Enterprise and Regulatory Reform Bill

Chuka Umunna Excerpts

Wednesday 17th October 2012 Commons Chamber

[Jo Swinson]

I do recognise that there is genuine concern, particularly in respect of the new fee regime. It is important that a remission regime is in place as well; it is important to point that out. However, the amendments would provide protection for people who are behaving in a vexatious and abusive manner. No matter which side of the dispute that occurs on, we should not be encouraging it. Where a claimant is behaving unreasonably—this is at the discretion of the tribunal—it would be inappropriate for employers to be prevented from seeking a costs order if the tribunal considers that the claimant’s behaviour justifies such an order.

[Mr Chuka Umunna (Streatham) (Lab)]

If the Minister accepts that there are serious concerns about the introduction of fees and its impact on access to justice, why does she not look at the case management powers in the interlocutory stage of case proceedings and perhaps expand deposit powers to act as a disincentive for vexatious claimants? That would not have an impact on access to justice as her Government’s proposals are having.

[Jo Swinson]

A range of measures in the Bill will help to improve access to justice. Of course, the most important thing is to make sure that fewer people end up going to employment tribunals in the first place. [Interruption.] I have just discussed the measures on early conciliation, which is a much better way of resolving disputes. We also have measures on rapid resolution, which I will come on to deal with and which have been discussed in Committee. Those are the ways of ensuring that people are able to get the best resolution to their disputes. Obviously there will still be a role for employment tribunals and there will be cases that, for whatever reason, cannot be managed through those other, better options for resolving them. In imposing a fee, there will still be access to justice through the remission regime for those who are otherwise unable to afford it.

--- Later in debate ---

[Jo Swinson]

Thank you, Mr Speaker. I think it is fair of my hon. Friend the Member for Skipton and Ripon (Julian Smith) to point out that many business owners are genuinely concerned about how employment law currently works.

[Mr Umunna]

The Minister has indeed been incredibly generous about giving way. For the record, Mr Speaker, I think it is of assistance to have a range of experience in this House. We have lawyers and many business owners in the shadow BIS team and we speak with the benefit of professional experience.

Does the Minister not acknowledge that employers can have these conversations with employees, as long as they follow fair procedures? That is all we are asking for.

[Jo Swinson]

The procedures are far more likely to be used by large companies, and many business people, particularly those in small and medium-sized enterprises, fear to take them up. That was borne out by much of our consultation, both formal and informal. I do not know whether Opposition Members genuinely believe that there is no concern among business about tribunals and employment law—

[Mr Umunna]

indicated dissent.

[Jo Swinson]

Well, people watching this debate or reading it in Hansard will see that that concern among businesses exists and is not being taken seriously by the Opposition, but I shall be happy to be corrected.

[Mr Umunna]

The Minister knows full well that, for example, we welcomed the setting up of the Underhill review, because we acknowledge that there are issues, but it is really a question of degree. Of course we have to take into account the concerns of business, but our job as politicians is to take into account the concerns of society as a whole and to balance the different interests, and that is what she has got wrong.

[Jo Swinson]

I agree that the job of politicians is to balance those interests, but I disagree with the hon. Gentleman that we do not have the right balance. As hon. Members have pointed out, very different proposals emerged from some quarters, but the Government have said firmly that we will not go ahead with the no-fault dismissal plans that were put forward. That shows that we are taking a balanced approach.

--- Later in debate ---

[Mr Umunna]

Let me say first, meaning no disrespect to the Minister, with whom I have enjoyed debating during the Bill’s passage, that I find it quite extraordinary that for this—the Department’s flagship Bill—the Secretary of State is not present.

On Second Reading, the Opposition tabled a reasoned amendment stating that the Bill was a missed opportunity to provide a strategy for economic growth and that it contained inadequate measures to improve business confidence, investment and competiveness. That remains our view on Third Reading. In Committee, as a constructive Opposition, we tabled amendments designed to support business, including measures to ensure that the green investment bank can be a strong and transparent catalyst for green growth; to improve the competition framework; and better to empower shareholders in relation to directors’ remuneration. Throughout that process, we drew on our discussions with business organisations and other stakeholders, as well as the evidence given by witnesses during the evidence sessions.

At this point, I add my thanks to my hon. Friends the Members for Hartlepool (Mr Wright), for Newcastle upon Tyne Central (Chi Onwurah), and for Edinburgh South (Ian Murray) and all the Opposition Members who served on the Bill Committee for their hard work. The Committee stage was something of a marathon, given the rag-bag of often very different measures contained in the Bill, but although we have not always agreed with the Government, it was good to hear the Minister agree that Opposition Members have thoroughly scrutinised the Bill and done so in good spirit and with some humour, too—I understand that “Fifty Shades of Grey”, One Direction and the Stone Roses have all been mentioned during consideration. Despite all the good work, however, Ministers did not accept any of our amendments in Committee, or pledge to return on Report with acceptable alternatives.

In the hope that we might be able to reach agreement on Report, I wrote to the Secretary of State at the end of last month setting out our position, highlighting the parts of the Bill we agree with and those we disagree with. The Secretary of State—I shall quote, as he is not here—replied saying:

“I believe that we support the same goals of promoting growth and reducing unnecessary burdens on business and I note that you are supportive in principle of a number of measures in the Bill.”

Indeed, it is true. We support in principle a number of measures in the Bill, such as those relating to the green investment bank, improving the competition regime and extending the primary authority scheme that we established in Government. There is no doubt about that.

The Secretary of State also referred in his letter to the changes that he has since made to his original proposals contained in the Bill on copyright. I am pleased that he has listened to what we had to say on that and that in some respects he has U-turned, although I understand that several stakeholders remain concerned.

Although we think the Government should go further in their reforms relating to directors’ remuneration, in principle we do not object to what they have done so far. However, despite our best efforts, we have not been able to reach agreement on the other aspects of the Bill to which we strongly object and which the Government refuse to remove from it.

There are certain red lines that the Bill crosses that the Labour party is not prepared to cross. We want to see enterprise flourish, but in a society where people’s rights are respected. We want to see our economy grow, and I hope and expect the next quarter’s GDP figure, which will be released next week, to be a positive number after three quarters of contraction, but growth cannot be at the expense of the basic protections that people enjoy in this country. In the name of growth, part 2 of the Bill will drastically reduce people’s rights at work and part 5, along with other Government measures, takes us along the slippery slope to the abolition of the Equality and Human Rights Commission. This is wrong.

Many of the measures in part 2 find their inspiration in the report of the Prime Minister’s employment law adviser, Adrian Beecroft. By his own admission in the public evidence sessions on the Bill, Mr Beecroft said that his findings were based on conversations and not on a statistically valid sample of people. Of course, the Government are implementing many of his measures. For example, having already increased the service requirement to claim for unfair dismissal in the employment tribunal, by reducing compensatory awards for unfair dismissal the Government seek in the Bill to water down further the rights of all employees in this country, as we heard today, most of whom are not members of a trade union.

As I said on Second Reading, reducing compensatory awards for unfair dismissal in particular will impact on those in middle income occupations. They, like others in lower income occupations, are already facing the biggest squeeze on their living standards in a generation under this Government, and weakening their rights at work will only add to the worry and stress that working people are under. Mr Beecroft, I read, suggested that the Secretary of State, who is not here, is a socialist. Well, I can tell him that the Secretary of State has done his best to prove otherwise in the Bill.

[Mr Graham Stuart]

I am grateful to the hon. Gentleman, who is being most generous. Does he feel that the compensation currently available is exactly right or does he think it should be increased further? He must recognise that there is a balance to be struck between looking after the interests of employees and not causing employers to avoid taking people on for fear of the costs. That balance must be struck and the hon. Gentleman obviously thinks the figure should be at the upper end. Does he want to increase the current levels?

[Mr Umunna]

With respect, I observe for the record that the hon. Gentleman has not been present for most of the debate on the Bill today, yesterday or at any time. If he had been here earlier, he would have heard me make much the same observation as he has just made—that there is a balance to be struck. We disagree with changing the current regime in relation to the compensatory award. I would not say that any system is perfect. For example, in relation to the unfair dismissal regime and the way that it interacts with the tribunals, yes, we have entertained the Government’s Underhill review because we understand that there are some issues. I am not sure that any system would be perfect, but we disagree with what is proposed in the Bill and the way in which it will change the balance. There is obviously a disagreement on that.

With regard to part 5, which relates to the Equality and Human Rights Commission, and the new clauses relating to the Equality Act 2010, the Secretary of State on Second Reading referred to the measures relating to the commission as “legislative tidying-up.” They are nothing of the sort, as I think he knows. He likes to pose as the opposition within on so many matters but waves through the more extreme impulses of his coalition partners.

To compound matters, last week the Government tabled an amendment to the Bill providing for the repeal of the provisions in the 2010 Act relating to liability for third-party harassment of employees, which was one of Adrian Beecroft’s proposals. It was a classic example of the Secretary of State trying to face both ways at once. When questioned on Second Reading about the Government’s intentions by my hon. Friend the Member for Stretford and Urmston (Kate Green), he assured the House that he had no intention of implementing that Beecroft proposal. Then, out of the blue and at the last minute, he presents us with a new clause seeking to do just that.

Samantha Mangwana, a senior employment lawyer at the respected law firm Russell, Jones and Walker Solicitors, asked in today’s Financial Times what signal that sends out. She said

“this is not some meaningless bureaucratic red tape, but the very protections that are in place to protect staff from predatory sexual advances by third parties.”

In conclusion, the unemployment figures released today are very welcome, but more than 2.5 million people are still out of work. In my constituency more than 11 people are chasing every Jobcentre Plus vacancy. Long-term unemployment has risen and the number of young people out of work and claiming benefits for more than a year has gone up yet again, and we are still in a double-dip recession, one of only two G20 countries in that position. That situation will not be resolved by taking away people’s fundamental rights; it will be resolved by getting demand back into the economy. That is what creates jobs, and that should have been the sole focus of an enterprise Bill. It is a shame that that is not the case with this Bill. Instead, we have seen today not the focus on kick-starting the recovery and laying a platform for long-term and sustainable growth, but the final nail in the coffin of any claim the Government could make to marrying competence with compassion. That is why we will vote against the Bill tonight.

[Several hon. Members]

rose—

--- Later in debate ---

[Matthew Hancock]

We have had a wide-ranging debate over two days on Report and now on Third Reading. We have heard speeches by the hon. Members for Bolton West (Julie Hilling), for Hayes and Harlington (John McDonnell), for Blaydon (Mr Anderson) and for North Ayrshire and Arran (Katy Clark) that have railed against enterprise and against the Bill.

By contrast, my hon. Friends the Members for Bedford (Richard Fuller) and for Skipton and Ripon (Julian Smith) have argued passionately for enterprise, business and jobs. I cannot quite match their eloquence or the power of their arguments about the ability of the free market system to create jobs and build prosperity not only in this country but around the world. I am disappointed to find out that President Obama has said something that it will now be impossible for us to say without reference being made to his saying it—that the free enterprise system is the greatest force for progress that the world has ever seen.

[Mr Umunna]

Will the Minister give way?

[Matthew Hancock]

No, I will not. I have only a few minutes. [Hon. Members: “Go on.”] I will come on to the hon. Gentleman’s comments.

My hon. Friend the Member for Isle of Wight (Mr Turner) spoke passionately about his constituency and the need to remove from primary legislation restrictions on Osborne house. It is interesting that in this single Bill we are amending the Osborne Estate Act 1902, the Interpretation Act 1978, the Estate Agents Act 1979 and many more Acts, to promote enterprise.

My right hon. Friend the Member for Wokingham (Mr Redwood) talked about the green investment bank and listed the Government’s various measures to support credit. We are adding a business bank, which may well sweep up some of those other measures. He asked about policy overlap, and I point out that thus far, the funds put into the green investment bank have been for projects with a maximum size of £20 million. That shows the scope of the bank so far.

The Secretary of State is at the John Cass lecture on social mobility. Government Members are in favour of social mobility, but Opposition Members argue that the Secretary of State should not be giving a lecture on it.

[Mr Umunna]

Will the Minister give way?

[Matthew Hancock]

I have two minutes, but I will give way.

[Mr Umunna]

The Minister referred to President Obama’s remarks yesterday. Where in those remarks did he talk about the need to water down people’s rights at work to promote growth?

[Matthew Hancock]

Making it easier for people to have settlement agreements, ensuring that health and safety legislation is implemented reasonably, helping the operation of listed buildings policy and improving the operation of the Equality and Human Rights Commission will all help the free market system, which is the engine of prosperity.

The Government’s record is clear. We now know that when we arrived in office, the structural deficit was £73 billion a year. Since then, however, 1 million new jobs have been created in the private sector. I did not notice any Opposition Members welcoming that fact. There are 170,000 fewer people on benefits, and the deficit is down by a quarter.

We have introduced measures on competition, on making it easier to employ people, on a green investment bank, on improvements to the Estate Agents Act and on health and safety. Members of the House are inspired and motivated to enter politics for many different reasons, and one of the best of those is to work at creating jobs and help employers to create jobs. It looks as if the Opposition will oppose this measure, and in doing so they will show that they are anti-business, anti-enterprise and anti-jobs. They have only one option—more borrowing—whereas the coalition Government are pro-enterprise, pro-business and pro-jobs. We need jobs for people who want to make their lives better, and I commend the Bill to the House.

Question put, That the Bill be read the Third time.