Employment Bill

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Alan Johnson: I agree with my hon. Friend. However, to be fair, the hon. Member for Hereford and Stortford raised the point about people on low incomes.

Mr. Prisk: Hertford.

Alan Johnson: I am sorry. The hon. Gentleman is the Member for Hertford and Stortford. The lighting is bad, and I do not have my glasses.

The important consideration is about people on low incomes who have genuine claims that they wish to take to an employment tribunal. We decided, as did the previous Conservative Government, that fees would be a tax on justice.

Would a charge deter applicants from taking cases forward? It probably would not deter vexatious cases, which are the ones that we are concerned about. However, it would affect applicants with genuine cases who thought that the expenditure was too great. After consultation and reflection, we decided not to take that route. People who understand employment tribunals argue that fees do not deter vexatious cases but that other measures should be pursued, such as admissibility. Therefore, the amendment does not deserve support.

The hon. Member for Runnymede and Weybridge asked for our estimate of the reduced number of cases; the Bill will reduce the number of cases by between 30,000 and 40,000 a year, the vast majority of which will come as a result of having workplace procedures. In 62 per cent. of all employment tribunal cases not a word is exchanged between the respondent and the applicant until they get to an employment tribunal.

The previous Government concluded that charging was not the solution, and we agree. We do not believe in introducing a measure in this way, giving us a power on the Committee Corridor to implement something so important. Of course, Governments can never say never about what may happen in future, but if we are to return to the issue, as the previous Government rightly did, there should be a full debate on legislation, not a discussion on regulations. I urge the Committee to oppose the amendment.

5 pm

Mr. Hammond: The Minister has advanced some fascinating arguments and given an eloquent exposition of the case for primary legislation, which Opposition Members broadly support. The Minister talked about what the previous Government did, but he was actually referring to what the previous Government but two did in 1988, when the world was a different, and in some respects, happier place. We cannot draw too many conclusions from what happened 13 or 14 years ago.

The Minister's response to the amendment was a well-argued, coherent argument against charging. However, he did not explain why he and his colleagues whole-heartedly supported charging when they published their consultation document on 20 July. With the exception of citing responses to the consultation, the Minister did not give a coherent reason for changing his position between 20 July and 5 September. He said that the Government reached a conclusion after the consultation, but they did not. In case there is any ambiguity—the Minister referred to it earlier—let us be clear about the dates. I invite the Minister to shoot me down if I am wrong.

On 20 July, the Department of Trade and Industry published ''Routes to Resolution'' and invited responses, the closing date for which was 8 October. It is conventional to wait until a consultation exercise is complete and the responses have been received before drawing conclusions. On 5 September, the Government announced—or leaked—that they had abandoned the proposed charging regime. They did so not because of a change of heart but because of pressure that had been applied to them. I quote from The Guardian on Wednesday 5 September, which stated:

    ''The Government is already facing a revolt over the future of public services, and Ministers felt they could not continue fighting wars on so many different fronts. Furious trade union sponsored Labour MPs were also promising to inflict a damaging defeat over the fees in the Commons.''

I suspect that they include members of this Committee who signed early-day motion. 260, without recording their interest in doing so. The Government abandoned their favoured charging scheme not because of the results of their consultation, which had not been completed at that stage, or for a principle, or moral reason, as the Minister would have us believe, but because the squeeze was put on them by the trade union movement, by trade union-sponsored Labour MPs. The Government abandoned a scheme that the Department decided was workable and appropriate simply because, in the grand scheme of things, with a punch-up going on with the trade unions about public services, the Prime Minister did not want a war on two fronts, having no doubt been attentive to history.

The Minister did not advance any logical or coherent argument against having the power in the Bill. He could not say, ''I object to it because it is a morally offensive power for a Government to have,'' because he proposed to give the Secretary of State such a power, and spoke eloquently in support of it a few months ago. He did not tell the Committee what he proposes to do if the estimated reduction in case load does not occur. He has seen the briefing and he will not be surprised that some legal experts think the Bill will not reduce tribunal case loads, as the Government hope.

The Minister did not tell the Committee how he will replace the revenue stream that he hoped to raise from a charge in order to strengthen the tribunal system and make it work better by being better resourced. The Minister failed to respond in two respects. First, he failed satisfactorily to explain the Government's change of heart, although he worked valiantly within the constraints in which he finds himself. It is apparent that an old-fashioned, strong arm on the Government from the union lobby forced them to drop a measure that they had proposed and that the employers' side of industry found broadly acceptable.

Secondly, the Minister did not say why it would not be appropriate to accept the amendment, if only as a reserve power if his other proposals fail to deliver the result that he anticipates.

I am not persuaded by the Minister's argument and unless he has anything else to say, I shall urge my hon. Friends to vote for the amendment.

Alan Johnson: The hon. Gentleman is not listening. He made no reference to the point about exemption. He quoted newspaper articles—there were interesting pieces in the Financial Times and in The Guardian—but not Government announcements.

The hon. Gentleman asked how we will replace the revenue stream, but I have to ask what revenue stream he means. If we are mirroring the civil courts, and no one suggested that it would be wrong to do so in relation to exemptions, there is no revenue stream. By the time a bureaucracy is set up to deal with partial and complete exemptions the money coming in with 60 per cent. exemptions just does not provide a revenue stream. The hon. Gentleman did not address that practical matter.

Mr. Hammond: Will the Minister give way?

Alan Johnson: No, I will not give way because the hon. Gentleman is going to press the amendment to a vote. He asked whether it was worth putting his proposal on the statute book in case other measures fail, but if they did, it would fail too. We oppose the amendment because charging will not deter applications, and certainly will not deter vexatious applications, for the deterrence of which we have other measures. If it would deter genuine applications, it is wrong in principle and we should not agree to it. If it is intended to provide a funding stream—it would not, for the reasons that I have set out—what would the mechanism be?

We shall later debate funding for the Advisory, Conciliation and Arbitration Service later, and the Lord Chancellor's Department is conducting a review and the Department of Trade Industry is taking an initiative to consider appropriate funding for the employment tribunal system. The amendment would not press any buttons that would bring about the desired outcomes. If the hon. Gentleman forces a vote on the amendment, I urge the Committee to oppose it.

Mr. Hammond: I am somewhat puzzled, as the Minister may be when he reads the report of our debate. He asks, ''What revenue stream?'' I was referring to the revenue stream to which he had referred a few minutes ago. He said that the purpose of proposing charges was not to deter applications but to generate a revenue stream. Those were the Minister's own words in support of the Government's original proposal to include a charging regime.

Mr. George Osborne: Is the hon. Gentleman aware that the press notice that announced the publication of the consultation document listed as one of the key proposals

    ''a new modest charging regime for use of the employment tribunal system to reduce the cost burden on the taxpayer''?

Presumably the Government calculated a cost burden on the taxpayer, which would be reduced.

Mr. Hammond: The Minister seems to vary his argument. When I ask about applications, he says that the original idea was to generate a revenue stream, not to deter applications. Five minutes later, when I ask about a replacement revenue stream, he tells me that charging was not intended to generate a revenue stream.

Alan Johnson: The consultation period began on a basis of 25 per cent. exemptions. We calculated that if we mirrored the civil courts, around 25 per cent. of applications would be exempt. During the consultation period, paying closer attention to how a complicated civil courts procedure would work in practice—[Interruption.] The whole purpose of consultation is to consider such issues in detail. That produced a system of 60 per cent. exemptions and a bureaucracy to deal with partial exemptions as well. We dealt with consultation in exactly the same way that the previous Government dealt with it on the same issue, and came to the same conclusion.

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