Work and Families Bill

Part of the debate – in the House of Lords at 6:45 pm on 25th April 2006.

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Photo of Baroness Miller of Hendon Baroness Miller of Hendon Shadow Minister, Trade & Industry 6:45 pm, 25th April 2006

My Lords, Amendment No. 15 in Clause 14 introduces the concept of uprating of the ceiling on the amount of wages for the purpose of calculating redundancy pay. In a piece of self-denial, the Government claim that this will be a once-and-for-all provision. Yet the Government know perfectly well that not only can no government bind a later one, but also one administration cannot be prevented from amending their own legislation in the same Parliament if they believe that circumstances warrant it, or if they change their mind. I absolutely do not, and never would, impugn the good faith of the Minister on this; I accept his word unequivocally. However, the pledge that the Government give in this clause, that this is a once-only provision, is technically and from a legislative point of view meaningless. One may mean to do it that way, but it can be changed.

I bring this political point into my argument because of a telling phrase used by the Minister in Grand Committee when he rejected my amendment. He justified this increase on the grounds that—I quote him exactly—

"we should recognise that successive governments have let the relative value of the weekly limit fall . . . because it is linked to RPI rather than average earnings".—[Official Report, 9/3/06; col. GC 393.]

The Government's paper Success at Work claims that the statutory limit,

"is less in real terms than it was when Statutory Redundancy Pay was introduced in 1965".

As statutory redundancy pay has always been linked to the RPI, as the Minister admitted to the Committee, the explanation in the paper is not correct. The real explanation will be found in the Minister's refreshingly frank admission in Committee which, to some extent, gave the game away: the Government want to restore the link between redundancy pay and average earnings. To achieve this, they will have to make an increase more dramatic than the Minister had promised—or, despite the self-denying provision in this clause, sooner or later the unions will be back, like Oliver Twist, asking for more.

As an aside, perhaps the Minister will explain why it is right in principle for the Government to restore the link between average earnings in the case of redundancy pay, but refuse to do so in the case of state pensions. Clearly, the brothers have more political clout than their mothers.

This is not a matter where the Government are free of expense. In many cases, the employee is made redundant because the employer is insolvent. In such a case, the taxpayer has to pick up the pieces and make good the deficiency in the sum available to pay the employee. There are more civil servants now than ever before, so redundancy pay is simply not a problem for the government—except perhaps in the National Health Service, where staff now appear to be sacked wholesale.

However, once again, the form of this legislation is that of a blank cheque. We do not know when it will come into force. The Minister wrote to me to say that he was not at that time prepared to comment on the timing of the increase, and the Government refuse to commit to the amount of the increase—except that the Minister told me in Committee that he suspected:

"that an increase of 10 per cent may be rather closer to the mark than 100 per cent".—[Official Report, 9/3/06; col. GC 393.]

Once again, the Minister cites "consultations" as the reason for all this uncertainty and the Government's reluctance, even at this very late stage of the Bill, to commit to a figure. It does not take much imagination for me to work out the employers' organisations likely attitude. I suspect that some continuing haggling is going on between the Government and the unions. Of course, I do not know; I only suspect—as the Minister would probably expect. Perhaps the Minister will give us a clear picture of who is asking for how much in these consultations.

Taking the Minister at his word—which I have no hesitation in doing—that any increase is closer to the 10 per cent mark, that is the figure I have again inserted in the amendment. The Government have had since this Bill first went to Committee to come up with a binding figure. I put this amendment down early to give them time to consider their position. Even at this eleventh hour—just before seven o'clock—I am open to a serious offer. I have to say, however, clarity is essential on an important matter such as this. The Government cannot leave Parliament in this vague and uninformed state. I beg to move.