survey confirmed this—that about 73% of care workers are not paid for their travel, and Unison estimates that that affects between 155,000 and 220,000 workers. The impact assessment is correct that some sectors use high wages to entice workers, but it is clear that some in the care sector are not doing that. The abuse of travel time means that the minimum wage is not being paid to hundreds of thousands of people.

I understand that, because of the fragmented work patterns, carers’ pay calculations are highly complex, and hundreds of time fragments per day are to be accounted for. That means it can be very difficult for people to ascertain whether they are being paid the minimum wage. Of course, it is possible under section 10 of the National Minimum Wage Act 1998 to get the pay records and inspect them, but I am told that those requests are frequently ignored, and information is often provided in a form that is difficult to decipher. Even pay experts sometimes find it hard to understand what pay is being received.

Employers are obliged to keep sufficient records, but there is a grey area in respect of what the standard constitutes in reality and, of course, the guidance can be ignored. No employer in the care sector has been prosecuted for poor record keeping, despite the high number of compliance failures and the clear evidence produced in the survey. Will the Minister talk to his officials about what more can be done to address the widespread abuses in the care sector, which deserve closer examination?

We should not forget that the minimum wage does not cover everyone. It does not cover the self-employed, many of whom do not receive the minimum wage. What is being done to address that? What is done to address the issue of people who are in bogus self-employment who do not get the minimum wage but, because the people who hired them are gaming the system, have no ability to challenge their pay and do not appear in any statistics? What steps are being taken to help those who are exploited because they are engaged on an internship that stretches out for months without pay? What about those who have to do a trial shift and work for eight, 10 or 12 hours, only to be told at the end that they are not required and will not get paid? Those are all abuses of the minimum wage and I want to hear from the Minister what is being done to tackle them.

Enforcement is key. If we are to have confidence that the regulations will benefit all our constituents, we need to be confident that they will be properly enforced. This year is the 25th anniversary of the Labour party having established the principle that workers are entitled to a minimum wage in law. It is important that the Government ensure confidence in the system by bringing to task unscrupulous bosses who exploit their workers. The law is positive only if it is enforced. The past 25 years have made a lot more employers consider the law when they pay their workers, but they have not ended the existence of unscrupulous bosses altogether.

One of the most crucial elements of the legislation is the need to tackle businesses that flout minimum wage regulations. The Minister understands the importance of enforcement because on 23 February he told me in a written answer to one of my questions that the naming and shaming of employers who fail to pay the minimum wage is an “important part” of enforcement and compliance. He is right about that, because companies should expect to be found out and called out when they underpay their staff, but given it is such an important part of the Government’s strategy, why has not a list of shame been released since the previous time the relevant regulations were debated? Given that the lists are supposed to be published on a quarterly basis, a hiatus of a year and a quarter since the last one, with no explanation, is concerning, so I hope the Minister will address that point when he responds.

The delays in publication have serious implications. The December 2021 round of naming included only investigations that had concluded back in 2018, and some of those had looked into breaches that went back almost a decade. We now have no publicly accessible register of firms found to be underpaying staff since before the covid pandemic. We all know that the labour market has changed drastically in that time, so it really is important that we get on to round 19 as soon as possible.

Leadership and setting an example are important. Naming and shaming is one thing; modest fines are another. If transgressors are allowed to continue to procure lucrative contracts from Government Departments, it could be said that the consequences of their actions are light. When handing out work to the private sector, the Government have billions of pounds at their disposal to distribute. Whether such reliance on the private sector is a healthy or wise option for the Government is a matter for another debate, but at the very least I would hope that those found not to be paying the minimum wage are at the back of the queue when it comes to handing out Government contracts, if not removed from the queue altogether.

It seems the Department for Business and Trade does not even bother to ask itself the question when contracting with the private sector. In response to a recent written question on whether the Department has issued any contracts in the last three years to companies that had appeared on the list of shame, the Minister told me that he

“does not hold information about the number of named employers who have a contract with a Government Department.”

He cannot stand up today and categorically tell us whether his Department has or has not contracted work with a company found to be illegally underpaying its workforce. How can the Department responsible for ensuring that businesses in this country comply with minimum wage requirements be unable to confirm something so basic and so important? Is compliance not a question worth asking of those who receive taxpayers’ money to undertake Government contracts?

There are concerns about other Departments that have sought to engage with companies that have appeared on the list of shame. I will not go through them all now, but it is important that the Department responsible for enforcing the minimum wage should look closely at whether the people it engages are paying it.

[Andy McDonald]

My hon. Friend makes an important point that speaks to the lack of commitment from the Government, given their previously expressed view to create a single enforcement body that could have embraced the enforcement of the national minimum wage. Is he as disappointed as I am that we still do not have any clarity from the Government on whether that single enforcement body will be formed?

[Justin Madders]

My hon. Friend is absolutely right about the questions in respect of the level of commitment. When I was preparing for today’s debate I looked back at previous discussions, and the Minister has always talked about the single enforcement body. We have not heard any of that from the Minister today. Perhaps he will confirm that it is still the Government’s intention to introduce a single enforcement body. They will have to table legislation to do that, so we might yet be disappointed. Will the Minister confirm, in the light of the answers we have received, that he will undertake a full investigation and ensure that in future those who do not pay the minimum wage face further scrutiny before they are given Government contracts?

As I hope to have demonstrated today, legal minimum levels of pay are not the whole solution to low pay, but they are an important part of it. Trade unions, as the collective voice of workers, also play a vital role in securing better working conditions. I hope that one day we have a Labour Government who will help all our constituents to receive the pay and conditions that they deserve.

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[Patrick Grady]

Indeed. There are plenty of asylum seekers in my constituency who have a huge amount of skills and talent but are unable to deploy them, because this Government will not give them the right to work, earn a fair wage and pay tax back into the system. Perhaps that is a place where we could start or, if the Government want to make working more attractive, perhaps—getting to the heart of the debate—people should be paid a fair day’s wage for a fair day’s work.

[Andy McDonald]

We have heard about litmus tests, one of which is the rate of unemployment. Does the hon. Gentleman agree that one litmus test is whether workers have enough money to live on and to pay their bills?

[Patrick Grady]

Yes, precisely. That is why the rises today are welcome, but they are not necessarily sufficient for a lot of people.

The way in which the Government have co-opted the use of the term “living wage” to describe their statutory minimum wage is unfortunate. It causes a lot of confusion, and is particularly unfair to people looking for a real living wage, which the Living Wage Foundation has calculated since long before this Government adopted that language and it consistently comes up with higher rates; its proposals for the coming financial year are £10.90 an hour for the UK as a whole and £11.95 in London. The £10.90 compared to the £10.42 might not, on paper, sound like a huge difference but in reality, in a seven-hour day, that is about £3.36 extra a day or, over a five-day week, £16.80 a week. That starts to make a significant impact on the pound in people’s pockets.

Of course, that is only the upper rate for workers aged over 23. We agree entirely with the arguments being made for the extension of a real living wage to everyone in employment without distinction for their age. As other Members have said, people do not pay differential prices when they go to the supermarket or use consumer goods or utilities and so on. People should be paid the same for the same kind of work.

The Government could be doing more, and they could learn from the Scottish Government in that regard. The Scottish business pledge, introduced by the Scottish Government, encourages employers to pay the real living wage, to end zero-hours contracts and to take action in their businesses to close the gender pay gap. The Scottish Government also offer a wider social contract to workers, including free prescriptions, tuition fees for their children going to university, the Scottish child payment—which is a real game-changer—the baby box and all the other actions that show just how much we have been able to do with the powers of devolution, and point to what we could achieve when Scotland becomes independent.

As welcome as the rise today might be, it does not go far enough. I do not think anyone in Scotland will look very much at what is on offer from the Conservatives or, indeed, the Labour party and think that this is as good as it gets.

--- Later in debate ---

[Kevin Hollinrake]

No, because this applies to a much smaller cohort. If the hon. Gentleman is proposing that we pay everyone across the public sector an inflation pay increase, which I guess he is from his comment, he has to explain to the taxpayer how we will raise that £28 billion a year, because that is what it would cost. Obviously, the Low Pay Commission works with employer groups, but it also works with business groups, other stakeholders and other employers to try to strike a balance between what is affordable for employers and what is an appropriate rise for those at the bottom of the income scales.

The hon. Gentleman asked about our ambition to get to two thirds of the median salary by 2024. That is certainly what we believe to be attainable, and it remains our target. With the growing economy that we expect to see by the end of the year, the economic context will be a lot brighter than it has been over the last few months.

On age limits, the hon. Gentleman is right; our ambition is to lower the age limit in terms of access to the national living wage, as we did from 25 to 23 in 2021, based on the Low Pay Commission’s recommendation. We are hoping to lower it to 21 by 2024. Part of the reason that it is lower—other Members asked the same question—is that there is no doubt that there is a greater vulnerability for young people. Unemployment levels tend to be higher in these lower age groups and it is important that we do not price people of low age out of the market. That is probably why Labour had different rates for 18 to 21-year-olds when it introduced some of these provisions when it was in government.

Let me turn to zero-hours contracts. Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request predictable hours. We have already legislated for things such as exclusivity clauses, which are not allowed for zero-hours contracts. For those below the lower-earnings limit, there cannot be an exclusivity clause in a zero-hours contract.

On compliance, the hon. Gentleman was absolutely right. It is very important to us, which is why we have doubled enforcement since 2015. I have met His Majesty’s Revenue and Customs team to discuss that. I welcome the fact that they have put £100 million back in the pockets of lower-income workers since 2015 through their excellent work. The care sector is one of the sectors they look at all the time, and there was no differential between it and any other sector. As far as employment law is concerned, travel time to appointments should be covered within employment law when it comes to calculating the national minimum wage or national living wage.

We believe that internships should be paid positions and should be subject to the national minimum wage or national living wage, and that trial shifts should be no more than a few hours.

[Andy McDonald]

I did not quite catch what the Minister said about travel time. Is he saying that care workers should be paid the same hourly rate when they are travelling between domiciliary appointments—paid at the full rate, effectively? Is that his position?

[Kevin Hollinrake]

Travel to appointments certainly should be calculated under national minimum wage levels. That is our position under employment regulations.

The hon. Member for Ellesmere Port and Neston was right to point out that we have not named and shamed for some time. I am very keen—I have had conversations about it today—to do that as soon as possible. We hope to have some news very shortly about a list of people who have not adhered to our national living wage requirements.

We are still looking at the best way to create a single enforcement body and whether it is right to do so given parliamentary time. We also do not want to increase the costs of enforcement. I work closely with the director of labour market enforcement to ensure that she has all the measures at her disposal and that there are no gaps in enforcement between different areas.

My hon. Friend the Member for Basildon and Billericay is right that research and development leads to higher productivity, higher wages and higher growth. I support that 100%. He was the only speaker other than me to point out the cost to business of these measures, and it is disappointing that the contributions of Opposition Members did not point out that business has to bear this cost, which is about £2.5 billion for employers annually. He also raised the very important point about corporation tax. Under the new rules, 70% of businesses will not pay additional corporation tax, because there is a small profits rate. Indeed, in my 30 years in business, when corporation tax was at similar levels, I cannot think of a time when our boardroom considered not investing. Given a higher level of corporation tax than we see today, we still felt that we could invest. I understand my hon. Friend’s points, and I am sure that he will make them to the relevant Department, which is of course the Treasury.

The hon. Member for Glasgow North talked about whether the rise is sufficient for low-paid workers, and I understand his point. I urge him, as I said before, also to consider employers in this conversation. We have to ensure that we do not raise the national living wage too quickly, which would cause problems for employers. That could be detrimental to the labour market generally and could have difficult consequences for some people who work in these kinds of jobs.

I am a big fan of the Living Wage Foundation, and it is absolutely right that we want the national living wage to increase. The gap between the Living Wage Foundation level and the national living wage is narrowing, and the Living Wage Foundation has always been keen to point out that its campaign for the national living wage is about trying to encourage employers to pay higher wages on a voluntary rather than a coercive basis.

From April, a full-time worker on the national living wage will earn over £6,700 more before tax than in 2015, when the policy was introduced, while younger workers and apprentices will also benefit from large rate increases across the board. This package of measures will have a huge, positive impact on the lives of millions of people. It should also serve as a reminder of the progress that can be made when Members across this House work together. I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2023.