Employment Law (Beecroft Report)
Oral Answers to Questions — Home Department
Chuka Umunna (Streatham, Labour)
(Urgent Question): To ask the Minister of State, Department for Business, Innovation and Skills, Mr Prisk, if he will make a statement on the Government’s plans in respect of the report on employment prepared for the Government by Adrian Beecroft.
Mark Prisk (Minister of State (Business and Enterprise), Business, Innovation and Skills; Hertford and Stortford, Conservative)
May I apologise to you and to the House, Mr Speaker, for the absence of the Secretary of State? He is currently travelling back from the north of England, where he has been visiting a number of businesses, and will return to the House later this evening.
The Beecroft report was commissioned by the Department for Business, Innovation and Skills as part of the red tape challenge and the employment law review. Mr Beecroft was asked to give his initial thoughts on areas of employment law that could be improved or simplified to help businesses and for the purposes of job creation. The report was intended to feed into the work that the Department is carrying out to review employment laws to ensure that they maximise flexibility and reflect modern workplace practices. That is important to employers and employees. The report was designed specifically to strengthen our international competitiveness in difficult economic times. It is worth noting that the UK is considered to have the third most flexible labour market in the OECD. That is good for jobs, and we intend to maintain that situation.
Mr Beecroft was asked to take a candid look at a wide range of issues. He submitted his report in October last year. Over the past few months, Ministers have been working on the red tape challenge and the employment law review. We are already actioning 17 of the 23 topics that he raised.
On considering the Beecroft report, it was clear that further evidence was required, most notably on the issue of no-fault dismissal for micro-businesses. The call for evidence on that began on
However, I noticed in the press today that an earlier draft of the report is in circulation. Therefore, in the interests of accuracy and so that the House has the correct information before it, I confirm that I have instructed officials that the report will be published later this afternoon. Copies will be placed in both Houses.
The Government are taking positive action to reform the labour market and to ensure that we can help more people get back to work as soon as possible.
Chuka Umunna (Streatham, Labour)
What a complete and utter shambles! I understand, as the Minister said, that the Secretary of State is in the north-east today. However, will he explain why the Under-Secretary of State for Business, Innovation and Skills, Norman Lamb, who is responsible for employment relations and is the author of this book
“to help you to maximise compensation awards”
in the employment tribunal, is not responding to this question, given that he would appear to be the expert on these matters?
The Secretary of State has called the Beecroft report, which has been promoted by the Prime Minister, “bonkers”. However, on page 3 of the report, Mr Beecroft says that he owes a “debt of gratitude” to the deputy director of labour law at the Department for Business, Innovation and Skills, who helped to produce it. Will the Minister confirm that his Department was complicit and fully co-operated in the production of the report, despite the misgivings of the Secretary of State?
We agree that improvements can be made to the way in which employment tribunals operate, for the sake of employees and employers, but we do not think that watering down people’s fundamental rights at work is a substitute for a growth strategy.
The Secretary of State has said that there is a “reasonably good balance” between workers’ rights and employers’ flexibility. The Prime Minister and the Chancellor, however, suggest that the balance has gone too far in favour of employees. Will the Minister tell us who is determining Government policy in this area—his boss or his ultimate masters in Downing street?
On growth, Beecroft suggests that his recommendations will solve all our problems. However, the double-dip recession that we are in is not a consequence of people’s right not to be unfairly dismissed or of our employment law regime; it is a consequence of the huge drop in demand that has flowed from the loss of business and consumer confidence caused by the Government’s policies.
Is it not the case that putting people in fear of being fired at will, far from promoting growth, will have a huge detrimental impact on consumer confidence? I ask that because Mr Beecroft proposes to give businesses of fewer than 10 employees the power to fire at will through compensated no-fault dismissal. That could affect more than 3.6 million workers in the private sector. Mr Beecroft said:
“The downside of the proposal is that some people would be dismissed simply because their employer did not like them.”
That, he said, was “a price worth paying”. That is wrong. Does the Minister agree?
Does not the noise from Government around this report demonstrate what our business leaders have made very clear: that the Government have lost the plot on growth? Having sought to blame British businesses for the lack of growth, with Ministers telling firms to stop “whingeing” and to “work harder”, the Government now want to blame the hard-working employees in those businesses for the mess that they created. The truth is that they have run out of excuses for tipping the country into a double-dip recession. Everyone wants them to change course to get more people into work. That is what they should concentrate on, not on making it easier to do precisely the opposite.
Mark Prisk (Minister of State (Business and Enterprise), Business, Innovation and Skills; Hertford and Stortford, Conservative)
A lot of clichés but not a lot of substance, I am afraid.
The hon. Gentleman asked whether I was complicit in the production of the report. If he had listened to what I said in my statement, he would have heard that the Department commissioned the report. He can use the term “commissioned” or “complicit”, but we still want to check what everyone says.
The hon. Gentleman asked where the employment relations Minister is. He is in the west country, speaking to and working with postal workers, who are keen to hear his views, and so he should be.
The hon. Gentleman asked about the quote including the word “bonkers”. Let us just clarify that, shall we? What the Secretary of State said was that the way in which the current working time directive works is bonkers, and he was right. It operates in such a way as to prevent hard-working people from earning more money. I have no problems in supporting the Secretary of State on that.
The hon. Gentleman then turned to the question of how to develop an economy that can grow more jobs. He may not have spotted the fact that 600,000 new jobs have been created in the past 20 months. There is no simple magic solution, and Government Members understand that although Mr Beecroft has his views, there are others, and we want to listen to them. That is why we have issued a call for evidence and want to consider that evidence.
Last week, I had the privilege of meeting the work force at Vauxhall, where there are to be 700 additional jobs, with a potential 4,000 extra jobs in the supply chain. Why? Because the staff there are prepared to be flexible and work on a modern basis. It is a shame that the Labour party does not understand that.
Mark Prisk (Minister of State (Business and Enterprise), Business, Innovation and Skills; Hertford and Stortford, Conservative)
I do not have a specific estimate, and that is why we have issued a call for evidence. My right hon. Friend is right to ask about that issue, which Mr Umunna unfortunately did not mention. We need to understand that there is a cost to every regulatory measure that is brought forth, not only economically but for people on the edge of the labour market who want the chance to have a job. If we regulate them out of work, we have to take responsibility for that, so my right hon. Friend is right to reflect on the costs.
David Winnick (Walsall North, Labour)
Does the Minister not understand that if the recommendations go forward, it will be an appalling attack on millions of employees? Their basic security at their place of work will be taken away. Is that not characteristic of a Tory-led Government?
May I suggest that the hon. Gentleman reads the report this afternoon, looks at what it says and understands what is in it before condemning it? There is a balance to be struck. We need to ensure that we have modern workplaces, but also that we can compete in a world in which there are real pressures. The workers at Vauxhall and elsewhere understand that. I hope that he will read the report, and then we will be happy to have a conversation with him.
William Cash (Stone, Conservative)
The Minister is aware that vast amounts of European legislation affect the workplace. He also knows of the Prime Minister’s promises on that matter before the last general election. Will the Minister confirm that we will not merely have a report on the outcome of Beecroft, which has much to commend it, but actually deal with the enormous amount of damage done to small and medium-sized businesses by excessive European legislation, which costs billions of pounds and a huge percentage of our gross domestic product? Will we have action and not just words?
I am delighted to confirm to my hon. Friend, who studies these matters very closely and is right that European legislation impinges on small businesses, that we have ensured that there will no longer be gold-plating of directives from Brussels. Just as importantly, we have secured the agreement of the European Commission that small businesses will now be exempted as a point of principle unless the Commission can show that they should not be. We need to make that work, and I hope I will have his support in ensuring that we do.
Dave Watts (St Helens North, Labour)
May I take this opportunity to apologise to business organisations? When this idea was discussed previously, I said that they were driving it. However, business organisations have been in touch with me and told me that they do not support the proposed legislation.
With respect to the hon. Gentleman, Mr Beecroft has submitted his report and we have submitted a call for evidence. Business organisations are now providing that evidence, and when we publish the report later this afternoon they will be able to comment on it. They recognise the value of ensuring that we have modern, flexible workplaces.
Lorely Burt (Solihull, Liberal Democrat)
I agree with the Minister on the need for balance, but does he agree that we would create a climate of fear in employees by introducing a fire-at-will option, which will not help productivity or growth, and which could be just plain bonkers?
Absolutely. We need to ensure we get the balance right so that businesses are competitive and we do not tie them with the red tape they suffered under the previous Government, but as the hon. Lady rightly says, we also need to ensure we do not strip away those basic rights. I understand that and we are sensitive to it, but we need to recognise that we face tough economic circumstances. I want to ensure that everybody who has the opportunity to get a job can do so. Red tape can sometimes make that very difficult to achieve.
John Denham (Southampton, Itchen, Labour)
What does the Minister think will do most for growth in this country: the introduction of a fire-at-will culture, or tackling the banks that are failing to lend to small business? If the latter, why is there so much more activity from the Government on employment legislation and pathetically little action on getting bank lending going?
Sadly, because of the failure of the previous Government, we had to ensure we tackled credit and the problems of red tape so that businesses can grow.
Both things are important, as the right hon. Gentleman knows all too well. What matters in that context is ensuring we have the workplaces, access to credit and industrial investment that will enable our businesses to grow. We saw good news last week; I am sorry the Labour party seems unable to reflect on it.
Conor Burns (Bournemouth West, Conservative)
Has the Minister had the opportunity to read the World Economic Forum global competitiveness report, which showed that between 1997 and 2011, the UK fell from seventh to 10th in the years when the Labour party was in power? Does he agree that if the Beecroft report leads to a new focus on deregulation and the undoing of the burdens placed on business by the Labour party, it will be welcomed by small business throughout the UK, which we rely on to be the engine of economic recovery?
I entirely agree with my hon. Friend, who is right to point out that we need to restore the sad decline in our competitiveness that we saw before the last election. We need to restore not just the Government finances, but the strength of the economy. Ensuring that flexible workplaces and modern work practices are in place is part of that.
Pat McFadden (Wolverhampton South East, Labour)
There is a flaw in the Minister’s logic. He cannot on the one hand claim credit for the creation of hundreds of thousands of jobs in the private sector, including the welcome announcement at Ellesmere Port last week, and then say there is a huge problem for employers wanting to hire people. Flexibility in labour markets is a good thing, but does he accept that what is really stopping companies hiring is the lack of confidence in economic prospects in this country and the eurozone? In that context, are not the proposals fiddling while Athens burns?
It was worth the right hon. Gentleman getting to that metaphor at the end. He is right that confidence is one of the critical issues in the corporate sector. The Government need to understand that, which is why we have ensured that we look at all such issues, whether workplaces or employment tribunals. Government Departments are working hard on those things—they are all important—but he is right that we need to ensure we get the appropriate balance. He says there is surely no problem if we have all those extra jobs, but we must compete in a tough world. I am proud that there are 600,000 extra private sector jobs, but we need more.
Sam Gyimah (East Surrey, Conservative)
Does the Minister agree that when we look at employment legislation, we should look not only at no-fault dismissal, but at all such legislation in the round? Activation policies that help people to get into work are as important as focusing on what happens when the relationship between an employer and employee goes wrong.
Absolutely. One of the encouraging things about the Beecroft report and other submissions is that they look at the issue in the round, and not just at employment tribunals, and the challenges of Criminal Records Bureau checks and visas. We need to ensure we think about the issue in the round and have an effective work programme alongside that.
Dennis Skinner (Bolsover, Labour)
Is not this new proposal of stripping employment rights for workers another example of how this Tory and Lib Dem Government are determined to attack workers’ rights while letting the bosses off the hook? Workers have already had a pay freeze and have to work longer for pensions, while the bosses get bonuses and even fatter pensions. Whatever happened to “We are all in it together”?
The hon. Gentleman needs to read the report and see what it says. I would also remind him that it is this Government who are ensuring that parents have much better rights. We have put those rights in place because we want to ensure that we balance work and home life. The analysis that he offers is somewhat out of date.
Anna Soubry (Broxtowe, Conservative)
As a former shop steward and proud trade unionist, I welcome many of these proposals. Does the Minister agree that we need to change many of our rules and regulations so that, instead of having a “can’t do” culture, we have a “can do” culture?
I totally agree, and I only wish that that were the case on the Opposition Benches.
Ann Clwyd (Cynon Valley, Labour)
“Britain has already got a very flexible co-operative labour force…We don’t need to scare the wits out of workers with threats of dismissal. It’s completely the wrong approach”?
Because, as the Secretary of State rightly points out, we need to ensure that we are able to continue to compete. It is good that we have been able to secure 600,000 jobs in the private sector, but we need more. We are not in the business of trying to scare the workers. We are not somehow trying to rip up their basic rights. We want to ensure that an effective modern economy has the quality and calibre of employees that it needs. That is at the heart of our policies, and I hope that the Opposition will join us and ensure that they do not seek to scare people.
Tony Baldry (Second Church Estates Commissioner; Banbury, Conservative)
Adrian Beecroft, who is a constituent of mine, has spent a considerable amount of time on this report. Would it not be sensible for right hon. and hon. Members to take the time to read what he has to say before expressing views on a document, the conclusions of which none of them has yet had the opportunity to consider? When they do get around to reading it, perhaps the only test should be whether each recommendation would make the UK more or less competitive.
I entirely agree with my hon. Friend; he is absolutely right. That is why I have made sure that the report will be available to the House, so that we can look at the facts and not just at the speculation in the newspapers.
Jack Dromey (Birmingham, Erdington, Labour)
Last week, the Secretary of State paid warm tribute to workers and their union, Unite, for their role in the transformation of the automotive industry. This week,
the Prime Minister wants to make it easier to sack workers. With 1 million young people out of work, should not the Government concentrate on making it easier to hire workers, rather than to fire them?
Again, I appreciate that the hon. Gentleman is at a disadvantage because he has not read the report; the question that he raises shows that rather clearly. If I may, I would suggest that he has a look at it. He will see that we are focusing on how to make the market more flexible so that it is easier to hire people. That is important. He is right about the workers at Vauxhall; they have done a fantastic job and I respect that. That is the attitude of this Government.
John Hemming (Birmingham, Yardley, Liberal Democrat)
Although the Opposition’s fantasy finance will not solve the growth problems, will the Minister accept that there are supporters of the Government who, when they read the report, will want to see that workers’ rights are protected?
Absolutely. That is why I have ensured that the report is published this week, while the House is sitting, out of respect for the House. The call for evidence will close on
Andrew Miller (Ellesmere Port and Neston, Labour)
On the question of clichés versus substance, may I remind the Minister that the deal at Vauxhall was struck under the law as it is, rather than under the law as he would like it to be? Will he therefore list his top 10 priorities for changing the law to make such deals more likely to happen?
Mr Speaker, I would test your patience if I were to list the full 10 elements of employment law as the hon. Gentleman requests, but he is right to say that that deal was struck under the current law. We do not live in a static world, however, and we need to ensure that we have examined all the changes in the workplace, whether in a large car plant or a small firm.
George Freeman (Mid Norfolk, Conservative)
Does the Minister agree that, when the Government have decided how to respond to the report, it will be important to listen more to the small businessmen and women around the country than to those on the Labour Front Bench—I do not think that any of them have started a business—and to remember that micro-businesses are the key to the growth that we all want to see? Does he acknowledge that too many of our small companies are struggling with big-company legislation, and that well intentioned employment legislation often has the opposite effect, in that it puts employers off taking the risk of employing people and creates a licence for spurious claims at employment appeals tribunals?
My hon. Friend is absolutely right. We saw an unreformed employment tribunal system that—as my right hon. Friend the Secretary of State for Energy and Climate Change, who used to be an employment Minister, knows all too well—had failed under the last Government. This Government changed it, and that is a record we can be proud of.
Frank Doran (Aberdeen North, Labour)
The last Labour Government were just as concerned about flexibility in the workplace as this Government, and the last Government asked the TUC and the CBI to report on what changes needed to be made. Those changes were put in legislation. Both those organisations have the most intimate knowledge of the workplace. What special qualifications does Adrian Beecroft have, as a venture capitalist, to report on the situation in the workplace?
Mr Beecroft is an employer. He has a significant record. He works in the marketplace not only as a venture capitalist but as an employer in his own right. He has tremendous business experience. We want to hear all voices; that is why we have a call for evidence. I hope that the hon. Gentleman will contribute.
Helen Grant (Maidstone and The Weald, Conservative)
Does my hon. Friend agree that overt and extreme employment protection can be a disincentive to enterprise and growth, and that that is the case especially for small businesses? I say that as the owner of one.
There we have the practical evidence of someone who is actually running a small business. When we put in well intentioned legislation to try to remove every possible risk from the employment market, the greatest danger is that the most vulnerable workers—those on the edge whom it takes a lot of effort to bring into the labour market—can be kept out by such legislation. That is what we always have to bear in mind.
Tom Blenkinsop (Middlesbrough South and East Cleveland, Labour)
I hope that the Secretary of State enjoyed his visit to Teesside Cast Products today, itself a control of major accident hazards site and protected workplace. What are the implications of the Beecroft report on chemical and other process industries on COMAH site safety?
The Beecroft report does not relate specifically to COMAH, which is a specific area. We always want to ensure a careful balance, especially where health and safety issues are a special concern.
David Nuttall (Bury North, Conservative)
Last Friday, I met various business leaders from my constituency. One of their major concerns was the complexity of employment law. May I urge my hon. Friend to take whatever action is necessary to simplify employment laws, cut red tape and get the unemployed back to work in my constituency?
Absolutely, and by making sure we revert to the position where someone has to work for an employer for two years and not one year before unfair dismissal procedures apply, we have already started down that positive path.
Grahame Morris (Easington, Labour)
Does the Minister recognise that one of the fundamental problems with lack of growth is the lack of domestic demand caused by lack of confidence and the unwillingness of employers to invest because of that lack of confidence? Does he think that introducing this fire-at-will concept will do anything to boost domestic consumer confidence?
As I said before, I genuinely advise the hon. Gentleman to read the Beecroft report. This is not a Government who will go about firing at will in the way he has described.
Julian Smith (Skipton and Ripon, Conservative)
Over 50% of Britain’s smallest businesses say that they would hire more staff if they were given greater clarity about how to end an employment relationship. Does my hon. Friend agree that there may be a voluntary third way for no-fault dismissal, and will he meet me and bring along the Secretary of State?
I welcome that positive suggestion, and I am more than happy to accede to it—as I am sure the Secretary of State will be.
Jenny Chapman (Darlington, Labour)
The Minister said in answer to a previous question that confidence is all important. Can he explain for those of us who have not read the report exactly how firing at will will increase consumer confidence?
If I may repeat my point, I urge the hon. Lady to read the report. This is not a Government who are in the business of hiring and firing at will. We are about ensuring that employers have the confidence to know that if something goes wrong, they have the ability to unpick that in a reasonable fashion. Many of them are deterred from taking on anyone in the first place, and that is bad for those on the edge of the labour market.
David Burrowes (Enfield, Southgate, Conservative)
The Minister will recall that under the previous Government, businesses faced 14 new regulations every working day. May I assure the Minister that, on the Government Benches, we support businesses, want to reduce their burdens and stand on the side of businesses that want to grow and be competitive?
I am grateful to my hon. Friend for his support. This is an important matter and we need to have an intelligent debate, which is why we are publishing the report.
David Wright (Telford, Labour)
Consumer confidence is low and the housing market is fragile. In towns such as Telford, thousands of public sector workers fear losing their jobs. How does compounding this problem by making private sector workers fear for their jobs help? When will the Government come forward with a definitive statement—they need to do it now—on their position regarding this policy?
Again, surely the point is to involve experts and ask them for their evidence, and then to make a decision. Sadly, I detect among the Opposition a wish to make up policy and then to try to make it fit the evidence. That is not how we do things.
Stewart Jackson (Peterborough, Conservative)
May I reassure the Minister, not least on behalf of many of my younger constituents, who are unemployed, that Government Members strongly welcome these labour market reforms? Will he take with a pinch of salt the
obvious opportunism of the Labour party, which, while in office, doubled the number of households not in work and doubled the number that had never worked?
That is the point. Striking a balance is crucial. Not only is my hon. Friend absolutely right but youth unemployment rose by 40% under the previous Government. The Opposition claim that they care about this issue, but caring is not enough; we need to get the law right to ensure that those on the edge of the labour market have the chance to work. That is what we will do.
Chris Evans (Islwyn, Labour)
Is there not a danger that having a different employment regime for workers in small businesses employing fewer than 10 people could be a disincentive to growing that business?
The hon. Gentleman is right that when devising policies we have to be careful not to create unintended ceilings to growth. That is certainly something we will want to consider carefully.
Amber Rudd (Hastings and Rye, Conservative)
Fifty per cent. of SME 500 companies were set up during the recession. Now is the time to encourage entrepreneurs. It takes courage, grit and determination to be an entrepreneur. May I urge the Minister to do all he can to help people to set up businesses and create employment?
Absolutely. It is crucial to ensure that when we devise employment law we recognise that often those small micro-businesses cannot cope with the kind of well-intentioned red tape that often comes from Whitehall and Westminster. We need to get the balance right. Those are the people in my mind when we devise these laws.
Julie Hilling (Bolton West, Labour)
Out of the 36 richest countries, Britain is 34th for employment protection. That means it is already very easy to get rid of people in Britain. What evidence does the Minister have that his policy will do anything for growth, rather than making people more frightened of losing their jobs and not spend their money?
Again, I urge the hon. Lady to look at the report and talk to employers, who make it clear that the law needs to allow them to take people on in comfort, knowing that if something goes badly wrong, they can change things. This is not only about employment law, however, but about looking at the whole of the workplace. What matters is looking at all the issues in the round and we are working on each of them.
John Baron (Basildon and Billericay, Conservative)
A key reason the eurozone crisis is unfolding is that politicians are failing to introduce the sweeping supply-side reforms needed to generate growth and close the gap between what Governments earn and spend. Will the Minister therefore ignore the cries from the Opposition and take a knife to employment regulations, which SMEs believe are the key reason they are not taking on new staff?
Ensuring that SME owners have the confidence to take on that next member of staff—perhaps even someone who is not as experienced as they would
like—is a challenge and a risk for them, which is why we need to rebalance the law. I am happy, then, to take a knife to bad red tape, but I will ensure that our workplaces are modern and flexible, which is good for both employers and employees.
Jonathan Reynolds (Stalybridge and Hyde, Labour)
Will the Minister concede that given the huge problems facing our economy of a lack of aggregate demand and confidence, further adding to job insecurity, as the report suggests, could make the UK’s recession even worse? People who fear for their jobs do not spend their money.
In a sense, that is why we want to get this report into the public domain—to get past some of the speculation in the newspapers. We are concerned to ensure that good policy is based not on rife speculation but on facts. That is what we are working on.
Duncan Hames (Chippenham, Liberal Democrat)
What thought has the Minister given to ensuring that no-fault dismissal cannot be applied unfairly so as to discriminate against workers looking to start families, especially young women?
This is precisely one of the issues that Beecroft is considering and one that the Department is reviewing. Some good, positive ideas have been presented since we called for evidence on
Fiona O'Donnell (East Lothian, Labour)
The Minister said that there was always a cost to regulation, but there will also be a cost from weakening employment protection. I suspect that women, especially those with caring responsibilities, will pay a higher price. Will he promise the House that the report and any proposals will be subject to an equality impact assessment?
As I said in my statement, we did not progress this matter until the Home Secretary spelled out the equalities aspect last week. The hon. Lady is right: we need to look at the issue in the round. In the end, however, I want to ensure that flexibility in the workplace is paramount. Why? Because for women, being able to balance home and work life is often crucial.
Elizabeth Truss (South West Norfolk, Conservative)
In 2005, Germany exempted businesses with fewer than 10 workers from unfair dismissal regulations, as well as introducing a new category of mini and midi-jobs. Since then, youth unemployment has halved and more women have found their way into the workplace. What can we learn from countries such as Germany?
That we need to look at this issue in the round—that is, not just at specific aspects of employment law, but at other aspects throughout the workplace. My hon. Friend is absolutely right: we need fresh ideas. It is just a shame that we do not get them from Labour.
Andrew Love (Edmonton, Labour)
Can the Minister explain the evidence base on which the “fire at will” recommendation has been made? Is the rushed consultation not an admission that there was no evidence and that the recommendation was based on prejudice?
I think we need some balance in this debate. We are talking about one element in a report of nearly 25 or 30 different elements, and this idea—“firing at will”, as the hon. Gentleman cavalierly described it—is not something on which the Government intend to proceed. The whole point of having a call for evidence is to ensure that we get things grounded properly. That is very important.
Chris Heaton-Harris (Daventry, Conservative)
Any idea that unites the shadow Business Secretary and Lord Oakeshott from the other place has to be worthy of proper thought and attention. I would urge my hon. Friend to consult not only those two individuals, but small businesses in general, because I think he will find a huge amount of support for the ideas contained in the Beecroft report.
A number of areas—perhaps, sometimes, parts of the work force and the employer-employee relationship—support the idea of looking at this issue in a fresh way. That is an important part of the process.
William Bain (Glasgow North East, Labour)
Has the Minister not considered the report by Howard Reed for the TUC two years ago, which concluded that slashing employment protection at work could increase the problems of job creation and decrease productivity? With 6.3 million people desperately trying to find full-time jobs but unable to get them, will the Minister explain how his proposals would increase demand in the economy?
With the greatest of respect to the hon. Gentleman, employment law, whether good or bad, does not increase demand in the economy. The important thing is to ensure that employment law enables employers to have the confidence to take people on. That is crucial, and the idea behind the temporary measures that we have had from Labour, which would give perhaps one year or 18 months of support, is complete nonsense.
Bob Stewart (Beckenham, Conservative)
A few years ago I ran a small company with 20 employees. One of them was grossly inefficient and incompetent. That person was highly unpopular and should have gone, but I was unable to remove them. It cost a great deal of money and effort, and in the end I failed. I hope that we will get legislation that allows good employers to deal with people like that.
The whole point is to ensure that the balance between the employer and employee is struck in a way that enables us to resolve exactly that kind of dispute. It is no good for the hard-working people left in my hon. Friend’s business to see someone who is clearly not able or willing to play their part. We need to ensure that they have the opportunity.
Anne McGuire (Stirling, Labour)
The Minister talks about introducing new practices. I would suggest that he is actually reintroducing some pretty old practices, in allowing someone to be dismissed because someone does not like their face. Will he reflect on what he is saying today and think seriously about whether he wants to return to the really bad old days, when people were summarily dismissed for no apparent reason?
As the right hon. Lady should realise, the discrimination laws will not be changed or affected in any way, so the description she gives is completely false.
Anne-Marie Morris (Newton Abbot, Conservative)
Is the Minister aware that 70% of the micro-business community are sole traders? When asked why they are sole traders, they say that the prime reason is the complexity and bureaucracy of employment legislation. Does he agree that if we changed the rules as he suggests in the consultation, we would increase the number of jobs and deal with our unemployment problem?
There has been a substantial shift within the small business base, so that we have seen a higher proportion being sole traders rather than employers. We need to try to encourage more of them to take people on; my hon. Friend is absolutely right.
Jonathan Ashworth (Leicester South, Labour)
Given the falls in consumption in the economy and given the chronic lack of business confidence, would it not be better for the Minister to come to the Dispatch Box to announce some workable schemes to support manufacturing investment and schemes to support business access to financial credit rather than making it easier to sack people?
I say to the hon. Gentleman “Vauxhall”. We are making sure that the British automotive industry is alive and well with £4 billion-worth of investment. I will not be lectured by a party that saw more than a million manufacturing jobs lost.
Therese Coffey (Suffolk Coastal, Conservative)
When I worked in a large company, it was difficult at times to do what was best for it because of the employment restrictions and the advice of lawyers. Let me provide an example. When we had a redundancy programme, several people were asked to be put out of its scope because of risk, which was unfair on the people who were not in certain special groups as determined by the lawyers. It is that kind of complexity that we need to remove to ensure that employers do what they do best—providing British jobs and growing the economy.
My hon. Friend is absolutely right. This is the sort of informed and balanced overall debate that we want. That is why we have called for evidence and why we are publishing this report. The issue should not be about just the clichés we have heard from the Opposition; it should be about making sure that we get the whole workplace right.
David Crausby (Bolton North East, Labour)
Will the Minister tell me how making British workers terrified of their employers will deliver growth and confidence in the British economy—or is it that the Government simply cannot resist the Tory habits of a lifetime?
I wish the hon. Gentleman would read the report and stop using words such as “terrified”. Does he really think that that helps small business owners or people in work? Language like that will be taken up by the media and spun, and I do not think it helps anybody to use that kind of language in half an hour of partisan banter.
Jo Swinson (East Dunbartonshire, Liberal Democrat)
Some critics of the Government policy to let parents choose how they share parental leave have a view of family life that is, frankly, stuck in the 1950s. They fail to take account of the benefits to business of employing mothers who might be able to return to work more quickly or the benefits to the wider economy of giving parents the flexibility to play a fuller role in the labour market. Whatever is in this report, will the Minister confirm that the Government are committed to introducing shared parental leave, with the benefits it will bring both to families and the economy?
It was made very clear in the coalition commitment that we understand how important it is to get the balance right. That is why I can confirm that that commitment has not changed in any way.
Mark Lazarowicz (Edinburgh North and Leith, Labour)
Is it not a totally bizarre approach to policy making to publish a report and then call afterwards for evidence to back it up? Does that not confirm the views of many of us, here and outside, that the Government have made up their minds on this issue? The fact is that the Government have not been able to provide a single piece of real evidence to show how this will support economic growth. The questions put on both sides of the Chamber illustrate that this approach is motivated not by policy, but by ideology?
No, what the Government do is to set out an agenda and then to seek evidence, which is an important part of the process, on the basis of which policy is made. That is how it should be done—not how it was done under Labour, when policy was made in between the phone throwing at No. 10.
Christopher Pincher (Tamworth, Conservative)
The British Chambers of Commerce reckons that the last Labour Government burdened British business with £77 billion-worth of bureaucracy. Does not the attitude of Labour Members, who have not even read the Beecroft report, this afternoon demonstrate that they have learned nothing and forgotten nothing from their time in office, and that they remain viscerally anti-business?
Ian Lavery (Wansbeck, Labour)
This can hardly be described as an independent report. Beecroft is a paid-up member of the Tory party and he funds the Tory party. When will the constant and continuing barrage of attacks on hard-working people stop and the focus shift to the people who created the problems in the first place—the bankers?
There is one slight flaw in the hon. Gentleman’s question. The Department for Business, Innovation and Skills, which commissioned the Beecroft report, is led by the Secretary of State for Business, Innovation and Skills, Vince Cable and then there was his colleague, who is now the Secretary of State for Energy and Climate Change, Mr Davey. The last time I looked, both were members of the Liberal Democrat party.
Rob Wilson (Reading East, Conservative)
Does the Minister agree that employment tribunals are a huge cost not only to business, but to taxpayers who actually fund them. Is it not right that there needs to be more balance in the system so that taxpayers do not have to pay so much and businesses can get on with growing their business?
My hon. Friend is absolutely right. I am pleased to say that the Ministry of Justice is leading the way in streamlining the process to reduce the costs and remove red tape which, sadly—as he says—existed in the past.
Katy Clark (North Ayrshire and Arran, Labour)
There is no international evidence of any connection between the weakening of employment protection and growth. We have yet to see the report, but will the Minister tell us whether it contains any evidence to justify its conclusions, or whether it simply contains the author’s opinions?
As my hon. Friend Elizabeth Truss pointed out a moment ago, Germany has made important reforms recently, and that has helped. We will look at all the evidence. We have a call for evidence, which will close in June, and I hope that the hon. Lady will contribute.
Sheila Gilmore (Edinburgh East, Labour)
Opposition Members might be more able to discuss the issue if they had read the report. It has been kicking around in Government for several months, but the Government have resisted calls for its publication. Why do the Minister and his colleagues persistently repeat the statement that they have created 600,000 jobs since the election, when the Minister knows that—in the words of his own Prime Minister—the first 500,000 were created in the first six months, and were clearly a result of the stimulus created by the last Government?
It is true that 600,000 private sector jobs have been created since the last election, and we are proud of that. However, as the hon. Lady ought to recognise, Governments do not create wealth and jobs but business does, and our job is to ensure that it can do so more confidently.
John Bercow (Speaker)
Order. There is a growing phenomenon in the House whereby Members who were not standing at the start of a statement are suddenly motivated to pop up towards its conclusion—but I would not want Mr Jones to be disappointed, so I think we had better hear him.
Marcus Jones (Nuneaton, Conservative)
Thank you, Mr Speaker. I recently attended a meeting with people who run small businesses in my constituency. Many of them said that they were keen to take on more employees, but were often put off by the additional red tape and regulation that had been imposed on them by the Labour party. Can my hon. Friend confirm that this Government will take account of the issues raised by my constituents, and will try to help them to create more employment in my constituency?
Absolutely. Not only have we already taken action in the last two years, but this programme will enable us to try to do even more to help the businesses in my hon. Friend’s constituency.
Kevin Brennan (Cardiff West, Labour)
Adrian Beecroft is an asset-stripping venture capitalist. Is not putting him in charge of a inquiry into whether it is a good idea to make it easier to sack workers—I mean no disrespect to the absent Business Secretary—a bit like putting Hannibal Lecter in charge of deciding on the nutritional benefits of cannibalism?
I hope that the hon. Gentleman has got his press release out, because that is a good joke. However, I think that he should be careful about referring to asset-stripping vultures and so forth. If we want people to develop and create jobs, and to invest in this country, we need to watch our language very carefully.
Paul Flynn (Newport West, Labour)