Enterprise Bill [Lords]

Peter Grant Excerpts

Tuesday 8th March 2016 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I rise to speak to amendment 18, which is in my name and that of my hon. Friend the Member for Livingston (Hannah Bardell). The amendment perfectly complements amendment 15, which would add specific protections to part 9. As the hon. Member for Cardiff West (Kevin Brennan) said, as it stands, and given the rhetoric accompanying it, part 9 is a classic populist move by the Tory Government. They are playing up to the perception of fat cats, saying that people get huge pay-outs that are not comparable with private industry pay-outs, but they are not taking account of long-serving, lower-paid workers.

As I have implied, there is a lot of smoke and mirrors behind this scheme. The £95,000 cap includes pension payments that go not to the workers, but to the pension funds, including in the form of strain contributions for those on ill-health retirement. It is absolutely amoral that somebody who has to retire on the grounds of ill health, having worked hard, perhaps in a manual job, will have their pension capped because of this scheme.

I really do not understand how the Government cannot recognise the impact of the scheme. It was interesting that the House of Lords asked for an impact assessment, but it was not forthcoming. Back Benchers have asked the shadow Minister about the impact, but it is not for Opposition Members to provide that; it is the Government’s responsibility to do so at the outset.

The Government have admitted that this provision could affect workers who earn less than £25,000, which includes librarians, midwives, NHS workers and other long-serving employees. Those people are worlds away from the horror stories that we sometimes read about failed chief executives who walk away with massive lump sums. I understand a curb on pay-outs for those people. Even worse, some people receive a massive pay-out and then pop up in another council as a highly paid consultant. Again, I agree that there should be cap on that. I also suggest that the situation I have outlined is more of a problem in England, given that Scotland has only 32 local authorities, but I understand the concept of trying to control that.

The sum of £95,000 is a lot of money but, to put it in perspective, it is only three and a half years of an average salary, and a pay-out potentially puts someone out of the marketplace for good. We already know that many women who have previously taken early retirement are now suffering financially because they were not informed about the increase in the state pension age. Those women are now being forced into work programmes, but they are struggling to get back into work, which illustrates how difficult it can be to get back into work at a certain age. We should not be imposing exit caps that affect life choices for lower-paid workers who are trying to weigh up their options, given their realisation that they will have to work much longer than they had planned or been notified about by the DWP.

This provision will also hit middle-income earners, who are not meant to be the target. The local authority that I belonged to periodically operated a teacher refresh scheme to allow older, more experienced teachers to be considered for early retirement and replaced by younger teachers. That represents a virtuous circle of creating vacancies for young teachers, protecting the pensions of retiring teachers, and saving the taxpayer money overall due to the lower wages that are paid to new starts. Good governance is needed, not an exit cap that, in its current format, is too much of a blunt instrument.

Given the forced austerity that has been imposed on us, the Scottish Government have implemented a policy of no compulsory redundancies. In Scotland there have been zero compulsory redundancies in the NHS, but in England there have been more than 17,000 since 2010. If the Government really want to play the popularity game, as the hon. Member for Cardiff West said, they should extend this measure to other publicly supported companies, such as those banks with public money behind them. It beggars belief that we have a Chancellor who will stick up for annual bankers’ bonuses against the rest of Europe, but is happy to stand back on important matters such as exit payments and to let lower-paid workers suffer.

[Peter Grant (Glenrothes) (SNP)]

My hon. Friend mentioned the Scottish Government’s record on avoiding compulsory redundancies. In my previous experience as the leader of one of Scotland’s biggest councils, we could not have managed the substantial reduction in our workforce without compulsory redundancies if we had not had the flexibility to offer severance packages that were proportionate to the service that people had delivered. Without that ability, councils in Scotland would have faced large numbers of compulsory redundancies that would have been inhumane in our workforce.

[Alan Brown]

I agree with that fine point completely. I went through the same experience as a local councillor on East Ayrshire Council. Although some of the payments made would be caught up by this payment cap, they were demonstrated to be value for money because of the payback period of two years. We were able to show good value for the taxpayer.

The Minister for Employment originally pledged to protect workers earning less than £27,000. Amendment 15 would allow that protection to be put in place, while amendment 18 would allow the cap to reviewed and increased in line with inflation. As the Bill stands, that cap is another part of the ongoing erosion of terms and conditions, given that inflation levels and the cost of living is clearly going to rise. The measures allow the Government to maintain a charade of being a party for workers. That is why we will push amendment 18 to a vote, and hopefully the party of workers on the Government Benches will support us.