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The Bill has come as a surprise to the House and to business. Just five months ago, the Queen's Speech contained no mention of an Employment Bill. In the debate on the Loyal Address, the Secretary of State spoke about an enterprise Bill, for which we are still waiting, and about the Sex Discrimination (Election Candidates) Bill, but she made no mention of the 53 clauses of further employment legislation that we are debating today.
Some of the measures in the Bill are welcome, and I shall set out our approach in detail in a moment. Overall, however, the Bill represents yet another raft of rights and entitlements for employees and trade unions, which will have the effect of adding still further to the costs, burdens and work load of businesses, and of small businesses in particular. It is extraordinary that, in the press release that announced the publication of the Bill, the Secretary of State claimed that the Bill would reduce red tape for employers. The truth is exactly the reverse, as almost every organisation representing business has made clear in their detailed comments about the Bill.
The Bill needs to be viewed in the context of the present state of the economy. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) has already done a great deal today to puncture the balloon of self-confidence that envelops the Chancellor of the Exchequer. It is crucial, when considering employment measures of this kind, to keep in mind the climate facing British business today. Across the world, economies are slowing and business men are having to operate in a harsher climate in which competitiveness counts above all. Although the British economy as a whole may escape a recession, manufacturing industry has been experiencing one for almost a year. Every business survey has shown a worsening outlook, with increased uncertainty and pessimism. When asked what the Government could do to help, business men have time and again pleaded for relief from the burden of regulation.
Mr. Lloyd: Will the hon. Gentleman do us the favour of saying which of the existing protections for people in the workplace the Opposition regard as the red tape that they now want to get rid of? It would be helpful to have a specific answer to that question.
Mr. Whittingdale: The Secretary of State made it clear in her opening speech that we have opposed the imposition of extra burdens on business on many occasions. Such measures have to be taken cumulatively. We have to consider the overall effect of all the regulations taken together.
Mr. Swire: Does my hon. Friend agree with me and, more importantly, with Ruth Lea, the head of the policy unit at the Institute of Directors, who has today pointed out an increase in the regulatory burden on business, and who goes on to say that
Mr. Frank Doran (Aberdeen, Central): If the hon. Gentleman will not tell us which of the regulations introduced by this Government he would get rid of, will he tell us which of the 3,000-odd regulations made in each of the 18 years of Tory Government he regrets?
Mr. Whittingdale: I must point out to the hon. Gentleman that, as my right hon. and learned Friend the shadow Chancellor made clear in his response to today's statement, the number of regulations introduced under this Government has reached an all-time record.
Mr. Whittingdale: I am all in favour of investment in human skills in the workplace, but we cannot achieve that through compulsion and regulation. I will deal with that specific element of the Bill in a moment.
Rob Marris (Wolverhampton, South-West): I should like to declare an interest in that my constituency received money from the Transport and General Workers Union before the general election was called.
Mr. Whittingdale: Unfortunately, it seems unlikely that we shall be in a position to make that judgment for a few years. When we do form a Government, we shall need to consider all the regulations, and I am afraid that there will be a whole lot more by the time that happens. This flow is relentless, and we know that there are more to come. I hope that the Secretary of State will be able to listen to and answer the pleas of business, and to make it clear that she will not introduce further regulations after the many that are contained in the Bill.
Part of our problem is that the cost to business of the regulations in the Bill is extremely difficult to judge. As is often the case with legislation introduced by this Government, the Bill contains enabling legislation that will result in many of the new regulations being introduced by statutory instrument at a later date. Business is in no doubt as to the overall effect of the Bill, however. My hon. Friend the Member for East Devon (Mr. Swire) quoted the Institute of Directors. I would cite the example of the Federation of Small Businesses, which has said that the Bill is a
Any measures that help to resolve more disputes in the workplace without recourse to litigation are desirable and necessary. The Secretary of State has on several occasions drawn attention to the trebling of the number of claims to employment tribunals in the past 10 years, and the cost that that has imposed on business. The CBI estimates a total cost to British industry of £633 million a year. The Government's own consultation document estimates the average cost to an employer of each application at around £2,000. Many employers put that figure considerably higher.
We support the proposal to require employees to use internal grievance procedures to resolve disputes in the workplace without going to a tribunal, but we are concerned that the Government have significantly watered down their original suggestion in the face of pressure from their Back Benchers and the trade unions.
Like the Federation of Small Businesses and the Institute of Directors, we are disappointed that the Government have dropped the proposal to require applicants to pay a charge for bringing a claim. The Government suggest that it did not receive widespread support, but a Forum of Private Business survey found that 80 per cent. of respondents supported it.
The Government have made optimistic forecasts that their proposals will cut applications by a quarter with savings to employers of about £70 million, but significant costs will fall predominantly on small employers. Those are acknowledged in the Bill's regulatory impact assessment, and a number of legal experts have already cast doubt on the effectiveness of the remaining provisions.
The Secretary of State seemed to suggest that there may be a probationary period in which to consider whether the flexible working proposals have been taken up. If they are not, the Government may have to revisit the issue. Will she give the same undertaking on these proposals? If the number of employment tribunal applications does not decrease, perhaps she will reconsider whether further measures are necessary, in particular the proposal she made in the consultation paper to introduce a charge for applying to a tribunal?