Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013
Debate between Lord Watson of Invergowrie and Viscount Younger of Leckie
Viscount Younger of Leckie
I would not take that track at all. I was merely making the point that if the consultation period is reduced from 90 to 45 days, there is obviously a reduction in costs in terms of the salaries that are paid out to employees who are made redundant more quickly if that is the case. Equally, another figure could be included, because employees might move on more quickly anyway. The answer is that I am more than happy to give the noble Lord, who clearly understands this exercise by this issue, a full answer in writing and to give the figure in more depth, but the £300 million figure is the one that we have.
Lord Watson of Invergowrie
Further to the point raised by my noble friend Lord Lea, the impact assessment says about benefits, particularly at this stage, that the current estimate of the reduction in wage costs would be £290 million at what is termed Option 2(a)—a reduction to 30 days. It says that a reduction to 45 days would make the impact lower,
“but it is not possible to quantify the difference”.
I ask the Minister why not. If it is possible to calculate a ceiling of £290 million from roughly reducing the period from 90 days to 30, which is two-thirds, why is not possible to say what the effect is of reducing that period from 90 days to 45, which of course is a 50% reduction? It seems to me that if you can do one, you must be able to do the other.
Viscount Younger of Leckie
As I say, I will address this question in much more depth later, but let me give a slightly extended answer to the question on pay. The committee argues that employees are unlikely to be predisposed to viewing the new regime favourably because the impact assessment assesses that the changes would mean a reduction in pay across affected employees of £250 million per annum. This does not mean that the individuals lose out on this money. This is the amount of money that the current employer will not pay to affected employees. In practice, employees will almost certainly move to other employment, which is the point that I made earlier.
The Government acknowledge that the proposed changes could result in a small increase in the number of employees seeking jobseeker’s allowance, but we do not see a direct link between the length of the consultation period and the amount of time an individual will take to find a new job. Each case is different. There are many other factors here, including the point at which an individual starts job hunting. The Government can see a considerable advantage for the employee in the new regime, because it proffers certainty sooner, which is the point that I made earlier, not only for those who end up losing their jobs but for those who remain. It is important to remember that the individuals remaining are typically more significant in number than those who depart.
In conclusion, the changes that this order will make are needed to ensure that the statutory framework remains up to date, so I ask noble Lords to consider this instrument.
Amendment to the Motion
Lord Watson of Invergowrie
I thank the Minister for giving way; I will be brief. There was one point I raised in terms of the consultation as a whole, and the rationale behind what the Government are trying to do on this. I have seen what is stated in writing, but when only 160 people or organisations think it fit to respond to a consultation, and only 100 of these make any comment on reducing the period of 90 days, and of those only 19 suggest 45 days, is that not a rather shaky foundation for the Government to proceed on?
Viscount Younger of Leckie
Consultation was just one part of the process, but this policy has been thought out—we believe, and we would say this, wouldn’t we? —extremely carefully. Having taken a lot of conversation wider than this particular consultation, we believe that this is the right way forward. I would remind your Lordships that we have also consulted businesses. In terms of the time, I repeat myself by saying that we have gone from the 90 down to the 45—it is not 90 to 30—because we have actually spoken to businesses and other organisations to get the information that we need.
I would like to conclude by saying that between 50% and 80% of employees subject to collective consultation are not actually made redundant. All are kept in suspense as they wait to find out who stays and who goes. If people do become unemployed, most leave unemployment quickly. Of those making a new jobseeker’s allowance claim, over 50% have left the jobseeker’s allowance within three months, and over 70% have left within six months.
Finally, union respondents did not provide any proof that reducing the minimum period would cause problems. Where anecdotal evidence was provided, it suggested that meaningful consultation can help reduce the number of redundancies, but these are rarely significant in number. I commend the order to the House.