Employment and Trade Union Rights (Dismissal and Re-engagement) Bill

Richard Fuller Excerpts

Friday 22nd October 2021 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to follow the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), who, through his commitment to his own Bill and through the amity he has shown to his colleague the hon. Member for Brent North (Barry Gardiner), who is bringing forward similar legislation today, demonstrates that he has a keen commitment to dealing with this problem. Although, as I will outline, I have a different approach to how we should tackle it, I believe the principle is shared across the House.

It is a shame that the hon. Member for Brent North chose the time I stood up to walk out of the Chamber—I shall not take it personally, whether or not it is personal. I wanted to commend him for the way in which he presented his argument and case today. He has undoubtedly done a tremendous amount of research and gained tremendous understanding about this issue, and in taking so many interventions from Members on both sides of the House he demonstrated that he was prepared to debate, understand and move forward. I will return towards the end of my contribution to how we might continue the progress of this amity between the hon. Members for Paisley and Renfrewshire North and for Brent North and my hon. Friend the Member for Newbury (Laura Farris), who outlined a substantial alternative approach and a better one to achieve the goals that are shared across the House.

It was a shame, and perhaps a disappointment to the hon. Member for Brent North, that what was the oratory of Cicero from him descended into the mosh pit of Westminster debate with the contribution from the shadow spokesperson, the hon. Member for Bradford East (Imran Hussain). It was a metaphorical head in the hands moment for the hon. Member for Brent North, but he did endear himself to many on the Government side of the House with his contribution. He was at one moment in danger of talking out his own Bill. Ironically, the fact that, unusually, there was a statement today gave him some latitude to come to a close.

I wish to pick up on two points the hon. Gentleman made. First, he said that his Bill would make the UK the best place to work, but the UK is already the best place to work, in large part due to measures that this Government have undertaken, particularly in their commitment to the living wage and in continuing the progress on reducing the gender pay gap by ensuring that there is enhanced reporting by boards about the treatment of employees. This Government are continuing to make the UK the best place to work, not least—I say this as much of this debate relates to actions that took place during the covid period—with the exceptional response of the Chancellor to support businesses through the furlough programme and other UK Treasury measures. So I gently make that point to the hon. Gentleman.

[Chris Stephens]

The hon. Gentleman and I share a passion for American football, but may I ask him why, if he believes the UK is the best place to work, the Government have not yet responded, formally, with legislation, to the Taylor report of four years ago on unscrupulous working practices in the UK?

[Richard Fuller]

That is an interesting point. Unfortunately, I am not a member of the Government. The hon. Gentleman probably wants to direct that question to those on the Front Bench. I am familiar with Matthew Taylor, who, apparently, is back in the news this week with a different hat on telling the Government what they should or should not do, and I am not sure whether I agree with him in that particular case.

The hon. Member for Brent North also said that the Bill was about better regulation, and that perhaps gets to the nub of the difference of approach between those on the Labour Benches and those on the Government side of the House. Our approach is not about making better regulation, but about making better business. We understand that in doing that, Government and others can take a variety of tactics and approaches to achieve a shared objective.

Let me point Members to my entry in the Register of Members’ Financial Interests, because I want to refer to a couple of pertinent examples from last year. This debate largely relates to an exceptional time and an exceptional practice, both of which remain exceptionally rare. For those who have quoted many statistics, let me just add a comment from the Chartered Institute of Personnel and Development. It said that the

“use of ‘fire and rehire’ remains low”

despite the “upheaval of Covid.” It was covid that created those exceptional issues for people. The part that was exceptional and that differentiated companies’ response from the one during a different time of distress, the 2007-08 financial crisis, was that the Government themselves had stopped commerce. This was not just a matter of overcoming financial considerations—the shortage of access to capital to support a business or a downturn in demand in the economy—but a direct intervention of the state, both in this country and in Europe and across the world, which said, “No, you cannot do business”. When we frame legislation, it is important to understand that, if the context for that legislation is primarily driven by such an exceptional event, we are wise to be very cautious indeed about what we put on the statute book for fear that it will have uses in less exceptional times that perhaps we cannot foresee today. That is one of the primary reasons why I will not be supporting the Bill in a vote later today.

Let me reflect on what was on the minds of companies at that time. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) talked a little bit about his broad experience, but I want to talk specifically about what was going on this time last year. Before coming to Parliament, my career was substantially in venture businesses. The businesses to which I still have relations would be covered by the provisions of this Bill. They are largely in the categories of businesses larger than microbusinesses, but they are all businesses for which the availability of cash and the support of capital, both shareholder capital and of loans, are always treated very seriously and quite tightly to achieve growth.

Growth is those companies’ main objective. They do not have a cushion of resources to fall back on, so when the exceptional events of covid and the closedown of the economy occurred, the amount of pressure on their boards and senior executives was beyond exceptional. There was the responsibility to understand where on earth money was going to come from to support ongoing operations. There was their duty of responsibility to make sure that they were not trading fraudulently because of insolvency concerns about the business. There was a desperate search for loans, and an approach to shareholders to gain additional liquidity through additional investment. Many senior executives voluntarily cut—and in at least one instance eliminated—their pay during that period. There was a tremendous focus on employees, and primarily on employee safety.

Let us all remember that the experience of covid was not a shared common experience for everyone in the country. There are those of us in the country, such as Members of Parliament, who were facilitated to continue to take 100% of our pay, to have 100% certainty of employment, and to have the opportunity to work from the safety of our own home, but there were many others who were facing: cuts in their pay, a 100% certainty of the loss of their business and the requirement that, if they wanted to stay in employment, they had to go to work. For any Member to say that senior executives and company boards were not intently focused on ensuring the safety and security of their employees does a gross disservice to what companies were going through.

Boards and senior executives were substantially challenged to make changes. In the process of looking at all the alternatives that could maintain the survival of the company, they would have due regard to the law at the time. As my hon. Friend the Member for Newbury stated, one of the issues with the existing legislation is that companies will defer putting all their cards on the table, including the option of fire and rehire if that is one of their considerations. Perhaps we can make some change in that regard that would be helpful for companies and employees.

Companies would also have due regard to maintaining the solvency of their business. To do that, consideration has to be given to what a company will do to manage its costs in the year ahead. If it is looking to access capital, loans or additional equity, questions will be asked by the banks, creditors and shareholders about what it is doing to manage their future costs. It would be a deterrent to gaining the investment and support needed to maintain the business if it was unable to outline what angles and opportunities it was investigating to reduce costs.

For many of the executives in business with which I have worked, consideration of employees is front and centre in their mind. It is exceptionally difficult for them to balance in their own heads the idea that, “I know I need this additional capital,” with, “I want to make sure I can protect the employees and the skills that I have within my workforce.” In my experience, most people involved in business who are entrusted with authority would undertake measures covered by the Bill only as a last resort, if ever.

[Geraint Davies]

The problem is that the hon. Gentleman is conflating the extraordinary situation of the pandemic, when the Government, to their credit, intervened with furlough, loans and other measures, with a normal situation when a business needs to adjust to economic pressure. That is what we are talking about today—a Bill that, to a certain extent, limits fire and rehire so that it is not the first but the last resort. I feel that he should support it.

[Richard Fuller]

I understand where the hon. Gentleman is coming from, but I do not think the facts of history indicate that what he suggests is the right approach. The truth is that throughout the period of the last Labour Government it was not seen fit to bring forward such legislation. As I mentioned earlier, there were no calls for it when we went through a severe financial crisis, although there was widespread fire and rehire. It is precisely because there was an exceptional event last year that I am conflating that with this legislation. In my view, the Bill has been stimulated by that experience but will sit on the statute book for the future of more regular business, though I am not sure what that will be.

Furthermore, there is a little confusion about the intent of the Bill, which perhaps the hon. Member for Brent North can help to clarify now he is back in his place. Many of us have seen Labour MPs—socialists—campaigning to outlaw fire and rehire, and one would anticipate that many of them have turned up today to vote to do that, yet we heard from the Bill’s sponsor that it does not do that. It got so confusing that the shadow Front-Bench spokesman, the hon. Member for Bradford East, urged hon. Members to “support fire and rehire”. Between those on the Opposition Benches who say that they want to ban it, the promoter of the Bill who says that his Bill does not ban it, and the shadow Front-Bench spokesman who wants us to do more of it, I wonder whether they know what indeed they are doing.

[Barry Gardiner]

rose—

[Richard Fuller]

Perhaps the hon. Gentleman can clarify.

[Barry Gardiner]

I am grateful for the hon. Gentleman’s good humour. The Bill does not ban fire and rehire, but we want—I think all hon. Members want—to end it as a tactic. That is the point. When people say, “Let’s end fire and rehire,” they mean, “Let’s end it as a tactic, as a bad practice used by disreputable employers to do the wrong thing.” I hope that that clarifies it.

[Richard Fuller]

I am very pleased that the hon. Gentleman is back. He is showing the steps that he is taking to create consensus. I think he will find that as we move forward, perhaps with an alternative approach. I would gently mention that only on 6 May this year 145 of his colleagues signed a letter to the Prime Minister urging that fire and rehire be outlawed, and he must accept that his proposal must be a severe disappointment to them, given what he has said today.

There is an important reason why I would urge the hon. Gentleman to continue his journey, perhaps towards a code of practice approach. For me, and I think for many, the work of business, the work of capitalism, is a good for society. Capitalism is good. Capitalism creates. Capitalism creates higher wages, better skills, stronger businesses and a more global Britain. It is through capitalism that this country has grown the strength to provide public services for so many of our people. It is through capitalism that we have been able to have the highest increases in wages for the lowest paid that we have had for decades. It is capitalism that gives hope to people who want to start their own business. It is capitalism that is going to close the gender pay gap and the discrimination against people based on colour, because capitalism seeks out talent. It is upon the captains of capitalism—the women and men who lead our businesses—who understand how to get that great concoction of people and investment to create wealth and security, that we should be entrusting the responsibilities to act ethically and responsibly.

In my view, that purpose is best accomplished through a code of practice that works with the best grain of business rather than against it.

[Kevin Hollinrake]

My hon. Friend’s points on capitalism were not totally accepted by those on the Opposition Benches. I think we all concede that capitalism is at times not perfect, but has the alternative ever been shown to work anywhere?

[Richard Fuller]

Certainly not, which is why Labour Members are on the Opposition Benches, and the Conservative party, which supports working people, is in government.

I should like to say a few more words about the detail of the Bill and to support some of the points made by my hon. Friend the Member for Newbury.

[Anthony Browne]

The shadow Front-Bench spokesman said earlier that various European countries were ahead of the UK, citing Germany, Spain and Ireland. I actually agree with him—they are ahead of the UK in unemployment. In Ireland, unemployment is 50% higher than in the UK. In France it is twice as high. In Germany it is three times as high. Youth unemployment in Spain is about 30%. It is a real tragedy for young people. Does my hon. Friend agree that there is a connection between the flexible labour market and the low unemployment in the UK?

[Richard Fuller]

Well of course I do. Who would not agree with my hon. Friend? He will accept that, should we as a House decide that the better approach is through a code of practice, that places great responsibilities on boards of directors and chief executives to abide by that code of practice. It is a better approach. When pressures require extraordinary measures to be taken, time is critical, and everyone is busy—not just within the business, but the advisers and so on, too. That is why the legal approach proposed by the hon. Member for Brent North would in those circumstances be too bureaucratic, not flexible enough and would end up with a worse outcome for employees than is his honourable intention. A code of practice gives those entrusted to make those decisions the right set of things that might otherwise miss their attention. Directors are absolutely aware of their responsibilities under certain aspects of law, but also of their responsibilities under a code of practice.

[Sam Tarry]

Does the hon. Gentleman agree that it is beyond belief to think that a code of practice is enough? We are talking about firms such as Clarks, where workers who make kids’ shoes are currently on strike. It was recently bought up by a Hong Kong-based private equity firm. Are such firms going to pay any attention whatever? It is just the same as BA. Its parent company IAG had £3.5 billion in the bank and it did not pay any attention even to British laws at that particular time. It was trying to circumnavigate them. It seems to me that a code of practice will not even be worth the paper it is printed on. Does he agree?

[Richard Fuller]

The hon. Gentleman makes a fair point. I am not particularly aware of the particular circumstances to which he has spoken, but the intention of the suggestions of my hon. Friend the Member for Newbury is that there would be some form of power behind that code of practice to encourage businesses so that we can eliminate those limited examples where companies are misusing fire and rehire. Perhaps the hon. Gentleman would like to speak to the junior—sorry, the Minister, my hon. Friend; I should never call him junior, he is very senior. The hon. Gentleman may wish to raise that point directly with the Minister, if he has not already.

In closing, I say to the hon. Member for Brent North and the SNP spokesperson that through their diligent efforts, they have raised an issue where some measured change is required. The hon. Member for Brent North might find that the approach of my hon. Friend the Member for Newbury is a better approach, but with the dignity with which he has proposed this Bill today and the way in which he has shown his willingness to speak to others, there is no dishonour in proposing and pushing something if ultimately there is a different way for us to achieve that objective.