13 Mar 2009 : Column 561

13 Mar 2009 : Column 561

House of Commons

Friday 13 March 2009

The House met at half-past Nine o’clock


The First Deputy Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3).

Andrew Miller (Ellesmere Port and Neston) (Lab): I beg to move, That the House sit in private.

Question put forthwith (Standing Order No. 163).

The House divided: Ayes 0, Noes 85.
Division No. 69]
[9.33 am


Tellers for the Ayes:

Mr. John Heppell and
Andrew Miller

Abbott, Ms Diane
Allen, Mr. Graham
Anderson, Janet
Baron, Mr. John
Bercow, John
Brennan, Kevin
Brokenshire, James
Browne, Mr. Jeremy
Bryant, Chris
Burden, Richard
Burgon, Colin
Burt, Lorely
Chope, Mr. Christopher
Clarke, rh Mr. Tom
Clelland, Mr. David
Crabb, Mr. Stephen
Crausby, Mr. David
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Dean, Mrs. Janet
Devine, Mr. Jim
Djanogly, Mr. Jonathan
Dobbin, Jim
Dowd, Jim
Drew, Mr. David
Ellwood, Mr. Tobias
Farrelly, Paul
Fitzpatrick, Jim
Flello, Mr. Robert
Follett, Barbara
Francis, Dr. Hywel
Francois, Mr. Mark
Hamilton, Mr. David
Harris, Mr. Tom
Havard, Mr. Dai
Hendrick, Mr. Mark
Hillier, Meg
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Iddon, Dr. Brian
Irranca-Davies, Huw
Jones, Mr. Kevan
Jones, Lynne
Keen, Alan
Keen, Ann
Kirkbride, Miss Julie
Kramer, Susan
Kumar, Dr. Ashok
Laxton, Mr. Bob
Lloyd, Tony
MacShane, rh Mr. Denis
Mallaber, Judy
Marsden, Mr. Gordon
McDonnell, John
McFadden, rh Mr. Pat
McGovern, Mr. Jim
McIsaac, Shona
Merron, Gillian
Moffatt, Laura
Mole, Chris
Naysmith, Dr. Doug
O'Brien, Mr. Stephen
Olner, Mr. Bill
Osborne, Sandra
Pelling, Mr. Andrew
Prentice, Mr. Gordon
Prosser, Gwyn
Riordan, Mrs. Linda
Robathan, Mr. Andrew
Robertson, John
Sheridan, Jim
Skinner, Mr. Dennis
Smith, rh Mr. Andrew
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Thornberry, Emily
Vara, Mr. Shailesh
Walley, Joan
Watts, Mr. Dave
Wiggin, Bill
Winterton, rh Ms Rosie
Wood, Mike
Wright, Mr. Iain
Tellers for the Noes:

Mr. Andrew Dismore and
Mr. Michael Clapham
Question accordingly negatived.
13 Mar 2009 : Column 562

Statutory Redundancy Pay (Amendment) Bill

Second Reading

9.46 am

Mr. Lindsay Hoyle (Chorley) (Lab): I beg to move, That the Bill be now read a Second time.

Today is an interesting day—Friday the 13th, red nose day. I hope that we do not have too many red faces on the Front Bench, let alone red noses. I am disappointed that, despite what seemed to be—and what I hoped would be—the sympathetic line being taken by my Government, some strange tactics were being used earlier in the week. Letters in the name of the Whip have gone out to certain Members asking them to come and speak against the Bill. I find that quite appalling and quite underhand. It is a very strange thing to do, especially when the Minister and I were still in negotiations on the Bill and had not yet met to come to an agreement. For somebody to prejudge those discussions is quite appalling, so I hope that there are some red faces.

Mr. Andrew Dismore (Hendon) (Lab): As my hon. Friend knows, I am a regular attender on Fridays. I have read no letters of that kind and I can assure him that I will not try to talk his Bill out.

Mr. Hoyle: I thank my hon. Friend for that assurance. I just hope that other hon. Members will do the same.

The Bill is important and I thank the supporters who have turned up today. It is a Bill—and a campaign—that matters. I would like to thank in particular the major trade unions and the smaller trade unions that have backed the Bill and worked tirelessly with their members to raise the profile of the issue and to rally support among MPs. I would also like to thank our people in the party who made the issue a manifesto pledge. We all stood on that manifesto, and it is one that I am proud to stand by, but it seems that some people wish to drop that pledge along the way. I find that very strange.

I would like also to thank the 178 colleagues from all parties who signed early-day motion 699 on the issue and the 11 colleagues, also from all parties, who have sponsored the Bill. There is cross-party support for the Bill, so it seems strange that the Government oppose it, but there we are. I thank the Secretary of State for Business, Enterprise and Regulatory Reform and the Minister for Employment Relations and Postal Affairs for meeting me to discuss the matter. In fact, we were still discussing it on Wednesday evening, because we had not reached agreement. We tried to change the Bill. We wanted to be amiable and remove any ambiguity from it, so for somebody to decide to try to scupper it while discussions were taking place is quite unacceptable.

Paul Farrelly (Newcastle-under-Lyme) (Lab): I congratulate my hon. Friend on introducing the Bill. My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) and I have been in the same position, with regard to temporary and agency workers. Does my hon. Friend agree that it would be a great shame if any hon. Member voted against a closure motion or against Second Reading, particularly any hon. Member on the Labour Benches? They do not have to vote against the Bill.

13 Mar 2009 : Column 563

Mr. Hoyle: My hon. Friend is absolutely correct. The Temporary and Agency Workers (Equal Treatment) Bill ended up being opposed and it caused delay for another 12 months: that did not help the people we are meant to represent. I hope that others who want to oppose this Bill will take note of my hon. Friend’s words.

The Bill calls on the Government to link the value of statutory redundancy pay limits to the level of average earnings, which will ensure that future increases in statutory redundancy pay are linked to average earnings. Before discussing the Bill in detail, however, I would like to inform Members about how statutory redundancy pay is currently calculated so that they can understand why I am introducing the Bill.

The amount of statutory redundancy pay to which an employee is entitled depends on his or her age and length of service and pay. An employee who has been employed continuously for more than two years is entitled to half a week’s pay for each complete year of service between the ages of 18 to 21, one week’s pay for each complete year of service between the ages of 22 and 40 and one and a half week’s pay for each complete year of service after reaching the age of 41. There is, however, a statutory cap on the amount of an employee’s weekly pay that can count towards the entitlement to statutory redundancy pay. Since February, the limit has been set at £350.

When statutory redundancy pay was introduced back in 1965 through the Redundancy Payments Act 1965, the limit was set at £40, even though average weekly earnings for that year stood at £19.95, which meant that it was twice the average weekly wage when people first had the vision back in 1965 to introduce the SRP.

Mr. Jim McGovern (Dundee, West) (Lab): I congratulate my hon. Friend on introducing his Bill. He may be aware that yesterday in my Dundee constituency, a major employer, NCR, announced 250 redundancies, and while I am sure that the local Unite trade union official, Fiona Farmer, will attempt to negotiate some sort of enhanced package, does my hon. Friend agree that if there is no such package, it is precisely that sort of people whom his Bill will help?

Mr. Hoyle: I could not agree more with my hon. Friend. He is right that it is all about ensuring that we look after people who do not get an enhanced package. I had a conversation earlier today with my hon. Friend the Member for Stoke-on-Trent, South (Mr. Flello), who made exactly the same point—negotiations had taken place with Wedgwood to give a good package and enhanced payout, but tragically it went into receivership, so those employees lost tens of thousands of pounds and unfortunately ended up with the bare minimum. That just shows why this Bill is needed—to represent those people and others, because I can honestly say that there is not a constituency in the United Kingdom that has not been affected by the issue of statutory redundancy pay. We all have to do the best for the people we represent, and it is usually those people at the bottom of the employment league that we must look after most.

Mr. David Hamilton (Midlothian) (Lab): May I draw my hon. Friend’s attention to another problem that people face? Now that we are in a downturn, multinational companies are taking the decision to lay people off, and
13 Mar 2009 : Column 564
on account of the poor terms and conditions on offer in the UK compared to Germany, for example, it is much more likely that a British worker is going to be laid off than a European one—and it is the European worker who is more likely to get an enhanced pay-off.

Mr. Hoyle: I could not disagree with that. In fact, the Business and Enterprise Select Committee took evidence on that, and I recall that three Opposition Members were sitting on that Committee when we took evidence relating to Peugeot and Vauxhall. One of the key issues that came out in that evidence was that it was cheaper and easier to get rid of someone in the UK, ensuring that people were more protected in Europe. It was people in the UK who suffered the most and who were the easiest to sack, so I agree with my hon. Friend.

Mr. Mark Hendrick (Preston) (Lab/Co-op): I congratulate my hon. Friend on introducing the Bill. Given the economic downturn, the financial crisis and the vulnerability of many people in our society today, is it not important that the Government do not get into the same sort of position as the banks? The banks would only give people money when they did not need it and when the economy was doing well; now that the economy is doing badly, they will not give people the money they need. We do not want a Government who provide an umbrella only when the sun shines.

Mr. Hoyle: Very good! My hon. Friend is absolutely spot on. It is all about helping and there has never been a more appropriate time than now to offer help, because we are a Government who care, who are meant to look after everyone, so I could not have put it better myself.

Joan Walley (Stoke-on-Trent, North) (Lab): My hon. Friend has mentioned the urgency of the Bill in respect of Stoke-on-Trent and north Staffordshire. Will he say a little about the importance of his Bill for women? Clearly, there are industries in the area that employ a greater proportion of women workers, who would stand to gain from the Bill.

Mr. Hoyle: My hon. Friend is absolutely correct about that—some will benefit more than others from the Bill, and women, workers in the hotel and catering trade and others in other sectors will be beneficiaries. My hon. Friend is spot on to say that the Bill is about helping women and others working on low pay and in poor conditions.

As I said, in 1965, the limit for SRP was set at £40, which was around twice the weekly wage, at £19.95, and it is interesting to note that that covered 96 per cent. of the working population. Since then, the relative value of the link to earnings has declined, and in 2008, just 40 per cent. of the working population were covered. That shows how much it has been eroded since 1965. It is only right, then, that we try to address this issue now, particularly given the economic circumstances that people face today.

I am aware of the limitations of attempting to achieve my aims through a private Member’s Bill. Much to my frustration, we cannot propose a Bill that would significantly change expenditure. That is a feature of any private
13 Mar 2009 : Column 565
Member’s Bill and it helps to explain some of our frustration, but we are working within the terms of such Bills.

John Bercow (Buckingham) (Con): I am pleased to support the hon. Gentleman’s private Member’s Bill, as he knows. Although I do not wish to intrude on private Labour party grief, may I put it to him that Ministers should not seek to prevent the Bill from going into Committee because of any concern about costs? Precisely because the hon. Gentleman is simply suggesting that a link should be made, without being overly prescriptive about it, the Government still have the matter in their own hands. To prevent the Bill from making progress, when an important principle is being established, seems to me perverse.

Mr. Dennis Skinner (Bolsover) (Lab): The hon. Gentleman should chair the Committee for the Bill.

Mr. Hoyle: I thank my hon. Friend for that suggestion, and hope that the hon. Member for Buckingham (John Bercow) will chair the Committee considering the Bill or at least serve on it. I am sure that he would like to see fair wind given to the Bill, which is why I was so surprised and shocked to find out what was going on. I thought that we were negotiating a genuine agreement. Okay, I may not have persuaded the Government to go all the way, but I thought that they would be prepared to see how the Bill went and not to stand in its way. That has not been case, so I hope that there are some red faces in the Chamber, particularly of those responsible for sending out that letter asking Members to speak against the Bill. I think it is shameful and silly. I believe that even at this late stage, whispers are going round with the intention of preventing this Bill from making progress. I hope that people will rethink their attitude and that the Minister will have a word to call off what is happening as we speak. I look forward to hearing the Minister taking a more sympathetic line, because I take him at his word; I believe what he tells me. I think that he will be shocked and embarrassed by what we have found out.

Mr. Skinner rose—

Paul Farrelly: The Minister should intervene.

Mr. Hoyle: Yes, I would always give way to the Minister. I do think he is an innocent abroad; I am not too sure how far abroad he is at the moment, but there we are.

As I was saying, the relative value of the payments has declined, so a significant proportion of the working population now earn significantly more than what is offered, so it is only right to address the issue, particularly given the economic times. There is no better time than now. Some people say that now is the wrong time, but that is absolutely not the case. When people need us, it is the right time.

Mr. Skinner: It is the right time. The Government have, quite properly, said that now is the time to put money into people’s pockets to give them a greater propensity to spend. They have done that for pensioners by bringing forward to January the biggest increase for about 30 years; they have brought forward increases in
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child benefit, tax allowances and all the rest of it. The idea behind what the Government are doing is encouraging the propensity to spend. My hon. Friend’s Bill is seeking to do exactly the same, so let me say this to the Minister: do he and the Cabinet understand that my hon. Friend the Member for Chorley (Mr. Hoyle) and the rest of us are engaged in a practice here today of helping the Chancellor to put more money into the economy to help it recover?

Mr. Hoyle: I thank my hon. Friend, who always has good advice, not just for me but for the Minister and the Government generally.

Mr. Dismore: My hon. Friend is right that this debate is somewhat redolent of times past. He will have read, as I have, the unfair dismissal legislation, and will know that one of the building blocks of unfair dismissal compensation is the basic award, which is equivalent to the redundancy pay calculation. Will he confirm that the Bill would translate into unfair dismissal law, so that people who are unfairly dismissed, for redundancy reasons or otherwise, will still get the basic award, calculated on the basis of the redundancy pay assessment under the Bill?

Mr. Hoyle: Absolutely. I would expect that link to be kept in place, and we need to ensure that that happens.

We ask the Government to adopt new legislation, which would link the value of statutory redundancy pay limits to average earnings and ensure that future increases, if determined necessary by the Secretary of State, are also linked to average earnings. The level at which the SRP is linked to earnings is obviously for the Government to determine, and is not part of the Bill. The Bill is not about putting the Secretary of State in handcuffs, but allowing the Government to set the level. I want to ensure that we get that message across. If successful, however, the Bill will change statutory redundancy pay for the better—that is the key.

Until 2000, the statutory limit was reviewed annually by the Secretary of State, who made the decision whether to increase the limit, and if so by how much. That was very good. In 2000, however, the Government decided to replace the system with a new scheme under which the statutory limit is increased annually by the Secretary of State in line with the retail prices index. The danger with that at the moment is that the RPI could go below zero, which means that, in theory; statutory redundancy pay could be reduced, not increased. That would be absolutely absurd at this time when people will need help, and that is why the Bill is important. We need to reconsider and reword the legislation.

Although the earlier development in terms of the new scheme has been welcomed, and has resulted in an annual increase, statutory redundancy pay entitlement has not been reinstated to its original value in real terms. Therefore, by introducing the link to earnings, as opposed to the RPI, my Bill aims to change the formula that the Secretary of State uses, and would protect the value of statutory redundancy pay in the future. That is what is important.

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