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6.49 pm

Dr. Vincent Cable (Twickenham): In general, the Liberal Democrats broadly support the Bill and, in particular, the key elements of tribunal reform and family-friendly employment are a step forward. However, when I talk to the key representative organisations, whether on the business or on the union side, it is obvious that they are unhappy about some aspects of the Bill. My assessment is that unions' unhappiness about the clauses that relate to them roughly cancels out the unhappiness felt by the Engineering Employers Federation about the provisions that relate to them. In that sense the Bill is well balanced, but there is clearly work to be done in Standing Committee, where detailed legislative points will have to be taken into account.

Employers have made two general comments about the Bill. First, they have said that there is no case at present for major, far-reaching labour legislation. One reason for that is that labour relations in this country are generally very good these days. Even though low levels of unemployment could create a lot of wage pressure, that pressure has not manifested itself. In addition, there are very few stoppages at present—about one fifth as many as in the 1970s and 1980s. There are various reasons for that, one of them being a structural move towards small firms and services. Also, one has to acknowledge that, to an extent, the labour reforms introduced by the previous Conservative Government have made a contribution,

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and the unions now have a much more constructive approach towards working in a positive way with employers. The cultural change in the trade union movement has to be acknowledged.

The second general point is that employers are concerned about over-regulation. I share some of the worries expressed by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), but he came dangerously close to arguing against regulation, as such. Regulation is not the problem: the problem is the way in which it is carried through.

The classic example of bad regulation in employment matters is the working time directive. It is bad because neither employers nor trade unions were consulted when the regulatory detail was being drafted. In effect, the parliamentary draftsmen and officials at the Department of Trade and Industry were let loose, and produced an enormously convoluted set of detailed regulation running to some 80 pages. If they had talked to their partners on both sides of industry they would have learned, among other things, that one page of instructions had sufficed in Holland. That was gold plating on an epic scale, and the experience has left behind a lot of ill will.

I regret that the Secretary of State has left the Chamber, as it appears that the Government want to counter some of the ill will generated by over-complex regulation by making somewhat hamfisted pro-business initiatives. The most recent was the announcement that senior business people would be seconded to operational jobs in the Department of Trade and Industry.

That initiative is appallingly badly thought out and dangerous, for many reasons. For example, if I were a trade unionist I should be extremely alarmed that an employer with a dubious labour relations record could in future draft employment legislation.

Mr. Chaytor: Does not the hon. Gentleman accept that that initiative establishes the interesting precedent that, in the future, leading trade unionists might also be seconded to the Department?

Dr. Cable: To be frank, I do not think that that would be any better. What is required is an element of neutrality and detachment in the people who give advice and prepare legislation. The initiative sets a very bad precedent. I have worked in a big company, and I know that people from big companies tend to have no background in small business and do not understand its concerns. They will always be suspected of representing their companies' sectional interests. The initiative is a very bad way to counter the ill will generated by inappropriate legislation.

I turn now to specific elements of the Bill. The core provisions of its family-friendly sections—the new paternity rights, and extended maternity leave and pay—seem very sensible, both in terms of their benefits for families and in terms of the economy.

The modern British economy faces the potentially long-term problem of increasing the supply of skilled and unskilled workers. Much of that supply will have to come from older workers who have retired prematurely, and from women who, traditionally, have taken long and often involuntary absences from employment. Any provisions such as maternity and paternity rights that make it more

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comfortable for women to return to work should be welcomed and encouraged, as long as they are properly balanced.

We must get away from the old-fashioned attitude to parental leave. That attitude was captured in the story—I am sure that it is apocryphal—of the naval rating who asked his senior officer for a little time off to attend the birth of his child. The rating was told that he had totally misunderstood his duties as a naval officer, and that they meant that he had to be present when the keel was laid but not when the ship was launched. Too many employers have applied the moral of that story to the families of employees for too long.

Some of the more critical comments made about the Bill have captured the practical problems that it poses. Some small employers—and not through bloody- mindedness or obscurantist attitudes—have genuine difficulty in accommodating absence. I welcome the small provision in the Bill that requires that the paternity leave be taken in a block, with the result that it is less disruptive. I hope that consideration will also be given to ways of ensuring that people taking such leave signal their intent well in advance, so as to give employers adequate notice. In small ways such as that, the provisions in the Bill can be made much more palatable to employers.

I was a little confused about what the Secretary of State said about flexible working. The logic beginning to emerge from the commission that the right hon. Lady established was that workers should not merely have the right to ask for flexible working, but that they should have the right to have a request considered sympathetically. In addition, it suggests that employers should be required to make a commercial case if they have to refuse a request for leave. If that commercial case were not made adequately, an employee would have the right to go to a tribunal.

If I heard the Secretary of State correctly, she did not confirm that such provisions would appear in the Bill. She seemed to say that there would be a probationary period of indefinite length before the Government took action, as she put it. I hope that the Minister for Employment and the Regions, when he replies to the debate, will say whether the more balanced approach that I have outlined, and which includes the right to a tribunal hearing, will be incorporated in the Bill, or whether it will merely be an eventual recourse.

The Minister is nodding, which suggests that that balanced approach will be contained in the Bill. If that is so, I welcome it.

The third element in the Bill that relates to family-friendliness but which is distinctly unfriendly to families is clause 47. The hon. Member for Maldon and East Chelmsford rightly said that the Bill is being used to introduce bits of welfare reform that are completely unrelated to its overall logic. I will go further, and say that the provisions are not only inappropriate but extremely reactionary. I suspect that the Secretary of State for Work and Pensions is trying to get another Secretary of State's fingerprints on the weapon that he is using to attack the rights of disabled people.

The clause will mean that, in future, the partners of disabled people in receipt of a variety of disability benefits will be required to submit to the work test. If they fail that test, as currently defined, benefit sanctions will ensue.

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That worries us deeply, because there is no evidence that the process will encourage disabled people's partners to work. However, there is a lot of evidence to suggest that many such partners, although they are not being paid, are working, in the sense that they are carers. Driving those people into work would be inhumane in some cases, and enormously costly to the state, which would have to fulfil the caring responsibilities.

Those familiar with the way in which the present incapacity benefit tests work know that some cases of real hardship are being generated. That is especially true for people with degenerative illnesses such as early Alzheimer's disease or Parkinson's disease, motor neurone disease or multiple sclerosis. In such cases, the early diagnosis of disablement does not entitle people to the higher levels of incapacity benefit.

There is a danger that many of the people who care for sufferers of such diseases will be pushed out to work, at a time that will be exactly wrong in terms of their caring obligations. I am worried that the good that the Government are doing with the more progressive family-friendly elements in the Bill will be countered by that extremely retrograde and damaging provision in clause 47. We shall vehemently oppose those provisions.

Mr. Prisk: Does the hon. Gentleman agree that the clause is deeply intrusive with regard to the relationship of a couple, as defined in the Bill?

Dr. Cable: The hon. Gentleman is absolutely right. We are no longer concerned about the work test for disabled people but about the way in which they balance their family relationships and caring responsibilities. I hope that the hon. Gentleman will support our objection to the clause when it is debated.

There has been a substantial escalation in the number of tribunal referrals—something like 25 per cent. in the past year and 300 per cent. in the past decade—along with substantial associated costs. I have read some of the analytical work on tribunals, and it is clear that this is not simply a question of people becoming more litigious or trade unions becoming more aggressive.

There are good reasons why more references are made to tribunals. For example, there are more women in the work force, and, as many of their problems are not addressed through existing procedures, they have to go to tribunals. Many tribunal references relate to redundancies in manufacturing industry which have been taking place on a large scale. A growing proportion of people work in small enterprises which often do not have these internal dispute settlement procedures, hence the need for tribunal references. So there are good reasons for this rising curve of tribunal activity—it is not necessarily a matter of blame.

The Government are right to say that there must be obligatory use of an internal dispute settlement procedure. There is consensus on that among employers and trade unions, and it would be a big step forward. I think that the Government are also right to have backed down on their proposal to impose fees for using a tribunal. That could have penalised many low-income people, particularly those making repeat appearances. I am glad that the Government have listened to the criticisms of that proposal.

There are problems regarding tribunals which we will explore in Committee. However, I will refer to some of the queries that have been raised with me. The legislation

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seems to contain a new screening procedure. At first sight, it seems sensible that cases do not automatically go through to a full tribunal hearing but have to be screened. It seems sensible to get rid of vexatious litigants. However, as I understand it, there is already a requirement to place a deposit and many people who do so subsequently win their tribunal hearings. It would be good to hear evidence from the Government about that experience before they press ahead with a new and more complicated procedure.

The other doubts that I have about this, which the hon. Member for Stoke-on-Trent, North (Ms Walley) and others have also mentioned, relate to cost orders. It seems sensible to tell people that there must be discipline and they must take account of the cost. However, it is all too easy to understand how someone in a dispute, particularly involving a large company, would put on the balance sheet the cost of half a day with the director of human resources, who is paid £100,000 a year, and a couple of QCs. The cost could quickly become astronomical, prohibitive and inequitable. That aspect of costings needs careful consideration.

It was clear from the consultations I have had on the Bill that there is a lot of unhappiness on the business side about the compulsion element of learning representation. Businesses are concerned that they are being asked to pay for—not simply to accept—learning representatives, some of whom might use their position to take an aggressive approach to industrial relations and destabilise them. That is the argument. My view is that that concern is probably overstated, one reason being that these rights will apply only in unionised companies, many of which will not have such learning representation. On balance, the provisions are probably about right, but the Government will have to deal with employers' concerns.

To conclude, I think that the Bill is balanced and represents a step forward. We shall support it. However, I agree with the amendment in one respect. We must be careful that secondary legislation does not produce a plethora of red tape such as that which we have seen all too frequently in the past.

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