Enterprise Bill [Lords]

Louise Haigh Excerpts

Tuesday 2nd February 2016 Commons Chamber

[Sajid Javid]

I respect the right hon. Lady, but I hope she understands how growth is generated by the private sector. The Government deregulate, cut taxes, get out of the way of businesses and set entrepreneurs free. She has to understand that we cannot just pass a law that will grow businesses. Perhaps she agrees with the leader of her party when he says he wants to restore clause 4 to Labour’s constitution; perhaps she thinks that is the way to help growth and help businesses?

One way in which we certainly do help businesses is through further deregulation. That is why in the last Parliament we scrapped £10 billion of Labour’s red tape. We have already committed to scrapping another £10 billion between now and 2020. But business owners have told us that the actions of regulators are just as important as the content of regulations. So this Bill will extend the deregulation target to include statutory regulators, and it will increase transparency with a new annual reporting requirement for regulators subject to the growth duty and regulators’ code. It will also extend the hugely successful primary authority scheme to give more businesses access to reliable, consistent regulatory advice. This will save them money, and give them the confidence they need to invest and grow.

The Enterprise Bill will also end the “Whitehall knows best” approach to the regulation of Sunday trading. We are a one nation Government and we want to see the benefits of economic growth being felt in every corner of our country. But no two parts of our great nation are identical. The needs and wants of a small rural community in the south-west may be very different from those of a bustling city in, say, the north-east. The people living and working in those communities understand them far better than any Minister or civil servant sitting in a comfy London office. So we will introduce amendments in this Bill to allow local authorities to decide whether to extend shopping hours in their areas. Central Government will not be dictating how to use this power. The decision will be entirely local, reflecting local preferences, shopping habits and economic conditions. If the people of Bromsgrove or Barking say they want to see longer Sunday opening hours, who are we here in Westminster to stand in their way?

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is fantastic to hear that the Government’s policy is that Whitehall does not just know best, which is indeed what I thought the Government’s policy was before. Why then is the Secretary of State closing the BIS office in Sheffield and moving it to central London where, by default, decisions on investment will be much narrower and much more focused to central London, away from the so-called northern powerhouse?

[Sajid Javid]

First, the hon. Lady will know that no one makes this kind of decision lightly. The Government have a duty to spend taxpayers’ money wisely, and that is what we do with every single penny. She is quite wrong in her accusation that this will centralise decision making in London. Once the Department has completed its restructuring by 2020, there will be fewer people in London and the vast majority of officials who work for BIS will be outside London.

--- Later in debate ---

[Louise Haigh (Sheffield, Heeley) (Lab)]

This debate is vital for our economy, particularly if the Government are ever to put any meat on the bones of the so-called northern powerhouse. In a week when jobs have been moved from Sheffield to central London, and amid rumours that the chief executive of Tech North has resigned because of attempts by Whitehall to centralise that company in London, Ministers should be increasingly worried about how they can justify such a lofty term.

The missed opportunities the Bill represents have been admirably expressed by hon. Members and by those in the other place, whether on improving finance to SMEs, a broadened scope and sharper teeth for a small business commissioner, or some real vision for our renewables industry rather than a further undermining of investor confidence and security.

The focus of my remarks today will be on the cap for exit payments for civil servants. Labour Members are all for the best possible use of taxpayers’ money. We are well aware that the headlines that disguise the real impact of the measures—to clamp down on pay-outs for so-called fat cat civil servants—will be very appealing, particularly at a time when so many people are still struggling. The Government know all too well, however, that that is not the whole tale.

On the face of it, this is a wholly reasonable policy. There are, however, several issues relating to employer flexibility, the public purse, people suffering from ill health, whistleblowers and staff morale at a time of huge change. I hope they can be ironed out in Committee. The proposals come at a time when we are about to see changes to the rules on recovery of exit payments and a consultation on reducing redundancy terms across the civil service. The latest proposals unilaterally override recently revised terms and conditions, and undermine agreements made at the highest levels of the Government’s own employer representative organisations.

The recent exit payment policy for the NHS was signed off by the Secretary of State in February last year, when NHS trade unions entered into an agreement with NHS Employers and the Department of Health to apply an absolute cap on exit payments. After extensive negotiations, it was agreed that section 16 redundancy payments would be set out by a formula that recognises length of service as its key element. This was implemented in only April last year and is on the back of Lord Maude telling civil servants in the previous Parliament that their settlements would be sustainable for a generation. We know from the Government’s own survey work that morale in the civil service is at an all-time low, with workers feeling year on year that they do not trust their leadership. Is that any wonder, when the rug is constantly being pulled from under their feet?

[Toby Perkins]

My hon. Friend is making an incredibly important case. Does she agree that there is a bitter irony in a Secretary of State, who obviously does not believe in government, spending £200,000 on employing consultants to come up to the northern powerhouse, shut the Sheffield office and move all the jobs down to London?

[Louise Haigh]

I completely agree. That point was made forcibly in the urgent question last Friday. Department for Business, Innovation and Skills workers were watching and were horrified by the Minister’s response to that question. It is not understandable that those people should be concerned that their jobs are only secure for the time being, until the Government can force through weakened redundancy terms? Given the announcement last week, people across the civil service will understandably be further concerned.

On the specific issues, people who have given long service to the public sector—midwives, nurses, librarians, social workers; people whom we, on either side of the House, could not describe as fat cats—have dedicated their lives to improving society. Is the Minister comfortable that these incredible workers will be impacted by the cap on exit payments? Why, when this policy was proposed last year by the Minister for Employment, the right hon. Member for Witham (Priti Patel), were people earning less than £27,000 explicitly exempted to

“protect the very small number of low earning, long-serving public servants”?

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend share my concern that, on the one hand, the Government are always ready to praise the work and contribution of public sector workers, in particular at the lower end of the scale, but that, on the other, it seems they are not ready to recognise that financially when those workers come to the end of their careers and face the difficult decisions that have to be taken by management?

[Louise Haigh]

Exactly. That is a really important point, given that this is a clear U-turn in Government policy following the announcement last year. There is absolutely no such exemption in the Bill. In the NHS, for example, even without the inclusion of pension strain payments, according to research by the union Unison, the proposed cap will affect nurses, midwives and paramedics with long service. These issues were the subject of very high level negotiations, where a higher level cap was set to mitigate against penalising long service in key front-line services. For this reason, will the Minister consider exempting people with salaries on or below average earnings?

On industrial relations, the exit payment cap will be implemented across a range of public service areas that already have fair, transparent and effective procedures in place which arise from collective agreements negotiated between employers and trade unions that are sensitive to the specific issues facing each sector. If we have anything to learn from the junior doctors’ action, it is that good industrial relations are vital and that we should not legislate haphazardly to weaken terms and conditions.

The Secretary of State said we should move away from the “Whitehall knows best” attitude—I could not agree more—but the Bill weakens that ambition by imposing an arbitrary cap across the civil service on exit payments and by restricting the freedom and flexibility that employers require to manage restructuring and redundancies effectively, at a time when public sector employers require it most. The public sector is in the middle of its most dramatic budget cuts in decades, and employers are having to restructure almost every aspect of public services to meet their new budgetary constraints. In moving the goalposts in the middle of an extended period of large-scale reorganisation, without an initial period of protection, particularly for staff over 50, the Government are further limiting the opportunity for employers fairly to reconsider strategic and operational decisions made in previous reorganisations and planned to be effected in stages on the assumption that current agreements and policies would apply. Will the Minister therefore consider a grace period for public sector employers undergoing reorganisation?

On the public purse, the Government seek to justify the cap solely on the basis of the cost of payments to staff in the public sector between 2011 and 2014. This is the only evidence provided in their consultation, but it fails to recognise that, during the same period, employment in the civil service fell by 107,350, under the current civil service compensation scheme arrangements. No evidence is provided to demonstrate that the cap will deliver value-for-money savings, as changes in the compensation payments naturally affect the number of staff willing to exit the public sector, which might engender higher costs elsewhere.

As for the coalition Government’s early conciliation scheme, which has actually worked quite well, the proposals could have a perverse impact by diverting people to tribunals, where settlements will not be capped, and avoiding settlements at this optimal stage. Ministers should therefore consider exempting such conciliation payments from the cap.

Finally, two more important exceptions should be considered: first, whistleblowers, and secondly, people retiring on ill-health grounds. Whistleblowing is a vital part of our democracy, and capping settlements in such cases could easily deter people from blowing the whistle, given that this often puts their livelihoods and reputations at risk. The Government have made clear their intention not to include those retiring on ill-health grounds and that this will be put in secondary legislation, so will the Minister take this opportunity to make it clear that this is the case and that such people will be explicitly exempted?