Enterprise Bill [Lords]

Debate between Kevin Brennan and Richard Fuller

Tuesday 8th March 2016 Commons Chamber

[Kevin Brennan]

There was a time when what Ministers said on the Floor of the House could be accepted, and I am prepared to accept that the Minister is sincere in what she has said. In fact, I am not sure that she said quite what my hon. Friend says she said. I think that she actually said that it could affect a small number of people on £25,000. However, I think that my hon. Friend is echoing what one of the Minister’s Treasury colleagues had said earlier. If I am not mistaken, the current Minister for Employment, the right hon. Member for Witham (Priti Patel), when referring to what would be in the Conservative party’s manifesto, said that the proposal would not affect anybody earning less than £27,000 a year. We have therefore taken her words, given as a promise from a Minister of the Crown, and put them into an amendment in order to hold the Government to their word. The fact that this Minister was not prepared to repeat that in those terms when she spoke on Second Reading can perhaps be explained by the Government’s refusal to support our very reasonable amendment.

[Richard Fuller]

Following the hon. Gentleman’s deliberations in Committee, and from his own analysis—obviously we are looking in the round at public expenditure on exit payments—can he advise the House on what proportion of that expenditure in, say, the last five years was for people earning less than £27,000, and what proportion was for people earning over £100,000?

[Kevin Brennan]

I do not have that figure to hand, but we did probe the Government to try to get some idea of what calculations they had made of the impact on people earning less than £27,000 a year. I am afraid we have not been able to elicit a great deal of information from them on that subject, other than that they think it would be rare for those people to be affected. If it is that rare—I will come to this in a moment—why do the Government not accept our amendment, because it will not actually cost them much?

[Richard Fuller]

The hon. Gentleman makes a fair point. In the absence of data, he has his good judgment and his reasonableness, following his many years in government before 2010. Do his instincts not say that the majority of people will be earning in excess of £100,000? That really is the target of what the Government propose, is it not?

[Kevin Brennan]

That is what the Government say the target is. As the hon. Gentleman knows, I respect him greatly for his independence of mind and thought, and for his intellect on these matters. As I said at the outset, if abuses are going on in relation to public sector exit payments, we are perfectly willing to say they should be stopped, but we need to look at what the clause actually does. It picks the figure of £95,000 to generate a headline saying that the Bill will stop fat-cat public sector exit payments of more than £100,000. However, what it does not elucidate very well is that that £95,000 is not just a cash lump sum, but includes the so-called strain payments that are paid into workers’ pension funds when they are forced into redundancy before retirement age. That is money they will never get in their pockets—they are not walking away with £95,000. They are not fat cats earning more than £100,000, and some are on relatively modest incomes. The Bill will also capture many people in the private sector, which the Government were also not keen to elucidate on.

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[Kevin Brennan]

My only assumption is that they think fat cats should not have holidays. That is probably why they thought it did not matter that there was only a four-week consultation. That is what they think of the people they were supposed to be consulting. The rhetoric used by the Government is shameful; the contemptuous, short nature of the consultation is shameful; and the way in which the policy has been introduced overall can only be described as shameful.

We are concerned about the Government’s reluctance to make the necessary exemptions to ensure that the unfortunate few—that is what the Government tell us they are: a few—are not disproportionately affected. If the low paid and average paid are affected only in rare circumstances, excluding them from the cap will not result in the Government losing a great deal of money, so what is the problem in exempting them?

[Richard Fuller]

I am listening intently to the hon. Gentleman. I was in the Committee, and I am wondering whether there may be a flaw in his argument—no pun intended. If we put the floor in at £27,000, what about the person at £28,000? How would we distinguish between the different groups? Is it not better to set a limit to the payment that is made and to be blind on the income that someone gets up to that limit?

[Kevin Brennan]

I understand the point the hon. Gentleman is making. That would be all right if it was truly a payment that people were going to get in their pocket. The reason these people are captured, however, is that the figure includes the so-called strain payments that are made into the pension fund if they are made redundant before their normal retirement age. That is the unfairness, and that is the reason why, I presume, that the former Treasury Minister said that no one on under £27,000 should be affected. The Opposition have simply taken what the Government originally said their intention was, as elucidated by a Minister of Her Majesty’s Treasury, and put it in our amendment to test why the Government are not acting on what was said.

On Report in the Lords, Baroness Neville-Rolfe indicated that a drop of £500 would not be disproportionate for someone previously entitled to a pension of £12,500—the implication is that there could be a fall in the pension paid ultimately. All I would say is that a 4% drop in income for somebody on a relatively small income—it is lower, after all, than what one would receive on the minimum wage—would be highly significant on that low income. To say that a 4% cut is not significant is hugely out of touch with the reality of many people’s lives.

The Government’s case is that a leaving payment of £95,000 or above is a large amount for any employee, but they are perpetrating the myth that people will actually receive that money. Employees on low to average incomes will never see a large amount, because the payment includes compensation paid to the pension scheme. In fact, some of them will never even receive their pension, so they will never see that money in any way, shape or form.

The cap includes strain payments, and the pension shortfall is adjusted at the time of redundancy. Strain payments could make up a considerable amount of the £95,000. If so, long-serving, loyal workers could finish work with a significant shortfall in the amount that should have been allocated to them to deal with redundancy, unemployment and uncertainty. They will be left with little in their redundancy payment to pay for annuities to provide long-term security. I do not think that was the Government’s original intention, but the fact that they have refused to respond to the concern makes me wonder whether I am right about that.

We have been told that the Chancellor has withdrawn his pensions proposals, which would have raised £10 billion to pay down the deficit. In other words, he has moved swiftly so as not to offend better-off pensioners who might have been hit by the proposals. Why, then, will the Government not turn their hand to those who earn less than £27,000 a year, whose redundancy and access to a pension are threatened by the exit payment cap? The Chancellor has famously said that we are all in this together and that those with the broadest shoulders should bear the biggest burden, so the Government have a chance to prove that by supporting our amendment 15, which is, after all, based on their own words.

Amendment 16 would exclude from the provision employees of the companies listed in new schedule 1, which are operated by the private sector. Those who would be affected are principally employees of companies across the nuclear estate and elsewhere in the private sector, such as Magnox. Why are they affected by a measure that the Secretary of State told us on Second Reading is designed to hit “public sector fat cats”? According to the Secretary of State, Magnox workers who work in the private sector are “public sector fat cats”.

Education Bill

Debate between Kevin Brennan and Richard Fuller

Monday 14th November 2011 Commons Chamber

[Richard Fuller]

On the hon. Gentleman’s observations on Lords amendments regarding schools admissions policies, one of the objections put about by some of those who oppose free schools and academies is their fear that admissions policies will somehow be discriminatory. Will the hon. Gentleman take this opportunity to confirm that the amendments suggested by the Lords put to bed that lie?

[Kevin Brennan]

The Government made it clear during the Commons stage that they wished the academies to be subject to the admissions code. We welcomed that at the time and I am happy to welcome it now, because any state school should have a fair admissions policy. Any school funded by the taxpayer should admit pupils on a fair basis in accordance with the code. We therefore welcome the extension of the code to academies and the clarification of that by the Government, rather than relying on funding agreements in order to achieve that.

One of the innovations of the Bill that we debated is the change to the powers of the schools adjudicator. Currently, when an admissions authority is found to be in breach of the code, the adjudicator can rectify any flaws with immediate effect, but following the passage of the Bill, the adjudicator will be able to make only “binding” decisions, which the admissions authority will be obliged to implement. Ministers have already made it clear that the purpose of that change is to emphasise the importance of schools taking responsibility for their own actions, but it should not allow them the scope to avoid those responsibilities or to frustrate parents who have made a successful complaint and have a legitimate expectation that matters will be put right promptly.

The draft version of the admissions code was pretty clear. Paragraph 3.1 stated:

“The admission authority must revise their admission arrangements immediately to give effect to the Adjudicator’s decision.”

That was the original version of the code issued by the Minister, which was pretty clear and unambiguous, as it should be. However, I was dismayed to read in the revised version of the draft code, published 10 days ago, that paragraph 3.1 has been changed. It now states:

“The admission authority must where necessary revise their admission arrangements as quickly as possible and no later than 15 April following the decisions (i.e. the deadline for determination of admission arrangements) to give effect to the Adjudicator’s decision.”

It is not clear from reading out those two sentences, but there is an important difference in their visual presentation. In the first sentence the word “must” is rendered in bold, whereas in the second sentence it is in plain text and “15 April” appears in bold. The proper sense of urgency and compulsion seems to have been replaced by one of contingency and delay. Although the second sentence states “as quickly as possible”, which is a weaker statement, the eye is drawn to “15 April”. Bearing in mind that the deadline for objections has been brought forward by a month to 30 June—a sensible change that we support—that means that there could be a delay of 10 months or more before a decision is implemented, which is simply unacceptable.

It is not necessarily for the legislation or the new code to undermine the effectiveness of the office of the adjudicator in a wholly unnecessary attempt to provide for circumstances that have not proved problematic under previous arrangements, so our amendment would put it beyond doubt that, where changes are required in response to valid objections, they must be implemented in time to benefit those who made them.

On constituting governing bodies, to which the Minister referred, it might be helpful if he offered some clarification. Our amendment was intended to make it absolutely clear what the Government’s amendments mean in relation to staff on governing bodies. In Committee, the Minister said:

“I am cautious about prescribing centrally the basis on which governing bodies should appoint people.”––[Official Report, Education Public Bill Committee, 31 March 2011; c. 811.]

Having had time to consider the matter, the Government and the Minister appear to have changed their minds completely. If that is the case, we welcome it. Will the Minister confirm that he now thinks that more than one member of staff could be a member of a governing body, which might help us in relation to our amendment? If he does so now, he might not need to later.

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[Richard Fuller]

I appreciate the opportunity to speak to the Lords amendments. I welcome the fact that in their lordships’ overall assessment, the main thrust of the Bill should pass through to Royal Assent. It is most welcome that the core objectives of what the Government are trying to achieve will make it into law. That will be welcomed in rural constituencies, as my hon. Friend the Member for South West Norfolk (Elizabeth Truss) mentioned, and in others. However, the Lords have made some suggestions, which my hon. Friend the Minister indicated that the Government would support. I would like to draw his attention to a couple of those suggestions with which I concur wholeheartedly, and others with which I concur partly.

My first point is about the Lords’ reinstatement of the duty on schools to co-operate with local authorities, which is specifically related to the well-being of children. That relates to the broader issue of how the new schools that are envisaged, and the ones that are already in place across the country, will co-operate with local authorities. Much attention has been given in the Bill’s earlier stages in the Commons to the responsibilities of schools with regard to local authorities, but as my hon. Friend the Minister knows, I often look at the matter through the other end of the lens and ask what is the responsibility of the local authority to co-operate with our schools.

I, and I think many Government Members, hoped that when the noble Lords considered that duty to co-operate, they might send the Bill back to this House with amendments that were somewhat more creative than simply placing into the Bill the original duty as it already stands.

Throughout our country, we are seeing a radical change in the relationship between local authorities and schools. Schools are gathering greater freedoms to operate independently. Those relate to not only financial status, but areas of operations, one of the most important being admissions policies, which I will come to. That liberalisation of the market for schools—if I can call it a market for schools—is very welcome, but as a consequence of those freedoms, new issues come up, such as how schools work together on behalf of their local community, and how in doing so, both as individual schools, in pyramids of schools or chain academies, they interact with local authorities, which are the democratically elected bodies in those areas.

In many cases, those relationships have been conducted positively in the past, but there is sometimes a contradiction between the schools’ best interests and those of local authorities. In that respect, it is a shame that the noble Lords have not sought to move the debate on the duty to co-operate forward to take us to the next stage of understanding. When the control over the education of our children is in the hands of such independent bodies, what will be the duty to co-operate between local authorities and schools?

[Kevin Brennan]

Does the hon. Gentleman agree that the duty to co-operate is not about the interests of schools or local authorities, but about the paramount interests of the child, which remain whatever school structures this Government put in place?

[Richard Fuller]

The hon. Gentleman is, as he has been throughout this process, a source of extreme insight and has expanded my knowledge. He is absolutely right that that is the key aspect. As he knows from deliberations in Committee, all Members on both sides of the House have sought to achieve that.

To the extent that it is not the structure that matters but the education of children, the hon. Gentleman is correct. However, the Bill is not a nudge along for the structure of our educational institutions but a more substantial change. I am therefore expressing the retrospective wish that their noble Lords had been somewhat more adventurous in defining some of the new scopes for duties to co-operate in their amendments. Had they done so, the goal of focusing on the education of our children, which the hon. Gentleman and I share with other hon. Members, including the Minister, could have been moved forward a little. My current concern is that there could be turf battles about who is responsible for what in the duty to co-operate.