Schedule 3 - Transfer schemes

Infrastructure Bill [Lords] – in a Public Bill Committee at 11:30 am on 18th December 2014.

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Photo of Richard Burden Richard Burden Shadow Minister (Transport) 11:30 am, 18th December 2014

I beg to move amendment 20, in schedule 3, page 87, line 5, at end insert—

“(d) the change in employment shall not alter the terms and conditions of that person’s employment.”

Photo of Jimmy Hood Jimmy Hood Labour, Lanark and Hamilton East

With this is it will be convenient to consider schedule 3.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

It was remiss of me not to welcome you back to the Chair, Mr Hood—I was so taken with the point of order—and not to welcome Committee members back for the last sitting before we break for Christmas recess. Everybody is looking bright eyed and bushy tailed about the prospect of a final sitting. Actually, I suppose I am rushing ahead a bit by saying “bright eyed and bushy tailed”, because that takes us on to invasive non-native species, so I will get rapidly back to the strategic highways company and amendment 20.

Schedule 3 enables the Secretary of State to make schemes transferring property rights and liabilities when a company is appointed, or ceases to be appointed, as a strategic highways company. Amendment 20 aims to address the real and widespread concerns among Highways Agency staff—there are some 3,500 of them—about this reform. I have met staff and Public and Commercial Services Union and Prospect union representatives in the agency and corresponded with a number of employees directly. I am sure that the Minister has done the same. If he has been in touch with the staff, I should think he will recognise some of the concerns that I have heard.

There is clearly anxiety about employee terms and conditions, pensions, and contracts changing, as the staff will no longer be civil servants. Concern has been expressed to me that we could end up with corners being cut in terms of the work involved. The new design standard for smart motorways, for example, is being given as a specific example of how that could affect working conditions. Also, the people I spoke to told me that new shift patterns for traffic officers are already having quite a detrimental effect on their work-life balance. They have raised with me concerns about the extent to which management are responding to feedback from employees. I have to say that the Highways Agency’s recent people survey is quite disappointing. It seems that not a lot of improvement is being made in staff morale, and so on.

Employees have reported to me a countdown to the introduction of the GoCo, which they have found unhelpful. The countdown has increased their feeling of unsettlement, and they do not feel that they have so far received assurances on the concerns they have raised. The good thing about schedule 3 is that it makes provision for staff to have continuity of service under the Employment Rights Act 1996.

The Minister was very helpful when we addressed some of these matters in a previous sitting, but I hope he will forgive me if I press a little further. At the moment, schedule 3 does not guarantee the maintenance of terms and conditions under the TUPE regulations. He said in a letter to my hon. Friend the Member for Hayes and Harlington (John McDonnell) that the Cabinet Office statement of practice on staff transfers in the public sector will apply and that TUPE principles are expected to apply, but staff are still expressing concern that that will not necessarily be enforceable. I would be grateful if the Minister stated why the Government are unable to ensure that TUPE rules, obligations and liabilities will apply to any transfer involving staff under the Bill. If the TUPE rules will not and cannot apply, will he try to firm up some of the assurances to make them clear to staff, particularly against the background of anxiety?

I would also be grateful if the Minister looked into the following areas of concern. Will the civil service standard for pension schemes and redundancy agreements continue to apply to staff? Although we have had assurances on remuneration, particularly in relation to the agency’s corporate staff, will he ensure that the company’s directors and senior managers will be paid in accordance with the outcome of the senior civil service review committee?

Just to indicate the level of concern among staff, I will end with a quotation from a traffic officer in the agency who wrote to me about the proposed changes:

“I and many of my colleagues believe the changes will not bring the benefits that we are led to believe. For us at the sharp end it will not lead to the improvements that the HA suggest.”

As I said when we debated clause 1, we remain to be convinced. Although we accept, and indeed welcome, the recognition of the need for a long-term funding formula and long-term funding certainty for the strategic road network, we remain to be convinced that a top-down reorganisation is either necessary or likely to deliver. We have the benefit of being able to debate such things in Committee, on Report and subsequently; staff do not have that benefit, and therefore they will be listening to our deliberations with interest. I hope the Minister is able to reassure them on some of those points.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Like the shadow Minister, I welcome you back to the Chair, Mr Hood. Let us hope that we can proceed today with a degree of alacrity that allows us all to go on to other, finer things—even finer things.

I regard this aspect of the Bill with considerable and proper concern. It is absolutely right, as the shadow Minister made clear, that staff associated with the Highways Agency—most of whom will be associated with the new body because of their expertise, background, experience and so on—understand the challenges associated with that change and that their interests are at the heart of what we do.

The last time I waxed lyrical on the Floor of the House about my family connections with trade unions, the Speaker invited me to place a family tree in the Library setting out those connections. I have not yet done that, but I will briefly repeat that my grandfather was the chairman of his union branch, my father was a shop steward and I am proud to be a member of a trade union myself. I take the working conditions of the people associated with this agency and with the new body extremely seriously, in that spirit. Anything that I do as the Minister will have at the heart of it a proper conversation with the staff through their unions—I have not yet referred to any of the notes that were prepared for me, by the way, but I will briefly later—and if there is a need for further meetings with the unions, I will have them personally.

I have made it a habit, in all the ministerial jobs that I have had, of bringing in the trade unions on a Chatham House basis to discuss with me directly any concerns that they have. When I first did that, when I was a Minister in the Department for Business, Innovation and Skills, I met the trade unions in the sector that I was responsible for, and we had a wonderful meeting, conducted in the spirit that I have just described, and they said to me at the end, in a quiet voice, “Of course, we would  never have got this from Labour.” I do not mean that unkindly in any way, but it is important that we conduct ourselves in that way.

I will now move on to some formal responses to what the hon. Member for Birmingham, Northfield said.

Photo of Andrew Miller Andrew Miller Chair, Science and Technology Committee (Commons), Chair, Science and Technology Committee (Commons)

I am extremely grateful to the Minister for giving way; I will be very brief. This problem has bedevilled transfers since the last one, which was fully protected in terms of employment and pension terms. That was Amersham International and it was rather a long time ago. Therefore, it is very important that the Minister spells out what he means by the word “expected” in his letter to the hon. Member for Hayes and Harlington (John McDonnell).

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Yes, I will try to come to that now.

This amendment, in the name of the hon. Member for Birmingham, Northfield, is designed to ensure that terms and conditions for staff remain the same when the Highways Agency changes its status. As I have said, I am very sympathetic to what the amendment is designed to achieve, and I would like to reassure the hon. Gentleman and the rest of the Committee about the measures we are taking to ensure that the terms and conditions of staff are protected.

In discussions with staff and their representatives over previous months, we have made it clear that staff will be transferred in accordance with TUPE principles. The transfer scheme goes wider than transferring staff, as the hon. Gentleman will have seen from the context of schedule 3 to the Bill. We have always made it clear that we want all staff to transfer and that there are no job losses. I said earlier that I expected most people to transfer. Of course, some people may choose not to, but I would expect anyone who wishes to, to transfer.

I have no doubt about the commitment and drive of the Highways Agency staff. They are a very important part of the company’s future. We have already stated that existing employees who are members of the civil service pension scheme can remain within the scheme under the new fair deal arrangements, which came into force on 4 October 2013. The hon. Gentleman raised that and I want to be absolutely candid and clear about it. No time limits are set out in the new fair deal on how long staff can remain in the civil service pension scheme as long as they remain employed by the new company.

I know that there may be considerable interest in how much staff will be paid. With the Modernising the Employment Contract pay offer accepted, that will apply to staff transferring to the new company. We have not yet agreed the extent of flexibility from the current public sector pay arrangements, but we want to ensure that we are able to reward performance effectively, so that we can retain good people and attract others to work for the company. There is no intention whatever to put people into a worse set of circumstances than those that currently prevail. Indeed, it would be against our interests as a Government to do so, and in my judgment it would certainly be against the interests of the new body to do so.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

The Minister will know, though, what quite often happens when transfers like this take place. He has given a pretty clear guarantee that TUPE conditions or the equivalent of TUPE conditions will not simply be expected to apply, but will apply.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

But then the Minister has gone on to say that after the transfer, new terms and conditions could be offered that would be better than previous ones.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

I just ask the Minister to consider this. Often, employees in that situation can start to feel hemmed in. They can start to feel that they are being told, “Well, you can stay on your existing pay and conditions, but actually it’s going to be a lot better if you don’t do that, and in terms of career prospects, standing within the organisation and all of that, it becomes a problem.” Can the Minister give assurances that that will not apply in the new organisation?

Photo of John Hayes John Hayes Minister of State (Department for Transport)

I think that what the hon. Gentleman is seeking, and rightly so, is protection for members of staff. Frankly, there is bound to be speculation about the new arrangements and some staff might fear that their circumstances will be worse and that their pay and conditions might somehow be altered disadvantageously. I want to make it clear that a baseline is well established in two key principles.

Once the new organisation is in place, there will be opportunities for people to rise through the system and negotiate on the basis of the expertise that they bring—all the things that one would expect in such an organisation. However, I recognise that there is a case for providing further reassurance, so we intend to come forward with further details about how terms and conditions will be protected to ensure that baseline even beyond what I have said. I am passionate about that.

More generally—I note that schedule 3 stand part is in this grouping—schedule 3 sets out in detail what may be included in a transfer scheme under the power in clause 13 to make transfer schemes. A transfer scheme may be used to transfer property, rights and liabilities held in the Secretary of State’s name to a strategic highways company. In making a scheme, the Secretary of State must have regard to the company’s functions and its appointment to avoid wholly inappropriate assets being transferred. The schemes will contain the detail of assets and staff transferred—including, for example, details of property and contracts.

Highways England needs such assets to fulfil the duties and functions transferred to it by virtue of its appointment. It has a separate legal entity with clear responsibility to deliver against targets. Its suppliers, contractors and others must be confident that the company has legal authority to act and take decisions.

The general power also includes the ability to make transfers between different strategic highways companies or for transfers back to the Secretary of State. That provides flexibility for the future, but as I have stressed previously, there are no current plans to use that power. As a strategic highways company must be owned by the Secretary of State, transfers can only be between public bodies. That is another important protection, which is pertinent to the remarks made earlier in the Committee  about the future arrangements associated with Highways England and the assurance I gave at that time that it is a public body.

Schedule 3, among other things, describes what schemes may cover, how they may be applied and how they can be modified through agreement with the Secretary of State and the company. The underlying intention of clause 13 and the schedule that supports it is to provide for an orderly transfer of property, rights and liabilities to Highways England so that it is properly equipped to exercise its functions.

To return briefly to the hon. Gentleman’s amendment, I emphasised at the outset that I entirely understand the spirit in which it is offered, and I affirm my determination to ensure that redundancies, pensions and related matters are dealt with in the way that he asked and the way in which I committed. I am happy to meet union representatives personally to iron out any particular concerns they may have about anything that I have said today or anything else. For that reason, I hope that the hon. Gentleman will withdraw his amendment.

Photo of Richard Burden Richard Burden Shadow Minister (Transport) 11:45 am, 18th December 2014

I am grateful to the Minister for his assurances, which sounded firm. I welcome that. I am sure that the unions will want to take him up on his offer of a meeting.

We will want to see what is on the record, because at this time of the morning, even though it is not early, we do not always hear things correctly. Should such a meeting take place, we can return to these matters at other stages in the Bill’s passage. With that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3 agreed to.

Clauses 14 and 15 ordered to stand part of the Bill.