Previous SectionIndexHome Page

Mr. Deputy Speaker: The hon. Gentleman will understand that I am not in a position to give him an instant answer to that point. I am sure, however, that Mr. Speaker will examine the matter, and I hope that, if an omission has taken place, it can be put right as soon as possible.


Local Sustainability

Sue Doughty presented a Bill to require the drawing up and implementation of strategies for promoting and increasing local or regional sustainability; to require the setting of targets for the implementation of those strategies; to specify the functions of the Secretary of State and the National Assembly for Wales; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 14 November, and to be printed [Bill 188].

23 Jul 2002 : Column 885

23 Jul 2002 : Column 887

Redundancy Payments

5.45 pm

Mr. David Crausby (Bolton, North-East): I beg to move,

When the Redundancy Payments Act 1965 was introduced, the Government restricted the amount of statutory redundancy pay per week and the maximum number of weeks to 30. The cap on redundancy payment currently stands at £250 a week, and I am delighted to be given the opportunity to introduce this Bill, which is designed to eliminate the injustice faced by those who suffer the pain and anguish of redundancy, many of whom have previously earned above the £250 a week cap only to find that their redundancy pay entitlement is limited to £250 a week.

I am grateful that the Employment Relations Act 1999 ensured that a limit on a week's pay would increase in line with inflation. In a growing economy, however, wages inflation will inevitably run higher than the retail prices index, and the relative value of a week's pay calculation will fall further and further behind. I am not, of course, asking for a limitless amount, as that would be ridiculous in the case of those who are in receipt of tens of thousands of pounds per week. The cap should, however, be aimed at the level of average earnings, and it should be linked to increases in the average wage.

The Redundancy Payments Act 1965 was introduced to compensate workers who had lost their jobs. It was set up with a maximum payment of 30 weeks' pay after 20 years' employment. The effect of the maximum weekly payment is to limit the level of compensation to £7,500 to an employee who, for example, is aged 60 and has worked for the company concerned for as many as 45 years. With five years to wait for a pension, £7,500 is little enough on which to exist. When the earnings of the individual concerned have previously been above the £250 cap, however—say £500 a week—the redundancy compensation would consequently be reduced to 15 weeks' pay instead of 30 weeks' pay.

It should be obvious that, for elderly workers with little chance of further employment, those levels of redundancy compensation are derisory. A maximum weekly payment cap was included in the 1965 legislation, when employers received a rebate of 40 per cent. from the Government, and the Government of the day undoubtedly wanted to restrict the Treasury's exposure to such claims. That has now changed, with the rebate that employers received being reduced initially and then removed entirely. Employers were properly compensated for the removal of the rebate by a reduction in national insurance contributions at the time. That was done because some people considered that it was too easy for certain employers to use redundancy as a first option and to claim a rebate from the Government subsequently.

In its day, the Redundancy Payments Act was an important and welcome step forward for workers' rights. It has barely changed in nearly 40 years, however, and advances in employees' rights in other countries have passed by the British worker. To be fair, whenever there are major high-profile redundancies in this country, political pressure is inevitably exerted to provide help for

23 Jul 2002 : Column 888

those affected. However, the problem comes with small-scale redundancies. When added together, they are just as damaging to the community. As with a large-scale factory closure, they are just as traumatic to the individual who suffers the loss of his or her job. The time has come for the working people of this country to be paid by right simply in relation to what they have lost. They should be compensated at least at the levels that their counterparts in Europe enjoy.

I argue that point not just from the standpoint of more financial compensation, but as much in the cause of deterring multinational employers from selecting British workers simply because it is cheaper and easier to make redundancies in the UK than it is elsewhere. For example, in the Netherlands and Spain, regional employment offices must authorise redundancies. In France, Germany, Austria and Luxembourg, employers are required to fund a social plan that may cover both financial compensation and measures to alleviate the impact of redundancies.

In France, employers must consult works councils or staff representatives and send a note of the consultative meeting to the labour inspectorate. They must consider retraining, shorter or reorganised hours and two consultation meetings are required with a gap of 14 to 28 days. In Italy, employers must inform workers and, within seven days, a joint review of proposals that can last 45 days must consider alternatives to the redundancies. Individual notice is then governed by collective agreement, which involves a two-stage procedure whereby workers are covered by lay-off provisions and then by mobility provisions. Faulty procedure can mean reinstatement. The House of Commons Select Committee on Trade and Industry considered the relative UK position in January 2001. Its report said:

I do not want to put excessive burdens on British employers, especially those in manufacturing industry. They need all the help that they can get in the current circumstances. However, the truth is that UK law gives poor protection in comparison with legislation in other countries. The French courts clearly demonstrated the difference, to the cost of Marks and Spencer when the company announced the attempted closure of its continental branches in March 2001. Our colleagues and competitors in Europe are unlikely to allow employers to make redundancy easier, and neither should they. It is therefore intolerable that, in the event of a need for a reduction in the number of employees, the burden should be disproportionately shouldered by the British working man and woman.

We could, of course, pursue justice through European legislation so as to level the playing field, but our Government argue that subsidiarity should apply and that such matters should be left to national Governments. That is fine just as long as we do not allow British employees to miss out and remain the poor, redundant employees of Europe.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Crausby, Jim Dobbin, Syd Rapson, Mr. Michael Clapham, Mr. Lindsay Hoyle, Geraldine Smith, Mr. Kevan Jones, Mr. Bill Olner, Mr. George Howarth, David Wright, Mr. Anthony D. Wright and John Mann.

23 Jul 2002 : Column 889

Redundancy Payments

Mr. David Crausby accordingly presented a Bill to remove the maximum amount of a week's pay for the purpose of calculating redundancy payments: And the same was read the First time; and ordered to be read a Second time on Friday 14 November, and to be printed [Bill 189].


Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Local Government Finance

Question agreed to.

23 Jul 2002 : Column 890

Public Expenditure

[Relevant documents: Minutes of Evidence taken before the Treasury Committee on 17th and 18th July on the Spending Review 2002, HC 1092-i and ii.]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sutcliffe.]

5.55 pm

The Chief Secretary to the Treasury (Mr. Paul Boateng): At the heart of this spending review is a passionate belief in the value of public services and in the potential of the British people. It also shows a passionate belief in the value of education in achieving that potential and of health in maintaining it. It recognises the need always to drive forward, with an emphasis on science, the creation of a competitive and productive economy with enterprise at its base. It also recognises, however, that common sense demands that, to deliver the outcomes that we desire for our country, there must be new investment. Common sense, too, dictates that this investment will not be enough without reform. Passion and common sense, investment and reform are the linchpins of this spending review.

Compare and contrast that with the approach of Conservative Members, a dispirited and lacklustre bunch still reeling after the letting of much blood. By the look on their faces, I fear that some of them are a little crazed by it all. The chairman of the Conservative party has gone; the shadow Chief Secretary to the Treasury has gone. Both have apparently been promoted. However, let me send my felicitations to the former shadow Chief Secretary, the hon. Member for Buckingham (Mr. Bercow). We will miss him; they do not often make them like that. That at any rate was clearly the view of one of the shadow Chancellors, but I will come to him in a minute. I genuinely want to congratulate the hon. Member for Arundel and South Downs (Mr. Flight) on what is a genuine promotion. He has worked hard for it, and I hope that he lasts a little longer than his predecessor.

There is something of the night about recent events. For instance, why is the shadow Chief Secretary, whoever it was to be, not opening for the Opposition in this debate? That is the precedent in the House. [Hon. Members: "No."] Opposition Members must get their facts right. The previous debate on the spending review, the one before that and the one before that were all led by the Chief Secretary and the shadow Chief Secretary. A week ago, why did we discover that the shadow Chief Secretary, whoever it was to be, would not lead for the Opposition? The shadow Chancellor was going to lead, so could it be that he was absolutely determined that, whoever was to be made shadow Chief Secretary, there was no way that person would lead for the Opposition?

Next Section

IndexHome Page