Standing Committee F
Tuesday 11 December 2001
[Mr. David Amess in the Chair]
Amendment moved [this day]: No. 16, in page 32, line 27, at end add—
Employment Tribunal procedure regulations may include provision for authorising an employment tribunal to charge a fee payable by an applicant upon lodging an application with the tribunal, in such amount as the regulations shall provide.' ''—[Mr. Hammond.]
Mr. Philip Hammond (Runnymede and Weybridge): Welcome to the Chair, Mr. Amess. It is a pleasure to serve under you in a Committee.
We had begun to debate amendment No. 16, which would insert a proposal to charge employment tribunal applicants. The Government originally floated the provision as a key part of tribunal reform, but subsequently dropped it. Rather than waiting to view all the responses to their proposals—the closing date for responses was 8 October—they panicked. In early September, the Secretary of State and the Prime Minister were due to address the Trades Union Congress annual meeting. The Prime Minister avoided that event due to the tragic events of 11 September, but the Secretary of State did not. At that point, the Government coincidentally announced that, in response to consultation, they were withdrawing the proposal to charge. They did not wait for the full completion of the consultative procedure.
Members of the Committee can draw their own conclusions about the pressures that may have been placed on Government to arrive at that decision. It is not true, as the parliamentary Labour party brief says—I am not a subscriber to the PLP but it is often a useful source of information—
The Minister for Employment and the Regions (Alan Johnson): Just because we have lost someone, that does not mean we want to swap.
Mr. Hammond: I am flattered that the Minister would be prepared to swap me for the hon. Member for Shrewsbury and Atcham (Mr. Marsden), but I am not sure that I would accept that transaction.
The PLP brief poses a series of questions and answers—a simple form that Government Back Benchers can understand. It asks:
''Q—Why did the Government drop charging on employment tribunals from the Bill?
A—There was a strong consensus against charging from both employer and employee representatives during the consultation period.''
The Government did not complete the consultation process before they dropped charging. There was not a ''strong consensus'' against charging among employer and employee representatives. Employer representatives welcomed the original Government announcement that they would introduce charging. That seemed sensible, and the Minister said:
''Charging a modest amount would bring a faster and more customer-focused service and also raise funding for improvements in the tribunal and conciliation process. At least a quarter of all tribunal applications which come from those who are on benefits or in genuine need will be exempt from any charges. These people will still have access to justice.''
The decision to drop charging was somewhat surprising, and produced a fair degree of ridicule, even in the generally pro-Government press. On 5 September, The Guardian said:
''Tony Blair has sanctioned his first political retreat since the election by bowing to union opposition and dropping plans to impose charges on applicants to employment tribunals . . . The climbdown is understood to have been made by the industry secretary, Patricia Hewitt, with the prime minister's personal agreement in the past few days.''
It goes on rather enlighteningly to say:
''The issue was threatening to engulf Mr. Blair and Ms Hewitt who are due to speak at the TUC conference in Brighton next week.''
The Government were willing to back down on a proposal that they had strongly defended and previously had said was predicted to save British business as much as £70 million in litigation costs. They were prepared to do that before hearing everything that people had to say during the consultation process. That is an additional stealth tax of £70 million imposed on British business by the Government.
The amendment seeks to put back in the Bill not a requirement to introduce charging, but a power for the Minister to do so if his original instincts were right and if the other measures in the Bill, largely welcome though they are, do not manage to slow down the seemingly inexorable rise in tribunal applications. What targets has the Minister set on that? If he does not meet them he will need additional means at his disposal. The amendment offers him just such an additional means. It is not a silly or extreme idea, but one that the Minister himself has strongly defended and which the Government originally put forward as a key part of their proposals.
The Opposition suspect that the proposal to introduce charging has not been dropped because of any flaw in the logic or because it is unworkable, but simply because of pressure from one interest group and because it provided the potential for serious embarrassment to the Prime Minister at a time when he wanted to generate harmonious relations with the TUC and hoped to have a successful appearance at the TUC conference. That is not the best way of delivering good legislation and good government. I hope that the Minister will have the good grace to tell us that he does not have an objection in principle to charging and that he would welcome the inclusion of this provision in the Bill, so that if all else fails—I know that it is not now his first choice—he has this additional weapon to draw upon in his armoury.
Rob Marris (Wolverhampton, South-West): Where in the Confederation of British Industry brief on the Bill is it suggested that charging would be a good idea?
Mr. Hammond: I hope that the hon. Gentleman will not fall into the trap of thinking that the CBI is the only organisation representing business. Let me remind him again of what I quoted from the PLP brief. It said:
''There was a strong consensus against charging from both employer and employee representatives''.
I have not spoken to any employer representative who felt strongly that the charging scheme was a bad idea. I concede that the CBI is fairly neutral on the issue of charging. Other employer representative organisations, such as the Federation of Small Businesses and the Engineering Employers Federation, which the hon. Gentleman himself cited this morning, are in favour of charging. They both strongly support the Government's original proposals and are deeply disappointed that the Minister retreated from them.
This is an unfavourable move in what is a delicately balanced package of measures that meet the agendas of both trades unions and employees, and employers. The symmetry and balance has been disrupted by the U-turn, as the BBC News website described it.
I am conscious of the need to make serious progress in this afternoon's sitting, so I will not make further remarks on amendment No. 16 until I have heard what the Minister and other Committee members have to say.
Mr. George Osborne (Tatton): Thank you for calling me, Mr. Amess, and I am delighted to serve under your chairmanship.
My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) spoke well on the extraordinary Government U-turn that we have seen in the past few weeks. I do not think that he mentioned that the charging regime was one of only two provisions that were highlighted in the press notice that accompanied the ''Routes to Resolution'' consultation paper. The other was the measure for companies to have an in-house dispute resolution procedure, which the Committee will discuss later. As my hon. Friend reminded the Committee, the Minister, so proud was he of the charging regime, said that the regime would provide a faster and more customer-focused service. That begs the question: is he now introducing a system that is slower and less customer focused?
We must ask ourselves why the regime is not in the Bill. As my hon. Friend suggested, there are all sorts of tell-tale signs. The charging regime generated huge opposition from the trade unions and, as my hon. Friend pointed out, it was an extraordinary coincidence that the measure was dropped just a few days before the Secretary of State and the Prime Minister were to go to the TUC conference. For me, that was a coincidence too far. Some 49 Labour Members signed an early-day motion opposing the charging regime. I must confess that I have not done my homework, and I am not clear whether Labour Committee members were among them.
Mr. Hammond: I am happy to enlighten my hon. Friend and tell him that six Committee members signed that early-day motion.
Mr. Osborne: I am looking forward to those six Members explaining why they were so hostile to the charging regime and how they successfully brought pressure to bear on the Government. The fact is that the move is an embarrassing U-turn and a typical example of new Labour talking tough but backing down when the pressure comes. Will the Minister explain how a tribunal system without the charging regime will not be slower and less customer focused than one with the regime?
Norman Lamb (North Norfolk): Thank you, Mr. Amess, and welcome.
The Liberal Democrats do not support the amendment. It would deter applicants, particularly those who are left in difficult circumstances following dismissal. I appreciate that the amendment would give the Minister only the discretion to introduce a charging system, but such a move would disadvantage those applicants who are in the most difficult financial circumstances. I find it interesting that the Conservative party wants to go beyond what the CBI sees as important in the Bill. Charging was not even mentioned in the briefing that I had with the CBI. I appreciate that it is not the only employers' organisation that has an interest in the matter, but I have not been overwhelmed by demands from other organisations to introduce the charging mechanism. The Bill already includes measures to deter tribunal applications by introducing procedures for in-house resolution of disputes, which is a valuable advance and should be welcomed by all. However, it would be a retrograde step to impose a charge and impede people who have not been able to resolve their dispute internally with their employer, and we would not support it.