Employment Tribunal Fees

Justin Madders Excerpts

Tuesday 1st December 2015 Westminster Hall

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

I beg to move,

That this House has considered the effect of the introduction of fees for employment tribunals.

It is a pleasure to serve under your chairmanship, Mr Streeter. An essential part of any democracy is an economy that works for the whole population. That means there should be not only full employment, or as close to that as can be managed, but opportunities for everyone to make the most of that economy. There should be no glass ceilings. People from different backgrounds should all have the same chance of making it into their chosen job. Crucially, in the context of this debate, an individual should have the security of knowing that if things go wrong, they have a realistic avenue through which to seek redress.

To my mind, we have a system in place that puts security near the bottom of the pile in terms of priorities. Security should be the cornerstone of any settlement on how the workplace operates. No matter how imperfect the current system is, if there are workplace rights and protections that this place has deemed a necessary part of the social contract between Government and the country, we should be absolutely sure that those rights can be genuinely enforced, if we are not to have an illusory scheme of protection.

The employment tribunal system has a social benefit for everyone and should therefore be accessible to all members of society. It is worth reminding ourselves that tribunals took on their present character as employment courts to resolve disputes between employers and workers in 1971, as part of that year’s Industrial Relations Act, largely arising from the recognition that unresolved workplace grievances had led to a proliferation of official and unofficial industrial action. Those origins should serve as a clear warning that if we are to live in a just society, we need an accessible and fair system for resolving disputes.

[Ian Lavery (Wansbeck) (Lab)]

I congratulate my hon. Friend on bringing this important issue to the Chamber. Does he agree that the introduction of these fees disproportionately affects women, particularly those who are pregnant or in part-time employment? That issue must be addressed.

[Justin Madders]

I thank my hon. Friend for his intervention. I will address later some of the disproportionate impacts of the fees, but they are part of a bigger picture: they are part of a sustained attack on working people in this country. A lot of the legislation in the previous Parliament and currently going through the House is nothing more than an attack on basic workplace rights and protections. If our ambition is to have an economy and country where everyone has a stake in their prosperity, we should value the security and sustainability of jobs as much as the means of creating them.

It is widely recognised that losing a job is one of the major occasions in life on which people face extreme pressure and stress. Obviously, it is not quite as significant as some other issues, but for many, it can be a pretty traumatic experience. It can affect a person’s marriage, health, home, finances and, of course, family, yet we seem to be fostering a culture in which an individual is considered a disposable item to be cast aside with barely a second thought. While that culture exists, it is important that we have strong protections in place and—this relates to today’s debate—an effective and accessible system enforcing those protections.

Let us look first at the stark data, which show that the number of tribunal claims lodged has fallen off a cliff since the introduction of fees in July 2013.

[Chris Stephens (Glasgow South West) (SNP)]

I congratulate the hon. Gentleman on securing this important debate. One of the reasons given for the introduction of these fees was to protect hard-working taxpayers from having to contribute to the cost, ignoring the fact that the people bringing these claims are hard-working taxpayers. Does he agree?

[Justin Madders]

I thank the hon. Gentleman for his intervention; his record on representing working people is one of note. He is absolutely right that everyone who takes part in the system contributes already through their taxes. As I will go on to demonstrate, there is little sign of any wider benefit to society. In fact, it could be argued that the fees are creating more problems than they solve.

Between October 2013 and September 2014, there were 32,671 fewer single claims brought by individuals than in the previous 12 months. That is a decrease of 64%. Over the same period, the number of multiple claim cases—those brought by two or more people against the same employer—was down by 3,527. That is a decrease of 67%. Comparing different periods can produce different figures, and an awful lot of different comparisons can be made. Indeed, some comparisons show up to an 80% drop in claims lodged. Whatever the comparisons or periods used, there is an average drop of around 70% in the number of claims lodged. It is therefore indisputable that there has been a significant drop in the number of claims since the introduction of fees.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I congratulate my hon. Friend on securing this debate. I held a debate in this room a few weeks ago on women and low pay, an issue that my hon. Friend the Member for Wansbeck (Ian Lavery) just raised. The tribunal process is an important mechanism through which women can secure equal pay in their place of work, because if the claim is successful, their employer is instructed to carry out an equal pay audit. The financial barrier, however, means that many women are not getting to that stage, and therefore fewer equal pay audits are being done than could be done. Does my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) agree that tribunal fees represent a barrier to equality in the workplace for not only the women making claims, but those in workplaces where claims could be made but are not?

[Justin Madders]

I pay tribute to my hon. Friend’s excellent contribution in the debate she referred to. She is, of course, right that there are significant issues of barriers to justice, and of employers not learning lessons about inequality; that needs to be put right. She makes a valid point about equal pay audits. Tribunals have additional powers beyond simply awarding compensation. We hear a lot of rhetoric from the Government about cutting down on the compensation culture, but tribunals have important powers that go beyond compensation. They also, for example, have the power to make a statement of an employee’s terms and conditions. That is absolutely basic, bread-and-butter stuff that we should expect to happen in an employment relationship, but occasionally it is necessary for an employee to go to a tribunal to get that basic statement of terms and conditions.

We can bandy the figures around in a number of ways, but the common thread is that there has been a 65% to 70% drop in the number of claims lodged. It is little wonder that, with such overwhelming evidence, Lord Justice Underhill stated the following when he considered in the High Court Unison’s judicial review of the fees regime:

“It is quite clear from the comparison between the number of claims brought in the ET before and after 29 July 2013 that the introduction of fees has had the effect of deterring a very large number of potential claimants.”

That is a very clear statement.

There has no doubt been a reduction in the number of claims made. Have employers suddenly started treating their employees better? [Laughter.] I do not think there is any suggestion among Opposition Members that that is the case. It is worth remembering that since the introduction of fees, the general trend has been an increase in the number of people in work, so the proportion of people in employment who are bringing tribunal claims is actually decreasing even more than is suggested by the raw data.

[Margaret Greenwood (Wirral West) (Lab)]

I congratulate my hon. Friend on securing this important debate. I would like to make reference to the TUC’s submission to the Select Committee on Justice inquiry on tribunal fees, which stated:

“The EHRC and BIS recently funded a large-scale survey of the experiences of new mothers in the workplace...The survey findings suggest that 54,000 women a year (one in nine new mothers) are dismissed, made redundant when no other employee is, or are treated so badly while pregnant or on maternity leave that they are forced to leave their jobs.”

Indeed, I know women who have suffered exactly that. That is happening at a time when, despite all the joy of adding a new member to their family, they are under a huge amount of pressure. In 2012-13, prior to the introduction of fees, there were 1,593 claims for pregnancy-related detriment or dismissal.

[Margaret Greenwood]

I am sorry, Mr Streeter. There was half the number in the following year—790 claims. Does my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) agree that that is an unacceptable level for our society?

[Justin Madders]

I thank the hon. Lady for her intervention and I understand the passion that led her to speak for slightly longer than is the norm. She is absolutely right that pregnancy discrimination is still rife in the workplace. Figures that I have seen suggest that of the 54,000 women who are dismissed on the grounds of pregnancy each year, only 1.5% proceed with a tribunal claim. Is that not a damning indictment of the difficulty that people have in accessing justice?

We need to examine the supposed reasons that the Minister may put forward for why the number of claims has dropped. I am sure that the Government would like to claim that the success of the Advisory, Conciliation and Arbitration Service early conciliation scheme is part of the explanation, but we should remember that the scheme was not in place for the period immediately after fees were introduced, so that cannot explain the number of claims dropping so dramatically immediately after fees were introduced. The figures that we have seen on early conciliation provide little comfort for those seeking to explain the reduction; indeed, as I will argue, the fee system can be seen as an impediment to effective early conciliation.

The figures on early conciliation tell us that of the 60,800 notifications made to ACAS in April to December 2014 as part of the early conciliation scheme, 15% were formally settled by ACAS and 22% progressed to an employment tribunal claim. That leaves a massive 63% that were not formally settled through ACAS but did not progress to an employment tribunal. Of course, it is not possible to identify how many of those claims had merits, but it is too large a figure to ignore, and the similarity between that figure of 63% and the figures that I have already referred to is too much of a coincidence for us to ignore.

[Jo Stevens (Cardiff Central) (Lab)]

Interestingly, if we look at employers taking up early conciliation through ACAS, we find that Government Departments are some of the worst offenders for not participating in early conciliation; that includes the National Offender Management Service, which is very poor at engaging. Does my hon. Friend have any comments on that?

[Justin Madders]

My hon. Friend, of course, has great experience in this area. The Government should be setting an example. They should be leading from the front and be seen to be engaging in the processes that promote and encourage good workplace relations. Is it not really something when we have a Government Department potentially discriminating against someone or impinging on their workplace rights, then refusing to engage with the systems that that Government have set up to try to resolve that dispute? And then the Government charge that person to force their rights. What kind of situation is that? It is not a fair, equitable or just way of dealing with matters.

Let me turn to the significant amount of evidence submitted to the Justice Committee. I think my hon. Friend the Member for Wirral West (Margaret Greenwood) has referred to evidence that was given to the Justice Committee in respect of NOMS, and I recommend anyone who has not read those transcripts that look at that evidence. In it, multiple witnesses demonstrate the deterrent effect that fees have had; that evidence goes well beyond the data that have been referred to.

[Chris Stephens]

The hon. Gentleman is making a number of excellent points. On fees, does he agree that there will be an impediment to cases in which a worker brings a case for an illegal deduction of wages, because the fee will be higher in some cases than the amount that the worker is looking for in their claim?

[Justin Madders]

The hon. Gentleman is absolutely right on that point, which I will come to later. Speaking from personal experience as a lawyer before I entered this place, I have a number of examples of such situations, and that cannot be right in a fair and just society. Returning to the Justice Committee, it received evidence from Citizens Advice, which published a report called “Fairer Fees” in January 2015. It stated that 82% of its clients said that the fees deterred them from bringing an employment tribunal claim.

All the Government talk at the introduction of the fee regime was about weeding out vexatious claims. As I will go on to demonstrate, there has been no convincing evidence put forward that this system has done anything to reduce such claims, in stark contrast to the significant body of evidence suggesting that people with genuine complaints have not been able to pursue their rights as a result of the fee system. It may be that part of the Government rationale is that those who use the system should contribute to it, in which case far more equitable solutions can be found. It may be that despite everything else, it is and always was part of the Government’s plan to reduce the number of claims being made, in which case they have succeeded.

[Richard Arkless (Dumfries and Galloway) (SNP)]

I thank the hon. Gentleman for securing this very important debate. Does he agree that one of the reasons given in the Beecroft report, which initiated the imposition of tribunal fees, was the desire to make business more efficient, and that the very notion that people being prevented from having access to justice within the workplace would increase productivity and make a business more efficient is completely misguided?

[Justin Madders]

The hon. Gentleman is absolutely right. The suggestion that workplace rights and treating people with respect and decency is somehow an impediment to a business running well is the stuff of nonsense. Having a stable and well-motivated workforce actually helps to improve productivity. The Beecroft report is really where all this is coming from. There is a view that employment rights are somehow an impediment to the good operation of business. If someone has the misfortune of having worked somewhere for less than two years, they effectively have no employment rights, so that has been got through almost by the back door.

Let me return to the reduction in the number of claims. Undoubtedly, that has been stark, and if that is the Government’s intention, it has been successful, but it is unfair, crude and a denial of basic justice. The Citizens Advice report stated that 47% of its clients who were potential type B claimants—those bringing unfair dismissal or discrimination claims—said that they would have to save all their discretionary income for six months in order to be able to proceed with a type B claim. And those are the lucky ones—many who have lost their job have no discretionary income. Keeping a roof over their head and putting food on the table will always take priority over pursuing a claim for which the outcome is uncertain and which will not be resolved for months.

[Margaret Greenwood]

Somebody facing a situation in which they may want to go to an employment tribunal is stressful enough, and they may well be thinking that they might lose their job or have to leave their job because they are so unhappy. With that in mind, there was the figure from Citizens Advice that four out of five clients they dealt with felt that the current levels of fees would deter them from even bringing such a claim. Does my hon. Friend think that is an acceptable state of affairs?

[Justin Madders]

No, it is not an acceptable state of affairs. My hon. Friend makes a really pertinent point: if somebody is still working for an employer, the last thing that they want to do is take them to a tribunal. It does not help the employment relationship to improve, and it almost certainly leads to a parting of the ways one way or another. We should be there to help people if they have had a violation of their rights. There should be an easily accessible system to enable them to resolve things.

Let me go back to the startling statistic that those bringing type B claims would have to wait six months in order to afford the fee. Does that not tell us something? When the time limit for bringing such claims is three months, the fact that a person would have to wait six months in order to afford the fee is a complete exposé of how wrong-headed and unjust the system is, so if the Government are minded to make any changes, at the very least, they should look at the level at which fees are set.

I will say a few words on remission, because no doubt that will be used to justify the level of fees. However, do not forget that the comments that I just referred to have been made by people at a time when fee remission is available, so it obviously is not working for many. It is worth noting that when the Government first looked at the fee remission system, they estimated that about 63% of claimants were predicted to benefit from fee remission in whole or in part, but in reality, only about 21% have. The average monthly take-home salary in this country is just under £1,800. Remission is not available to people on that salary, but they are asked to stump up two thirds of that sum just to pursue a tribunal claim. Does that not highlight how unrealistic the fee remission system is?

We also have the completely indefensible situation in which an employer does not pay their staff, which is one breach of the law, but that is then compounded by the fact that the employer does not issue payslips and, because the individuals have not received payslips, they cannot access the remission system. How can that be a just situation?

If the objective of introducing fees was to weed out unmeritorious claims, the policy has been a failure. The success rate has not really changed, and I argue that the employment tribunal structure has plenty of well-developed measures to deal with unmeritorious claims, such as deposit orders, strike-outs and costs awards. Indeed, over the last decade or so, there has been a general ratcheting up of measures designed to deter and weed out frivolous, vexatious and misconceived claims. The rules are there, are clear and are perfectly capable of being applied, so I suggest that that is the route to go down if the concern is really about stopping people pursuing claims unreasonably or vexatiously.

[Karl Turner (Kingston upon Hull East) (Lab)]

While my hon. Friend is on that point, I want to mention the fact that under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, legal help was available to advise clients on whether they had a claim that was worth pursuing at a tribunal. Would it not have been better for the Government not to mess around with legal help under that Act, and to allow people the opportunity to receive that legal advice, which often acted as a safety net?

[Justin Madders]

I thank my hon. Friend the shadow Minister for his intervention. Of course he is absolutely right: that advice is an important safety net. I know from experience that the majority of people who are advised that they do not have a claim will take that advice on the chin and will not pursue the claim, so the fact that we have not been able even to maintain levels of access to advice has probably only made the situation worse.

As I was saying before the intervention, there are rules to deal with unmeritorious and vexatious claims. I want the Minister to tell us today whether he considers that those rules are effective, and if he does not, what he will do to change them.

Denying access to justice via a high fee level is arguably making no difference at all to the number of vexatious claims being lodged, because if this system was weeding out vexatious claims, the success rate would increase. The fact that it has not suggests that the fee system is a deterrent to all. Ministry of Justice statistics indicate that success rates have in fact remained broadly the same, rather than increasing. In the four quarters before fees were introduced, success rates ranged between 10% and 9%. In the four quarters after fees were introduced, success rates were broadly similar at 9%, 9%, 5% and 13%. Even the president of the employment tribunals, Mr Brian Doyle, suggested that only a very small percentage of claims can be identified as weak or unmeritorious and that we need to be careful about the way in which we bandy around the term “vexatious” when it comes to claims.

[Chris Stephens]

Can the hon. Gentleman confirm that those workers who have the benefit of trade union membership will find that a trade union also has a test as to whether to proceed with a claim to a tribunal?

[Justin Madders]

I thank the hon. Gentleman for his intervention. He is of course absolutely right. Trade unions play a vital role in ensuring that justice is served for their members, but they also play a wider role by not supporting or endorsing claims that are considered vexatious or weak. We really should mark out that contribution that is made. Of course the vast majority of people who work in this country are not trade union members. Perhaps that is one reason why the figures have not substantially changed as a result of these initiatives from the Government.

The myth that there is a vexatious culture out there has been perpetuated by parts of this Government and certain sections of the media. It is almost as if they believe that there is an army of litigious individuals out there who are routinely fleecing employers with spurious claims. That view has no basis in fact. As I said, there are already rules to stop vexatious claims proceeding. Each case is considered by a legally qualified judge. Most employers have access to professional advice on their case and far more are legally represented at tribunals than claimants—and all of that in a country that regularly appears near the bottom of the pile in any OECD studies of the strength of employment protection across the planet. It is far from the easy ride for employees that some people would portray.

In addition, it is simply not the case that there are hundreds of no win, no fee lawyers out there ready to exploit employers by bringing forth spurious claims. The clue is in the title: “no win, no fee”. If the lawyer does not think that the claim will win, they will not get paid for it, so why would they waste time pursuing a claim that they know will ultimately be unsuccessful?

The idea that employers are a soft touch in these matters is simply untrue. Most are professionally represented and should be able easily to spot someone trying it on. There is a question about how those who are not members of trade unions access affordable representation. We have dealt with that in some of the interventions today. Of course I would say that the best thing that anyone can do to protect themselves in the workplace is to join a trade union, but that is not a substitute for basic advice and support for people who find themselves in these very difficult situations. The Government have pulled the rug out from under them.

This system not only prevents access to justice, but feeds the myth that employment rights are some sort of undesirable impediment to properly functioning businesses. At its worst, it acts as encouragement to those rogue employers who think that employment protection and workplace rights are an optional extra to be ignored whenever possible.

There is plenty of evidence from those representing individuals in employment tribunals, including those who gave evidence to the Justice Committee, that some employers will deliberately decide not to engage in any kind of discussion about resolution of a claim until the very end of the process, even when they may very clearly be in the wrong. The pre-claim conciliation process run by ACAS can be and often is met by employers refusing to engage at all. They know that if they have dismissed an employee, they may not have the funds to pay for a tribunal claim. Even when one is under way, they still hold off until the hearing fee is paid before seriously considering whether they should engage in settlement negotiations. That can be as little as three weeks before the tribunal hearing. That wastes everyone’s time and the tribunal’s and the taxpayer’s resources. There is a category of employers who will not engage with anything unless they know that the employee has paid their £1,200, but even in the cases in which the lower fee applies, there is now a real dilemma facing employees, who are asking themselves, “Can I afford to take this on even though I know I am in the right?”

The starkest example—I referred to this earlier—is one from my own experience shortly before I was elected to this place. It involved an employer systematically refusing to pay their staff over a period of weeks. They refused to engage with ACAS in early conciliation and decided instead to sit back and wait for the tribunal claims that never arrived. The people affected whom I saw were all women and had all lost several weeks’ wages. There was no doubt that money was owed, but all of them questioned spending £390 to recover a similar amount and some of them were actually seeking to recover less than their initial outlay in fees, so for them the dilemma was even greater. Of course, there was no reason to suppose that they would not succeed in their claims, but it is a sad fact that employers, even if they do lose, do not actually pay the compensation due to the employee more than 50% of the time. Given the intransigence shown up to that point, I could not criticise those people at all for not wanting to take that risk.

How can anyone defend the bad employer playing the system and preventing very basic employment rights, including the right to be paid, from being enforced? It does not take a great feat of imagination to see how that attitude can inform an employer’s thinking on whether they should, for example, take steps to dismiss an employee fairly in the first place. After all, if they want rid of someone, why waste too much time on that process if they think that the person will not have the resources to challenge it afterwards? Far from the picture painted by some, this Government are actually creating a culture in which an employer can hire and fire with impunity.

Then there is the situation in which the employer becomes insolvent. The claimant has to apply to the Redundancy Payments Service for redundancy pay, but if there is no employer left to order reimbursement from and it is not recoverable from the national insurance fund, the claimant never recovers their fees. How can it be right that the state can profit from that situation? What kind of situation allows an employee to be, in effect, fined for attempting to exercise their rights in the already difficult situation in which there is an insolvency?

The GMB union has provided a very clear example of what amounts to a significant profit made off the backs of trade union membership fees. It was involved in a claim in Sheffield against a company that in February 2015 went into administration. The business was later sold to new owners, with the original company being wound up. There were redundancies, and the employment tribunal found in favour of the 48 people who brought claims in respect of a failure to consult and unfair dismissal. The claimants were supported by the GMB and three other unions, with fees totalling £13,200 being paid to issue the claims and have them heard. Although the tribunal ordered the respondent to refund the fees, there was virtually no chance of recovering them, as the legal entity had been wound up. Notably, it was only possible for those employees to bring claims because they were supported by a union to get their case before the tribunal. That is a tribute to the importance of trade union membership, but it cannot be right that trade unions or individuals have to make such payments with no avenue for recovering the cost. In that situation they were completely blameless, so why should the state penalise them?

On the question of costs, it has been suggested that one of the justifications for the fee system is that it will recoup some of the costs of the tribunal system. If that was the intention, the system has been a failure. The latest accounts from the Ministry of Justice show that in 2014-15, the net income from employment tribunal fees was £9 million and expenditure on employment tribunal services overall was £71.4 million, which means that the increase in net income from fees covers 12.5% of the cost of running the employment tribunal service. The Government seem to have been unable to quantify, in response to written questions, the extra administration and staffing costs in the tribunal service of having to administer the fees and the remission system. In reality, the gain in revenue is probably lower than 12.5%, and it has been achieved at the expense of a 69% drop in the number of claims.

There is no mention anywhere in any of the documents I have seen of the benefit to the taxpayer from the application of the recoupment regulations, which can result in an employer paying back to the taxpayer thousands of pounds—for example, in jobseeker’s allowance already paid to the claimant—which is offset against the claimant’s compensation. Such repayment is normally ordered where a tribunal has made a finding of unfair dismissal. Why is that clear benefit to the taxpayer not included in any considerations, and has anyone stopped to consider that the level of recoupment will have reduced as the level of claims has reduced—

[Mr Gary Streeter (in the Chair)]

Order. I am reluctant to intervene, because the hon. Gentleman is making a fine speech, but he has been speaking for half an hour. He might want to take into account the fact that several colleagues want to catch my eye.

[Justin Madders]

I will be brief, Mr Streeter. As we have discussed, do not the participants contribute to the system through their taxes anyway? Is it not simply part of the cost of a civilised society? In the long run, we all benefit from stable and balanced employment relations. If the Government are so determined to recoup costs and if they are genuinely interested in ensuring access to justice, surely the obvious way to deal with the matter is to levy a fee or apportion a percentage of compensation at the end of the process, not at the beginning.

At the moment, if a claimant is successful, they can recover their fee from the respondent, but what is the respondent’s contribution to the costs of the tribunal? It is nothing. I suppose it could be argued that they indirectly contribute by recovering the fee and repaying it to the employee, but as we have seen, that outcome is not certain, and the burden disproportionately falls on those who seek to enforce their rights.

Employment tribunals play a vital role in ensuring the effectiveness of basic rights, such as the rights to the minimum wage, paid holiday, time off and maternity leave, and the right not to be unfairly dismissed or discriminated against. If we value those rights and think that they are important, we should also value the ease with which people are able to exercise them. Those rights are not just about individual dignity and respect in the workplace; they bring with them important social and economic benefits for the country. They ensure that most people can participate in the labour market without facing unfair discrimination. They give vulnerable workers more job security and stability of income than they would have. They encourage a committed and engaged workforce and the retention of skilled workers. They allow people to plan their lives and plan for the future, knowing that if they do a good job and their employer runs its business well, they are likely to remain in work. Employment rights are, ultimately, of benefit to everyone. The fee regime not only undermines those rights but actively encourages rogue employers to flout the law, and I say that the regime should be scrapped.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Vara]

As I said in reply to an earlier intervention, I am not making any decisions on the spot, much as the hon. Lady would like to tempt me into those waters.

[Justin Madders]

I do not wish to labour the point, but the question is simple. We are not asking the Minister to make a decision today; we are simply seeking clarification and confirmation that he is not ruling out the abolition of fees altogether as part of the review.

[Mr Vara]

It is important to appreciate that once the Government website publishes terms of reference, which have been there for many weeks, it is not appropriate to seek to change those terms of reference simply because one is in a debate, no matter how many times colleagues try to press me to respond in that way.

[Mr Vara]

I refer the hon. Gentleman to the answer I gave setting out the three objectives against which we are basing the review.

It is important to note that the introduction of fees was designed to encourage parties to use alternative ways of resolving their disputes. Colleagues will appreciate that such means can often be more effective, less stressful and less expensive than formal litigation. For that reason, the previous Administration introduced the new early conciliation service, under which anyone contemplating bringing a complaint to an employment tribunal must first contact ACAS, which will offer conciliation that is free of charge.

ACAS’s evaluation of the scheme during its first year shows that the early results are promising. Although participating in early conciliation is not compulsory for either party, the vast majority do so. In 75% of cases, both parties agree to participate. The scheme was used by more than 80,000 people in its first year. Recent research by ACAS shows that more than 80% of participants in early conciliation were satisfied with the service. Much has been said so far about lawyers acting for people, so it is important to note that we have a free option, without lawyers who charge fees, that will also be less stressful and in an environment that is constructive to arriving at a solution. Sadly, it is often the case that when lawyers are involved, it can be antagonistic. That is not always the case, but it can be the case when two sets of lawyers are acting.

I assure colleagues that it was always our intention to carry out a post-implementation review of the impact of fees on employment tribunals. As Members will be aware, we announced that review in June. The aim of the review is to look at how effective fees have been in meeting the original objectives, as I mentioned. Following their introduction, there has been some concern—it has been expressed today—about the impact fees have had on people’s ability to bring claims before the tribunal. Those criticisms have tended to focus on selected statistics, taken in isolation and out of context. In particular, the fall in the volume of claims issued in the employment tribunal has been pointed to as proof that people are being denied access to justice. That is too narrow a perspective when considering this rather broader issue. The fall in the number of claims is likely to be the result of a number of factors. Crucially, there is a failure to take account of the significant increase in the take-up of conciliation.

[Justin Madders]

The Minister will be aware that conciliation was introduced some time after the fees were introduced. Will he explain why there was such a significant drop immediately after fees were introduced?

[Mr Vara]

I maintain that it is too simplistic to say that the fees were responsible for the drop. If the hon. Gentleman will bear with me for just a moment, I will explain the other reasons that may have contributed to the decline in the numbers. As I have already mentioned, ACAS’s evaluation of the service suggests that the early results are promising. It is noteworthy that the trend was that the number of claims was declining before fees were introduced. It is likely that that was related, at least in part, to the improving economy, which has delivered higher levels of employment. The economy and employment have continued to improve, and it is therefore likely that we would have continued to see a trend of falling claim numbers, irrespective of whether fees were introduced.

--- Later in debate ---

[Justin Madders]

It is a pleasure to serve under your chairmanship, Mrs Gillan. I will be brief. I am disappointed in what the Minister has said today. I do not believe that he has really taken on board our concerns. I am very disappointed that, despite having had four opportunities to confirm that there is a possibility that the review of the fees will lead to their abolition, he has declined to confirm that. So we have a consultation and a review of the system, but it is nothing more than a comfort blanket to justify the original decision. I am also disappointed that, apart from the Minister, who spoke as best he could in a difficult situation, no one else from the Conservative party was here today to speak up on behalf of the Government’s policy. Perhaps they do not want to defend the indefensible.

It is worth bearing in mind that the Government’s approach is all part of a strategy in a race to the bottom. It is not a race that we should take part in. In the long run, we will all be the poorer for that kind of mentality. Let us get a system that allows workplace justice. Let us have a proper consultation and take on board all the evidence—the weight of evidence from the Justice Committee that we have heard today—about how the fees have really denied access to justice. Let us get a system that really allows access to justice. The only way to do that is to scrap the fees altogether.

Question put and agreed to.

Resolved,

That this House has considered the effect of the introduction of fees for employment tribunals.

Police Procurement (Motor Vehicles)

Justin Madders Excerpts

Thursday 16th July 2015 Westminster Hall

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

I am grateful for the opportunity to speak in this important debate. I am also grateful for the clear and compelling case made by my hon. Friend the Member for City of Chester (Christian Matheson). He explained the circumstances in which this matter has been raised.

The British manufacturing sector includes 11 of the world’s leading global vehicle and engine manufacturers: Aston Martin, BMW, Ford, General Motors, Honda, Jaguar Land Rover, Lotus, MG, Nissan, Toyota and Volkswagen. Several of those manufacturers are in close proximity to my constituency. The Vauxhall Motors plant in my constituency employs several thousand people locally and many more elsewhere in the supply chain. Motor vehicle manufacturing is a key part of the local economy, as it has been for more than half a century.

We recognise that police budgets are under pressure as a result of Government decisions. Central funding to police forces has fallen by £2.3 billion in real terms since 2010—a 25% reduction in five years—so the challenges faced by the police and crime commissioners and chief constables making such decisions are real. The need to ensure value for money for the taxpayer is greater than it has ever been.

As correctly highlighted by my right hon. Friend the Member for Leicester East (Keith Vaz), the concept of a procurement consortium is good, because the combined purchasing power of many police authorities can deliver significant savings. I have seen many examples in local government of how that has worked to the benefit of the taxpayer. That power should be utilised to provide wider benefits. When looking for value for money on an issue such as vehicle procurement, it is important that we take a wider, more holistic approach than simply looking at individual unit cost. We need to look at the value, not just the price. That encompasses a range of issues, including fuel economy, servicing, maintenance cost, resale value, fitness for purpose and, most importantly, social value.

I share the anxiety expressed by my hon. Friend the Member for City of Chester about having a narrow, short-term approach to procurement, which could end up costing us much more by providing poor value for money. That is particularly true when we look at social value, which seems to have been completely disregarded in this case. As my hon. Friend said, a cursory look at police fleets in other countries shows that we stand almost alone in failing to recognise the importance of social value as part of the procurement process.

In France, the police use Citroens, Renaults and Peugeots, produced in French factories. In Germany, they use Mercedes, BMWs and Volkswagens. In Spain, they use SEATs. In Sweden, they use SAABs and Volvos. In Italy, they have Alfa Romeos, Fiats and a few Lamborghinis—I am not quite sure what value those bring. All those countries are governed by the same directive as we are, yet they are all able to procure in a way that supports their own industries. I ask myself why police officers in Cheshire are using vehicles made thousands of miles away rather than those made down the road at the local Vauxhall factory.

We should pay tribute to the success of Vauxhall Motors in Ellesmere Port in recent years. In the face of stiff competition from other General Motor plants across Europe, it has consistently seen off threats to its existence. Management and trade unions have worked together to show that British industry can be competitive and adaptable. Just this week, the plant is looking to recruit more than 50 young people in new roles as it prepares for the launch of the latest model of the Astra.

The continued revival of the UK car industry through initiatives such as the Automotive Council leaves us with the conundrum that one of our most dynamic and successful industries has been leading the way in our bid to increase exports but appears unable to compete with foreign manufacturers on its own patch. We should be proud of the success of Vauxhall and other British manufacturers, but we should not be complacent about the challenges they face. We should take every opportunity to bolster that success.

We seem to be procuring more skilfully in other parts of the public sector. I note, from a response to a written question I tabled recently, that the Government car service has shown improvement in that area. From 2011 to 2014, 80% of all vehicles purchased by the Government car service were manufactured in the United Kingdom. Clearly, I would like that figure to be 100%, but it is a lot better than the 0% for policing.

I join my hon. Friend the Member for City of Chester in urging the Minister to get the police and crime commissioners together to find a way to support British business. Do we really want to make ourselves the laughing stock of Europe on this subject? Do we really want to miss this opportunity to secure more jobs and investment in our car industry? I understand that procurement processes have to be legally robust, but a comparison with other European countries shows we are missing a trick somewhere. I hope a way can be found to procure in a way that delivers value for money for the taxpayer and boosts our economic performance.

[Mr Graham Brady (in the Chair)]

We now come to the first of the Front-Bench winding-up speeches, after which Mr Matheson will have the opportunity to make a short reply.

--- Later in debate ---

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

Mr Brady, it is a pleasure, as usual, to serve under your chairmanship in my first Westminster Hall debate in the same role as I had in the previous Government, but doing more. The Prime Minister kindly inserted the word “Crime” into my portfolio—a short five-letter word that means I have apparently taken over most of the rest of the Home Office.

I congratulate the hon. Member for City of Chester (Christian Matheson). It is a beautiful city; I know it well. It is a long time since I was there, so perhaps I need to go back soon and go out on patrol. The hon. Member for Ellesmere Port and Neston (Justin Madders) also spoke in the debate. As a young fireman I did a bit of moonlighting in the Port Sunlight area, delivering quite a lot, and I used to drive through that part of the world regularly—well, I tried to drive, but it was like a car park on the motorway most of the time.

Anybody who knows me will know that I am ever so slightly Eurosceptic, so I have a great deal of sympathy with what has been said in this Chamber this afternoon. As a Minister with experience in five Departments now, I assure colleagues that I have pushed the parameters as far as I can when it comes to what I perceive—and what I am sure the Government perceive—as incorrect interpretation of EU regulations. My advice is that many of the things that Members have been asking be done—I will ensure that I check this when I write to them—are illegal under the EU procurement directive. Even looking at the matter again in 2015, as Members have mentioned, that would have made no difference to the geographical part of the procurement process. If I am wrong, I will certainly write to colleagues to correct it, but that is the advice I stand here with as a Minister.

[Justin Madders]

On the lawfulness of the process, is the Minister aware of any judicial testing of how the system operates in other European countries compared with our own?

[Mike Penning]

As a Minister in the Home Office and the Ministry of Justice, I would not want to take on other responsibilities, but I promise to made sure that we look into that and get the facts on how other countries do it. Other countries interpret their membership of the European Union differently. I have committed infractions on more than one occasion in more than one Department, because my interpretation was different both from what my officials were pushing me to do and from the interpretations of courts in Europe.

If I was sitting on the Opposition Benches—I have sat there—I would be arguing for similar things. Whether we can physically do those things and how we get to the position where we can do them are important. To be honest, a Select Committee could look at this in procurement terms, so that we can be open and honest about what we can and cannot do. I thank the shadow Minister for his comments; we have come a long way in the past couple of months. We disagree that there should be a centralised purchasing system. We have freed up the police authorities to police their areas in the way that they feel they should. The police are doing fantastic work in Cheshire: crime has dropped with fewer police officers and less money, and the situation is exactly the same with West Midlands police.

One point that the shadow Minister and I agree on is that there is money to be saved in procurement. There is no argument about that; I was banging on about that long before I came into the House. As a fireman, I used to complain bitterly about the money that we spent. There were cupboards full of stuff bought 15 years before; it was sitting there and would never be used. I am desperately trying to push that spending down. To be fair to the PCCs and the chiefs, they are coming to the table. We created the PCCs to be independent and to be able to do what they want, and all I have said to them all along is that there has to be value for money. Some of them have clearly said to me, as Members have in this debate, that if they can buy locally, that should outweigh a little of the cost that they could have saved if they had got it cheaper elsewhere, and I understand that point. There are, however, huge differentials in what forces are paying, not only for cars, but for batons, shirts, fleeces and trousers. They are so huge that I have decided in the next couple of weeks to publish by police force the main things that they buy, so that the public can see what their force is spending in their area. We will make that information available, including for Cheshire, West Midlands and Leicestershire.

I was a tad cheeky in saying that Leicestershire was not part of the consortium of 22 police forces that has done the recent review. The West Midlands force, sadly, is not part of it either. I am sure there are reasons for that, and I am sure they will come to the party. We can get that 22 up, but it is not just about having all 43 forces. As we have heard, Police Scotland is part of the consortium, which is welcome as it helps us to get more bang for our buck, as are the British Transport police.

I will touch on the points raised on it being only Peugeot that won a contract, because it was not only Peugeot. BMW, Ford, Vauxhall and Peugeot were successful in the e-bid process that we have just come through. An interesting point was made about whether, when manufacturers have brought something else to the UK, that balances things out. That is similar to what the shadow Minister said about Italy buying 4,000 SEAT vehicles from Spain that were manufactured in Spain—some of the parts might have been produced here in the UK. We are a major exporter of car parts, and we should not underestimate that part of the system. BMW makes the Mini in this country, and that very successful product employs lots of people in Swindon. Sadly, Ford does not manufacture vehicles here any more. As a young fireman in Essex, I used to go to the Dagenham plant all too often—it was technically over the boundary, but we were often needed when there was an incident. The TCDI engine is a world-leading diesel engine that is exported all over the world. Some 80% of the vehicles manufactured in this country are exported, and Members have alluded to that great success story.

I must declare an interest: many of my constituents in the great constituency of Hemel Hempstead work in Vauxhall’s Luton van manufacturing plant, which is part of the consortium. Vauxhall vans will be with police forces, based on the process that took place, and Peugeot has also won a contract.

A new bidding process will take place this autumn. I am sure that Vauxhall, like many other manufacturers, will want to bid. Nearly every time I have visited a police force, I have been squeezed into the back of an Astra. The Astra is a bit of a Marmite subject for police forces. I love the Astra, and we have had Astras in our family, but colleagues who have been out on patrol will know that if there are two burly bobbies with all their kit and a burly Minister in the back, it can be interesting—but it does the job. Peugeot has won this contract, and I am sure that Vauxhall will be bidding for the other one.

What has happened here for the first time is economies of scale. I was a little bit cheeky by naming two forces that just happen to cover the constituencies of two of the most senior Members in Westminster Hall this afternoon. I am sure that there are contractual reasons for those forces not being in the consortium, because nearly all the chiefs I have met have said, “We’re going to be part of this. It’s very important.” I hope that forces join together at that level in other types of procurement. We see a lot of joint practice across different forces at the moment on HR and procurement in the IT sector. We have just announced a new IT company that will run the IT purchases for all 43 forces. I hope that Scotland will join us on that, because it would be brilliant to have an operable IT system. We need to work together on that with the National Crime Agency and organised crime units, and I will be working on it with Ministers in Scotland and Northern Ireland.

The key is having the right vehicles for the right people doing the right jobs. I first became a Minister back in 2010. I never dreamt that would happen to me, but it did. Having been a shadow Health Minister for four and a half years, the Department for Transport was really interesting on the first day. One thing I worked on was the Government car service. I am sure that colleagues remember the Mondeos outside Parliament over the years, then the Priuses and the Honda hybrids, but they have probably noticed that we do not see those vehicles out there any more—certainly not the Honda hybrids and the Toyotas. I made an absolutely conscious decision to buy the Avensis for junior Ministers, because they were assembled and manufactured in this country. There was not another compatible vehicle that could do the job—we tried lots of other vehicles: we had a Qashqai on loan for a considerable time, but it did not work; Hyundai sent us some vehicles, and I think one of them is still hanging around. I took a little bit of flack, but I wanted that pressure.

There are exemptions. For instance, the Metropolitan police wanted to use BMW armoured vehicles because they come off the production line armoured, whereas all other vehicles, such as the Jaguar, are retrofitted. I think we will find that the Prime Minister is in a Jaguar. It took a little while, but we got there in the end. I do not criticise the Metropolitan police for taking that time, because they wanted to keep people as safe as possible, but I want to ensure we have vehicles that create as many jobs as possible in this country, and I have a track record of trying to do that.