Business and the Economy

Julie Hilling Excerpts

Monday 14th May 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

I am pleased to speak in the debate, because I want to dispel the myths that are so often spoken by Government Members. If there was any doubt before the Budget and the Queen’s Speech, the Government have now made it obvious to everyone that they are totally out of touch with the real everyday concerns of ordinary people. Their only growth strategy is to take away people’s rights at work.

The economy is not in recession because of the UK’s employment rights but because the Government are cutting spending too far and too fast, hitting business confidence and choking off growth. They do not seem to understand that removing the rights of workers will only increase job insecurity, harm work force morale and productivity and lower consumer confidence. It will make things worse not better. Just like taxes on pasties, caravans and hairdressers, their proposals will hit the poorest hardest, but, funnily enough, the rich get a tax cut. Only 6% of small and medium-sized enterprises think excess regulation—all regulation, not just that on employment rights—is a barrier to growth, but there is consensus that the real problems are a depressed economy and difficulty with bank lending.

The Government are very keen on international comparisons and, according to the OECD, out of the 36 richest countries the UK has one of the lowest levels of worker protection, beaten only by America and Canada. I do not think that that is a record of which to be proud. The Prime Minister said his proposals will make it easier to hire people, but we are not all that stupid and we know that what he is really saying is that they will make it easier to fire people. He thinks that with 2.7 million unemployed and more than 1 million young people without work, making it easier to sack people will increase growth. With reasoning like that, it is no wonder we are in a double-dip recession.

Government Members seem to hold the view that it is difficult to sack people, but as a former trade union official who frequently had to tell members that they had no case with the mantra, “The law is as it is, not as we’d like it to be,” I can tell them that it is already shamefully easy to dismiss workers. The Government’s change to the qualifying period for unfair dismissal claims to two years means that almost 60% of all employees under the age of 24 are now not protected, 1.4 million part-time women workers are not protected and 32% of all black and minority ethnic employees are not covered.

If someone manages to win a case at tribunal, the average award is £4,500—hardly a fortune. The average cost of defending a tribunal, however, is £8,500 plus about £5,000 to pay off the employee. It seems obvious to me that employers should therefore obey the law, just as they would in any walk of life. If they pay their employee what they are due, treat them properly and do not discriminate, they will not end up in a tribunal.

The Business Secretary said earlier that an employer should be able to get rid of an underperforming employee, and of course they can with no changes to the current law as long as they follow simple, fair procedures. Having attempted to protect the jobs of such employees, I can attest to how easy it is to sack them. We have to ask what those businesses are doing, as surely they cannot reach the end of two years of employment and then say that the employee is underperforming. What is happening with their recruitment policy and with their management of that employee? If, after two years, that person is underperforming, the company should ask itself what is wrong with its business, with how it is managing those people and with the work it is asking its employees to do.

I welcome the notion of early conciliation, but I hope that there are no devils hidden in the detail. Proposals to charge workers to bring a case at tribunal, however, are fraught with problems and are yet another barrier to justice, hitting ordinary people at some of the most difficult times of their lives, just like the other measures that the Government have brought in to remove access to justice for so many ordinary people.

Government Members have made various other suggestions about weakening employment protection, including removing small firms from legislation. As about 44% of private sector employment is in SMEs, that would create a second-class citizen at work and make it harder for small firms to recruit good staff.

There have been rumblings about equality legislation, but as the Fawcett Society stated:

“Cutting red tape can all too easily mean scaling back on equality. Many of the regulations being revised—such as protections from unfair dismissal—have been vital in shoring up women’s security in the workplace.

Considered against a 25 year high in women’s unemployment, watering down these kinds of regulations poses a very real threat to women’s ability to get and keep work. A healthy labour market cannot exist if women are not enabled to take their rightful part in it.”

How true.

There are also worrying things said about health and safety legislation. We have one of the lowest incidences in Europe of fatal injuries at work, but we should not be complacent, as the figures do not include those killed in road traffic accidents, members of the public killed by work activities, suicides attributed to work-related stress, or those no longer in work who die from mesothelioma or other work-related illnesses. Many people killed at work worked in small and medium-sized enterprises. Of course, there are many thousands who suffer as a result of non-fatal but often life-changing incidents. Fewer inspections and less enforcement will lead to more deaths, injuries and ill health at work. Reductions in health and safety should not be considered by any Government in a civilised society.

The Government are turning the clock back to a time when people had to choose between heating and eating, were dependent on food banks, and had to beg from their neighbours for food to feed their children, and when workers had fewer rights. It clearly is not working. They need to change course now.

--- Later in debate ---

[Julie Hilling]

What was my hon. Friend’s view when he heard the Prime Minister say:

“You call it austerity, I call it efficiency”?

[Ian Lavery]

If I was not in the palace of varieties and the great hall of democracy, I would answer that exactly as I would like to.

I have mentioned public sector jobs—500,000 of them. Those jobs have not been lost. They have been torn from the economy; they have been stolen from ordinary people; they have disappeared because of the actions of this Government. Those jobs have been lost because of nothing other than the ideology of an incoming Government. We are desperate for growth, jobs and investment, but what do we have? We have a double-dip recession.

There is good news in my area, with Bernicia and Akzo Nobel having decided to locate there. That is absolutely fantastic, and I hope that it will continue, but there are problems with the regional growth fund and with not distributing money fast enough. Statistics announced at the weekend suggest that each job costs some £33,000, but that is not what it was like under the old regional development agency system. We had a shining light—a beacon—in One North East, which was providing brilliant results for the region. Sadly, though, it was abolished within weeks of the Government being elected.

If new companies are to be encouraged into our region, they need to be incentivised. Enterprise zones are fine, but if an area is not part of one and is surrounded by them, it will have huge problems, as we do in Wansbeck. The enterprise zone needs to be extended up through the Alcan site and around the town of Ashington, but the capital allowances must come with that extension. It is no good extending enterprise zones without capital allowances; it may as well not happen. I appeal to Ministers to consider extending the enterprise zone in south-east Northumberland around the Alcan site and to bring with that what capital allowances can be afforded.

We need to protect deprived areas from the effects of the discussions that are taking place in Europe about EU state aid. I urge the Government to give serious consideration to ensuring that small and medium-sized enterprises will still be able to get EU state aid after 2013. That is essential because otherwise we will have a double whammy. We also need infrastructure in south-east Northumberland in the form of the Ashington, Blyth and Tyne rail line, so that we can get to and from other areas.

The Queen’s Speech offered little to my constituents. We have done everything we can to try to get them on to an even keel. I simply ask: do this Government care?