Enterprise and Regulatory Reform Bill

Lord Monks Excerpts

Wednesday 14th November 2012 Lords Chamber

[Lord Monks]

My Lords, perhaps the first test of this or any Bill is whether it lives up to its hype. Will its espousal of enterprise inject some much needed dynamism into our struggling economy? Will it encourage long-term growth, as it claims it wants to do? With the interesting exception of the Green Investment Bank, the Bill falls well short of these objectives. It claims to be about enterprise, but its measures are unenterprising, small-scale and modest. Compare it for a moment, as my noble friend Lord Stevenson did, with the recent report of the noble Lord, Lord Heseltine. This started by recognising the stark truth, which I agree with, that we are in,

“the worst economic crisis of modern times”.

We are almost in a war situation. Whether you agree with it or not, that report is ambitious, urgent and seeks to draw some lessons for the UK from the more robust and successful economies on the other side of the North Sea. Importantly, it seeks to build on a national consensus on the way forward. I ask the Government whether this is not the right approach, rather than this modest Bill which fiddles around in so many areas and, I guess, in many cases to so little effect.

Apart from the Green Investment Bank, I welcome one aspect of the Bill: expanding the role of ACAS. It does a good job and can do even more. However, as my noble friend Lord Stevenson, the noble Lord, Lord Razzall, and the noble Baroness, Lady Brinton, among others said, will it have the resources to do the job at a time when nearly everybody is suffering from fewer resources? There could be some very long queues outside ACAS’s doors after this Bill goes through. Even that provision to strengthen ACAS is linked to a weakened entitlement for workers to claim unfair dismissal. That means that the workers’ influence at the conciliation stage will inevitably be weaker than perhaps in the present circumstances.

When we get to employment, this part of the Bill is based on what I regard as a rather tired mantra that reducing employment rights will lead to creating jobs. I and many people not just on this side of the House regard that as the low road to economic growth. It is not a road ever shown to have had any great success. The balance is to be tilted a bit more to employers and away from workers. Could we not have pointed the UK towards the high road to growth instead, towards more investment and fewer debt-ridden companies financially engineering to minimise tax payments and maximise dividends? We should look for more skills for higher productivity and better relationships at work. Instead, under a parallel Bill to which my noble friend Lord Morris referred, rights are to be marketised and sold on. I look forward to seeing a secondary market developing in due course, once the City of London wide boys get their hands on it.

The reality is that rights are under attack. Anyone now pursuing a claim of unfair dismissal has to cope with an increased qualifying period of two years. A possible deposit will be levied and, under this Bill, the scope for levying that deposit will be extended. There will be more freedom for employers to press for compromise agreements. I heard what the noble Baroness, Lady Brinton, said but this last measure is not that far from the no-fault dismissal provision of the Beecroft report, which was so excellently and expertly derided by the Secretary of State. I wonder whether he lost a battle on this provision.

I, like others, want to highlight Clause 61. As my noble friend Lord McKenzie said, this will reverse the Health and Safety at Work etc. Act 1974, which was an all-party measure in which the Conservatives were prominent, by the way. That Act allows claims from a worker for damages for breach of health and safety regulations. Instead, under this Bill, the worker will have to prove negligence so it will not be enough to prove the breach of the statutory obligations. In effect, the burden of proof shifts to the injured or damaged worker. The Government have claimed support for this idea from a recent review of health and safety regulation by Professor Löfstedt, but he did not recommend a blanket removal of employer liability from health and safety law and it really must not be alleged otherwise.

It has been said by many of your Lordships that there was no consultation on this provision. It was sprung at a late stage in the Commons and its promoters apparently include the insurance industry. In the opinion of quite a few lawyers who are looking at this, it turns the clock on health and safety back to 1898. Through our nation’s story, we know that it took tough legislation from this House and determined politicians to improve the appalling health and safety practices of the 19th century. That is what is now being weakened. This small clause cannot be underestimated. The Government are sending out a message that they are easing up on health and safety. That is not a good message. I hope that this House will challenge it and remind the Government that such a weakening is not appropriate—not with 20,000 workers in this country seriously ill at the moment, many of them dying, from a work-related illness or injury and 176 workers having been killed in workplace accidents last year. Clause 61 should, frankly, be dumped.

Finally, I have two questions. First, are the Government going to move on the proposal of the noble Lord, Lord Heseltine, to assert the public interest in mergers and acquisitions, especially where foreign takeovers are concerned? I am not opposed to foreign takeovers but the UK needs to get more on jobs and investment than is currently the case and not be so,

“timid in engaging with potential investors in … key sectors”,

words, by the way, that come from the Heseltine report. Secondly, on Part 6 of the Bill, given that chief executive officer pay and benefits in major companies went up on average by over 10% in 2012—a year when, as we know, growth was generally negligible—how do we check that excess? Will it be enough to rely on shareholders when, as has been said in the House today, many of them, particularly the institutional investors, are in the same circle? Will the Government change their mind and agree to insert employee representatives on to remuneration committees and so interrupt their current, cosy boardroom practices of mutual back scratching? This is not a matter on which to be timid either. We have a duty to improve this Bill. I hope that we can take it vigorously and with both hands.