Employment Rights Bill (Seventeenth sitting)

Steve Darling Excerpts

Thursday 9th January 2025 Public Bill Committees

[Greg Smith]

A lot of the detail is in the clauses that follow this one; as the Minister said, this is very much a building-block clause. Although I totally understand and appreciate the rationale for taking enforcement powers that are currently fragmented across multiple different agencies and consolidating them into one, the devil is always in the detail.

Although it might seem sensible to consolidate the powers that are currently so spread out into one agency, this is very much a centralisation of power. The crux of clause 72 is about directly providing the Secretary of State with the overall function of enforcing labour market legislation. Whenever I see such provisions in any legislation, I cannot help but be reminded of the late, great President Reagan’s famous quote about the nine most terrifying words in the English language:

“I’m from the Government, and I’m here to help.”

As my hon. Friend the Member for Bridgwater suggested in his intervention on the Minister, the serious detail is about the practical workings of the fair work agency as it is set up. What will be the total number of enforcement officers, employees and ancillary staff required—admittedly, some will be brought across from other agencies—to form it? What will be the cost to the taxpayer of putting that together? How many people are we actually talking about? I think that, as opposed to the powers that they will hold, was the crux of my hon. Friend’s intervention.

As I said, we accept the rationale for bringing these powers together under one agency, but whenever such powers are granted to a Secretary of State, no matter what the field, there is always uncertainty and scope for never-ending expansion of the new agency, and of the size of the state, to do what is, in many cases, important enforcement work—I do not doubt that. Given the presumption that the Bill will become an Act of Parliament and that the agency will be set up in the way envisaged in clause 72, it would be good to have clarity about the plan for just how big the agency will be and whether the Secretary of State will put any cap on that from the get-go. How far does the Minister envisage the agency going?

[Steve Darling (Torbay) (LD)]

It is a pleasure to work under your chairmanship, Mr Mundell. I broadly welcome the bringing together of powers under the fair work agency. I note that the Secretary of State is due to publish an annual report, but I am sure that businesses in Torbay would be interested to know where in the Bill the critical friend is to hold the Secretary of State to account and ensure that they are being light of foot and driving the agenda we all want to see in this area, so I would welcome the Minister’s sharing that.

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

As is customary, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I am a member of the Union of Shop, Distributive and Allied Workers and the GMB.

I warmly welcome this clause and the subsequent clauses, and the establishment of the fair work agency. I remind the Committee of the evidence we heard of the broad support for the agency, including from Helen Dickinson, the chief executive of the British Retail Consortium, who said:

“I think everybody is supportive of and aligned on proposals like a single enforcement body.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 99, Q95.]

Jamie Cater, the senior policy manager for employment at Make UK, said:

“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.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 54, Q53.]

Jim Bligh, the director of corporate affairs for the Food and Drink Federation, said:

“For me, it is about enforcement and having a really strong, well-resourced enforcement agency.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 55, Q53.]

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[Greg Smith]

Yes, Mr Mundell. I am genuinely struggling to find the connection between my questions in transport orals this morning on sustainable aviation fuel and this Bill. I will gladly offer to have a coffee with the hon. Member for Birmingham Northfield to discuss my passionate view on synthetic fuel in the future, but it really is not relevant to this Bill.

I accept the hon. Gentleman’s latter point, about previous reviews, but new clause 23 is specifically looking at the creation of this new body and is about ensuring that that is the right thing to do and that the cost of it will actually bring the benefit that the Minister and other Government Members have explained that they believe it will. It is incumbent on all of us, whether we sit on the Government or Opposition Benches or for the smaller parties, that we challenge everything put in front of us. Any culture in any organisation that does not challenge what is put in front of it is often weaker for it. That is what new clause 23 is seeking to do.

Inherent in that, notwithstanding the Taylor review, is the aim to ask and double-check whether the rationale takes into account how effectively labour market legislation is currently being enforced and understand what research this Government—not former Governments, but this one—have undertaken on what will be done more effectively or efficiently with the creation of this new body. We would like the Government to assess how effectively the labour market legislation that will be enforced by the new body is currently working in that fragmented sense that the Minister spoke about earlier, and how effective the enforcement of it is, before setting up any new quango.

Generally speaking, new quangos fill me with dread and fear, but this one may be worth while. However, we need the evidence. Will the Minister expand on how matters will change for businesses through the new labour market enforcement authority? What will feel different for them and what changes might they need to make as they prepare for it? New clause 23 tries to get to the heart of that.

[Steve Darling]

I know from my surgeries and casework in Torbay that discrimination is sadly alive and well. I ask the Minister to reflect on some of the evidence from the Equality and Human Rights Commission, which talked about the provision leading to fragmentation and the possibility of some of its standard work falling between two stools. What reassurances can the Minister give that the good work will proceed appropriately either through the fair work agency, or in a partnership approach with the Equality and Human Rights Commission?

[Sir Ashley Fox]

I want to speak in support of new clause 23 and to ask the Minister whether he is familiar with Parkinson’s law. It states that the number of workers in any public administration will tend to grow over time, regardless of the quantity of work done. The corollary is that work expands to fill the time available for its completion.

Although Conservative Members are in favour of the creation of the fair work agency, there is a risk that, over time, it will seek to have more staff and more power, will consume a great deal more of taxpayers’ money and resources, and will impose more on employers’ time, without great result. That is why a review is necessary. We want to ensure that any new authority is lean and efficient. We also want the Government to take the same approach to regulations.

Unfortunately, the Bill is a hefty document. It will impose £5 billion-worth of costs on employers, which will probably result in fewer people being employed, higher inflation and lower growth. It is therefore perfectly reasonable for the Opposition to ask the Government to reflect after 18 months and ascertain whether they can find anything in this weighty tome that they could do better or more efficiently.

The working time directive is immensely complicated and imposes burdensome record keeping on employers. In the past, it has resulted in retained firefighters in rural areas having to count the time when they sit at home, not doing anything, as working time. It has been a difficult and troublesome measure, and perhaps my party should have done more to simplify it when we were in office, but that is not an excuse for the Government to say, “Because you didn’t do enough, we intend to do nothing.” It is reasonable for us to ask the Government, at the end of 18 months, to take another look and see whether they can do anything to reduce the burden on businesses.

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[Greg Smith]

On the face of it, the clauses are not problematic: they are quite clear, and it is important that those things that are considered as enforcement functions are clearly defined. That is all well and good—until we get to clause 74(5), which states:

“Arrangements under this section do not prevent the Secretary of State from performing a function to which the arrangements relate.”

Therefore, a body with certain powers—admittedly in the Secretary of State’s name—is created; essentially, a quango is put in place, and people are given the clear job of carrying out the enforcement functions in the Bill. However, if the Secretary of State is not prevented from performing one of those functions, what is the mechanism by which they can overrule the quango they themselves set up to perform them? Of course, the ultimate buck must stop with the Secretary of State, but it is a pretty established convention that where a quango is set up and has powers delegated to it—I think of Natural England within the Department for Environment, Food and Rural Affairs and many other quangos—it is very rare for a Secretary of State to intervene, overrule and perhaps come to a different conclusion from that quango.

We will not oppose the clauses, but I would be grateful if the Minister could reflect on the circumstances in which he believes clause 74(5) would come into effect, to make clear the procedures a Secretary of State would need to follow to bring that subsection into effect.

[Steve Darling]

I broadly welcome the proposals in the clauses, and I look forward to the Minister’s explanation of the issues outlined by the shadow Minister.

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[Greg Smith]

I understand the hon. Gentleman’s point. I believe in freedom; I have no problem with any hon. or right hon. Government Member being a member of a trade union. The point here is clarity and transparency. We have a Bill in black and white in front of us that refers to equal numbers but fails to define whether a member of a trade union could sit as an independent expert or would have to be categorised under subsection (4)(a) as representing the interests of trade unions. This is a matter of information on which the Committee and the general public deserve to have clarity before we allow this clause to become part of primary legislation in our country. As in all walks of life, there will be points of debate on that. I want to hear from the Minister’s own mouth whether he deems it to contradict the “equal number” provision. We could dance on the head of a pin all day, but when we are seeking to pass legislation, clarity is very important, and I look to the Minister to give it.

[Steve Darling]

I am concerned about the heavy weather that colleagues on the Opposition Benches are making of this. For me, this measure is about driving a positive culture in employment, and the board’s balance is entirely appropriate. I welcome the clause.

[Sir Ashley Fox]

I have a number of concerns about the establishment of the advisory board for the enforcement of labour market rules. I do not believe that such an advisory board is necessary and I am convinced that its creation would represent an expensive and bureaucratic exercise that would be redundant at best and a tool to disguise the Government’s intentions behind a veil of unnecessary consultation at worst. Let me explain why.

Let us first address the central issue: the need for advice. It is not as if there is a shortage of expert opinions on labour market matters; far from it. If the Secretary of State is seeking guidance from trade unions, he need look no further than the extensive and loud representation of trade union interests on the Benches behind him. There seems to be no shortage of trade union representatives in key positions, be it MPs with close ties to the unions or those with—