Employment Rights Bill (Thirteenth sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 17th December 2024 Public Bill Committees

[Greg Smith]

The hon. Gentleman is clearly not of the orange book wing of the Liberal Democrats.

[Nick Timothy (West Suffolk) (Con)]

Are there any left?

[Greg Smith]

My hon. Friend indicates that perhaps there are not any left. I fundamentally disagree with the point made by the hon. Member for Torbay. It is not about profits for the private sector, although the profit motive is an important element in driving up service standards and ensuring that if a company wants to keep a contract, it has to deliver on it.

Some councils have failed on this front by failing to set the specification of a contract correctly and failing, as the client, to enforce against the contract. That is where we see failure on so many fronts; it has little to do with terms and conditions or the points covered by the clause. Often, an ill-equipped council, be it the members or the officers—I have seen this from both sides—fails to properly specify in the first place, when it goes to market, and then fails to deliver proper contract management. That is where we see gremlins creep into the system and unintended consequences come about.

I gently point out to the hon. Member for Torbay that when I was in local government, we saw many benefits from competitive tendering over multiple iterations of the contract. I can ensure him that in the cabinet portfolios that I held in that local authority, where I was directly overseeing the waste, street cleansing and grounds maintenance contracts, I was pretty tough on those contractors in ensuring that they did drive up standards. But sometimes it is not the right step. The Labour council we took over from had outsourced housing, which we as a Conservative council brought back in house. We ended the arm’s length management organisation to bring it back within direct council control to deliver a better service for the tenants of those properties. So if it is not done properly in the first place, that model does not always work.

The measures in clause 25 are once more a sledgehammer to crack a nut. They do not recognise the practical realities of how competitive tendering has worked, excepting the flaws that I raised about how well contracts are specified and enforced against. If we want to ensure that we are delivering the best possible value for money for taxpayers—the people who pay for public services—at the same time as increasing the standard of services delivered, which I expect is a universal aim that all of us hold, there have to be flexibilities to ensure that efficiencies can be found, and that the fat is taken out of all systems, processes and ways of doing business. If we lock contractors into absolutely having to match every term and condition, with every pay scale being exactly the same, we are never going to deliver that.

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[Laurence Turner]

I doubt I am going to do it personally; as with all these things, it is a collective endeavour. The hon. Member asked whether the Government are going to do this, but they are doing this—it is in the Bill. I ask again: what is the Opposition’s alternative? We are yet to hear it.

It is worth reflecting on the nature of these review bodies—not that this is a pay review body; it is a negotiation body—and the way in which we establish new agreements, because these things do not happen quickly. I think that the establishment of “Agenda for Change” in the NHS took seven years from initiation to completion. That exercise took a long time, but I do not think anyone would seriously argue for going back to the plethora of terms and conditions, and the mismatch between different grades of workers, that existed before, which created serious equal pay liabilities. That is the situation that we inherit in respect of school support staff.

These things do take time. If the shadow Minister goes back to the record of the original school support staff negotiating body—from 2009 to 2010—the progress made in that relatively short time was not on establishing the new pay system, but on drawing up model role profiles and moving towards a national handbook for terms and conditions. Those measures would be hugely welcome today. In fact, the Conservative Government acknowledged that some the school support staff negotiating body had done some important work during that time. They were on record as saying that there was a clear case for carrying forward some of it, but that never happened, and we have been left with an absence in that area of policy for almost 15 years. The changes to pay will be hugely welcome when they come. It will be a negotiation, so the outcomes will be a matter for the parties represented on the negotiating body, including the Department for Education.

We must go back to the problem: schools are finding it increasingly difficult to recruit and retain skilled school support staff. A number of private sector employers, including supermarkets, are increasingly offering term-time only contracts, with the intention of attracting people out of schools and into alternative roles. Freedom of information requests show that, where data is held, teaching assistant vacancy rates run at around 10%. That is having a real impact on the ability of schools to deliver inclusive education, which is a shame.

[Nick Timothy]

On schools’ ability to deliver, my hon. Friend the Member for Bridgwater asked the hon. Gentleman a moment ago to acknowledge the significant rise in the performance of English schools in the PISA rankings and other international comparative studies. Will he clearly say whether he acknowledges or denies that rise?

[Laurence Turner]

That is a direct question. We could talk about the way the PISA rankings are constructed.

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[Uma Kumaran (Stratford and Bow) (Lab)]

It is a pleasure to serve under your chairship, Mr Mundell. I refer Members to my entry in the Register of Members’ Financial Interests and to my membership of GMB union. I note the comments that you have made, but if I may I will just respond to the shadow Minister, who talked about the previous Conservative Government’s record. I draw his attention to an article published by the London School of Economics that said that England was an outlier among OECD countries, having both lower numeracy and literacy levels among school pupils.

[Nick Timothy]

Does the hon. Lady accept that it is not just the PISA rankings that show great advances in achievement in English schools, but the TIMSS—trends in international mathematics and science study—report published last week? That report said exactly the same thing: English schools are ahead of any comparable western country.

[The Chair]

Order. I am sure you did not wish to do it, Mr Timothy, but we are going down exactly the opposite route to the one I suggested. Let us stick to the Bill.

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[Justin Madders]

I will respond in the strict terms that you have directed, Mr Mundell. I also point out to Members that an education Bill will be presented today. So there will be an opportunity for the wider debate that Members are keen to have, when that Bill gets its Second Reading in due course.

[Nick Timothy]

Will the Minister give way?

[The Chair]

I hope it is relevant to the discussion.

[Nick Timothy]

I will avoid the temptation to start to read out the PISA statistics. It is important that the Bill that is published today is seen alongside this Bill, because together they chip away quite substantially at the academy freedoms that have been behind school reform. It would be good to hear the Minister acknowledge that fact.

[Justin Madders]

Of course, the Bill has not been published yet, so we cannot stray into that. We may be able to get on to it this afternoon, but we are trying to help some of the most poorly paid people in our society, who do such an important job. My hon. Friends the Members for Penistone and Stocksbridge, for Birmingham Northfield and for Stratford and Bow all talked about how important teaching assistants are, particularly in supporting those with special educational needs. My hon. Friend the Member for Birmingham Northfield was right that it is shameful that the Low Pay Commission has now deemed teaching assistants to be part of the low pay environment. We are determined to address that, which is why the reinstatement of the SSSNB is an important step.

Let us reflect on some of the evidence that we have had—for example, the GMB evidence. Andy Prendergast said:

“we see increasingly more pupils with special educational needs go into mainstream education, and they need that additional support.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 132, Q136.]

Some of those staff do detailed things such as phonics, supporting pupils with special educational needs and disabilities, and help to deliver classes.

I take the point that has been made about the NJC being an inappropriate way of evaluating and assessing job value. It is clear—indeed a number of other pieces of written evidence have supported our assertion—that the NJC is not the right vehicle for assessing teaching assistants’ pay. We believe that the SSSNB is the way ahead.

The hon. Member for Bridgwater talked about this being a centralising move. Of course, the SSSNB will comprise mainly employers and employee representatives. It will not be a Whitehall-dominated machine.

Employment Rights Bill (Fourteenth sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 17th December 2024 Public Bill Committees

[Laurence Turner (Birmingham Northfield) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz.

I think I am correct in saying that Buckinghamshire is one area that has opted out of the National Joint Council, so I recognise that the shadow Minister brings a particular perspective to the debate, but the final line of the amendment states that

“a prescribed matter is, or is not, to be treated as relating to 30 career progression”.

I assume that is just a typographical error, but it would be good to have that point clarified.

More widely, I do not think the amendment is necessary. In some ways, it is quite loosely worded. It seeks to put in the Bill a reference to a framework, but a framework is not defined and that would not be clarified through later regulations. Therefore, I am not sure that the wording before us would necessarily resolve the Opposition’s aim, and the meaning of “framework” is probably not something that we would want to have out in the courts.

On the wider issues, the shadow Minister said that the proposals in the Bill would overwrite the funding agreements, but part of those agreements is a requirement for academy employers to have regard to the academies handbook, which is altered as part of the normal course of public policy, so such variations are not especially new. As I say, I do not think that what is in front of us would achieve the Opposition’s aim. The reinstatement of the school support staff negotiating body was a manifesto commitment. It would be problematic to say that a manifesto commitment could not be implemented because funding agreements were already in place. It is quite proper for the Government of the day to pursue their public policy objectives in this manner.

I would like to correct the record. In the morning sitting I said that freedom of information requests had established that, where data was held, the vacancy rate for teaching assistants was 10%. The actual figure is 18%. I just wanted to put that higher number on the record.

[Nick Timothy (West Suffolk) (Con)]

I should warn the Committee that I have a frog in my throat and a bit of a cough, but I think it is known that I used to work for the former Prime Minister, Baroness May, and I have seen how to get through a speech with a cough.

The amendment is important because it seeks to protect one of the academy freedoms that have made English schools the best in the west. I say English and not British schools advisedly, because education is devolved and, in Scotland and Wales, standards have gone not forward but backward. In Wales, the average pupil reaches about the same level of attainment as the average disadvantaged pupil in England, yet it is the Welsh model that the Government seem to be intent to follow. So the amendment is all about seeking to protect the academy freedoms behind the success of the school reforms of which the Conservatives are rightly proud.

According to the programme for international student assessment—or PISA—rankings, English primary school- children are the best readers in the west. On 15-year- olds, they say that schools in England are 11th in the world in maths, up from 27th in 2009; 13th in science, up from 16th; and 13th in reading, up from 25th. That is an unqualified success story. Yet I am afraid the Education Secretary and Ministers in the current Government repeatedly claimed that standards fell under the Conservatives.

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[The Chair]

Stay within scope please, Mr Timothy.

[Nick Timothy]

I am doing my best to remain in scope, Ms Vaz.

If I may say so, the hon. Member asks a characteristically precise and intelligent question. I suggest that members of the Labour party who want to move away from academy freedoms look first at what Labour figures such as Tony Blair and Lord Adonis say about why those freedoms matter.

It is a bit like with the Bill overall: just because some employers choose to hit certain standards, that does not necessarily mean that those standards must then be imposed in a uniform manner through legislation. The point about academy freedoms is that, a little like labour market flexibilities, they are cumulative. If we look at the list of academy freedoms—whether in respect of the terms and conditions that schools are able to employ staff on, the relationship with councils and how admissions are decided, or the policy of having to respond to school failure through academisation—we see that they are all being picked away at, partly through this Bill and partly through the Children’s Wellbeing and Schools Bill, which we discussed briefly earlier and is being introduced today. While that Bill has not been published, as the Minister corrected me earlier, there is a description on gov.uk of the measures in that Bill, and it is quite clearly a reversal of policy when it comes to academisation. The reason that school reform has worked over this time is not just because of particular measures about things such as the promotion of a knowledge-rich curriculum, or didactic teacher-led instruction, or anything like that. Those are the means by which lots of schools have chosen to use their academy freedoms in order to improve standards—

[The Chair]

Order. This is the Employment Rights Bill, not an education Bill. I do not know how long you are going to continue, but could we move to a possible wind-up, Mr Timothy?

[Nick Timothy]

Perhaps we could, but I am trying to make the argument that, in the end, when we are talking about employment in the public sector—when we are talking about terms and conditions and things like that—yes, these things are obviously of huge importance to the employees themselves, but they are also important regarding the way in which employers set themselves up. The purpose of a school is obviously to educate our children, and the ultimate objective is to drive up those academic standards. That is the context in which we are discussing these particular academy freedoms and what this Bill therefore does.

It is the case that free school and academy founders have been in the vanguard of reform, precisely because they have been able to use their freedoms from local council control—freedoms to develop the curriculum in their own way, to set things such as the school day and term dates, and to decide the pay and conditions for their staff themselves. We can see that in the data that is published: it is not just about things such the PISA rankings; it is also about things such as the trends in international mathematics and science study, an international comparative study, which was published a couple of weeks ago and showed that, despite the pandemic, English schools have actually improved and have outperformed almost all western countries.

It is also the case that the progress data that the Government have published demonstrates that the best schools in the country have benefited from exactly those kinds of freedoms. The best school in the country, looking at performance data, is Michaela, which is a free school. Free schools and academies far outperform normal maintained schools when it comes to that data, and that is because of the freedoms that we are talking about trying to defend through our amendment.

I know that this is a debate for another time, but I am very disappointed that the Government have cancelled the next wave of free schools, that they have weakened things such as Ofsted and its inspection framework, and that they want to water down discipline policies and so on. I am very disappointed as well that, through measures such as this, the Government are watering down the academy freedoms that have done so much to make our schools the best in the world.

[Sarah Gibson (Chippenham) (LD)]

It is a pleasure to serve under your chairship this afternoon, Ms Vaz. I share the passion of the hon. Member for West Suffolk for education—as I stated earlier, both my parents became headteachers before retirement—so I appreciate that he is very concerned about the state of education in our country. However, I am very concerned that this amendment is in danger of creating a slightly two-tiered system between maintained schools and academies, whereby maintained schools would have a certain level of protection for their staff that would not be there in academies.

If this change is so important for the academies, my question to the hon. Members for Mid Buckinghamshire and for West Suffolk would be that, if this is good for academies, surely it is good for maintained schools? In that case, why are we not arguing that this whole Bill should be changed, and that this whole clause should be taken out and the change therefore applied to all schools?

I am also concerned about the separation of requirements for one school and not for the other.

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[Greg Smith]

I understand the point that the hon. Gentleman makes, but I caution him against this presumption that those academies want to pay poorly, somehow mistreat their staff or set pay rates so low that most of us would think that it was an absurdity. I am not sure that they do; I am not sure that anybody wants to pay their staff as low as they can get away with. Those academies often advertise and appeal for staff, be they teaching assistants, teachers, ancillary staff or whoever, in a manner that actually makes them more attractive than the other offerings. That is part of the freedom to set up the school in the way that they wish and to ultimately deliver the best possible outcome for the children they are teaching and preparing for their future lives.

I come back to the point that if we start stripping away the freedoms and rights of those establishments to have local control, in this case around employment, I do not see any other natural conclusion than trying to bring our entire educational establishment back into being one single style of education. There may be some on the left—I say “the left” broadly; I am not just looking at the Labour party—who would welcome going back to simply having the secondary modern or whatever it might be. To be fair to her, the hon. Member for Chippenham agreed with me on the point of diversity and choice in education. It is a huge strength and a benefit to all children in this country that we have that level of different offering and choice in our educational establishment, and it has made our country fundamentally better. For total fairness, I repeat the fact that it was the last Labour Government who introduced academies.

[Nick Timothy]

I reassure my hon. Friend that the danger he is talking about is not just hypothetical. Special advisers in the Department for Education have briefed the newspapers, calling free schools a “Tory vanity project”. I find that absolutely appalling, as somebody who believes—

[The Chair]

Order. We are discussing the Employment Rights Bill.

[Nick Timothy]

Yes, and free schools have the academy freedoms that we are talking about undermining with this and other legislation. I just wanted to draw that example to my hon. Friend’s attention.

[Greg Smith]

I am grateful to my hon. Friend; he is always reassuring. He raised an important point. Given that, as he highlighted, free schools enjoy the same freedoms —they are specifically referred to in amendment 168—as academies, I am worried that the Government’s attitude to free schools indicates that they are rowing back on support for them.

Employment Rights Bill (Eighth sitting)

Nick Timothy Excerpts

Committee stage
Thursday 5th December 2024 Public Bill Committees

[Justin Madders]

I think there was a suggestion there that we may favour one stakeholder group over another. I assure the shadow Minister that when we tot up the engagements that we have had so far, the number of businesses and business organisations is far in excess of the number of trade unions. Actually, we want to consult with everyone, broadly: we do not think that there should be an arbitrary limit on who we discuss this with.

On the time limits, the “Next Steps” document is very clear about the timetable. If it takes more time, it takes more time. We do not want to rush the Bill through and create unintended consequences of the type that the shadow Minister is rightly concerned about. We want to get it right. That is why we are committed to consulting as we go forward.

[Nick Timothy (West Suffolk) (Con)]

On the point about process: at the point at which the Bill came before the House for a Second Reading, how many of its clauses were already subject to revision within the Department?

[Justin Madders]

I was not privy to the drafting of individual clauses—the Office of the Parliamentary Counsel does that, and it is a separate organisation from the Department—but I can certainly write to the hon. Gentleman with details on which clauses we expected to be amended. It is fair to say that we expected a number of clauses to be amended when the Bill was published.

It is important that we get this right. The Bill is a Bill, not an Act, so it will continue to evolve; there will then be further detailed consultation on implementation and the regulations. That is why I believe that the shadow Minister’s concerns are ill-founded.

Question put, That the schedule, as amended, be the First schedule to the Bill.

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I do appreciate that we are looking in the weeds of employment legislation—in our discussion of this Opposition amendment, we have perhaps ventured subterranean—but I will just say that the question of exempting or blocking employees of the security services from normal access to employment law has been tested to destruction. It has been quite some time, but there is now an accepted approach to these matters.

[Nick Timothy]

The hon. Gentleman is making a powerful case for the universalism, or near-universalism, of employment rights and presumably, within that, trade union rights. The power to withdraw one’s labour is a very important part of modern employment practice. We are talking about the three security and intelligence agencies listed by my hon. Friend the Member for Mid Buckinghamshire, but I want to give the hon. Gentleman an opportunity to give his view about the universalism of these rights, including the right of the police, for example, to join a union and to strike.

[Laurence Turner]

I am grateful to the hon. Member for raising that point. It is a shame that our Liberal Democrat colleagues are not able to join us, because we could have an interesting discussion about the consequences of the 1919 police strike, and the promises that Lloyd George made and subsequently broke, which led to the creation of the Police Federation rather than an independent trade union, but I will not detain the Committee on that matter. I will just say that we are operating under the international framework for employment law, which sets out very clearly that there are exemptions to the normal right of freedom of association—let us call it what it is—and that includes industrial action. I do not think that the Bill is the right place to diverge from that international framework.

I had reached the end of my points. As I say, there are good national security reasons for rejecting the amendment.

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[The Minister for Equalities (Dame Nia Griffith)]

I draw the Committee’s attention to my interests, and to my membership of the Union of Shop, Distributive and Allied Workers and the National Education Union.

The hon. Member for Mid Buckinghamshire seeks to amend clause 7 in order to commit the Government to exempting the security services from the requirement to refuse a flexible working request only when it is reasonable to do so against one of the eight reasons set out in legislation. His amendment would also exempt the security services from having to explain to an employee why their request for flexible working could not be met. My hon. Friends the Members for Birmingham Northfield, for Worsley and Eccles and for Gloucester have pointed out many good reasons why that is unnecessary, and I will explain why I think the same.

The grounds for refusing a flexible working request are intentionally broad, so that they capture all the business reasons that may make such a request unfeasible. That applies to the security services as it does to any other employer. I will not read out all eight reasons, but I will give some examples. The work may not be able to be reorganised among other staff, or quality or performance may be negatively affected. There may be a lack of work at a particular proposed time, or the business’s ability to meet the demand of customers—we have mentioned the Home Office—may be negatively affected. There is a huge range of reasons that could be used, and they would surely cover—

[Nick Timothy]

I would be grateful if the Minister could explain what conversations she has had with MI5, MI6 and GCHQ to understand whether, given their unusual, specific, specialist operations, there are any circumstances that might go beyond those already set out.

[Dame Nia Griffith]

If I may continue, the point is that there is significant leeway. Basically, the way the provision is worded takes into account the context of the particular type of business. There are many different types of roles in the security services, as has been pointed out, and different things will apply in different circumstances. There is plenty of opportunity there.

[Nick Timothy]

I think the answer to the question must be no. That may be fair enough, but can the Minister tell us whether she has had any conversations with her opposite numbers in the Home Office, which sponsors MI5, or the Foreign Office, which sponsors GCHQ and MI6?

[Dame Nia Griffith]

What really matters is that flexibility is in-built, and I am sure that colleagues in the Home Office will be able to use it.

The other point that the hon. Member for West Suffolk might like me to address is whether giving a reason could expose something that it would be undesirable to expose—in other words, whether any explanation given would incur a breach of security. In many cases—probably the majority—the reason for refusing a flexible working request will not involve matters of national security. It might be a matter of not being able to reorganise the work among existing staff to facilitate a requested working pattern, or there being insufficient work during the period someone has asked to work. Those reasons will be no different from what other employers are considering. In most cases, it will be possible for an employer to give reasons for their refusal without disclosing any sensitive information.

There will certainly be cases where matters of national security come into play, but there are already protections in place. The grounds for refusal given by the employer have to be made public only at the point at which legal proceedings are started. In the unlikely event that an employee makes a claim in the employment tribunal, the tribunal is able to conduct all or part of the proceedings in private, or to order a person not to disclose any document. I therefore invite the hon. Member for Mid Buckinghamshire to withdraw his amendment.

Employment Rights Bill (Fifth sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Nick Timothy (West Suffolk) (Con)]

On the cumulative effect of the pressures that are building on business, during our evidence sessions last week with various witnesses, the compelling point was made that we should not look at the Bill in isolation. The impact assessment states that the costs are a minimum £5 billion a year for business. Some witnesses thought that that was actually an underestimate, and that the true figure will be higher and will grow when more details emerge as we go through this process. We should also look at the Bill alongside decisions such as the equalisation of the national living wage for young people, the increase in employer’s national insurance contributions and other business taxes that were in the Budget. I thought my hon. Friend might want to say something about the cumulative effects of all those decisions.

[Greg Smith]

My hon. Friend is right. The cumulative impact of other measures should be considered in the round. I might gently push back by saying that some of those matters are perhaps not fully in scope of the amendments that we are discussing. However, he is absolutely right that the Bill has to be considered in the light of other factors relating to other decisions in Government, be that fiscal events or other legislation. That goes to the nub of this set of amendments. This is about whether some of the measures are proportionate given the Government’s original intent in the Bill, and whether some of the original intent in the Bill, from which these amendments seek to exclude SMEs, will be the metaphorical straw that breaks the camel’s back.

Amendment 140 excludes employers with fewer than 500 employees from the Bill’s provisions on dismissal for failing to agree a variation of contact—this is also part of our set of amendments. We have questions about the wisdom of clause 22, or at least we seek reassurance from the Minister that it will not prevent employers from improving working conditions or working practices. I would like to remove yet another burden on small and medium-sized business unless and until the Government can prove that that measure is needed and proportionate, and that, critically, the benefits will outweigh the costs.

Employment Rights Bill (Sixth sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Uma Kumaran]

Statistically, less than 1% of women who have been subject to pregnancy or maternity discrimination pursue a claim in an employment tribunal. While making the case for business, it is important to realise that we are talking about a very small percentage of people. As we heard from my hon. Friend the Member for Penistone and Stocksbridge, these things can make a huge difference to people’s lives, and we are talking about very specific amendments that will make a real difference to the lives of working people.

[Nick Timothy (West Suffolk) (Con)]

I want to add a couple of thoughts, not so much about the principle of the amendments, but about what they say about the process. I note what the hon. Member for Birmingham Northfield said about the history and about the Law Commission having made its proposals in 2020. That rather adds to our confusion about why the amendments are being introduced in Committee and why they were not part of the Bill on Second Reading. I would be grateful if the Minister could tell us a little about the preparation of the Bill and what his officials said at the time of Second Reading about how many more amendments would be necessary in Committee and about its readiness. Will he also tell us more about the precise impact of the amendments, and what they mean for the Bill’s impact assessment?

[Justin Madders]

We have had a pretty wide-ranging debate. Generally, there has been support for the amendments. I welcome the Liberal Democrats’ support and hope they carry on in the same spirit for the rest of the Bill—we will see about that.

On the principle of what we are trying to achieve, let me take the Committee back to a time before the advent of the employment lawyer, when we had a thing called industrial tribunals. Industrial tribunals were about having a speedy and informal way to resolve industrial disputes where there was an individual issue. As time has passed, employment law has grown and industrial tribunals have become employment tribunals, and the original time limits have not been able to keep pace with the range of developments.

A number of examples have been given for why some people will not be able to enforce their rights, because of the strict time limits. Equally, there is evidence that enabling a longer period between a claim being discovered and a tribunal deadline being set means that there is more opportunity for parties to try to resolve their differences. On maternity leave in particular, I recall many occasions when a woman has returned to work and tried to crack on with things but been discriminated against all the time, yet because of the understandable pressures and her eagerness to try to get on, she has not acted as quickly as she should have done.

I will give a recent practical example of a constituent who came into my surgery. He had been involved in a road traffic accident while he was working, and he had been dismissed for that. He was not a member of a trade union and had taken no legal advice on his situation. Clearly, I am not in a position to give him legal advice, because I am not insured to do so, but I pointed out to him that he might want to think about talking to someone about his rights with respect to unfair dismissal. The point I am trying to make is that I was having that conversation two months after he was dismissed, which does not give him—or, indeed, the employer—much time to try to resolve things. It would be preferable for that individual to have the opportunity to have a dialogue with his employer, possibly get a process done correctly, and be reinstated. Because the time limits are so pressured, though, if he did go away and take legal advice, he will probably have been told that the only realistic avenue for him was to put a claim in as soon as possible.

There will be real benefits to the amendments, not just for making sure that people are able to enforce their rights, but in giving people more opportunity and time to resolve their differences before proceeding to litigation. For that reason, the impact assessment has not really been able to pin down a particular figure for the impact of these measures. It is probably fair to say that there are a number of other measures in the Bill that may impact tribunal claims, not least the introduction of the fair work agency. The possibility for that agency to enforce holiday pay claims and wages claims, for example, could take a significant burden off the tribunal.

Let me return to the original point of the amendments. They are about removing anomalies and giving people more time to resolve their differences. It has been an anomaly in the law for many years that equal pay claims and redundancy pay claims can be brought up to six months after the termination of employment, but most other claims cannot. Indeed, there are some claims that, depending on where they are progressed, can take even longer, such as certain types of employment-related claims that go through county court. This is about ensuring consistency.

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We think that is something the best businesses do already. We do not see why it would be a huge burden on businesses, but the benefits to employees, the levelling of the playing field, the increase in worker wellbeing and the financial benefits are there for all to see. That is why I urge the shadow Minister to withdraw his amendment.

[Nick Timothy]

I am sorry to test everyone’s patience. We have heard at different points during the proceedings that “Good employers do this already.” Undoubtedly, that is true, and where employers want to be able to offer certainty, they will. The full quote the Minister just read was “by and large”, because employers cannot do that in all circumstances, even those that set themselves up to be that thoughtful. Does the Minister recognise that where businesses do not do the things in the Bill, it is not necessarily because they are bad employers? Obviously, some employers may be bad. If he recognises that, does he therefore recognise that through standardisation and an increase in things such as compliance costs, the Bill is, in a cumulative sense, adding costs to businesses that are not bad employers?

Employment Rights Bill (Third sitting)

Nick Timothy Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Anneliese Midgley (Knowsley) (Lab)]

Q In our evidence sessions earlier this week we heard concerns about changes to collective redundancy, and particularly the changes to the “one establishment” rules. What are your views on the provisions in the Bill?

Liron Velleman: We rarely deal with collective redundancy on multiple establishments, other than for a few establishments, but it is important for the Committee to understand that collective redundancy is not always a huge battle between employers and unions. It gets into the news that this employer and that union are fighting to the death over something, but usually collective redundancy is an opportunity for employers and unions to sit around the table and try to minimise the impact on the workforce. Even with employers that unions might have a difficult relationship with, collective redundancy is usually an opportunity to do that.

It is very well known that Tata Steel recently announced collective redundancies at its steelworks in Port Talbot in south Wales. The original stated redundancy figure was around 2,500, but after work between the unions and the employer, that number has been heavily reduced through cross-matching and through finding training opportunities. Unions are not there just to say, “We are going to keep our members’ jobs for the sake of it,” and scream from the rooftops. Collective redundancy is an opportunity to allow mitigations to protect workers. Any improvements to rules around collective redundancy—whether that is reducing the number of employees needed to start a collective redundancy scheme, increasing the timeframe for that to happen, or looking at the establishment rule—are hugely welcome.

Joanne Cairns: On the establishment rule, we are very pleased that the loophole is now being removed. We took a significant legal case on behalf of our members who were employed in Woolworths, where 27,000 employees were made redundant in a single redundancy exercise when the company went into administration. In 200 stores with fewer than 20 employees each, there were 3,000 employees who were not entitled to any protective award even though collective consultation had not taken place. That was purely because they were employed in establishments with fewer than 20 people, even though the decisions were being made far above that level and affected 27,000 employees. It is just common sense that that is now being corrected.

We are aware that the issue of scope has been raised in this Committee. We went back and looked at the Trade Union and Labour Relations (Consolidation) Act 1992. Clause 23 of the Bill would not alter what section 188 of the 1992 Act says about

“the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”

It would not mean that workers are being consulted over redundancies that do not affect them; it would just mean that workers who are affected by the redundancies, or their representatives, would be consulted regardless of the size of the establishment that they are working at. We do not see people being involved in consultation exercises that do not affect them; that will not be a result of the Bill.

[Nick Timothy (West Suffolk) (Con)]

Q Further to a point that Mr Turner made, my recollection of the session on Tuesday was that re-unionisation was first mentioned by Mick Lynch, but we might want to check the record about that.

You are obviously pleased with the legislation, and I know you think it could go further; I just want to ask a little about how you would characterise your engagement with the Department. Was it very welcoming? How many meetings did you have with Ministers and officials? Were draft clauses shared with you? How constructive was it?

Liron Velleman: Community has a productive relationship with the Department for Business and Trade. We have had productive relationships with parts of the Department for a number of years, but unfortunately not on a political level for the last 14 years. It is welcome that this Government have seen a sea change in how they want to do relationships with trade unions.

[Nick Timothy]

But could you answer specifically my questions about how many meetings you have had with Ministers and officials and whether clauses were shared with you?

Liron Velleman: I believe that meetings between Ministers and whoever they meet with will be on the public record, so I am sure you would be able to find that.

[Nick Timothy]

But you are not answering my question. I am asking you a question; I would like you to answer it.

Liron Velleman: I am not sure how many meetings we have had with Ministers related to this Bill.

[Nick Timothy]

Did you see draft clauses?

Liron Velleman: No.

[Nick Timothy]

Okay. Joanne Cairns?

Joanne Cairns: We have been involved in a number of roundtable meetings with DBT, which have been very helpful in understanding what the Government’s intentions are on a number of aspects of the Bill. I do not know exactly how many meetings we have been involved in, but the engagement of DBT with unions has been good, as it appears to have been with business as well.

[Uma Kumaran (Stratford and Bow) (Lab)]

Q Thank you both for your evidence today. How important is managing work and caring responsibilities to your members? How will the Government’s “Make Work Pay” agenda and the Bill help to address those issues?

Joanne Cairns: Many of our members are juggling paid jobs with caring responsibilities, whether that is childcare or looking after disabled partners and relatives. The majority of our members are women; the burden of care continues to fall disproportionately on women, so we really welcome a number of the measures in the Bill that will help workers with caring responsibilities, including the right to parental leave and paternity leave being from day one of employment. We welcome the shift in the burden to employers to justify why they have refused a request for flexible working, and the new right to bereavement leave, which widens the current provision entitling bereaved parents to statutory parental bereavement leave.

We think that there are some areas in which those rights could be strengthened. We welcome the Government’s commitment to review parental leave more widely outside the Bill; we will be engaging with that review. We think we need to look at the length of paid maternity and paternity leave, the provision of paid carer’s leave and the wider support that is needed to make sure that those rights work effectively for working families.

On flexible working, the shift to employers having to justify their refusal is welcome, but there are still eight business grounds on which employers can refuse a request. It is still very difficult for employees to ask for flexible working; they are often concerned about what the repercussions of making a request might be. We recently surveyed our members with caring responsibilities and found that only just over half were even aware of the right to request flexible working. Of those who were aware, only half had used it. We would like a more robust framework for making requests for flexible working. For example, we could abolish the restriction on the number of applications that can be made in a 12-month period; extend the right to all workers, not just employees; and ensure that there is a right to appeal if a request is refused.

However, I would say that there has been some really important progress through the Bill and, we hope, through the review of parental leave to support working families.

Liron Velleman: I do not want to repeat what Joanne has said, but I have a small point to make. The day one right to request flexible working is so important. So many people start a new job and then work out, “Okay, how am I going to balance this with my caring responsibilities?” If they cannot make that request for the first six months and they really struggle to make sure their kids are picked up from school or to deal with their elderly parents, they might find a not great way of dealing with it. It is then quite difficult to turn around to their employer and make the request six months down the line. It is so much better to be able to say, as a day one right, “This is what I want to give to this new employment that I have just received, but this is the world I exist in and these are the other responsibilities I have—how can we best make that work?” We know that our members will see a huge benefit from that, especially if they move to a new workplace.

Employment Rights Bill (Fourth sitting)

Nick Timothy Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Michael Wheeler (Worsley and Eccles) (Lab)]

Q This is a question particularly for Mr Prendergast. What do you think will be the impact of reinstating the school support staff negotiating body—a measure that your union has long called for—on your members in schools?

Andy Prendergast: When you look at the school support staff negotiating body, this is something that has been on the agenda for about the last 25 years. We have found overwhelmingly in schools that teachers have national bargaining and very clear terms and conditions that are vigorously enforced, but unfortunately for the support staff, it is almost like the soft underbelly. So often when schools enter financial difficulties, heads—when you read the school returns, they have often given themselves quite large pay rises—end up cutting hours and pay from some of the lower-paid people.

Over the last quarter of a century, we have seen a transformation in what schools are like. Most of us remember schools having one teacher and that was it. Now, we see increasingly more pupils with special educational needs go into mainstream education, and they need that additional support. People from vulnerable backgrounds get the support of teaching assistants, and we have seen educational outcomes really improve off the back of that.

For us, particularly as we see more and more academisation and more and more fragmentation, we often find that there is an undercut-and-poach approach from different schools, which ultimately means that one benefits at the expense of another. It is not helpful when we get into that situation. The school support staff negotiating body allows for minimum standards and the extra professionalisation of roles, which really have changed over the last 25 years. Originally, there was a little bit of a stereotype that teaching assistants were there to clean paint pots and tidy up. Now, they do very detailed work on things like phonics and supporting pupils with special educational needs and disabilities, and they really help to deliver classes. I think it is time that professionalism was recognised and rewarded.

[Nick Timothy (West Suffolk) (Con)]

Q I think that you, like all the other witnesses from the trade unions, were quite pleased with the Bill, and understandably so. I know you said that you felt shut out over the 14 years of government until the general election. I want to ask about your engagement with the Department and with Ministers, and indeed with No. 10. How many meetings have your organisations had with officials, special advisers and Ministers, and were you involved in any of the drafting of the clauses of the Bill? Did you see any in advance before publication, and that kind of thing?

Andy Prendergast: Personally, I was involved in two meetings, and they were tripartite ones. They were quite robust exchanges where we had Ministers, civil servants, people from the employers’ associations and large employers, and also people from trade unions. I think those meetings were really quite helpful. We were raising points that sometimes they would argue with or agree with, and they raised points that sometimes made us look at things differently.

In the wider sense of the union, we have had quite a lot of engagement, but I would expect a union to be engaged over a Bill that has a huge amount of clauses about trade unions. In terms of whether we saw any of it in advance, no. We were very much holding our breath when the Bill came through. Part of my job is to tell people things and make cases, and to be told that they have heard, and then something comes out that is the complete antithesis of everything that we talked about.

As I said, we did not see the Bill in advance. When it turned up, there were some things we liked an awful lot. Some things, as we said beforehand, did not go far enough. The majority of engagement was tripartite, and I think both ourselves and the business organisations that have taken part in that process have helped understand it, and we have got to something we can all live with. That is certainly our impression.

Mike Clancy: I would just emphasise that Prospect is not affiliated with a political party, so any comments I make are based on evidence of the past and the present. We have had proportionate engagement. We have not kept a count or a register in that regard. Frankly, probably trade unions and business would want more and more time on this, and I am sure that will be a challenge going forward.

What I think was most positive, and something I had not seen in my career before, was a tripartite meeting with a range of very senior business representatives, trade unions and civic society with officials, the Business Secretary and the Deputy Prime Minister back in August. That is important because it demonstrates that we can get in a room, we can talk to each other and we can resolve problems. That, for me, is the absolute core of this Bill and the “Next Steps to Make Work Pay” agenda. I hope that we can do more of that. I have talked a lot—I have had the privilege of doing this job for a long time—about how we have lost convening spaces in the economy in the past period, so we may be shouting over fences or making our cases separately to Government. Government is difficult, and it is about problem solving. The more that business, trade unions and civic society can come together and say, “Look, we’ve got our differences at the edges, but we can do this together. This is how we would fashion an outcome within the public policy you set,” the better. We will always want more, but to be fair, with their strong pace and intensity, the Government and their supporting officials have done an admirable job in convening us.

--- Later in debate ---

[Alison Hume (Scarborough and Whitby) (Lab)]

Q I cannot resist the temptation of having three professors in a row in front of us. If you could make one change to the Bill, what would it be?

Professor Simms: We were warned about this question, and I am going to be very cheeky and ask for two. First, I think a clear and proactive right to strike and join a trade union would go a long way to bringing us into line with many of our comparator countries. I also have some concerns about the negotiating bodies, which really look quite like pay review bodies at the moment, rather than free collective bargaining between the parties deciding their own issues and what works for them. Those are the two areas I would focus on.

Professor Deakin: I would make a change on fire and rehire. I think that the provisions on unfair dismissal are helpful but will not address the problem of collective agreements being undercut. At best, at the moment, the remedy for an unfair dismissal is almost certainly going to be compensation, when what is needed is a mechanism to embed terms and conditions going forward. The Department is consulting on reforms to the interim relief procedure, but I would go further. I think there has to be a change to the remedy for unfair dismissal so that the previous terms can very clearly be reinstated. At the moment, it is not possible to enforce a reinstatement order. You have to go to the county court even for compensation, but in the case of a reinstatement order, the employer can resist it and just pay compensation.

In my opinion, there should be a collective arbitration mechanism. The Central Arbitration Committee should have the power to reinsert terms and conditions for the affected categories of workers, and that would be true of the persons hired, if that happens to replace those who have been dismissed. That mechanism existed under 1970s legislation and would provide the kind of collective remedy that we have just been discussing. It would be important for stabilising terms and conditions in labour markets and avoiding the need for individuals to bring complex claims before employment tribunals. I also have ideas about zero-hours contracts, but you said just one.

Professor Bogg: I have said that I think enforcement is the critical dimension of the conversation about all of this Bill. One specific change that I think would be valuable is to remove the presumption that collective agreements are not legally enforceable. That puts the UK in an almost unique position in the world. One aspect of the P&O Ferries scandal that is not often discussed is that there were collective agreements in place, but because of the statutory presumption that they were not legally binding, P&O Ferries was able to put the collective agreements in the bin. I am not saying that I would mandate them to be legally enforceable, but I would remove the statutory presumption, which would give a signal to the parties that they could make them legally enforceable. I think that would bring some real value to the enforcement dimension of UK labour law.

[Nick Timothy]

Q I thought that I would quickly clear up the disagreement that seems to have broken out between the two sides of the Committee, so I have gone through the record of Tuesday’s session. Paul Nowak said:

“It is very likely we will see increased unionisation as a result of the Bill”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 67.]

and Mick Lynch said that the Bill will mean that “many workers”—more than 50%, he hoped—

“are covered by collective arrangements in one form or another.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 62.]

That is up from 22% today. So I think it is fair to describe that as re-unionisation. I do not really understand why the Labour party would be so ashamed of doing such a favour for the Labour movement, of which it is a part. But anyway, you just mentioned P&O. I just wanted to ask you, who did you think was right about P&O? Was it the Transport Secretary or the Prime Minister when he slapped her down for criticising them?

Professor Deakin: I am not sure I quite understand the question.

[Nick Timothy]

It is about employment rights. We have been discussing P&O throughout the whole—

[The Chair]

If nobody wants to answer the question because you don’t know the answer, that is fine.

Professor Deakin: I can tell you what I think about P&O.

[Nick Timothy]

Q Okay, you don’t want to answer that; I will ask another one.

One of my concerns about labour market regulation relates to the use of substitution clauses by firms like Amazon and Deliveroo, where they give a licence to a courier and the courier is then entitled to share that licence with others. The expectation is that responsibility for checks for things like the status of the substitute, in terms of whether they can work legally and so on, and responsibility for the pay that will be provided to that person, all lies not with Deliveroo or Amazon, but with the person that they have contracted with in the first place. That is not dealt with in the Bill at all; I think it should be. Can you expand on that, please?

Professor Deakin: Of course, the issue of employment status has been deferred, has it not, to a consultation? But unless a way is found to include workers like the Deliveroo workers within the scope of protective labour law, the proposals to improve collective bargaining rights and many other rights will just fall away. Large businesses like Deliveroo, I would say, need workers; and if our labour law system cannot describe those workers as protected by one means or another, there is a clear defect in it.

There are various ways to get to that point. They do not all turn upon the definition of worker, or the use of a substitution clause to get you outside the scope of the current law. In some cases, and in some countries, independent contractors are protected by labour law rights, even if they do not count as employees. In our past, homeworkers who might have employed other people had legal rights under labour laws. So this issue absolutely has to be addressed. I understand it is out for consultation. Many of the measures contained in the Bill would not be effective, unfortunately, if this issue was not grappled with.

Professor Bogg: In the situation that you have just described, I think part of the driver for the use of substitution clauses is that they are used to avoid employment status. So in any review of employment status, a key thing that will need to be addressed is the problem of substitution clauses as a way of avoiding either employee or worker status. There is quite a simple way to do that, which is to treat personal work as an indicative rather than a conclusive factor, because it then just drops back into the range of things that the tribunal will look at.

In a situation where a large company is relying on wilful blindness to avoid responsibilities under migration rules or under health and safety legislation, there is a very simple response, which is to impose criminal liability on large corporations that try to rely on wilful blindness to avoid obligations in primary legislation. That is a very straightforward way of tackling an abusive avoidance of rules that are very important to enforce.

[Dr Tidball]

Q You have mentioned where the Bill places the UK internationally in terms of strike law. Where do you think the Bill broadly places the UK compared with other developed nations, when it comes to the level of employment rights?

Professor Deakin: If we take the whole of individual employment law, for example, the Bill will bring us closer to the OECD average, but there will still be various respects in which we would not be as protective of individual rights as other countries, especially when they relate to remedies for unfair dismissal. Enforcement could be made much more effective, but there is no doubt that the Bill brings us closer to the OECD norm—and not just there: many countries in east Asia and other parts of the world will have labour law systems that are at least as protective as ours. So it is a corrective.

On the other hand, I emphasise that UK employment law has never been as deregulatory as US law has, for example. We are not in a situation, as US unions and US workers are, of starting from scratch. We also have a history of labour law that we can build on. That makes it easier to think of this as the first step in a rolling programme that will effectively restore us to where we were before the 1980s. In the 1970s, more than 80% of workers in this country were covered by a collective agreement. Union membership was around 55% or even 60%, but coverage was over 80%. We had a very progressive employment protection law at that point.

Going back further, we were the first country not just to industrialise, but to have modern factory legislation. We now know that the implementation of the Factory Acts led to not just protection and things like the weekend, but improved productivity. This history is important for us.

Professor Bogg: This Bill seems as radical as it does only because the baseline is so low, and it is very important to keep that in view. Let us assume that this Bill is not enacted—if you look at the OECD countries, we are the fifth least regulated on dismissal protection out of 38 countries, and we are the third least regulated on hiring on temporary contracts. That is where we are in OECD terms, so the measures on dismissal protections and guaranteed hours will push the UK back into an intermediate position in the OECD. I do not think the Bill marks any kind of revolution just yet; it just pushes the UK back into the mainstream of other civilised OECD countries with employment regulation that works effectively.

Professor Simms: To return to enforcement, the challenges of both individual and collective enforcement in the UK at the moment really do add extra difficulty. Not only do the rights not exist in general—there are relatively few rights in general—but they are very difficult to enforce.

--- Later in debate ---

[Laurence Turner]

Q I apologise to the panel for returning to an earlier dispute in this quite disjointed way, but just for the record, earlier this week one of our witnesses, Paul Nowak, said:

“I do not think there is a direct link; you do not pass a piece of legislation and trade union membership and collective bargaining go up”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 67.]

Another witness, Mick Lynch, said that personally he hoped to see 50% collective bargaining coverage. That is compared with 39% now. It seems like thin margarine to me and certainly not a unionisation of the economy, but there we go.

My question to the panel is the same question that was put to employers’ federations earlier this week. We all understand the points that you have made, but are there specific measures in the Bill that you welcome?

Michael Lorimer: No.

Luke Johnson: No.

Michael Lorimer: I am not trying to be contrarian, but I think Luke’s point is a very good one. There are 150 pages and 28 new measures, or whatever it is. Apart from anything else, it is an administrative burden. I welcome the White Paper hugely, but there is nothing in here that I am excited about.

Luke Johnson: I will give you an example of one very specific issue that may arise that I do not think has been thought through properly, and its unintended consequences. There is an adjustment to collective redundancy rights. This would, I guess, normally apply in a business that is going through a very severe restructuring and possibly an insolvency.

What happens in an insolvency is that a buyer can keep that business alive and keep a chunk of the jobs, at least, from going by buying it out of administration. The one thing that goes through an administration is the TUPE rights of the employees. If you are only buying a small portion of that business, normally you can carve out only TUPE rights relating to the staff of the bit you are buying—let us say that it is several divisions, departments or whatever. As I understand it, this will tighten that, as proposed, such that almost any buyer of any part of that business will face the TUPE rights of the whole workforce. The unintended consequence will therefore be that parts of a business that were good and that could survive will not; they will be shut. The whole thing will be shut and all the jobs will be lost.

I do not think that whoever drew up that part of the legislation has fully thought it through, because it is in society’s interest that where businesses can be saved and rescued—I have been involved on both sides in those situations—they should be. It is always a great deal easier in certain respects to save a business that has failed because it had too much debt, or some other problem, than to start all over again from scratch.

Michael Lorimer: Perhaps I should add that there are aspects of this that I am quite neutral or comfortable about. There are some things around bereavement, and so on, that are all good. I emphasise that my focus today is around the day one stuff and flexibility.

[Nick Timothy]

It is quite conspicuous that you are the first two witnesses, I think, who actually run businesses yourselves, and your evidence is rather different from much of the—

Luke Johnson: Has any of the other witnesses ever created a single job?

[Nick Timothy]

I would have to leave that to them.

Michael Lorimer: I did think, Nick, that we could have met in the endangered species part of the Natural History Museum, as business leaders.

[Nick Timothy]

Q Indeed. With not just the Bill, but the increase in employer’s national insurance contributions and things like the equalisation of the national living wage for young people—you also mentioned energy prices, Mr Johnson, which are a particular concern of mine—you sound very worried about the future of innovation, investment and ultimately jobs in this country. You have a platform today to send a message to the Prime Minister and all the Ministers who are involved in this legislation. What would that message be?

Luke Johnson: I think there is a complacency about our current prosperity. There is this belief that jobs will always appear, that businesses will always invest and that living standards will naturally rise. It sometimes feels as if Britain is a nation running on fumes at the moment. We have large amounts of debt, certainly at Government levels. We have public spending projected to take, I think, 45% of GDP—a very high level compared with 10 years ago—and that crowds out the private sector. Interest rates, especially if you have to borrow from the bank, are pretty punitive.

As for the idea that we can continue to occupy the role in the world that we used to occupy decades ago, it is a dramatically more competitive place. There are dozens and dozens more countries where money can be invested, factories can be sited and jobs can be created. Many of them are much lower-cost than we are. They might argue that they have a hungrier workforce, or whatever it may be. No country has ever taxed and regulated its way to a higher standard of living. It feels as if that is what this Government are about. They need to get real about how prosperous economies are actually created.

Michael Lorimer: If I were speaking to him, I would say, “Listen well to those who matter most.” To go back to the White Paper, you simply cannot create jobs without the private sector on board. You can listen to all sorts of people who will give you incredibly important stakeholder advice, but if you want to create jobs and grow the economy, the business community has to be on board. If we want to create prosperity, the private sector is where it is going to happen. I would say, “Listen well to those who matter most.”

Secondly, I would say, “Take your time and consult widely on this.” I feel that at the minute the consultation is not wide enough. We are here today: there are two of us speaking, broadly on the same message. Take time and do not rush it through for the sake of meeting a timescale. Take time and speak to business. Go out to the country and speak to small and medium-sized businesses and employer groups.

A lot of this stuff is not controversial. It is tick-box and—to go back to the first question—it is reinforcing a lot of stuff we do in the business anyway. We have 600 employees; at the minute I think we have three people in total on long-term sick, so we do not have a lot of problems. We have an engaged workforce and we are delighted to pay people well, at above the national living wage. All that stuff is about us trying not only to help our people to prosper, but to help our customers and the Banbury community to prosper. All this feels quite counterproductive and could have a lot of unforeseen consequences.

[Michael Wheeler]

Q As the Minister says, we have heard from businesses and their representative groups, which have said that good employers have nothing to fear from the measures in the Bill; in fact, they welcome the level playing field to prevent undercutting. Given that the purpose of the Bill is to promote good-quality employment, what are the specific measures in it that you think do not contribute to that aim?

Luke Johnson: It has already been raised, but if you introduce lots of rights like paternity rights and flexible working rights from day one, you risk having more problems, and that will be a cost. For example, there is a new obligation to protect employees from harassment. That sounds wonderful, but if you are in the licensed trade, as I am, that means that a single remark from a single customer could lead to a harassment claim for which you are responsible. How on earth are we to police that?

I do not know whether you are at all familiar with the state of the hospitality trade, but it is pretty dismal. We had two years where we were barely allowed to open; we have had unprecedented energy costs; we have higher rates; we obviously have all the costs for NIC and so forth from the Budget; and we have at best flat, if not declining, sales. I fear that hundreds more—if not thousands more—hospitality businesses will shut next year for good. That is obviously not the fault of this legislation, but it is petrol on the flames.

I suspect that a lot of the organisations you are hearing from are very large corporates with huge HR departments. In a way, they want to keep out new, young and innovative competition, because that is how big companies often behave. Building walls of regulation suits them, but that is not how you get a growing, vibrant and innovative economy. You get that through lots of smaller, younger businesses growing, coming up with new ideas and challenging the incumbents.

--- Later in debate ---

[Chris Murray]

Q May I ask about the evidence we heard about industrial relations, both from representatives of business and from the many trade unions that we have heard from? How do you see this Bill affecting industrial relations in Britain, and what do you think will be the long-term impact of that on the economy?

Justin Madders: Over the last 14 years, there has been a pretty hostile environment for trade unionists. That has been ramped up in recent years, which is why we have seen in the last couple of years the highest number of industrial relations disputes for about 40 years. The solution is not to continue to legislate to make it harder for people to strike; it is actually to change the culture and attitude towards industrial relations.

We are trying to make sure that trade unions have the opportunity to operate on a level playing field, and I think that we have heard plenty of evidence from both employers and trade unions that when there is a constructive relationship, businesses benefit and individual workers benefit. There is plenty of evidence that trade union members usually have better pay, and better terms and conditions—that is recognised throughout the world—and that is something that we want to help facilitate under this legislation.

[Nick Timothy]

Q Do you personally want to see increased unionisation in Britain, and do you hope and/or expect that the Bill will deliver it?

Justin Madders: I think that is actually a challenge for the trade union movement. I think that they would accept that this is really up to them. Personally, as a trade union member and someone who has been actively involved in the trade union movement for many years, I see the absolute advantages and benefits of being a trade union member, but it is really up to them to get into the workplaces, explain their advantages to the workforce and then engage on a tripartite basis with Government, business and workers to improve everyone’s working lives.

[Nick Timothy]

Q Thank you. Can you name a CEO of a real business—not a representative body—employing more than, say, 100 people who would say that this Bill is unambiguously good for the economy? How many of them do you think there are?

Justin Madders: I would imagine that there are quite a few.

[Nick Timothy]

Can you name some?

Justin Madders: I cannot name individual CEOs. Octopus has been very positive, Sainsbury’s has been very positive and, as we heard today, the Co-op has been very positive. I think the CBI welcomed the Bill and welcomed the engagement as well, and Make UK too. There are quite a lot of organisations on the employer side that are generally welcoming of the intentions of the Bill, and I think that has been reflected in the evidence.

[Nick Timothy]

Q But the only real businesspeople who have been here have been unambiguously against it.

Justin Madders: I think you will find that the Co-op is a real business, and it employs an awful lot of people.

[Nick Timothy]

That is true. That is a correction.

Employment Rights Bill (First sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[Chris Law]

Q This is a question for the whole panel but, Carly, you mentioned that regulations here set the minimum standards. Does this Bill go far enough, and which bits would you like to see go further?

Carly Cannings: It was not a criticism when I said that it was about minimum standards. As I said, creating a happy, thriving, engaged workforce is more than just legislation. It is not to be misunderstood as a criticism of those minimum levels, but equally, you do not want to tie the hands of good employers by making them jump through too many hoops around legislation.

For me, this Bill is about raising the standards of those employers who are not necessarily doing, and need a bit of encouragement to do, the right things. We need to be mindful of the balance. The previous panel mentioned the impact on small businesses and the importance of not going too far the other way in over-legislating that ties the hands of small businesses. It is very much not a criticism; it is a realistic statement of the Bill being part of the package.

Ben Willmott: We have done a lot of research over the last few years looking at the level of HR capability and people management capability in small firms, and what sort of support they need. The research has involved more than 500 small firms, and shows the very low level of HR knowledge and capability within them. They do not have in-house access to professional HR practitioners; most of them do not use any sort of external professional HR consultancy support either.

There are a lot of issues that you probably would not imagine. A lot of small firms may not even have written employment contracts or written terms and conditions of employment. There is a lot of informality still in that part of the economy. That is the point I was making earlier. We really do need to find ways of providing better quality, more accessible advice and support to help these small firms meet their obligations and improve the overall level of employment standards in the economy.

Cathryn Moses-Stone: From our perspective, we would hope that this is a broader catalyst and a driver to see better-led and managed organisations across the board. We want to see more investment in management and leadership in general. We have lots of evidence looking at the impact of better-trained managers in the public sector and how that can support public service reform. We have evidence for what that looks like in healthcare education settings. We have evidence for what that looks like for delivering green skills and AI, and for how that is a driver of more investment in management and leadership across the board, given the evidence we have and what it does for workplace growth, productivity, our economy and people’s happiness.

Again, I emphasise the point that 82% of people are accidental managers. We have all heard—I am sure everyone in this room has, in their time—about a bad manager and the impact that that can have on an organisation. We see this, hopefully, as a bit of a catalyst for further investment and the thought given to M&L in general.

[Nick Timothy (West Suffolk) (Con)]

Q Employment standards are obviously important and can contribute to higher productivity, but also, if you guarantee and legislate for certain standards, there will be trade-offs, because that brings cost and opportunity costs through lost time. Real improvements to productivity come from things like investment in tech and training.

May we explore the trade-offs a little? With this kind of legal framework, to what extent will managers be able to focus properly on the core purpose of their businesses, as opposed to compliance with the law? To what extent will managers be able to invest properly in training and new technologies to aid productivity, rather than have the costs set out in the impact assessment?

Ben Willmott: That is a really important point. I alluded to it earlier. We know that one of the things that will drive productivity will be looking at how businesses can identify and address skills gaps, which will require thinking about how we train and develop our staff and managers. We know that responsible technology adoption will, to a large degree, depend on the people element—things like job design, or making sure that people are trained and have the right skills to use technology, and that we are consulting employees in advance so that their views help shape how the technology is implemented.

Businesses only have so much bandwidth, so I think that there is a real challenge there, particularly for our members, who are on the frontline of trying to ensure compliance. At the same time, the business will be asking them to help improve workplace productivity through those other activities. That needs to be thought about when we think about how regulation interacts with other factors that might support workplace productivity.

Carly Cannings: You are right—there is an inevitable trade-off. Even employers who are now broadly compliant or doing good things will have some costs associated with bringing in changes to policies that reflect the actual detail of the Bill, for example. They might be broadly doing something good in that space, but it might not quite align with the provisions of the Bill. It is important to make the point that it is going to have an impact on employers, even those that are doing good things in that space already. But the way to offset that is by phasing the changes through—not dumping them all on employers all in one go, but helping them to navigate the changes. This has already been alluded to, but it is making sure that they have that support through the implementation phase.

Cathryn Moses-Stone: I am pretty much in agreement with Carly. Obviously, there will be an initial trade-off, and investment will be required, but I guess our point is that it is for longer-term gain. Once we have got those happier and more supported managers, and therefore workplaces, these things will become elements that save the business money in the long run. Understanding that broader piece is important, and making sure that the process is there in order to upskill and train people in the right ways. It will be about a clear understanding of, “Will this agency be there to support them in the right ways?”, rather than just being a place to go as a last resort, assuming a slap on the wrist and ill intent. What is the support package alongside this to manage some of those trade-offs?

[Michael Wheeler]

Q I want to drill down into something Ben talked about earlier: how can the Bill best meet its aims while supporting smaller businesses that might not have dedicated HR support? Carly, the Happy Business School describes itself as being

“on a mission to help organisations build people-centric workplace cultures, where happy people can thrive.”

Which measures in the Bill will be most transformative and help you in that mission?

Carly Cannings: Not to labour the point further, but this is about setting minimum standards, and creating happy, thriving workplace cultures is far broader than employment legislation. On the stuff around flexibility, some of which has already come in through previous legislation, a common theme with organisations I work with is that having good, flexible working policies generally goes down very well with employers. As with everything, there is a balance to be struck, but some of the firming up of the flexibility rights is good. But as I said, lots of the businesses I work with are already doing good things in that space. It is more about bringing up the standards for the others. This is just a small part in that bigger picture, but a move in the right direction. I suppose it is raising the profile of those rights and broadening them.

Employment Rights Bill (Second sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[The Chair]

Before I call Nick Timothy, we do not have long left now, and other Members are indicating that they want to speak. Could questions be quick and answers be slightly shorter, too?

[Nick Timothy (West Suffolk) (Con)]

Q My concern is for people who are more at the margins of the labour market. We have touched on this a bit, but I think it is really important that we understand that employing anybody has a risk. If you were to multiply the costs when things go wrong, the risk may not be taken in the first place. In the hospitality sector in my constituency, of which a lot is connected to horse racing, people are quite up front about the fact that headcounts are going to fall as a result of this, combined with the Budget. Can you give us a bit of quant and qual—an idea of the numbers who might not be employed as a result of these measures? Do you have any case studies or examples—of hoteliers, and so on—that might bring home the story?

Allen Simpson: I think that is right, but the bigger impact was the Budget. Whether you take the Government’s number of 50,000 or Deutsche Bank’s number of 100,000— I have no way to tell between those two things, so let’s split the difference—there will certainly be job losses as a result. We should expect that those job losses will heavily weigh on people on minimum wage, because you can adjust the demand curve when you get to set the prices, but you cannot if the prices are set. Hospitality will bear a disproportionately large number of those losses, for sure.

If you want some qual, I was speaking to a publican who runs a series of pubs across the south-east, and his net profits at the moment are about £300,000 across the set of pubs. He estimates that next year, running the same numbers with next year’s costs, he will lose about £60,000. Clearly, his judgment is about exactly how much of that bears on raising prices, on him reducing his profits and on reduced salaries for the workers.

[The Chair]

One last question.

--- Later in debate ---

[Laurence Turner]

Q I want to ask you about the international dimension; I am thinking about manufacturing businesses. Do you have sites in other countries? Mondelēz Cadbury in south Birmingham comes to mind. Among your members that have exposure to different systems of employment law and labour market regulation, have you received any feedback on the Bill that is informed by a knowledge of different systems and practice?

Jim Bligh: I would be happy to write to you with more details. We have not had direct feedback from members. Very often, the businesses that we work with in the UK, whether large or small, are the UK arm—they will operate their HR and legal policies and all the rest of it in and from the UK for the UK market.

To go back to something I said earlier, flexible labour markets are the hallmark of growing economies and of growing productive food and drink manufacturing sectors around the world. Global businesses would say that the UK has done really well on that front in recent years, so would not want to go any further backwards. I am happy to write to the Committee after this with more information about international examples.

Jamie Cater: Anecdotally, some concern has been expressed by our members about the competitiveness of the UK when it comes to manufacturing and the measures in the Bill. There is a concern from member companies that might be headquartered elsewhere or have significant operations in countries outside the UK that it is becoming harder, more expensive and more challenging to employ people in the UK.

The Government have done a lot of very welcome stuff in developing an industrial strategy that gives a lot more certainty and confidence for lots of businesses to invest generally in operations in the UK, but when we think about the total cost of the Bill and its administrative and regulatory impacts, there is a bit of concern that it is becoming less attractive to employ people in the UK versus elsewhere. We are increasingly having conversations with members about that.

[Nick Timothy]

Q The impact assessment says that the costs of the Bill are around £5 billion, but earlier we heard that that is actually probably an underestimate and it is likely to be a lot higher. Could you tell us a bit about where those costs will tend to fall for your sectors in particular and how they will relate to other challenges that businesses are going to face with the national insurance rise, the equalisation of the minimum wage and higher energy costs?

Jamie Cater: A lot of those up-front costs will have to go into training, in particular for HR managers, people managers and line managers, not just to ensure regulatory compliance but for employers that want to think about how their broader culture and organisational culture reflects the principles of the Bill. Lots will go into ensuring compliance and wider training of staff.

I mentioned earlier that there was concern that the Budget announcements on NICs—you mentioned the living wage and minimum wage as well—may make it more difficult to take the risk of employing people who might require additional training and, more broadly, that training budgets might get squeezed. It is already difficult and has been made challenging over recent years for our members to recruit the apprentices that they need; I am thinking about the apprenticeship levy and wider skills policy.

The challenge, I suppose, is that given that training budgets are getting squeezed the money effectively goes increasingly into training managers rather than necessarily into the young people who need the trade and technical skills to work on shop floors and production lines. The risk is that that could further weaken manufacturers’ already unfavourable position when it comes to investing in the technically skilled workforces of the future. That is where we see the real risk.

Jim Bligh: I agree with Jamie on all that and would add two more specific examples. I have mentioned the administration burden, which falls particularly on small businesses but really falls on them all. There are two examples of where that might come in. One is on the collective redundancy proposals for consultation, which remove the single establishment. If you are a large business with, say, four or five different sites and you are making more than 20 people redundant at one of those sites, the expectation will be, according to how we read the Bill, that you consult across all those sites.

Previous witnesses have called this a perpetual consultation, and that is a concern that we have as well —that it would be quite hard to manage. It is administratively really difficult to manage something like that across five different sites in a business. It could also lead to uncertainty and confusion among employees, who are being constantly consulted on restructuring and changes to other parts of the business in other local areas that have no impacts on them.

The other point on zero-hours contracts is that there is a risk that with a short reference period of 12 weeks, you end up not aligning with seasonal spikes in demand, so you end up paying people substantially more to do contracts that actually are not required, given that that does not reflect a full season. So our proposal, like others’, is for something more reflective and closer to the Ireland model. We would suggest a 26-week reference period; that covers most elements of seasonality in a business.

[Chris Murray]

Q I am an MP from Edinburgh, and obviously that is a university city; it is a city with a lot of tourism and hotels and hospitality, and we also have the festivals in August, so we see a lot of this kind of stuff. Looking around my constituency, I can see a real difference in how employers treat their staff, some of whom will be really impacted by this legislation, but a lot of whom will not be, because they are already above that.

I think, Mr Cater, you said that a lot of your organisations already go beyond the provisions that are based in this law. Do you think that the legislation could lead to more of a level playing field, where the organisations that are already treating their staff well are unaffected, but others would have to change and improve—a kind of levelling up in how people’s staff are treated?

Jamie Cater: The important thing for levelling the playing field is the fair work agency, and making sure that we have an approach to enforcement of labour market policy and regulation that is properly resourced and does have that level playing field. I said right at the start that we support efforts to remove and address genuine exploitation and bad practice in the labour market. We have confidence that the fair work agency can begin to do that.

On our concerns about the Bill, we have talked a lot about statutory probation periods, but on guaranteed hours and so on, I think there is the potential to create a level playing field as long as we have the caveats that allow that genuine two-sided flexibility where it works in the interests of both the employee and the employer—retaining, for example, zero-hours contracts where they work for both parties, as in many instances they do, so that employers and employees can still benefit from those arrangements.

Some of our concerns around the right to guaranteed hours are in things like the definition of regular working hours, and the scope, which Jim has alluded to, of the reference period, where we think there is a risk of an unintended consequence because it captures a much broader range of flexible contracts than just literal zero-hours contracts or low-hours contracts. The example that we use in manufacturing is annualised hours contracts, where employees are guaranteed a minimum number of hours over a 12-month period. They have much more financial security in terms of pay, but those hours can still vary on a week-by-week or month-by-month basis. We would not consider that to be an example of, to use the words of the plan to make work pay, “exploitative zero-hours contracts”, but depending on where that 12-week reference period falls, and depending on how you define regular working hours and what the number of those hours might be, a form of flexible employment like that could end up being in scope when maybe it is not appropriate for it to be.

We want to ensure that there are no unintended consequences where arrangements like that, which provide financial security, stable employment plus flexibility for both parties—which should be retained—unintentionally fall within scope of the measures in the Bill, because that would mean that the Bill is not a level playing field; we would be in a situation where good options for both parties had effectively been taken off the table.

--- Later in debate ---

[Dr Tidball]

Q Why are the changes to statutory sick pay in the Bill so significant, and what opportunities do they bring for disabled workers and those who have long-term health conditions?

Paul Nowak: Why is it so important at the moment? We have 8 million people who are reliant on statutory sick pay, which does not kick in until day three of illness. That means that you literally have people, often disabled workers but not exclusively, dragging themselves into work despite the fact that they are ill, and they are often then spreading ill health. I will give you a practical example, Dr Tidball. I was at a mental health hospital in Blackpool last year where a group of women workers had needed to take strike action, while working in an NHS mental health hospital, because they did not have access to day one sick pay. They are people who were going into an NHS setting when they were clearly unwell, because they could not afford to take time off.

We also have an issue where we have over a million very low-paid workers, mainly women, who do not get any sick pay at all because they do not meet the lower earnings threshold. I think that the Bill will be transformative, and we will get to a situation where people are not afraid to take time off if they are ill because they are worried about whether they will be able to pay the rent, mortgage or bills. I think it is absolutely essential, and a really important part of those basic day one rights that every worker should be entitled to.

Maggi Ferncombe: I concur with everything Paul said. I would only add that we end up with different workers working in the same workplace under different terms and conditions. One group of workers who cannot afford to take a day sick, because they do not get paid, potentially bring in an illness and infect other people. In the public sector, such as in health settings, they are infecting not only the workforce but the public. It will be significantly different for all of those people.

Hannah Reed: As we saw from the pandemic, it is really horrendous when people feel pressured to go into work and put themselves and their colleagues at risk. Therefore, day one rights to SSP are obviously really critical. Moving forward, we would like to see an uplift in SSP because we still have one of the lowest rates in Europe, but the Bill represents a significant step forward, as does the recognition that there will be more collective bargaining. We as trade unions will negotiate for day one rights, often at full pay and not simply at the level of statutory rights.

We are also looking forward, not just with the Bill but moving forward with the wider “Make Work Pay” measures, to working with the Government on the health and safety review. It is regrettable that there is nothing in the Bill on health and safety. We hope that the Government will continue to prioritise that, addressing not only issues about mental health in the workplace but the impact of long covid, which disadvantages some people. We recognise that not everything can be done with this Bill, but we look forward to that ongoing programme of work.

[Nick Timothy]

Q I have three very quick questions, which I think you can answer very quickly. You are obviously very pleased with the Bill, and I know that countervailing power is important and matters. First, would you characterise this as a fundamental act of rebalancing between capital and organised labour? Secondly, as the Bill was prepared, how was the relationship with the Department? How welcoming was it? Did Ministers ensure that you had an open door? Thirdly, I know you hope that the Bill means a more collaborative relationship with employers in the way that you have described, but obviously the right to withdraw your labour is a very powerful thing. Do you think there is a possibility that we will ultimately see more strikes as a result of the Bill?

Paul Nowak: Perhaps I could have a quick go at those questions. I would not describe it as a fundamental rebalancing; I would describe it, as I said, as the biggest upgrade in workers’ rights in decades, and one that has been desperately needed for years. I hesitate to say this, but I think there has been a political consensus that this rebalancing, if you want to describe it as such, needs to take place. If you cast your mind back to 2016-17, Theresa May commissioned Matthew Taylor to undertake his review of modern employment practices. I think there were between 50 and 60 recommendations in his piece of work. The then Government promised 20 times or more in Parliament that they would bring forward an employment Bill and they did not. There was actually a recognition under successive Conservative Governments that the labour market was not working, that it was letting down far too many workers and that it was not working on its own terms, with low productivity and so on.

I hope that there is a political consensus that we do need to shift the balance. On the relationship with the Departments, I have been at the roundtables with union colleagues and also with representatives from the CBI and the other business organisations, and I think it genuinely has been a collaborative effort. What has been said to trade unions and what has been said to business has been exactly the same. The message has been consistent, and I think that is a good way of working.

I do not think you can draw a line between this legislation and an increase in industrial action. Indeed, I would flip that point. Previous Governments introduced the Trade Union Act 2016, which was designed to make it harder, effectively, for workers to take industrial action, and then last year they presided over the biggest strike wave in our recent history. I stood—not because I am some trade union anorak on these issues—on more picket lines last year than I have in the previous 20 years combined, despite the fact that it was made harder for workers to take industrial action. Actually, I think the focus of the previous Government, and I think the focus of this Government, is not on trying to legislate industrial problems out of existence, but on trying to resolve disputes and on finding ways of working together.

I was on the council of ACAS for 11 years. There will always be individual and collective disputes in workplaces; that is a fact of life in modern workplaces. How you manage those disputes and how you put in place the right, proper framework of law to give workers an effective voice is really important, and I think this legislation helps to do that.

Maggi Ferncombe: Good industrial relations will mean fewer strikes; it is as simple as that. If workers feel that they have been listened to through their trade union, and that we have been able to find a solution—hopefully—to any of the issues, the likelihood of workers feeling that they have no option but to take strike action will lessen.

Dave Moxham: I fully concur.

Hannah Reed: From Unite’s perspective, we would say that this is a step towards rebalancing power relations in the workplace. We think that at the moment there are too many gaps in the Bill and we have to include in that zero-hours contracts. We think it is too easy for the employer to game the measures, but we look forward to working with the Committee on tightening those provisions up.

I want to pay absolute tribute to the Department—the civil servants as well as the Ministers—for the work that it has done in recent weeks and months, and for genuinely engaging. I have been in employment rights policy work for generations, and I have never seen anything like this level of engagement in terms of civil servants and also Ministers giving their time to both sides of industry.

I want to reiterate the point that I think has been made by Unison: collaborative working relationships are dependent on both sides. Too often—we have experienced this in recent years—employers have resorted to hard strong-arm tactics such as fire and rehire, sacking workforces and driving up casualisation in the workplace. That increases insecurity and damages morale in the workplace. We would like to be in workplaces where employers come to the table, have genuine negotiations and recognise the importance of investing in the workforce, building security and offering a genuinely fair share of the outcomes from what workers do, not simply increasing the profit margin.

[Alex McIntyre]

Q We have heard a lot today from other witnesses about the benefits of the flexibility of zero-hours contracts to businesses. Could you tell us a little bit about the impact on your members of the uncertainty of zero-hours contracts?

Paul Nowak: It has a massive uncertainty in terms of people not being able to plan their lives and not knowing whether they are going to be working enough hours to pay the bills and to meet their rent or mortgage at the end of the month. Overwhelmingly, those on zero-hours contracts want guaranteed hours. The vast majority of the British public, regardless of who they voted for at the last election, want to see an end to zero-hours contracts. We polled 1,000 large, medium and small employers, and 70% of them believe that getting rid of zero-hours contracts will drive improvements in productivity.

I will make one final point. We hear a lot about the potential cost to employers, the potential impact on recruitment and so on, but some of those points were made during the introduction of the minimum wage.

Port Talbot Transition Project

Nick Timothy Excerpts

Wednesday 11th September 2024 Commons Chamber

[Jonathan Reynolds]

My hon. Friend is right to make that point. We cannot say enough that this is not a sunset industry; it should have a bright future. We can get this right. On the negotiations, my hon. Friend will know what I have already said about the conversations with British Steel. It is a very challenging issue. We have made it clear that the Government are there to play a part, and we obviously want that to be part of a transition. We have made that as clear as can be. As soon as I have further information, I will update the House.

[Nick Timothy (West Suffolk) (Con)]

I thank the Secretary of State for his statement. As a supporter of industrial strategy, I welcome the idea of a steel strategy in the future, but I will ask a couple of specific questions on the detail. First, is it the Government’s policy that the domestic manufacture of primary steel is a strategic industry that must be protected and guaranteed? What do the Government intend to do about the sourcing, either domestically or through the import of coking coal? Earlier, he seemed to suggest that he would not intervene to support British Steel in Scunthorpe. Can he confirm that, if we lose that capacity, we may go five, six or seven years without steel manufacture in this country?

[Jonathan Reynolds]

I welcome the hon. Gentleman’s support for industrial strategy. I have said many times that there should be, as there is in many countries, cross-party agreement—perhaps not on the detail, but on the premise and what we are trying to achieve. He asks about domestic manufacture and the blast furnaces remaining open. That is of course my preference, but I need a business partner—a company that is willing to do that. I do not think that it would be reasonable to spend the very considerable sum of money that we have pledged on subsidising short-term losses rather than on the ability to deliver new things. He also asks about coking coal. Obviously, that depends on the long-term future of the blast furnaces. That is what they need.

In relation to British Steel, I want a transition plan. My comments earlier were about my frustration that, for me, the ideal deal in a place like Scunthorpe would have been to build the future alongside operating what we currently have. That was available to the last Government; they did not proceed with it. The kind of infrastructure needed for the long-term future of operating blast furnaces would require carbon capture and storage. It was cancelled many times by the previous Government, and is not there. I am heavily constrained in my options, but I am still doing everything that I can to get a deal for the workforce, and to ensure that there is a business there that commands the support of its customers to transition in the future.