Employment Rights Bill

Kevin Hollinrake Excerpts

2nd reading
Monday 21st October 2024 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House notes the balanced reforms made by previous Conservative governments to improve workers’ rights, including the National Living Wage, the prohibition of the use of exclusivity clauses or terms in zero hours contracts and the introduction of shared parental leave and pay, and declines to give a Second Reading to the Employment Rights Bill because it has been rushed into Parliament without full consultation to meet an arbitrary 100-day deadline and Monday 21 October 2024 Business Today: Chamber 19 has not been accompanied by an Impact Assessment considering the impact on the Employment Tribunal, especially as a result of the removal of the qualifying period for the right to claim unfair dismissal or the impact of the extra red tape on SMEs or the impact of establishing the Fair Work Agency; because the repeal of trade union laws will lead to more strikes and intimidation in the workplace, and will force taxpayers to foot the bill for inflation-busting pay hikes without public service reform; because the Bill undermines choice for workers about whether they want to fund political campaigning and forces firms and public bodies to bankroll more trade union facility time, including trade union diversity jobs; and because the Bill is contrary to the Government’s stated goals of improving productivity and economic growth and will increase costs for businesses and consumers.”

The Conservative party will always be the party of business, but we are pro-business and pro-worker, not least because many Conservative Members have been both workers and people who have started and grown their own businesses. Those who have done so are the first to appreciate the symbiotic relationship between the two. We acted during our time in office to improve workers’ rights in several areas: flexible working, parental leave, redundancy protections, ensuring that workers keep the tips left for them by their customers, and significant increases to the national living wage.

I started my first significant business back in 1992. Over three decades, we grew to become a national business employing hundreds of people. We valued every one of those people. We were one of The Sunday Times’s best 100 companies to work for and were certified by Investors in People. I believe that business is a force for good and that businesspeople do great service to our communities and the wider economy. As Winston Churchill put it, they are the strong horse that pulls the whole cart.

The question I now ask myself is whether I would start that small business again today if the Bill were in place. Sadly, the answer is probably no—certainly not a business that employed any people. The very high cost of these measures will be borne by all companies and passed on in the form of higher prices, reduced wages and lost jobs. The measures will fall most heavily on small businesses, for which they could be existential.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the hon. Member remember 1997 and 1998, when the Conservative party said that the social chapter and the national minimum wage would cost half a million jobs? In the late 1990s, half a million jobs were actually created.

[Kevin Hollinrake]

I was not here at the time, but it is clear nevertheless that the minimum wage and the national living wage have had a positive effect on prosperity in this country, and I would be the first to admit it. I want the hon. Lady, and other Government Members, to understand that those measures fell equally on all businesses across the UK. The measures in this Bill fall disproportionately hard on small businesses.

What the right hon. Member for Ashton-under-Lyne (Angela Rayner) fails to understand is that the implication of these measures, such as a day one right to an employment tribunal, is that even a spurious case of unfair dismissal costs time and money. It is potentially tens of thousands of pounds to defend that case. As one business organisation put it, “You lose when you are accused.” Most small businesses saddled with such a cost would be sunk without trace. It is not just that, but the deterrent effect, which it would have had on me, and which will be felt right across the economy and by every existing and aspirant business person across this entire nation. When the Deputy Prime Minister reflects on what she is hearing from people who have actually run a business, will she at the very least consider exempting small and medium enterprises from this catastrophic Bill?

[Graham Stuart]

Like my hon. Friend, I started a business—I started mine a little earlier than him, but that is how much older I am. I followed the Deputy Prime Minister’s speech as carefully as I could. From what I could understand, because of the changes in the Bill, someone can fail to turn up to work on day one claiming that they are sick and then, because they will now have rights against unfair dismissal, they will be able, without ever doing a day’s work, to hold a small business to ransom and put that business at risk.

[Kevin Hollinrake]

As drafted, that is certainly the case. My right hon. Friend is absolutely right. Members may not know that small businesses stand the cost of statutory sick pay. It is not reimbursed by the Government, so the Bill would have a significant cost for businesses.

[Several hon. Members rose—]

[Kevin Hollinrake]

I am happy to give way to the hon. Member for Leeds East.

[Richard Burgon (Leeds East) (Ind)]

I have listened with interest to what the shadow Minister is saying about people being entitled to go all the way to an employment tribunal hearing from the moment they take up employment. Has he ever heard of pre-hearing reviews for employment tribunals?

[Kevin Hollinrake]

The point I was making is that the case may go all the way to an employment tribunal, as the hon. Gentleman knows, but there would also be the cost of defending the case even if it does not. That small business will have to bring consultants in and will have to speak to lawyers. That itself costs money, and in many cases that will be thousands of pounds. That is what the hon. Member fails to understand: when you are accused, you lose.

[Several hon. Members rose—]

[Kevin Hollinrake]

No, I will make a little progress. The cost of all these measures—in individual opportunities and to the wider economy—is huge. The Government may try to deny that, despite their clear lack of experience of the real world of business. It is extremely alarming that not one of those on the Front Bench today have ever started or run a business that employed anyone. Even worse than that, only one member of the Cabinet has ever done so, and that is the Secretary of State for Scotland.

Shamefully, given what is at stake, the Government cannot deny our case that the Bill will have a huge economic cost, because today—finally, two hours before this debate—they have actually produced the impact assessments. The cost of the Bill is on the very first page: up to £5 billion per annum. The word “uncertain” appears 302 times in those impact assessments, and the word “risk” is used 432 times, so the cost is likely to be much more.

[Paula Barker]

The shadow Minister has just said that shamefully there is only one person on our Front Bench who has run a business. How many of his Front-Bench team are trade union members?

--- Later in debate ---

[Kevin Hollinrake]

I am not a trade union member, and I would not know about my colleagues, but I started a business, as did my hon. Friend the Member for South Suffolk (James Cartlidge), as did the shadow Chancellor and as did many others in our party. We are proud of that fact.

This morning I met business representatives covering all parts of the British economy. Like us, they have serious reservations about this Bill. The Institute of Directors highlighted the fact that 57% of its members will be less likely to hire staff, with only 2% saying that would be more likely. The Confederation of British Industry said that the costs associated with this Bill cannot be afforded by 54% of businesses.

[Jim Shannon (Strangford) (DUP)]

This legislation applies to England and not Northern Ireland, but I echo the hon. Gentleman’s concerns. I am concerned about small and medium businesses that employ a small workforce. If one or two of them have a long-term illness, they may be off for a while, come back to work and then go off for a while. Is there not a need—I look to the Deputy Prime Minister—for a methodology whereby small businesses can employ someone in the short term for those positions, otherwise they will go to the wall?

[Kevin Hollinrake]

I agree. I was interested that the Deputy Prime Minister said that her menopause measures would be exclusive to large businesses. I welcome that, and I ask her to look at attaching the same conditions, ideally, to the entire Bill, but if not to certain parts of it. The risks for small businesses are simply catastrophic. Even one or two cases could completely sink a business.

[Dr Luke Evans]

When it comes to risk, is my hon. Friend concerned about the timing of this legislation if, as reported, the Budget raises national insurance for those businesses? Is that yet another risk in addition to this legislation?

[Kevin Hollinrake]

My hon. Friend is right. This morning we met representatives from UKHospitality, who said exactly that: the Bill is coming on the back of a number of changes and some difficult times during covid for industries that employ a lot of people, which will be particularly badly affected by this legislation. The Government should think twice about implementing it at this moment in time.

[Sir Edward Leigh (Gainsborough) (Con)]

My hon. Friend mentioned the 302 mentions of uncertainty. It is hard to know how that can foster growth. Let us be honest: businesses are already more highly taxed and regulated than ever before. We all know the reason—the pandemic— and we have to take responsibility for that. Will he assure me that, as a party, we will use this period of opposition to once again proclaim our values as a low-tax, deregulated economy? Otherwise, how will we foster growth in an increasingly competitive world? If we tax businesses more, we simply lay the foundation of a future Labour Government.

[Kevin Hollinrake]

I agree. We should be low tax and low regulation. One of the saving graces of this legislation is the detail, although the Bill itself is light on detail: many of the measures will be brought in through secondary legislation, therefore making it easier for a future Government to reverse some of the catastrophic changes.

[Several hon. Members rose—]

[Kevin Hollinrake]

I will make some progress. The Government’s own impact assessment acknowledges that the measures will mean price rises for consumers and job losses. In it, 40% of firms surveyed said that prices would go up, and 17% said that they will reduce the number of employees. That is hundreds of thousands of jobs at risk.

The criticism of the Bill does not stop there. The Institute for Fiscal Studies has warned that it risks lower employment rates and lower wages for employees. The Local Government Chronicle has warned that the Bill will place financial pressure on councils. The Recruitment and Employment Confederation has said that the Bill will fuel long and complex litigation. The Financial Times has warned that the Bill is causing deep unease among business leaders. In short, jobs down, wages down and prices up.

In their failed attempt to allays concerns about the Bill, the Deputy Prime Minister and the shadow Business Secretary have stated that they have consulted businesses—

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

You are the shadow Business Secretary.

[Kevin Hollinrake]

Sorry, though I think the Prime Minister is guilty of similar; I do apologise. The Deputy Prime Minister and the Business Secretary have stated that they have consulted businesses. Really? The Federation of Small Businesses said not only that the Bill will

“inevitably deter small employers from taking on new people”,

but that it is a

“rushed job, clumsy, chaotic and poorly planned”

and that the Government are guilty of shallow engagement. So much for the “strong horse”. Several representatives at this morning’s meeting said that they have been talked to but not listened to—including those representing the hospitality and retails sectors some of the most labour-intensive in our economy, which is acknowledged in the impact assessment.

[Kit Malthouse]

Alongside the many negatives relating to the Bill that my hon. Friend has laid out, does he recognise the strong possibility that, particularly in small and micro businesses, the legislation could inject quite significant resentment among the staff body itself? For example, just to amplify my previous point, if you have six members of staff and three of them apply for flexible working, that has an immediate impact on those who do not have flexible working. The ability of the business to offer flexible working to future workers is also reduced, which turns the whole thing into a massive negotiation between six or seven people. That could have a significant impact on morale and sense of fair play within businesses themselves.

[Kevin Hollinrake]

My right hon. Friend is absolutely right. There speaks somebody who has actually run a business and understands the impact on a small employer. That is why we say there should be a carve-out, certainly for small and micro businesses.

We have to ask ourselves this: if the Government are not listening to businesses who “pull the whole cart”, who are they listening to? I think we all know the answer to that. A consultation is not five minutes inside No. 10 and a photo opportunity. Proper consultation is working with business, listening, taking your time and not rushing things—the exact opposite of what the Government have done. We know why that is. The Deputy Prime Minister made a misguided promise to Labour’s trade union paymasters that legislation would be introduced within 100 days. Despite 100 days of gloom and doom, talking the economy down and wrecking business confidence, they managed it—just.

The Government are not even listening to their own legal experts. Only last week the Attorney General said:

“excessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation, upsets the proper balance between Parliament and the executive.”

Because the Bill is such a rushed job, it takes swathes of delegated powers, including Henry VIII powers, meaning the final policy will be decided later at the Secretary of State’s whim—not now by Parliament. Legislating that way is causing real concerns for businesses today. The Deputy Prime Minister and her colleagues preach stability, yet in the same breath they are causing instability, uncertainty and falling confidence at a cost of jobs and investment today. There are already 58,000 fewer payroll jobs than when Labour took office. Confidence levels at the Institute of Directors on future investment intentions have dropped from plus 30 in June to minus six today. The Government are planning 30 consultations on the measures in the Bill. They should have taken place before the Bill was introduced, so the legislation could be precise about what it will do.

[Saqib Bhatti]

I thank the shadow Secretary of State for giving way. He talks about trade unions. I have just seen a news update on the Unite union’s Birmingham hotel and conference centre being investigated by the Serious Fraud Office. The total cost was £112 million, but it has now been valued at £29 million. Who will hold the trade unions to account in the Bill?

[Kevin Hollinrake]

My hon. Friend makes a strong point. That certainly needs looking at very carefully.

As the Government’s attempt at business consultation has clearly failed, and as no one on their Front Bench has any business experience, I will draw the right hon. Lady a picture of what the Bill actually means for businesses.

[Mr Richard Quigley (Isle of Wight West) (Lab)]

As the owner of two successful small businesses—[Interruption.] I know Opposition Members like to do that—it’s pantomime—but they can listen. As the owner of two successful small businesses and an employer of 25 people in the hospitality sector, I welcome the Bill. Do Opposition Members agree that the main reason they are against this groundbreaking employment Bill is because they are embarrassed about their own record over the past 14 years?

[Kevin Hollinrake]

I welcome the fact that there is at least some business experience on the Government Benches. Perhaps the hon. Gentleman joined the wrong party.

The hon. Gentleman will recognise the picture of what the Bill means for businesses. They will be terrified to take new people on for fear of huge compliance costs and legal action. They will be tied up in red tape, something that the Prime Minister said he was taking an axe to. They will have to cope with measures such as the need to frequently recalculate all workers’ hours for each reference period for each separate employee, each of which will have a unique date as they will be required to proactively offer guaranteed hours. This is not even restricted to those on zero-hours contracts. It will be for anyone on low hours—a bureaucratic nightmare. They will have to deal with a new right to demand flexible working, such as a four-day week. The right hon. Member for Islington North (Jeremy Corbyn) must be proud. Businesses will have to become the free speech police to prevent any of their customers offending their staff. They will have to deal with a new regulator, the fair work agency, which will have the power to enter any business premises, confiscate documents and levy fines—all backed up by new criminal offences with penalties of up to two years in jail.

[Emily Darlington (Milton Keynes Central) (Lab)]

As someone who has started and run a business, I should like to know the hon. Gentleman’s opinion of the views of the former Business Secretary, the right hon. Member for North West Essex (Mrs Badenoch), that the minimum wage is a burden, that statutory maternity pay is excessive, and that equal pay protection in respect of race and disability is akin to segregation policies in South Africa—or does he want to distance his party from her comments?

[Kevin Hollinrake]

That is not what my right hon. Friend said at all. I worked with her when she was Business Secretary, and at no point did she ever say that about maternity pay. She was talking about regulation costs. She was simply pointing out that for many businesses, particularly in retail and hospitality, the rise in the national living wage has been very difficult to cope with. She was not talking about abolishing it. Businesses will have to deal with new union powers to gain access to any business premises and contact its staff—wonderful!—in order to recruit and organise members and make it much, much easier for a union to gain recognition. As the impact assessments state—this is great news; this will really cheer everyone up—there will be “increased industrial action” and tax rises to pay for increased pay demands. [Interruption.] That is what the Government’s impact assessments say. Labour Members should check their impact assessments. 1970s, here we come! There is much more, but in short, it all means that the tail will be wagging the dog.

[Nigel Huddleston (Droitwich and Evesham) (Con)]

I am sure that my hon. Friend will be aware of the history of Labour Governments since the second world war. Every single one of them has left office with employment higher than it was when they started. Is he concerned about the possibility that this Government will repeat the same mistakes, especially given their lack of business awareness and understanding of the private sector?

[Kevin Hollinrake]

I am very concerned about that. Today there are 4 million more jobs in our economy than there were in 2010, and 1.2 million fewer people are unemployed. I am very worried about the things that my hon. Friend is very worried about.

Making work pay is a laudable aim, but as one stakeholder put it this morning,

“work doesn’t pay if there’s no work”.

Most people recognise that one of the reasons why the UK is the third most popular destination in the world for inward investment, which creates hundreds of thousands of jobs throughout the economy, is the flexible labour market that the Government are now seeking to eliminate. Do the Deputy Prime Minister and her Cabinet colleagues realise that? Perhaps they secretly do, given that nine out of 10 of those Cabinet colleagues recruit on terms that are at odds with these new regulations. Sixteen Cabinet Ministers, including the Chancellor, the Foreign Secretary, the Home Secretary and the Energy Secretary, have hired people for roles that involve working outside regular hours and at weekends; six Cabinet Ministers have hired people to roles with extended probation periods; and seven Cabinet Ministers, including the Chief Secretary to the Treasury and the Deputy Prime Minister, have hired on “insecure” fixed-term contracts. Why would they introduce legislation that they do not understand or even comply with themselves? The answer is, of course, their union paymasters.

Much like the more than 200 Labour MPs who have taken trade union cash, the Deputy Prime Minister has her donations to think of. She declared her interests as a union member, but she did not declare her interests as someone who had taken £13,000 from unions in donations. The question of what is orderly is up to your judgment, Madam Deputy Speaker, but it seems to me that that should be declared at the start of any Member’s contribution.

This is not an Employment Rights Bill, but a trade union charter—a charter that will bring about no-knock warrants that allow unions to access all business premises, from the local takeaway to the local pub. Clearly, shutting the beer gardens is not enough for this Government; they are now relying on strike action to stop you getting a pint. Under this trade union charter, trade unions will revert to requiring people to opt out of donating to unions’ political funds. That will line Labour’s pockets with default donations from working people. This trade union charter will abolish the thresholds for strike action, unleashing waves of low-threshold strikes, and crippling public services by putting power in the hands of militant trade unions. This trade union charter will force employers to inform their staff that they can join a union at every turn. This trade union charter will reduce notice periods for strike action, meaning that businesses will be plagued by zero-warning strike action, which will unleash misery on the public at the last minute.

[Tom Hayes (Bournemouth East) (Lab)]

We have just had a general election. The Labour party won a historic majority on the basis of a manifesto that was pro-business, pro-worker and pro-growth. Through the Bill, we are bringing forward provisions that were sketched out in our manifesto. Why is the hon. Member choosing not to listen to the result of the election? In choosing to reject the provisions in the Bill, he is not learning from the result of the general election.

[Kevin Hollinrake]

We deserved to lose the election fair and square, but the hon. Gentleman should look at that result, because it was not a popular vote for Labour. The party’s popularity is dropping by the day, and the business confidence that we need to protect in this country is dropping by the day.

The Bill is a trade union charter. By repealing the Trade Union Act 2016, it will increase the number of strikes by 53%. It is a charter that will take Britain back to the 1970s—a stated goal of the Deputy Prime Minister. The public will pay the price not just through uncollected waste, dysfunctional local government and picket lines outside hospitals, as in the 1970s; they will be forced to pay through higher taxes—a fact that the Government have now admitted in the impact assessment, despite pledging not to increase taxes on working people.

At a time when the Government claim to be scrambling for cash and are taking the winter fuel payment from 9.5 million pensioners, they have the gall to drive up taxes to reward their trade union paymasters. That will be done not just through higher national insurance, a hike in fuel duty or whatever other punishing measures the Government choose, but through council tax. Because of the Government’s Corbyn-style collective bargaining for social care, councils will be required to stump up an additional £4.2 billion, or £150 per household.

The path that we took in government was pro-worker and pro-business. Whereas this Government put party first and country second, we worked in partnership with businesses and workers to deliver improvements without risking investment, unemployment and businesses going bust.

[Sonia Kumar (Dudley) (Lab)]

I just want to double-check: have you actually read the Bill? It talks about a consultation period with businesses, and the provisions will not be rolled out until 2026. There will be a probation period for certain businesses. We are pro-business, and maybe the shadow Minister should read the Bill properly.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We should not refer to other colleagues in the Chamber as “you”. It is quite simple.

[Kevin Hollinrake]

I wish the hon. Member for Dudley (Sonia Kumar) was with me for the hour I spent with the representatives of organisations this morning. They do not feel as she does—that there is nothing to see here and nothing to worry about. They are very concerned, and we should all be worried about that.

Through our approach, we doubled the minimum wage, boosted employment by 4 million, cut taxes on working people by £900, cut youth unemployment, slashed the employment rate and rolled out the biggest ever expansion of free childcare. Our approach recognised that by harming business, which is the strong horse that pulls the whole cart, we are harming workers—a fact that this Government have clearly failed to grasp. This Bill puts the cart firmly before the horse. For small businesses particularly, it creates an existential crisis of a magnitude not seen since the pandemic. The future of hundreds of thousands of business people and millions of jobs is in the Deputy Prime Minister’s hands. I urge her to think again, withdraw this legislation and listen carefully, not just to the unions but to the voice of business, before it is too late.

[Several hon. Members rose—]