Outsourcing: Government Departments

Debate between John McDonnell and Gregory Campbell

Wednesday 29th January 2025 Westminster Hall

[John McDonnell (Hayes and Harlington) (Ind)]

I have come to this debate because of our recent experiences of visiting picket lines, with regard both to Government Departments and, in particular, the railway sector. I have been a trade union rep in the public sector, but I have also been a manager in the public sector: I was chief executive of the Association of London Government and I also was in a London borough, managing large numbers of staff.

When you have the scale of disputes that we have, I think we have to recognise that there is an underlying industrial relations problem that has to be addressed. I would invite the Minister to join us on some of those picket lines over the coming weeks, because the disputes in the Government Departments are starting again next week and we will have picket lines for several Government Departments around Whitehall.

I have tried to identify the underlying problem causing these disputes, and when we talk to the workers themselves on the picket lines, it is strikingly obvious. Some of them—well, all the ones I have met—are on, I think, shocking levels of low pay. When you talk to them, particularly those based in London, you wonder how they are surviving on the pay that they are receiving. Also, they have conditions of work that I thought we had eradicated years ago. I am talking about lack of access to sick pay, some of them being paid below legal minimums at the moment, and many of them being without any pension rights whatever apart from the statutory pension. So we have a group of people who are on low pay, in insecure work, and feeling extremely exploited, so they have no other resort but to take industrial action. I want to point out what is interesting. I invite everyone to come on those picket lines and look around them, because the vast majority of those workers are from the BAME community; so there is also an issue with inequality in our employment practices as well.

Various unions have provided us with briefings for the debate today, and most of them have done surveys of their members to identify what is the issue facing their members that they should be putting to management. Some of the survey results are stark. The RMT did a survey, and I want to talk about the response that it had from its members. It has about 10,000 members who have been outsourced on trains; Transport for London, for cleaning, has 2,000; and Network Rail has 2,500. What happened then? In the survey results that came back, 80% of the workforce who had been outsourced were saying that they were struggling to meet their basic needs: to pay the rent, pay for food, and so on; 90% were worried about bills coming in. What was interesting was that more than 80% of them were saying, “We come to work when we’re sick, because we can’t take the time off—we can’t even afford to be sick.”

That is why the disputes are taking place, and they involve the same old companies: G4S, ISS, OCS and Mitie. These are companies that have made extensive profits out of the outsourcing, and the bulk of their profits is obviously made from the low pay that they are forcing upon their members of staff. It causes real anger among the workforce when they are seeing these companies paying out high dividends to shareholders, while at the same time they will not pay the staff a decent wage.

There needs to be an understanding in Government that if we are to have decent public services, there has to be a re-examination of how we provide those public services. I agree with what has been said by the deputy leader of our party, and by the Chancellor, which is that we need

“the biggest wave of insourcing…for a generation”,

because I think that is the way to tackle insecure work, low pay, and so on.

My hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) raised the other issue about outsourcing, which is that it has an impact on productivity. If a worker is exploited, if they are not paid properly, if they are worried at work about how they are going to survive, it does impact on how they deliver the service. That is inevitable; it would have an impact on all of us. As a result we have found that productivity issues are a real problem in some of these sectors. Unfortunately, because of the old Treasury Green Book model, that is resulting in even more outsourcing being justified: it becomes a vicious circle.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The right hon. Gentleman said that he fully agreed with the deputy leader of his party. I wonder whether there was an undue emphasis on the word “deputy” rather than “leader”.

[John McDonnell]

I am lost on that one—completely. There are conspiracy theories here that I have never even heard of or even thought of, so I will pass on that one.

What we are asking the Minister for today is a strategy. The first step in that strategy must be to meet the unions themselves. A number of unions have asked whether they can they have a meeting whereby, Department by Department, they can work with the Government, looking at what contracts there are, seeing how those contracts can be brought in in this biggest wave of insourcing in a generation, and how the legislation, particularly the Employment Rights Bill that is progressing through Parliament at the moment, can include the initiative and rights and responsibilities to bring that insourcing about. There is a strategy that can be developed alongside the Government’s procurement policy, that can address all these issues and will be cost-effective for the Government in the long term.

UK-India Trade

Debate between John McDonnell and Gregory Campbell

Wednesday 25th January 2012 Westminster Hall

[John McDonnell (Hayes and Harlington) (Lab)]

I congratulate the hon. Member for Wimbledon (Stephen Hammond) on securing the debate. It comes at a vital time in the trading relationship between these two countries, because the European Commission and the Government of India are aiming to conclude the free trade agreement during the EU-India summit on 8 February in Delhi. The next fortnight is therefore a critical opportunity—the last opportunity—for us to try to influence that agreement.

I urge the Minister to do all in his power to ensure that it is not just a free trade agreement, but a fair trade agreement. A number of significant and expert non-governmental organisations working in this field have raised serious concerns about the consequences for some of the poorest people in India of the free trade agreement as proposed by the EU at the moment, and are seeking amendments to the agreement in this last phase.

When I raised the question with Ministers at the Department for Business, Innovation and Skills, I was referred to the conclusions of the European Union’s sustainability impact assessment. The Minister pointed out that as a result of the FTA, there would be an overall reduction in both rural and urban poverty. The study does come to that general conclusion, but there are sections in the report, particularly relating to the rural poor of India, that give cause for concern. It demonstrates that there will be an increase in the wealth of the rural poor only if they are, for example, connected to the supply chains that will flow from the FTA and if they are in suitable locations, with adequate infrastructure. The problem is that most of the rural farmers do not operate with adequate infrastructure and are not organised in the way in which the FTA describes; nor is domestic policy likely to change that. Therefore, the impact assessment by the EU, as against one by our Government, is, in this and many other areas of the report, at best wishful thinking or at worst simply determined to prove the case for the FTA.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman touches on an important point. The UK farming industry and, in particular, small businesses that excel in the international market can assist in poor rural areas in India, especially in terms of delivering higher yields through best practice, and can assist in promoting trade between the UK and India.

[John McDonnell]

That is exactly right, and it is one of the issues that need to be dealt with in the final negotiations so that people are appropriately placed and organised to enable that to happen.

In contrast to the EU’s assessment of the FTA is the more realistic and deeply worrying alternative assessment of the potential impact of the FTA that was published only a few weeks ago, in December, by organisations working in this field: Misereor, the Heinrich Böll Foundation, Anthra, the Third World Network and Glopolis.