Orders of the Day — TRADE UNION REFORM AND EMPLOYMENT RIGHTS BILL [Money]

– in the House of Commons at 9:34 pm on 17th November 1992.

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Queen's Recommendation having been signified—

Motion made, and Question proposed, That, for the purposes of any Act resulting from the Trade Union Reform and Employment Rights Bill, it is expedient to authorise the payment out of money provided by Parliament of—

  1. (a) any expenditure of the Secretary of State in securing the provision of careers services,
  2. (b) any sum payable by the Secretary of State to or in respect of the Commissioner for Protection Against Unlawful Industrial Action, and
  3. (c) any increase attributable to the Act in the sums payable out of money so provided under any other Act.—[Mr. David Davis.]

Photo of Andrew Miller Andrew Miller , Ellesmere Port and Neston 10:14 pm, 17th November 1992

The section on "Financial effects of the Bill" says: The Bill is estimated to give rise to an overall net saving to public funds. I question that judgment on a number of headings.

The Bill continues: The net cost to public funds arising from the provisions of the Bill which create new or extended grounds of complaints to industrial tribunals is estimated to be some £1·5 million in a full year. I shall seek to show that those costs are indeterminate, and substantially higher than the estimated figures. In a period of alleged constraint on public expenditure, such an increase does not seem wise.

Clause 14 provides for independent scrutineers for balloting arrangements. Why do the Government not recognise that the scrutineers could enable people to be balloted in the workplace, thus saving substantial amounts of effort and time on the part of the scrutineers?

Clause 22 deals with the transfer of undertakings. The regulations will not create a high cost to the Exchequer, but if the Government are so keen to protect pension funds, why are pension funds excluded from the clause? Reference has been made this evening to Maxwell. Are the Government really taking the issue seriously, or are they protecting the interest of a few Lords who are in the business of buying and selling companies?

Schedule 4 deals with the rights of representation in disciplinary cases. Again, there is no reference to the rights of the individual. We have heard time and again today about the rights of the individual. The failure to incorporate the right of the individual to representation or clearly to specify that right in the Bill will increase the legal costs to the Exchequer from industrial tribunals, from the employment appeals tribunal, and from higher courts.

Extensive references have been made to an alleged £3 million to be saved from the abolition of the wages councils. We have had a long and impassioned debate today about that proposal. There may be savings of £3 million, but what will be the cost to the lowest paid? Has the Chancellor made the obvious calculation about the net effect of that abolition on social security payments? I should welcome a response from Ministers about the projections on such payments.

The functions of the Advisory, Conciliation and Arbitration Service have been narrowed by the Bill. That is an interesting point. Narrowing the functions of ACAS may achieve some financial savings, but it contradicts what was said in the Government's official brief. Once again, fact stands in the way of dogma. The Government simply fail to understand a modern economy.

Clauses 29 and 30 narrow the scope and powers of tribunals. Chairmen will be given the right to sit on their own when working people who seek confidence in tribunals want their rights to be represented properly by a fully fledged tribunal. To cut the resources available to that service will be damaging in the extreme to the process of industrial relations. As a result of the change, more cases will go to the employment appeals tribunal and higher courts, and higher costs will therefore be involved.

The Bill is a reflection of the Government's failure, yet again, to understand. Contrary to what Conservative Members have said, the Bill attacks the structures of unions to the disadvantage of individuals, and it does so at indeterminate cost to the taxpayer.

The Bill could have afforded increased protection to individuals against unscrupulous employers and in the interests of industrial relations. It failed to do that. It could have promoted change that would have enhanced our competitiveness. It failed to do that. The mood of the House is clear: these matters will be dealt with in detail in Committee.

I take very seriously a financial point which has been made a number of times in a lighthearted manner. It is time that we had payment by results around here—including payment by results for Ministers. I am glad to see that they are not to take a pay rise this year—indeed, it is time for a pay cut. That would introduce TQM—total quality management—in style on the Government Front Bench.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster 10:22 pm, 17th November 1992

Having listened to much of our proceedings today, I regard the Bill as a thoroughly sound measure. I am therefore happy to support the money resolution. The opinion of the House as a whole was also manifestly in favour of the Bill, as the result of the Division reflected a majority far greater than the Government's actual majority.

My constituents are economical by nature, as am I. The fact remains, however, that they do not begrudge expenditure on worthy causes. Who can describe it as other than worthy to secure the provision of careers services, as the money resolution requests? Which Conservative Member—and which of the saner members of the public—would begrudge money spent on protection against unlawful industrial action? We should have had that years ago. I am happy to support the money resolution.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South 10:23 pm, 17th November 1992

I am pleased to discover that, rather than money resolutions going through on the nod, we are now to have genuine debates on them. I am grateful to my hon. Friends, a number of whom wish to speak, and to the hon. Member for Lancaster (Dame Elaine Kellett-Bowman). I hope that my information that this is the latest that the hon. Lady has been in the Chamber for more than 10 years is not true, and that she will be here regularly in future.

Photo of Mrs Elaine Kellett Mrs Elaine Kellett , Lancaster

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Bradford, South (Mr. Cryer) to make a manifestly untrue statement? I am frequently in the House at 6 am; I am frequently here until late.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

I said that I hoped that it was not true. I hope that the hon. Lady will be here to take part in debates on money resolutions again and again. I welcome the fact that she is here. I find it extraordinary that she should take exception to my defence of her attendance record.

Why do we need a money resolution when, according to the Bill, it is estimated that it will give rise to an overall net saving in public funds? Paragraph (a) of the money resolution provides for the authorisation of any expenditure of the Secretary of State in securing the provision of careers services". Yet the explanatory and financial memorandum states: There will be no overall change in the forecast level of central government expenditure funding for careers services by reason of the new arrangement which may be established by virtue of clause 33. Why, therefore, is there a need for paragraph (a)?

Paragraph (b) refers to any sum payable by the Secretary of State to or in respect of the Commissioner for Protection Against Unlawful Industrial Action". According to the financial memorandum in the Bill, that amounts to £300,000. I shall come to that in a moment.

Paragraph (c) refers to any increase attributable to the Act in the sums payable out of money so provided under any other Act. The financial memorandum makes clear that there will be expenditure of £600,000 by the Department of Employment and the Scottish and Welsh Offices.

According to the Minister, the cost of the extension of the work of industrial tribunals is estimated at £1·5 million in a full year. The additional costs for the certification officer and the new commissioner will be £300,000. Together with the £600,000 for the increase in the careers services, the total expenditure is estimated at £2·4 million, but the income claimed in the financial memorandum is £2·8 million through the wretched, nasty, vicious abolition of wages councils. The Minister is giggling about it all, but that gives a net income to the Department of £400,000. Why, therefore, do the Government need a money resolution? The reason is that the Government have allowed for large increases over and above the estimates in the paragraphs dealing with the financial effects of the Bill.

The £300,000 allocated for the new investigatory functions of the certification officer and the activities of the new commissioner is a paltry sum. A function of the certification officer will be to investigate financial malpractices in trade unions, of which there is very little evidence. Perhaps the Minister can confirm that the sum is small because the Government do not expect to find any financial malpractice. When the Government were considering that function, why did they not apply the same criteria to the City, and particularly to Lloyd's insurance market? There is no legislation before us which offers to trawl over the board rooms and the accounts of the big businesses which back the Tory party. Instead, the Government are spending taxpayers' money in an area where there is very little evidence of financial malpractice.

In addition, the new commissioner is to be covered by the self-same £300,000. He will decide whether High Court or Court of Session actions will be financed. On that basis, I should have thought that £300,000 was a very small sum. The one closed shop that the Government do not oppose is the lawyers' closed shop. The Minister knows full well that that closed shop can run away with hundreds of thousands of pounds in a matter of days. The complicated libel actions and breach of contract actions which take place in our courts can result in costs of £100,000 and £200,000. The Bill specifically requires the new commissioner to deal with cases where, because of their complexity, an individual cannot take them any further. Therefore, I wonder whether £300,000 is adequate since the Government will use taxpayers' money to bolster up complaints about trade unions and send them into the courts. At the same time, the Government are going to cut legal aid when people seek redress in the courts for ordinary purposes, including criminal actions. That reveals a scandalous set of double standards.

The paragraphs relating to the financial effects of the Bill refer to a figure of £ 1·5 million in respect of complaints to industrial tribunals. Those complaints are being enlarged to include challenges to terms of collective agreements, breaches of contracts of employment, sex discrimination cases, suspension disputes over maternity leave and remuneration, and employment protection in health and safety at work cases. Opposition Members support the view that we should protect people who raise health and safety issues at work, but that is a very minor part of a generally very bad Bill. Will the £1·5 million referred to in the Bill and the power in the money resolution be sufficient?

My next point relates to the savings claimed from the abolition of the wages councils which protect the lowest paid people in the country. The Minister cannot justify their abolition by claiming that it will create more jobs. When the Minister was asked a parliamentary question about that, he was unable to quantify the number of jobs that would be saved as a result of the abolition of wages councils.

The Government claim that they will save £2·8 million. Is that figure accurate? If it is accurate, the Government do not need the money resolution. The Minister has replied to questions about the costs of the wages councils and the Government claim that their abolition will save £2·8 million. However, there were only 55 wages inspectors in post on 2 November—down nearly 20 on the correct number. Is the Government's calculation of the savings based on the wages councils in full operation or on actual expenditure?

The Minister has also said that one third of wages council employees are paid at, or just above, minimum rates, so they receive relatively low pay. As there were only 55 wages inspectors, and presumably only a small support staff, does that add up to £2·8 million? If it does, the Minister must explain how he reaches that figure. If the figures add up to £2·8 million, the Government do not need the money resolution.

There was a shabby parade of Tory Members through the Lobby to attack the lowest paid by abolishing the wages councils when most of those Tory Members are moonlighting and have six, eight or 10 other jobs which pay more than their parliamentary salaries. That is an absolute and utter disgrace.

Photo of John Hutton John Hutton , Barrow and Furness 10:33 pm, 17th November 1992

I wish to raise two points in relation to the money resolution. Both relate to legal aid.

My hon. Friend the Member for Bradford, South (Mr. Cryer) has already referred to legal aid, but Ministers have not referred to the availability of legal aid to cover the new extended jurisdiction of the industrial tribunals. I am sure that I do not have to remind the Secretary of State and her ministerial colleagues that legal aid attaches to breach of contract actions brought in the county courts and in the High Court.

The Government propose today to extend the jurisdiction of industrial tribunals to include those breach of contract actions, and I fully support that. It makes much sense for the industrial tribunals to have that new jurisdiction, but will the £1·5 million referred to in the Bill cover the provision of legal aid in breach of contract actions which will now be brought before industrial tribunals? That is a very important point.

If the Government are saying that legal aid will not apply to new breach of contract actions brought before the industrial tribunals, we are witnessing yet another cut in the legal aid budget, which is under severe pressure. We know that the Lord Chancellor is trying to reduce the volume of legal aid. If legal aid will not apply, members of the public and of the House will be interested to hear what the Government's true intentions are. That is an important issue. Legal aid should be available for such actions. It is available in the county court and the High Court, and it should be available once such actions are brought before industrial tribunals.

Secondly, the Government propose to spend at least £300,000 of taxpayers' money to support the activities of the so-called commissioner for protection against unlawful industrial action. My view, and that of many of my hon. Friends, is that the commissioner is for the provision of vexatious litigation. Given the financial circumstances facing the Government—excessive borrowing, the public sector borrowing requirement, and so on—and the financial constraints on the legal aid budget, I wonder whether it is appropriate for them to propose to spend money which could be better spent on legal aid elsewhere, such as on civil legal aid, which is under severe pressure, on promoting silly claims which will cost taxpayers money that they can ill afford to lose.

I hope that the Minister will be able to respond, especially to my questions about legal aid and breach of contract actions, which is an important issue of practice and principle. I know that many people who are concerned with that field will be interested in his response.

Photo of Richard Burden Richard Burden , Birmingham, Northfield 10:35 pm, 17th November 1992

I join my hon. Friends to question some of the financial estimates that the Government have produced in relation to the Bill.

The part of the Bill which has been least discussed today is the provision on the careers service. In the section entitled, "Financial effects of the Bill", it states: There will be no overall change in the forecast level of central government expenditure funding for careers services by reason of the new arrangements which may be established by virtue of clause 33. In fully implementing the legislation, a small increase in resources (£0·6 million) will be required by the Department of Employment and the Scottish and Welsh Offices. I do not think that we should be confused about the new arrangements for the careers service. When one reads the Bill, it is clear that we are talking about privatisation.

This seems to be the night for hon. Members to declare their interests, so I shall declare mine. Before I came to this place, I worked as a trade unionist in the public services and the public sector. Sadly, I endured a range of privatisation experiments and I have yet to come across one which has not cost the Exchequer far more than it has saved, whether in monitoring arrangements put out to contract, or in wholesale privatisation. Nothing said by Ministers tonight dissuades me from the belief that the privatisation of the careers service, as envisaged by the Government in the Bill, will cost the Exchequer more than the £0·6 million estimated.

The provisions relating to the rights of pregnant women at work seem to have been welcomed by hon. Members on both sides of the House, but the Government's financial estimate of their cost seems to have gone astray. We know that when the issue was discussed in Brussels, the British Government moved heaven and earth to water down the directive. Having succeeded in doing so, they could not even bring themselves to vote for it in the Council of Ministers. They went all the way to Brussels just to abstain. As we are discussing money, I wonder whether it was worth the air fare to go to Brussels to abstain on a directive that they had watered down more than it needed to be.

That directive was passed and, as a result, women in Britain and elsewhere will be entitled to paid maternity leave, irrespective of service. Or will they? This is where the financial implications come in. They will probably not be, because the proposed abolition of wages councils will inevitably take many women employees below the lower earnings limit of £54. More than 20 per cent. of working women—76,600 women—already receive pay of less than that figure. The abolition of wages councils will inevitably increase that figure, and the result of that will either be to reduce income to the Exchequer or mean more women turning to the social security system to make up their income. That, in turn, begins to undermine the estimated £2·8 million saving from abolishing wages councils.

Although working women will suffer in the main, many others will be affected. In my region of the midlands, it is estimated that about 270,000 employees will be affected by the abolition of wages councils. That represents about one in every 10 households. In other words, the crazy part of what the Government propose is that by attacking the pay of the already low paid, the recession will be prolonged and income to the Exchequer will be reduced. A pay cut of just 20p per hour in wages council industries means £10 million per week being removed from the purchasing power of the low paid, and—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. The hon. Member is getting wide of the subject. Indeed, he is making a Second Reading speech. He must speak to the money resolution.

Photo of Richard Burden Richard Burden , Birmingham, Northfield

I apologise for digressing, Mr. Deputy Speaker.

In their estimates of the cost of the Bill, the Government have been highly selective in what they have chosen to include and exclude. We were told last week, when discussing the Department of Social Security's budget, that benefits would be index linked. I question the willingness of the Government to do that if, as a result of the effects of this measure, with the abolition of wages councils, the income—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. The hon. Member really must address his remarks to the money resolution.

Photo of Richard Burden Richard Burden , Birmingham, Northfield

My remarks are linked to the resolution, Mr. Deputy Speaker, because the provision to which I referred at the outset deals specifically with the consequential effects of the Bill on the budgets of other Departments. That is the point that I was about to make.

I shall not delay the House any longer, however, save to say that when the balance sheet is finally worked out it will show that the Bill has cost the Government money and has cost the low paid both money and rights. When, in due course, my hon. Friends and I show that to have happened, I hope that Conservative Members will have the honesty and dignity to accept that we were right and that they were wrong.

Photo of Patrick McLoughlin Patrick McLoughlin Parliamentary Under-Secretary (Department of Employment) 10:42 pm, 17th November 1992

We have had an interesting debate on the money resolution, although it was perhaps somewhat unusual bearing in mind the way in which the hon. Member for Bradford, North chose to attack my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), saying that somehow—

Photo of Patrick McLoughlin Patrick McLoughlin Parliamentary Under-Secretary (Department of Employment)

The hon. Gentleman has represented nearly everywhere, so from the point of getting his constituency right—

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

On a point of order, Mr. Deputy Speaker. Do you agree that it is important for hon. Members to get the names of constituencies right, thus enabling the Official Report to identify the Members in question? The fact that the Minister is here so rarely does not excuse him from giving the correct constituencies.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. While that is not a point of order for the Chair, it is helpful if hon. Members get the names of constituencies right.

Photo of Patrick McLoughlin Patrick McLoughlin Parliamentary Under-Secretary (Department of Employment)

That is a very wise ruling, Mr. Deputy Speaker. You will appreciate that we have a problem in that the hon. Member for Bradford, South (Mr. Cryer) has represented many constituencies both here and in the European Parliament. To say that Members of Parliament should not moonlight when for two years the hon. Gentleman was doing two jobs—

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. I am at a loss to understand what that has to do with the money resolution.

Photo of Patrick McLoughlin Patrick McLoughlin Parliamentary Under-Secretary (Department of Employment)

I am, of course, guided by you, Mr. Deputy Speaker, but I was making the point made by the hon. Member for Bradford, South in attacking my hon. Friend the Member for Lancaster.

The resolution provides authority for the provision, out of money provided by Parliament, of any public expenditure that may arise as a result of clause 33, which deals with the provisions for the careers service, clause 19, which makes provision for the new commissioner for protection against unlawful industrial action, and to grant assistance to individuals contemplating or taking proceedings against trade unions under the new right established by that clause, and for any additional public expenditure which may arise as a result of the other clauses in the Bill. That includes the expenditure arising from clause 8, which provides new investigatory powers for the certification officer and for the various clauses in parts I and II of the Bill which will extend and create new grounds for complaints to industrial tribunals.

It may be helpful if I explain that clause 33 of the Bill provides for the management of the careers service to be opened up so that it can be run in a variety of ways and be more responsive to the demands of local economic and education communities. It achieves that by placing a duty on the relevant Secretaries of State to ensure that careers advice is provided throughout Great Britain. That would be a tremendous advance for the careers service and not a diminution of it, as Opposition Members suggest. It is not our intention to diminish the careers service. Our intention is to secure more widespread availability of careers advice to the public in general.

The new provisions which may be established as a result of clause 33 will not lead to any overall change in the forecast level of central Government funding of the careers service. However, a small increase in resources—an estimated £600,000—is needed to cover the administration costs of my Department and the Scottish and Welsh Offices in implementing the legislation.

Clause 19 will enable an individual citizen deprived of goods and services because of unlawful organisation of industrial action to go to court to stop that happening. The citizen will also be able to apply for material assistance for the court proceedings. There will also be a new independent commissioner for protection against unlawful industrial action—something which the Opposition will undoubtedly oppose, as we have seen today. We believe in increasing, not diminishing, the rights of individuals.

Several of the clauses in parts I and II of the Bill create new and enhanced individual rights, the enforcement of which will be effected by providing extended grounds for complaints to industrial tribunals. Following any such application to an industrial tribunal, the Advisory, Conciliation and Arbitration Service will offer its conciliation services to both parties. The principal additional costs which will arise from those proposals will be those of the industrial tribunals in dealing with complaints under the new rights, and the corresponding increase in the workload of ACAS.

It is believed that, overall, the Bill will bring savings, as several hon. Members on both sides of the House have said. I commend the resolution to the House.

Question put and agreed to.

Resolved, That, for the purposes of any Act resulting from the Trade Union Reform and Employment Rights Bill, it is expedient to authorise the payment out of money provided by Parliament of—

  1. (a) any expenditure of the Secretary of State in securing the provision of careers services,
  2. (b) any sum payable by the Secretary of State to or in respect of the Commissioner for Protection Against Unlawful Industrial Action, and
  3. (c) any increase attributable to the Act in the sums payable out of money so provided under any other Act.