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Mr. Djanogly: That record sounds excellent until one considers the number of unofficial days off for last year. On doing so, 2003 turns into the worst year since 1997.

Ms Hewitt: I notice that the hon. Gentleman does not make a comparison with the number of days lost under the Conservatives, especially in respect of the Royal Mail, for which I have a particular responsibility. Industrial relations are continuing to improve, despite all the scare stories from the Opposition at the time of the 1999 Act. We know that, crucial to success in a competitive global economy is the ability of Government, business, employees and their trade unions to work together on skills in high-performance workplaces and to ensure that we sustain the economic stability that has underpinned the extraordinary achievement on employment that we have delivered.

I believe that it is an excellent Bill and I commend it to the House.

10.5 pm

Mr. Stephen O'Brien : I draw the House's attention to my entry in the Register of Members' Interests. I should also like to say that I draw on many years of experience in manufacturing industry, working positively and constructively with all those in the business in which I was engaged including union members, union officials, individual employees and employers. It gives me great pleasure to thank my hon. Friends the Members for Huntingdon (Mr. Djanogly), for Epping Forest (Mrs. Laing) and for Hexham (Mr. Atkinson), who served so diligently in Committee, and I pay tribute to the extraordinary hard work and scrutinising effectiveness of my hon. Friend the Member for North-West Norfolk (Mr. Bellingham).

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There are real and urgent problems facing British industry today, and it is against that background that we must debate Third Reading. Productivity has halved since 1997, the total trade deficit rose to an unprecedented £18.8 billion last year and the British Chambers of Commerce informs us that the cost of regulation has shot up by an astonishing £9 billion in the last 12 months alone. The annual cost of poor skills amounts to an estimated further £10 billion.

In that context, it speaks volumes about the priorities of the Government and the Secretary of State that we are not debating any of those vital issues, but another Employment Relations Bill, for which there is scant demand, least of all from those engaged at all levels working in British business. We know that there is little demand because the Bill arose from a Government-commissioned review of the Employment Relations Act 1999. According to the regulatory impact assessment published alongside the Bill,

"The main conclusions of the review are that the legislation is generally working well".

If the Government's own conclusion is that the current legislation is working well, is it not strange that they have decided to use primary legislation essentially to fine-tune an Act passed just four years earlier?

The Employment Relations Bill that we are debating today is not the Bill that we saw on Second Reading. It is not the Bill whose tepid endorsement from the CBI and others was based on relief at its basic insubstantiality and on what it did not contain rather than what it did. We voted against it on Second Reading because it was an unnecessary Bill in its own terms.

Precisely as I predicted in my Second Reading speech, the Bill has turned out to be a Christmas tree an unadorned framework on which interest groups, specifically the unions, have been invited to hang their favourite baubles. Precisely because that was my original suspicion, I asked the Secretary of State on Second Reading whether she would

"assure the House that additional measures will not be introduced by Government amendment, or conceded by them, with the exception of those that she has already flagged and on which we have had a constructive exchange" [Official Report, 14 January 2004; Vol. 416, c. 832.]

Let me place on record, before Labour Members attempt to make any potentially mischievous or even grossly misrepresentative points, that what was then flagged was the Government amendment introduced after Second Reading, which resulted in what is now clause 28, dealing with the exclusion and expulsion from trade unions of racists. We said then that we would consider that positively, particularly when we had a chance to explore the detail, because Conservative Members are equally determined to root out racism. However, the clause does not refer to the British National party, only to "a political party" and to "excluded conduct" of an individual. That could have been achieved either through union rules or, failing that, by a statutory instrument brought under the authority of the 1999 Act. It does not justify the Government in bringing in wholly new primary legislation.

The Secretary of State refused to give me the guarantee that I sought on introducing or conceding additional measures. Instead, we have seen a host of late

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amendments, a great many of which were tabled just five days ago in a deliberate attempt to downgrade the House's opportunities for scrutiny and for outside organisations such as the CBI, the British Chambers of Commerce, the Engineering Employers Federation, the Federation of Small Businesses, the Forum of Private Business and many others.

Let me say to all those who study the record if asked, those who worked with me when I worked within a large unionised industry, would confirm it that I am not, nor have ever been, anti-trade unions or anti-trade unionists.

Because this is a short debate, I have time to focus only on the most scandalous of the late amendments the Government's bung to the unions. The regulatory impact assessment accompanying the Bill states that the quantified benefit to the unions is between £75,000 and £108,000. The RIA was signed off on 3 December 2003. On 10 February 2004, the Minister for Employment Relations, Competition and Consumers announced that he was tabling a new clause that would

"make funds available to independent trade unions and federations of trade unions to modernise their operations."

He also said that he envisaged that

" the size of the fund would be in the region of £5 million–£10 million in total, with expenditure spread over several years, probably beginning in 2005–06." [Official Report, 10 February 2004; Vol. 417, c. 67WS.]

That happens to coincide with what we understand to be the £5 million to £10 million that the unions, from the hard-won earnings of trade unionists, give to the Labour party. Such a fundamental alteration to the Bill, so vaguely phrased and coming after the signing off of the RIA, constitutes a total abuse of the parliamentary process.

Furthermore, it is evident that the Government have proposed this measure at great, uncapped cost to the taxpayer, having given no thought to the nature, structure, mandate or time limit of the so-called union modernisation fund.

Mr. Redwood : Will my hon. Friend comment on how wide-ranging clause 46 is? As I understand it, the money can be applied for any existing purpose or any new, unspecified purpose. It could not be any wider.

Mr. O'Brien: My right hon. Friend puts his finger on the inadequate opportunity that the House has had to scrutinise the proposal. The proposal is vague, it was introduced after Second Reading and I am sure that the other place will wish to scrutinise it with great care and consideration.

If I am wrong in what I have said, I invite the Secretary of State to intervene to correct me. Would she care to clarify the expenditure limit of the fund? Or will she confirm that effectively it has none? What is the time limit of the fund? Or will she have to confirm that it has none? As the Government know, it is not possible to amend a new clause in Committee. Why are the Government so reticent about providing a clear and

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accountable definition? Is it all part of the Government's embarrassed desire to avoid spelling out the extent of the bung?

Mr. Archie Norman (Tunbridge Wells) (Con): Does my hon. Friend also accept that this case is a clear illustration of the need for some form of external, objective audit of regulatory impact assessments? It is a classic case of the regulators assessing their own performance, being vague and, in this instance, virtually negligent in so doing.

Mr. O'Brien: My hon. Friend anticipates my tribute to his ten-minute Bill on the issue, to which the Government have paid no attention. It would ensure a degree of independence and impartiality so that the Government could not up the benefits of a Bill but seek to diminish the costs.

What is the justification for subsidising union modernisation but not a charity or voluntary organisation? Come to think of it, what is the Secretary of State's definition of modernisation, besides its habitual use by new Labour to mask yet again its absence of principle? It defines everything it sees as rotten so that it can justify the use of precious parliamentary time on it as necessary and useful. What processes will the Secretary of State put in place to ensure that the unlimited quantity of money goes exclusively towards the purposes of modernisation, whatever they may be? I am not surprised that we have heard no satisfactory answers to any of those questions. What is clear is that the only calculation that the Government have made is a cost-benefit analysis of throwing a sop to their friends and paymasters in an attempt to tame them ahead of the general election. That is the real regulatory impact assessment at the front of ministerial minds, not the version that they have provided for display in the Library.

I note that the Government have made great play of the support of the CBI for the Bill. However, the CBI has made clear its views on the union modernisation fund, which was of course introduced after Second Reading and after it had given its approval to the contents of the Bill. The CBI believes that

"the Government should not subsidise inefficient unions or union recruitment campaigns through its proposed union modernisation fund."

The Minister attempted to suggest that such purposes have been excluded, but the Government have not defined what is included. Lack of precise definition is part of the problem. The CBI also says:

"It is disappointing that the Government has taken this step given the low incidence of union membership in both the private and public sectors."

That gives rise to the question of how much information the Government provided about the amendment and how much consultation took place between the Government and the CBI. Was it about as much as the Chancellor provided for the civil servants he summarily dismissed in his Budget address?

The Secretary of State has rightly expressed her opposition to employees being sacked by text message, but what about a Government desperate to stay on-message on tackling public sector waste, which the Chancellor has now admitted amounts to £20 billion of

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taxpayers' money? I invite the Secretary of State to have a quiet word with her right hon. Friend the Chancellor about the importance of leading by example in a "no surprises" culture in the workplace. Does she not feel even a tiny pang of conscience, given her Under-Secretary's edict? On 2 December, in a DTI press release, he said:

"I want to see an end to the climate where people only hear out of the blue about job losses from the media, or by text message. I want to see a "no surprises" culture at work where employers and employees discuss common ground and find solutions to mutual problems."

Only yesterday, however, we learned in The Sunday Telegraph that the Government are to slash or relocate at least 1,500 jobs in an overhaul of the Department of Trade and Industry. It reported:

The headcount at the DTI's headquarters will be reduced by a third, with about 650 jobs cut and around 850 relocated to the regions."

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