Employment

Lord Morris of Handsworth Excerpts

Thursday 27th October 2011 Lords Chamber

[Lord Morris of Handsworth]

My Lords, I, too, commend my noble friend Lady Prosser on securing this timely and important debate. Debating alongside my noble friend ignites many happy memories for me but today I am somewhat handicapped, as I no longer have the casting vote—and I never had a block vote. I see this debate as extremely timely, as I sense that the economies of Europe have reached a critical fork in the road, which will significantly impact on the world of employment here, and indeed abroad.

Throughout the ages, the pattern of employment in Britain has been through many phases of change, principally the British industrial revolution of the 1800s, which spread to the United States and other European countries in the 19th century. As I reflect on the history of changing employment patterns, buttressed by a recent visit to my old place of employment—the factory where I worked for 18 years—I was reminded of the first sentence in LP Hartley's famous 1950s novel, The Go-Between:

“The past is a foreign country; they do things differently there”.

The question implicit in the Motion before the House today is: how can we manage the technological revolution for social and economic benefit by doing things differently here?

In his groundbreaking book, The End of Work, Jeremy Rifkin, the president of the Foundation on Economic Trends in Washington, argues strongly that as the industrial age ended slave labour, the information age will end mass wage labour. Faced with that proposition, he goes on to argue that Governments need to promote alternatives, such as shorter working time, more voluntary work—I think that is the big society here—and greater leisure in response to the replacement of jobs by technology. From this economic and social analysis, it is clear that the three forces driving modern economies and employment are finance, knowledge and social capital. Yet whatever the prevailing view is, there is common ground that we must have the skills to meet the challenge in the changing world of employment.

Indeed, the best summary of the response needed is to be found in the foreword to the final report, Prosperity for All in the Global Economy - World Class Skills, by the noble Lord, Lord Leitch, which says:

“In the 21st Century, our natural resource is our people—and their potential is both untapped and vast. Skills will unlock that potential. The prize for our country will be enormous—higher productivity, the creation of wealth and social justice”.

Sadly, we have not followed the positive signposts which the noble Lord, Lord Leitch, left us. The truth is that we are running out of options, and indeed out of time. That is what the debate in Europe in the past week or so has really been about. How else do we have over 2 million people out of work, with the Office for National Statistics reporting unemployment at 8.1 per cent?

On the evidence we see, the Government place almost no value on workers. Indeed, it could be said that the Government have raised the flag of hostility against workers unless they happen to be bankers. Public sector workers are facing attacks on their pensions by being required to work longer, pay more and get less. As we debate today, it is reasonable that we should ask: what is the Government’s response to those gallant groups of Remploy workers who are facing a bleak and uncertain future, and the possible closure of their factories? Where have they fallen down or fallen short of contributing positively to the economy?

As a nation, we have a capacity to destroy what workers in our economy have actually built. Family-friendly policies have been a hallmark of the past 10 years or so. They have been liberating policies which enable people to learn new skills, broaden their horizons and expand their social network. They are about flexibility and the opportunity of choice. But in the last day or so I have read the magazine from the IoD, Big Picture, where we see a concerted campaign emerging to persuade the Government to make no further change or concession in the opportunity for workers to request flexible working. It has set out an argument and a campaign is now in train.

I believe that the attack on workers’ rights has now moved to a very negative and dangerous position. For example, the barriers for access to justice at industrial tribunals are being raised higher and higher. I am somewhat old-fashioned in my views about fairness: I take the view that an unfair dismissal is unfair whether it is on day one or day 100. Why are industrial tribunals the only facet of the British justice system where workers will be asked to pay an entrance fee of £250 just to go through the door to lodge a claim for an unfair dismissal? That is one proposal coming out of the consultation document from the Department for Business, Innovation and Skills, and that £250 only gets you through the door to determine whether you have an arguable case. If the tribunal finds at the preliminary stage that you do, you need to pay £1,000 for that case to go forward to a hearing. I do not know many single-parent female part-time workers who can afford to lay out £1,250 just to test the flexibility and therefore the ability of justice.

The reason why workers are being treated in such an unjust manner is quite simple: we now have a Government, supported by the cloak of a coalition, which believe in the culture of hire and fire. The Prime Minister says that industrial tribunals should no longer be seen as a barrier to growth, but the reality is that the Government’s proposals will be a barrier to justice.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, I start by congratulating, as have many other noble Lords, the noble Baroness, Lady Prosser, on securing this debate on a wide-ranging topic, on which she spoke with authority and passion, setting the tone for a very serious debate—one that I know the House has been happy to engage in. In the gap it brought to his feet my noble friend Lord Campbell of Alloway—another bonus.

As the noble Baroness outlined and as we can all bear witness, the employment landscape has changed beyond all recognition since the 1960s. Globalisation, technology and social change are still moving at hyper-speed. Europe has expanded eastwards, bringing in cheaper labour, and we face greater competition from the tiger economies. Many British workers will need to reskill to adapt to new job opportunities and many already have.

I will try to answer many of the questions that have been asked during this debate, but if I run out of time all questions will be answered by letter. The good news is that we are living longer but this means that we have to manage the effects of an ageing population. The noble Lord, Lord Young, talked about the removal of the default retirement age. We believe that this will increase the number of older people who are able to be in the workplace, stimulating the economy and leading to more job opportunities for everyone, including young people.

More women are working now than ever before. Part-time working has increased, as has the overall diversity of working patterns. My noble friend Lady Randerson spoke about this growth of part-time and temporary workers. The UK labour market is internationally recognised for its strength and flexibility. Our light-touch system of employment regulation is a key driver of that strong performance. Our labour market has achieved a steady rise in employment, despite cyclical peaks and troughs. During the recent recession employment fell by much less than many had expected, even given the fall in GDP. Part of this success is due to our flexible labour market. My noble friend Lady Randerson rightly pointed out that part-time working is an important choice for many workers, especially some of the older workers to whom she referred, and that part-time staff are a huge resource for business.

The noble Lord, Lord Collins, talked about his concerns over discrimination against lesbian, gay and bisexual workers. The Government’s equality strategy sets out our vision for a strong, modern and fair Britain. It is built on our two principles of equality: equal treatment and equal opportunity. This means building a society where no one is held back because of who they are or where they come from. It is obvious from the most moving speech that the noble Lord made that we must be very vigilant in this. In relation to the world of work, we commend the good work of ACAS in promoting better workplaces. I know that the noble Baroness, Lady Donaghy, used to be chair of ACAS. Britain’s future lies in nurturing a highly skilled, quality workforce, and in harnessing the ingenuity, creativity, diversity and inventiveness of all the British people.

The noble Lord, Lord Stevenson, asked a question at the end of his speech. I have not had much chance to catch up with it but I hope that this will help. Supporting economic growth is our central task. The original growth fund is making a valuable contribution to growing a private sector-led economy in England. In particular, it will support areas and communities that are currently dependent on the public sector in making the transition to sustainable private sector-led growth and prosperity.

Education and skills are vital to our future and essential to building sustainable growth and stronger communities. Here, we agree with the noble Baroness, Lady Prosser. We need a long-term strategy to deal with issues raised in the global market. The Government’s priority is to achieve strong, sustainable and balanced growth, and we are sticking to our plan. We are creating a new model of growth, driven by investment and exports. A whole new government drive to promote trade and investment was announced in the trade and investment White Paper. It includes an expanded remit and updated strategy for UK Trade & Investment and refocusing the FCO on commercial diplomacy and new and improved products from the Export Credits Guarantee Department.

Measures so far to take forward our universities, technical colleges and all levels and styles of education include expansion of the university technical colleges programme to at least 24 new colleges by 2014. Each will offer 600 to 800 14 to 19 year-olds the opportunity to take a highly regarded, full-time, technically oriented course of study. An increased apprenticeship budget of more than £1.4 billion this year is enough to train at least a third of a million apprentices. The noble Lord, Lord Young, an apprentice himself—fast becoming the most famous apprentice in the House—was the campaigning Minister in the previous Government. It has been my pleasure and privilege to build on the work that he has already done. He talks constantly about the need to create apprenticeships for 16 to 18 year-olds. We agree and we are doing many things to advance that. We have seen high levels of employment in the UK due to the flexibility of our labour market, but we must work to build on this strength.

The noble Lord, Lord Desai, spoke of the need to encourage inward investment and suggested that national insurance contributions might no longer be a good idea. I was interested to hear this—I always expect something interesting from the noble Lord, Lord Desai. I have a real answer for the noble Lord, Lord Desai which I hope to give him later. The Government’s role is to put the right framework in place and provide support where necessary. The noble Baroness, Lady Prosser, and the noble Lord, Lord Kestenbaum, spoke of the need to invest in research and innovation. I was interested in the noble Lord’s descriptions, which did not always find favour with some of those on his own Benches.

The noble Lord, Lord Lea, said that the Government should benchmark employment law across Europe. The Government do not have to do that. The World Bank and the OECD conduct such studies regularly and they are always praising this country’s strength and flexibility. I hope that he finds that encouraging. The Government are helping women to continue to develop their careers by making a commitment to implement a system of flexible parental leave. This will give families more choice on how they care for their children and encourage early discussions between employees and their employers about leave plans in the important first year of a child’s life. We agree with the noble Baroness, Lady Prosser, that we need positive action on diversity and participation in the workplace and we are working towards this.

The noble Lord, Lord Lea, spoke about the rolling back of maternity rights and the number of women in employment. Despite the recession, the employment rate for women remains historically high at 65.4 per cent compared with 53 per cent in 1971. I believe that this is the figure that the noble Lord, Lord Lea, could not quite remember in his speech. We have no intention of reducing the total periods of leave and pay available to women. In line with our coalition commitment to encourage shared parenting, we recently consulted on proposals to introduce a system of flexible parental leave so that parents can choose how best to share their caring responsibilities between them. Where families choose, mothers will still be able to take exactly the same amount of leave and pay. Some of the more enlightened companies I have worked with—I particularly remember Unilever 15 years ago—made arrangements to enable women to come in during their parental leave and have their babies looked after while they were brought up to speed and kept up to speed, so that when they returned they had not fallen so far back that someone else had taken their job. I am therefore personally keen to see this piece of work go forward.

Now, more than ever, we need to ensure that the overall system of employment law helps rather than hinders growth. It is essential that the labour market functions in a way that gives employers the confidence to create new jobs. We have an extensive programme of welfare to work policies, but we also need our labour markets to be even more effective. Our aim, therefore, is to set employers free from unnecessary red tape while safeguarding the rights of individuals. Businesses can then concentrate on doing business and employing people rather than filling in forms. To ensure that we have the balance right, we are reviewing employment law. The employment law review has been under way since last May and will continue until the end of this Parliament. The review is an essential element of the growth review, an ambitious and relentless focus on the role government can play to drive, to ensure support and to enable the right conditions for businesses to thrive and achieve strong, sustainable and balanced growth.

The noble Lord, Lord Monks, asked about the current economic model. He thought that the one we had was bust and that we are cutting too quickly. We do not, of course, believe that. It is vital that we renew the balance within the country. Our top priority is to achieve sustainable and balanced growth. We have prioritised capital investments that support long-term economic growth because we believe that is the right way forward to keep our jobs safe and secure. We have launched a growth review and are working closely with industry to create a new model of economic growth, driven by investment and exports. We have taken decisive action to tackle the deficit, restoring economic confidence and stability.

The noble Baroness, Lady Wheeler, spoke of the importance of leadership and management skills and the Investors in People standard. We look forward to considering the recommendations of the review of the IiP standard that the UK Commission for Employment and Skills is currently undertaking and to which she referred. We are already tackling some of the problems that we have identified. Employers regularly tell us that they want to grow, but are put off by the fear of ending up in employment tribunals. We have therefore consulted on a framework that has, at its heart, dialogue rather than confrontation between employers and employees—conversation rather than diktat. We believe that businesses and workers can sort things out better than government.

The noble Baroness, Lady Donaghy, highlighted the labour market’s need to be able to respond to changes resulting from the rise of social media. The noble Lord, Lord Haskel, talked of joint enterprise and employee engagement. We have consulted on plans to improve and streamline employment tribunals and announced that we will extend the qualifying period for bringing claims for unfair dismissal. The noble Lord, Lord Desai, said that making it easier to sack staff will not help unemployment. Our announcement of the increase in the qualifying period for unfair dismissal claims from one to two years aims to increase business confidence in recruiting, which is in everyone’s interest. We believe this strikes the right balance between protecting workers’ rights and giving businesses, particularly smaller ones, more confidence to take on people to train and to encourage them to take many more.

The noble Lord, Lord Morris, spoke of employment tribunals, unfair dismissal and fee charging. Fee charging by employment tribunals is the policy responsibility of the Ministry of Justice and I hope the noble Lord will respond to the consultation on fee levels which it will be launching in due course. We have concluded that it is right to ask users to contribute to the costs of running the employment tribunal system but it is important that we develop a system which is as fair as we can make it for vulnerable workers. The Red Tape Challenge focus on employment related law will help us gather more ideas on how we can improve or get rid of specific regulations. We are considering more than 1,200 comments on employment related laws which we have received through the Red Tape Challenge website.

The noble Lord, Lord Lea, spoke of Adrian Beecroft’s contribution on employment law and protected conversations. Adrian Beecroft has been asked to contribute his thoughts to government to support the work of examining the burden of a cross-government employment related law. This is part of the wider consultation with stakeholders for Red Tape Challenge. His views will feed into that process and we do not plan to publish them. As I have said, we have already announced plans to raise the qualification period for unfair dismissal. This is an outside view that we are taking notice of—that is all.

It is not just about what we enforce. We also need to ensure that the system of enforcement is both effective and cost-effective, and we need to do so in a way that minimises inspections and other burdens on reputable businesses. That is why earlier this month we announced our intention to review whether a streamlined enforcement regime could be implemented. As part of this work, we will consider potential enforcement models, including whether there could be benefits from establishing a fair employment agency. By developing a better system of enforcement we will be able to increase its impact and ensure that the most vulnerable are aware of their rights and supported in their protection. We will report again on progress in the spring.

The Government are determined that employers that operate outside the law must not be allowed to undercut their legitimate competitors by exploiting their workers. Ensuring that workers are properly protected from abuse is not only good for workers; it is good for business and the economy as well.

Ultimately, our vision is for an education system attuned to the changing world of employment, with young people given the skills for work and for life—and for a labour market that is: flexible, by encouraging the creation of jobs by making it easy to get people into work and to stay in work; effective, by enabling employers to manage their staff productively; and, above all, fair, with employers competing on a level playing field and workers provided with a strong foundation of employment protections.

[Lord Morris of Handsworth]

Can the Minister say whether the Government have any plans to charge users of other tribunals, apart from industrial tribunals, for entry and accessing those facilities?

[Baroness Wilcox]

No, at the moment I cannot give the noble Lord an answer, but I will go back and ask whether there are other plans that I do not know about and cannot answer on today. I will ensure that the noble Lord gets a proper reply to that question.