Draft Human Medicines (Amendment etc.) (EU Exit) Regulations 2019 Draft Medical Devices (Amendment etc.) (EU Exit) Regulations 2019

Debate between Justin Madders and Thangam Debbonaire

Wednesday 6th March 2019 General Committees

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

It is a pleasure to serve under your chairmanship, Mr Robertson. Here we are again, discussing statutory instruments that would make provision for the regulatory framework after Brexit in the event that we crash out without a deal. That possibility has been known about for nearly two years, since article 50 was triggered, yet this pair of detailed and important draft regulations are being debated only three weeks before the proposed exit date.

The volume and flow of EU exit secondary legislation is deeply troubling in terms of accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are taken as part of these regulations. However, establishing a regulatory framework inevitably involves matters of judgment and raises questions about resourcing and capacity that I will address in detail later on. It is our view that secondary legislation ought to be used for technical, non-partisan, non-controversial changes, primarily because the legislative accountability process is not suited for anything beyond that. Instead, the Government continue to push through contentious and detailed pieces of legislation with high policy content in this manner.

As legislators, we must get this process right. The regulations could represent real and substantive changes to the statute book. As such, they need proper, in-depth scrutiny. The draft Medical Devices (Amendment etc.) (EU Exit) Regulations 2019 alone are over 200 pages long. The draft Human Medicines (Amendment etc.) (EU Exit) Regulations 2019 are just under 200 pages long. They cover several EU directives and cannot possibly even be read in the time we have, let alone debated sensibly. We therefore put on record our deepest concerns that the process for these regulations is not as accessible and transparent as it should be.

Decisions made today could have huge implications for a multi-billion pound industry, potentially affecting millions of patients’ lives. Yet we are presented with non-amendable instruments with a derisory amount of parliamentary time allotted to debate them. People who voted to restore parliamentary sovereignty might feel that this is a long way from what that should look like. I appreciate that this wholly unsatisfactory approach is not down to the Minister. I thank her for introducing the regulations and for the time that she and her officials gave me yesterday to discuss them, but as the representative of the Government seeking to trample all over proper scrutiny, she has the onerous task of defending this approach, although I believe no one can defend this mess.

As we have heard, the UK participates in an EU-wide system for the testing and approval of medicines and medical devices. The regulations transfer responsibility for those activities to the MHRA—a standalone medicines and devices regulator for the UK—in the event of a no-deal Brexit on 29 March. The instruments intend to ensure the continuity and safety of medicines and devices in the UK, while retaining the UK regulator’s ability to take regulatory action to protect public safety. We do not disagree with that objective, which is why we will not oppose the regulations, but that is not to say that we do not have serious concerns about how that objective will be achieved in practice—there are many questions about that.

Although the objectives set out in the instruments are intended to be met with minimum disruption and burden on businesses and the supply of medicines and devices in the UK, we have serious misgivings about how realistic that proposition is.

[Thangam Debbonaire (Bristol West) (Lab)]

My hon. Friend mentions minimal disruption to patients, which the Minister mentioned twice. Does he share my concern that any patient listening to or reading the record of these proceedings, who regularly has to take medicine or receives a medical device, will not know whether the minimum disruption may affect them? That may cause significant distress.

[Justin Madders]

My hon. Friend is right; we will all have had constituents raise those real concerns. I will go into more detail about what the Government’s impact assessment says about some of these issues, which justifies our concerns.

Under the draft regulations, the MHRA, which already carries out a wide range of work, including medicines licencing, pharmacovigilance, inspections of standards and enforcement, will take on an expanded role in the registration, assessment and post-market surveillance of medical devices. Listening to the Minister, we could be mistaken for thinking that that massive expansion in responsibility and bureaucracy will take place with no disruption and with no impact on businesses and patients but, as we have just heard, we have real anxieties about that.

The regulations will enable the UK to continue to recognise prescriptions from the EEA. They provide transitional grandfathering rights for medicines and products that have already been authorised in Europe up to exit date, and provisions that would allow the Secretary of State to make temporary changes to the authorisation process or to allow alternative medicines to be dispensed in the case of potential shortages. Their importance cannot be overstated.

As 29 March is fast approaching, the regulations are increasingly crucial. It is right that we make arrangements, although it is a matter of regret that we are dealing with them in this manner at the last minute. We support efforts to ensure regulatory continuity, to ensure the ongoing safety of medicines and medical devices entering the UK market and to avoid disruption to the UK supply chain. But we have several questions about the additional cost to businesses, about the MHRA’s capacity and resources to take on these additional roles and responsibilities, and the Government’s general ill-preparedness to deal with medicine shortages and additional regulations.

Let us start with the impact on businesses. The Government’s own impact assessment for the medicines regulations recognises

“a possibility that some medicines that would have been authorised in the UK because of the UK’s involvement in the EMA will not be submitted to the MHRA due to business decisions. This could have an impact on access to certain medicines and therefore to public health.”

The phrase “business decisions” is, on the face of it, quite innocuous—all businesses make decisions all the time—but the impact assessment almost suggests that such decisions are being made in a bubble, in isolation from the regulatory environment in which they operate.

The impact assessment for the medical devices regulations is a little more explicit. It says:

“It is likely manufacturers would seek to recoup these additional regulatory costs through price increases, which would affect NHS budgeting and spending choices”.

That seems at odds with previous assurances. Indeed, the Minister’s colleague, the Under-Secretary of State for Health and Social Care, the hon. Member for Winchester (Steve Brine), said in a Westminster Hall debate in November 2017 that one of the three key principles for medicines access post-Brexit was that,

“patients should not be disadvantaged”.—[Official Report, 21 November 2017; Vol. 631, c. 349WH.]

Yet that is what we are facing now, and it is a damning indictment of the way the Government have mishandled the entire process.

Has the Minister made an assessment of which specific medicines might not now be submitted to the MHRA? Are any particular conditions or patients more at risk than others? What actions has she taken to speak with businesses and ease their concerns about the decisions they will have to make? What public health impacts has her Department been planning for? What contingency plans are in place? Will she clarify exactly which medicines the Department believes will increase in price and by how much, and what the Department will do to avoid the possibility of those costs being passed on to patients or indeed the taxpayer? Has there been a revised estimate of the annual NHS drugs bill, for example, as a result?

The Government’s impact assessment also recognises that there will be,

“ongoing costs for businesses currently operating in the UK as they would need to adhere to additional UK only regulatory requirements if they currently sell in the EU/EEA. This includes additional fees, legal and administration costs.”

Given that there will also be,

“familiarisation and set up costs as businesses transition into dealing with both systems”,

will the Minister confirm whether the Department will be providing any financial relief to the largely small and medium-sized enterprises that will be affected by the changes? What about the MRHA’s capacity and funding to take on additional roles and responsibilities? The impact assessment recognises that there will be,

“costs to the MHRA of establishing and sustaining new regulatory capabilities”,

although it states that,

“these will be largely recouped through fees.”

In light of those statements, I have a number of questions for the Minister. Will she outline whether the MHRA will receive additional funding to support the work it will have to take on independently of the EMA, or will costs be passed on to businesses and therefore, by extension, to patients and the taxpayer? Will she outline more precisely what costs the MHRA will face and over what time period? How much of those costs will be recouped through fees and how soon will those fees be recouped? Will she confirm whether the Department intends to cover any of the additional costs that will not be recouped through those additional fees?

Can the Minister confirm whether the MHRA will be given additional staffing and funding to establish and sustain its new regulatory capabilities? Is she aware of what the make-up of any additional staff would look like and whether that is already in place? If so, how many new staff have already been hired, what training have they undertaken and who is regulating them? Is there, in fact, a ready-made market of suitably qualified and experienced staff just waiting to go and work for the MHRA? That is a critical point in the light of our general debates on NHS and healthcare shortages.

The new framework will be far from the rosy picture that has been painted in some quarters, but before we even consider the effect of what will happen when we get there, there is a basic point for businesses to consider. If they decide to continue to trade in this country, do they know exactly what it is they need to comply with, and by when? One only needs to look at the commencement dates for these regulations to understand the scale of the task ahead of them. The medical devices regulations alone contain over 10 pages of commencement dates, and they are not set out in a user-friendly way at all.

Here is one example, from proposed new regulation 4B of the Medical Devices Regulations 2002. Sub-paragraph (1) says:

“Part VIII only applies before 26th May 2020 in respect of a device or accessory that is a relevant device for the purposes of Part II or III if the conformity assessment that the person placing it on the market or putting it into service relies on for doing so is the conformity assessment required by Part VIII (rather than by Part II or III).”

Sub-paragraph (3) says:

“Where Part VIII applies—

(a) Part II ceases to apply, apart from regulations 7A and 19 (to the extent that those regulations otherwise apply, for which see regulations 4D(1) to (5) and 4E(4)); and

(b) Part III ceases to apply, apart from regulations 21A and 30(3) to (5) (to the extent that those regulations otherwise apply, for which see regulations 4D(6) and 4E(4)).”

Another example is proposed new regulation 4E of the 2002 regulations, which states:

“(1) Subject to paragraph (3), regulations 91 to 95 do not apply until the date which is 6 months after the date on which the UDI database managed by the European Commission becomes fully functional (a date that the European Commission is required to publish in the Official Journal of the European Union), unless that date (‘the operational date’) is before 26th May 2020.”

Paragraph (3) states:

“(3) Regulation 91(4) only applies in respect of a device to which Part VIII applies, or in respect of an accessory to such a device—

(a) on and after 26th May 2021 (or on and after the operational date if later), in the case of a device classified in accordance with Schedule 9 as—

(i) an implantable device, or an accessory to such a device, or

(ii) a Class III device, or an accessory to such a device;

(b) on and after 26th May 2023 (or on and after the operational date if later), in the case of a device classified in accordance with Schedule 9 as—

(i) a Class IIa device, or an accessory to such a device, or

(ii) a Class IIb device, or an accessory to such a device;

(c) on and after 26th May 2025”.

I could go on. [Hon. Members: “More!”] Okay, I will do a bit more, then. [Interruption.] Hon. Members are regretting that now. Sub-paragraph (d) states:

“(d) on and after the date which is 2 years after the operational date, in the case of a device considered to be a reusable device, or an accessory to such a device, in circumstances where it is required to bear the UDI carrier on the device or accessory itself.”

The proposed new regulation continues:

“(4) If the operational date is before 26th May 2020, regulations 7A and 21A cease to apply on the operational date in respect of a device or accessory to which Part VIII applies because regulation 4B(1) applies.

(5) Subject to paragraph (7), regulations 157 to 160 do not apply until the date which is 6 months after the operational date, unless the operational date is before 26th May 2022.”

I am sure that Members do not want to hear any more of that, so I am not going to read out the rest of the regulations, but there are another four commencement dates in proposed new regulation 4E alone, and they are subject to different exceptions and qualifications. At least another dozen regulations contain similar provisions. The Minister will be relieved to hear that I am not going to ask her to explain all those and how they relate to one another. I am conscious that we have limited time, so we would never be able to do that anyway, but how on earth can any business be expected to understand, adjust to and comply with all those different dates without a massively increased burden upon them? What support will be made available to businesses so they can be confident that they are complying with the rules correctly?

I feel the need to lie down after that, but I am going to continue and look at the specifics of the draft human medicines regulations. That statutory instrument relies on the power in section 8 of the European Union (Withdrawal) Act 2018 to amend the Human Medicines Regulations 2012 and modify the effect of the restated EU regulations to ensure that all aspects of retained EU law in relation to human medicines operate effectively and are not deficient after exit day as a result of the UK’s withdrawal from the EU.

Will the Minister confirm whether the Secretary of State intends to report back to Parliament on any amendments to existing HMRs after exit day? Will she outline the arrangements for collecting data, monitoring the effectiveness of the regulations and regularly reporting? Will she confirm what bodies will be able to scrutinise performance and delivery, and what assessment has been made of their capacity to take on that additional work?

On pharmacovigilance, in the event of no deal, the sharing of common systems and formal exchange and recognition of data submitted for regulatory activities between the UK and EU countries would cease, and the MHRA would have primary responsibility for the conduct and oversight of all pharmacovigilance activities. The Government’s impact assessment recognises that there will be administrative costs to businesses that need to provide that information to the MHRA. Does the Minister intend for the Department to help businesses with those increased costs, and does she have an estimate of what they might be?

On pharmacovigilance information, the draft regulations provide for reporting by the pharmaceutical industry of suspected adverse drug reactions associated with its medicinal products directly to the MHRA database rather than to the current EU database, which is known as the EudraVigilance database. Will the Minister confirm whether, in a no-deal scenario, the UK would be able to access the existing EudraVigilance database, which may be more detailed than the existing MHRA database of pharmacovigilance information?

On serious shortage powers, this contingency legislation enables regulations to be made to modify the application of the Human Medicines Regulations 2012 to deal with serious shortages of medicinal products, which, as we know, is a matter of great public interest. That would replace the regulation-making power in the European Communities Act 1972 for certain limited purposes and would ensure that Government continue to have the power to make temporary changes to the 2012 regulations in a no-deal scenario. That is a clear example of Ministers being given Henry VIII powers over many regulations if they think there is an urgent need because of shortages.

Does the Minister anticipate a doomsday scenario where it will be necessary to use those powers? Or is she saying, “There’s nothing to see here; we don’t anticipate any problems, but we are going to give ourselves these powers anyway”? Will she outline how the process will be handled if there are shortages and what scrutiny will be available for decisions made under it?

The draft regulations introduce a new targeted assessment route to incentivise novel medicines and biosimilars, which currently use one of the routes involved in the European regulatory network to receive a UK marketing authorisation, or MA, in the same timeframe as today. That involves changes to regulation 58 of the Human Medicines Regulations 2012 and to the Medicines (Products for Human Use) (Fees) Regulations 2016, and may also involve the implementation of further non-legislative changes in order to ensure the

“continued competitiveness of the UK market.”

Will the Minister outline what further non-legislative changes the Department intends to implement? Will she outline details of what the new target assessment route will look like in practice? What assessment has the Department made of the impact of introducing the new route, and how does the Minister propose that we will keep in step with, or ahead of, improvements as the EU makes them while we are in the process of exiting and after we exit?

The generics industry expressed concern in response to the Government’s consultation about whether the targeted assessment routes would be made available for generics. In response, the MHRA proposed to review that and work with industry to shorten the timings of UK national licensing of generics. Will the Minister clarify the timeframe for the review and outline any progress made towards its completion?

With regard to “legal presence”, the medical devices regulations ensure that a UK-based marketing authorisation holder, or MAH, and a UK-based qualified person for pharmacovigilance, or QPPV, will need to be in place for all medicines in the UK. Will the Minister outline how many QPPVs are in operation, what their remit is, what support and training they receive and what net funding they receive? Is the Minister confident that the UK-based QPPVs will immediately have the necessary access to safety data systems for medicines? Can she confirm what ongoing communications there will be between QPPVs based in the EU or EEA and new ones based in the UK? Is she concerned that the additional costs for the UK industry of having to establish domestic pharmacovigilance may make the UK less of a priority market?

Transitional provisions require UK MAHs and QPPVs to be in place within 21 months after exit, to allow time for business to comply. That is especially the case for the QPPV, which is a specialist role. Can the Minister outline the process in that 21-month period? The Government’s impact assessment notes that

“there would be a cost to industry in establishing a contact person, MAH and QPPV presence in the UK for those who do not already have a UK presence”.

Those costs include a direct cost to change an MAH to a UK MAH and to establish

“premises, familiarisation and administration for the interim contact person or MAH, and QPPV to comply with the new legal requirements, and labour costs for these representatives.”

Will the Minister confirm whether the Department intends to help to meet those costs, or will businesses, and ultimately patients and taxpayers, again pick up the tab? What safeguards will be in place, and what are the risks of having our own set of MAHs and QPPVs? Will they require their own insurance? Are there minimum levels of liability that they must be insured for? What is the risk of some random individual being set up as an MAH because there are not people with experience and knowledge available to take up the roles in the first place?

The medical devices regulations ensure that existing centrally authorised products that are currently licensed for the UK market through the EMA will continue to be licensed in the UK in a no-deal scenario. The regulations provide for all existing CAP MAs to automatically be converted into UK MAs, and issued with the UK MA number on exit date, unless the MAH indicates that it does not wish its MA to be converted in that manner. Will the Minister confirm what contingency planning she will undertake if an MAH declines to have its MA converted into a UK MA? Can she guarantee that, in such a scenario, patients will not miss out on medicinal products that are CAPs? Can she outline the cost implications for CAPs of having to supply a full set of data? What will she do if an MAH does not provide that data within one year of exit day?

With regard to packaging, the requirements placed on all actors in the UK supply chain from February this year regarding the safety features aspects in the falsified medicines directive will be removed by the human medicines regulations. Furthermore, this instrument ensures that there will be no obligations on the UK supply chain to affix the safety features or scan packs of medicines. In the interests of public safety, the Government have said that they will evaluate the options for a future UK falsified medicines framework, but ending falsified medicines monitoring without replacing it with a similar UK equivalent is a very serious matter that has clear patient safety implications. Quite simply, it will be harder for the UK to monitor fake medicines coming in from non-EU and EU countries. Will the Minister outline how she intends to resolve that matter as a priority?

The human medicines regulations will also introduce into UK law a new authorised activity as part of the existing wholesale dealer licence, enabling the importation of medicinal products from countries on a list. On exit day, that list will comprise all EU and EEA countries, but the list may change over time. Does the Minister not feel that Parliament should have oversight of those lists, or at least an ability to block or make additions or subtractions, particularly as they will allow medicinal imports?

As we have heard, the medical devices regulations also introduce a new RP-I role to allow wholesale dealers to import medicines from the EU and EEA on to the UK market. Can the Minister confirm how many RP-Is she expects there to be? How will they be trained and regulated? Who will they report to? What arrangements will there be for oversight and holding them to account, including taking legal action against them if there is a concern that they are not carrying out their duties effectively? How will complaints in relation to this new role be handled?

Moving on, the human medicines regulations will allow the recognition of prescriptions from an approved list of countries following EU exit. On exit day, the list will comprise all EEA and EU countries. For a prescription to be eligible, the prescriber must be of equivalent professional status to a profession that is eligible to prescribe in the UK. Will the Minister clarify how oversight will be maintained, to ensure that prescribers are indeed of a professional status equivalent to a profession that is eligible to prescribe in the UK? What will the arrangements be for collecting data and monitoring the effectiveness of these regulations, and how will errors be compensated?

Coming back to medicines, in the event of a no-deal Brexit, there are two possible scenarios for manufacturers marketing biological medicines in the UK. First, where the UK agrees with one or more countries to accept each other’s independent test certificates for biological medicines, it would mean little change from the current arrangements, except as agreed and set out in a formal mutual recognition agreement between the countries. What progress has the Minister made in drawing up the list of those countries with which the UK has an agreement in place, and how many countries does she anticipate the UK will have an agreement with by exit day, whenever that is?

Secondly, where there is no mutual recognition agreement in place, that scenario would involve the National Institute for Biological Standards and Control issuing UK certificates for batches of biological medicines used in this country. Where the batch is destined for use in both the UK and another country, if it has already received independent certification in a country that is on the UK’s approved country list, the NIBSC will take a public health risk-based approach to deciding whether to rely on a paper assessment of that certificate or to issue a UK certificate to carry out testing.

Will the Minister clarify what is meant by a public health risk-based approach in this context? Can she confirm whether the NIBSC has drawn up a clear set of guidelines by which staff will be making those decisions? If so, is she aware of whether staff have received suitable training in using those guidelines, and will she confirm whether the NIBSC is being given extra resources to manage the extra workload that that will require? Can she guarantee that there will be no time lag in making approvals after exit day?

Looking at the sale of medicines, we see that EU-based online sellers currently have to register, comply with relevant requirements and display an EU common logo linked to the competent authority in which they are based. These regulations remove the requirement for UK-based online sellers. Does the Minister not agree that removing that requirement for UK-based online sellers might make it harder to work out which sellers of medicines online are legitimate?

With regard to manufacturing and wholesale dealing, the current good manufacturing practice directive is preserved, with modifications to reflect the fact that the UK is no longer a member state, but with a regulation-making power for Ministers to modify the directive or replace it in the future. The power is also placed on the licensing authority to publish guidelines on good manufacturing practice and good distribution practice, while preserving the EU guidance in place immediately before exit day until it does so. Can the Minister confirm today that these guidelines will be ready on exit day?

I feel I need to sit down, but I have a few further concerns.

[Thangam Debbonaire]

My hon. Friend is attacking the detail of these statutory instruments with forensic attention, and I do not envy the Minister in trying to respond to all his many pertinent questions. Does he agree that his analysis of these draft instruments shows that we have been, at best, misled about how straightforward, simple and easy it would be to translate EU regulations, directives and laws into UK law, and also how easy it would be to scrutinise that process? It is important that hon. Members such as him undertake such scrutiny.

[Justin Madders]

I thank my hon. Friend for that helpful intervention. I feel that we could be a double act on the stage, but I am not sure that we would get many people in to watch us talking about these draft regulations. However, she makes a valid point. We have a lot of these problems because of the foolhardy decision to come out of the European Medicines Agency, which has created an unnecessary amount of work. There are serious questions to answer for those who portrayed leaving the EU as a straightforward matter, and who must now justify our having to interpret, debate and agree this absolute minefield of regulations at very short notice.

I will now talk a little about medical devices. You will be pleased to know that I do not have that much more to say, Mr Robertson; I am sure that the Minister is quite pleased about that as well. I will not go over the section 8 powers of the EU withdrawal Act, but they also apply to the draft medical devices regulations and modify the effects of the re-stated EU regulations, so the questions about reporting to Parliament, oversight and the collection and monitoring of data apply in that context, too.

I also have concerns about the conformity of devices, the expansion of registration requirements and data exchange. The Government announced their intention to continue to recognise, for a time-limited period, the CE mark on medical devices and in-vitro diagnostic devices that have demonstrated their conformity with EU regulatory requirements. Will the Minister clarify what is meant by a “time-limited period”, and what the arrangements will be once that period comes to an end? Will she also outline what assessment she has made of the impact of that on access to new devices?

Furthermore, in the event of no deal, UK-based notified bodies responsible for verifying medical devices will no longer be recognised by the EU, meaning that the devices that they have certified will no longer conform to the applicable EU directives after 29 March. What assessment has the Minister made of the impact of not being able to place those products on the market, and what are the Government’s contingency plans for that? While UK law will give UK-based notified bodies an ongoing legal status and will continue to recognise the validity of the certificates that they issued prior to 29 March 2019, those bodies will be unable to issue certificates for new products. What assessment has the Minister made of the impact of that on products being developed for the UK market?

With regard to registration requirements, in a no-deal scenario, all medical devices will need to be registered with the MHRA prior to being placed on the UK market. Where a device manufacturer is not established in the UK, the registration of a product with the MHRA will be undertaken by a “UK responsible person”, who will be established in the UK with a UK-registered address. That person, as the name suggests, will take responsibility for the product in the UK. Will the Minister confirm how many manufacturers will need to establish a UK responsible person? Will she also clarify the oversight and regulation arrangements for such persons? I note that the impact assessment says that it is uncertain how many people will have the necessary expertise to fulfil that role. Does the Minister have a plan for if enough suitable people do not come forward to be a responsible person?

The draft devices regulations also refer to an appropriate transitional period for people placing medical devices and IVDs on the UK market to comply with the new requirements. The transitional period will vary from between four and 12 months, depending on the risk category of the devices. Will the Minster clarify what the arrangements will be when that transition period comes to an end?

Regulations 76 to 133 of the draft human medicines regulations place a large number of obligations on manufacturers, and corresponding powers to the Secretary of State to require compliance. Who, in reality, will perform that role, and what additional resources will they be given to ensure compliance?

Finally, in a no-deal scenario, the UK will no longer have access to EU data systems, including Eudamed, the European databank on medical devices. These systems are vital for data exchange, facilitating the exchange of information between notified bodies, national competent authorities and the European Commission. The MHRA is building an electronic system that expands on the current registrations database, which the Government say will mirror, as far as possible, the Eudamed requirements. Will the Minister confirm that the new electronic system being built by the MHRA will be operational by exit day? What are the additional costs and where is the funding coming from? Will she outline which aspects of the new database will not mirror Eudamed, and what steps are being taken to mitigate that?

Members will be pleased to hear that I have come to the end of my contribution. I appreciate that I have raised a significant number of questions, and it may not be possible for the Minister to answer them all in the time we have, particularly as we also have to hear from the SNP spokesperson, the hon. Member for Central Ayrshire. The amount of material I have gone through today demonstrates without question why this process is so wholly inadequate for dealing with such important and complicated issues. There are many important questions about the impact on businesses, patients and the taxpayer. We really deserve a better attempt at this than that we have seen today.

Hospitality Sector: Tipping

Debate between Justin Madders and Thangam Debbonaire

Wednesday 7th March 2018 Westminster Hall

[Justin Madders]

My hon. Friend is absolutely right. That practice is common in petrol stations as well, when people drive off without paying. It is not something that should be visited on the employees, some of the lowest-paid people in our country. It is not right or fair that they should be penalised for something that is entirely out of their control. There are other things the employee cannot control: what if the customer has a complaint about the food, which has been prepared by someone else, and does not leave a tip? What if they have had to wait a long time before being seated? They might be in a bad mood anyway and just not feel like giving a tip.

Those are all vagaries that can affect whether a tip is given at all, but they should not be used to undermine the lawfully agreed pay rate, potentially breaching minimum wage regulations. I accept, as my hon. Friend the Member for Bristol North West said, that it is quite difficult to reach a calculation and know whether the regulations have been breached, but it is certainly possible.

I have heard it said that some employees can end up paying more to their employer in tips than they actually earn in wages for their shift. Does that not tell us something about how this system is completely out of kilter? Conversely, if they do not receive enough tips, they can have money physically taken from them, possibly taking their pay below the minimum wage—albeit maybe not across the whole reference period, but certainly for that particular day—which could leave them out of pocket altogether.

There are other challenges like that, in the hospitality sector in particular. The practice of cancelling shifts at short notice can also lead to people being out of pocket. What kind of country do we live in if somebody can pay for their childcare and their transport to work, only to get to work to be told that they are not needed and can go straight back home again? That is not acceptable.

The blunt truth is that this and many other arrangements in some areas of the hospitality industry are just a scam. They are a device to increase profits at the expense of workers. That is part of a wider problem in that this sector and others seem to treat workers, especially young people, as a disposable commodity. This industry has always involved a fair amount of casual work, but there are companies out there that seem to predicate their business model on exploiting their staff. I believe this is part of a wider trend, which has crept into our economy over the last few years, that work is now insecure and exploitative, and it is not the cornerstone it once was to enable people to build their lives.

That culture has led to an explosion of zero-hours contracts: it says that anybody wanting to become a nurse has to pay £9,000 a year for the privilege of working on the ward and allows an employer to pay less than the minimum wage by calling a job an apprenticeship. It is a culture in which the only way to get into some roles is to take an unpaid internship, which can last for months and have no guarantee of a job at the end. It is a culture that classes more and more jobs as self-employed, thereby avoiding a range of employment rights. It is a culture in which mass redundancies are met with a shrug by those with the power to do something about it.

[Thangam Debbonaire (Bristol West) (Lab)]

My hon. Friend is eloquently explaining some of the ways in which risk is being transferred from the most powerful in the equation to the least powerful. Does he agree that those are all specific examples of how big employers—and sometimes, unfortunately, small employers—can use all sorts of different methods to transfer the risk away from themselves while keeping the rewards?

[Justin Madders]

A whole industry has built up over recent years that involves the chipping away of what were once long-established principles in this country—part of the social contract of our society. It is prevalent in sectors in which collective bargaining is not prevalent, so I say to anyone in this industry or any other to join a trade union, because unions are their best chance of getting protection in the workplace.

We need to end the destructive combination of weak employment rights, greedy bosses and a complicit Government who are leading us in a race to the bottom—a race that will leave us all the poorer. If reports that up to half of all jobs will be lost to automation in the next decade are correct, we need a complete change in the way the Government view work.

We will have to undertake a massive, state-sponsored exercise to reskill our workforce and to develop a culture in this country that says education and redeployment will run through people’s lives. Three, four or five career changes will be the norm; at the moment, we see three, four or five job changes each year. There is no permanence. The state and employers should invest in individuals throughout their adult lives, reward effort with stability and let people have the confidence that they are getting a fair day’s pay for a fair day’s work.

There are many other ways an employer can take money out of their employees’ pockets or get them to work for free: uniform costs, cutting breaks or even stopping pay when the restaurant or bar shuts and expecting staff to work an extra hour or two to clean the establishment. Those are all different ruses and different ways of exploiting people. Expectations are so low, especially among the young, that people do not expect to be treated any better. It is time we offered a better vision and a bit of hope, so that people do not see this way of working as inevitable. I believe we can do better.