The
Chairman: Order. I remind the hon. Lady that that Bill is
not before us
today.
Lorely
Burt: I am suitably chastised and reminded, Mr.
Martlew. I think that today we face the Government’s attempt to
buy off that Bill and persuade the hon. Member for Chorley and his
colleagues to withdraw it. The House will consider the Bill’s
money resolution
tonight. Is
an uprating of the statutory minimum rate from £350 to
£380 fair? Given that the average earnings figure is
£479, the rate is still only 79 per cent. of the average
national wage. The Government have considerately suspended the
RPI-based adjustment for February 2010, in case the RPI drops this
September. I understand why they are doing so, but that shows the flaw
in the way in
which the amount is calculated. We should measure against not the
RPI—it is an inappropriate indicator—but the average
wage. On Second
Reading of the Statutory Redundancy Pay (Amendment) Bill, the hon.
Member for Huntingdon talked about the burden on business. The order
represents the Government trying to compromise in a way that will not
hit business too hard, but will give some comfort the trade unions and
those who are in danger of redundancy. However, it will not give a
great deal of help to people who are being made redundant.
In the
circumstances, I welcome the Minister’s comments about retaining
the link with forms of pay, including holiday pay, and the minimum
rate. However, we still have a formula that links the cap to the price
of a loaf of bread instead of the general level of prosperity reflected
in the average wage, which is intrinsically
unfair. As
an interim measure in difficult times for business, however, Liberal
Democrats will be content to support the order. However, I would like
the Government to give a commitment that they will link the statutory
minimum rate to average earnings at some stage in the future when
circumstances to business are more propitious. I am sure that the hon.
Member for Chorley and his colleagues would also endorse that
approach. 4.54
pm
Peter
Bottomley: I was wondering, Mr. Martlew, how it
would be possible to stay in order while making a passing reference, as
the Minister did, to the Bill proposed by the hon. Member for
Chorley.
The
Chairman: Order. The hon. Gentleman is a very experienced
Member—I am sure he will
know.
Peter
Bottomley: I doubt that the change of date for the
Bill’s Committee stage has anything to do with the timing of
this particular statutory instrument, but if it has, I shall confess to
being wrong, as I often am. I wish the Bill well next week, but I am
afraid I will not be able to be
present. There
are several reasons to support the general thrust of what my hon.
Friend the Member for Huntingdon said about cost and the impact on
jobs. We should remember that the biggest impact is not the change from
£350 to £380, but the general level of national insurance
that the employer has to pay, and the difference between the cost to
the employer of having an extra worker and what the worker puts back.
If we take from an index figure of 100 the cost of national insurance
and tax to the employee, and add on the cost of national insurance to
the employer—let alone that of sick pay, holiday entitlement and
possible provision for redundancy pay—we see that the wedge is
too great. It has been growing, and I wish that it could be reduced,
because taxation and cost to the employer has the biggest impact on the
amount of
employment. However,
as the Minister said, we are discussing whether it is appropriate to
raise this level now. It could be argued that the level is too high or
too low, or that the timing is wrong because more people are being made
redundant now than they were in happier economic times. I faced those
arguments as junior Employment Minister in the 1980s, so this is not a
new position.
Clearly, this
measure addresses only part of what is needed by someone who loses
their job after a period of time. They need their self-respect and
opportunities—training has been mentioned. We must face the
problems affecting those who become entitled to that higher level of
redundancy pay, although we need to accept that not everybody who is
out of work has been made redundant. Sadly, in most of our
constituencies, unemployment is more than 100 per cent. higher than it
was this time a year ago. In more than half the constituencies in the
country, unemployment is higher than in 1997. Many of the claims made
by the Government have not endured or shown themselves to be
sustainable. They cannot be blamed for everything, but they can be
blamed for an appropriate amount of what has happened.
I join my
hon. Friend in opposing the precise terms of the order for the reasons
that have been explained. I am not sure that the last sentence in
article 3 passes the plain English test. It says that any
duty “shall
be excluded on the occasion of the retail prices index for September
2009 being found to be higher or lower than the index for September
2008.” That
might do what it is supposed to do, but I am not sure that anyone
outside reading it would fully understand what it means.
The real task
facing Members of Parliament on both sides of the House is how we get
to a stage at which fewer people lose their jobs due to redundancy.
Industrial restructuring has been with us for a long time. One hundred
years ago, two thirds of us would have been in industries that have
virtually vanished. Agricultural labouring has gone, as has domestic
service and chasing round after horses in the transport industry. Such
restructuring will continue. However, we in the House must be aware of
the people losing their jobs while unemployment rises month after
month, and continues to rise, even when the green shoots
appear.
4.58
pm
Ian
Lucas: I thank all hon. Members for their contribution to
this thoughtful and stimulating debate. I hope that all further
statutory instrument debates in which I am involved will be as
interesting as today’s, although I suspect that that will not be
the case.
Although I am
new to my post, I have been around long enough to know that when the
Government propose to increase statutory redundancy pay, they are
likely to be opposed by representatives of employers' organisations.
Furthermore, it is likely that trade union representatives will suggest
that the proposed increase is not big enough, and should be
considerably greater.
This increase
in limit from £350 to £380 is considered far too small by
the trade unions. They have called for an increase to more than
£500. In circumstances such as this, when representations are
made, it is the Government’s role to look for the right balance,
which is why we have decided to reject the submissions made by the
business organisations to which the hon. Member for Huntingdon
referred. Equally, we have not fully accepted the suggestions made by
my hon. Friend the Member for Chorley or the representations made by
trade
unions.
Mr.
Djanogly: The Government considered this idea only a few
months ago. Will the Minister explain why he is reconsidering it now,
outside the statutory timetable?
Ian
Lucas: The hon. Gentleman might not have noticed, but
economic circumstances have changed dramatically over the past year.
Individuals, including his constituents and mine, have been placed in
exceptionally difficult personal circumstances. I am proud to say that
this Government believe that those circumstances merit action now. That
is the reason behind the order, which I repeat that I am proud to
introduce, because it will bring real help to individuals who have been
made redundant.
Mr.
Djanogly: Four months ago, unemployment topped 2 million
and the economic situation was dire. Things are no worse
now—well, they might be worse, but they were not much better
back then—so will the Minister please explain why he is
reconsidering the proposals
now?
Ian
Lucas: The Government are reconsidering the proposals in
view of the economic circumstances appertaining at this time. We
believe that it is right and appropriate that the limit should be
increased from £350 to £380. I make no apology for this
order. We have considered both sides of the argument and reached a
conclusion.
Peter
Bottomley: This is not supposed to be a pointed remark,
but does the Minister know whether the Prime Minister referred to this
increase in his speech to the GMB
today?
Ian
Lucas: I am afraid that I do not know—I have had a
busy day—but if the hon. Gentleman would like, I will write to
him about that.
I do not want
to go too far beyond my brief, but I was about to refer to the speech
made by the hon. Member for Worthing, West, in which he touched on
important matters, such as important assistance for those who have been
made redundant. He is absolutely right, which is why this Government
believe in programmes to assist individuals who have been made
redundant and to get them back into employment as quickly as possible.
Train to Gain is one of a range of measures that the Government are
taking to assist such people.
We face an
exceptional set of economic circumstances. I know that the Opposition
do not like to hear this, but the United Kingdom is not alone in being
struck by this worldwide recession. Since last autumn, the Government
have taken a great deal of action to ensure that the recession does not
have the catastrophic effects of those in the 1980s and 1990s, when a
generation of people was left on the scrapheap, with their lives
blighted ever since. That was my experience of growing up in the
north-east of England. I do not want, and the
Government
are determined that there will not be, a recurrence of that experience.
For that reason, we are determined at this crucial time to put in place
the necessary infrastructure to support training and industry
development. Mr.
Philip Hollobone (Kettering) (Con): The Minister began his
remarks by rightly making the point that the Government must perform a
difficult balancing act. He stressed the importance of getting the
balance right. However, in the teeth of the worst recession since the
second world war, when small and medium-sized businesses are bearing
the brunt of the problems, annexe A of the Government’s economic
impact assessment of this measure
states: “The
indication is that small and medium sized workplaces would be
disproportionately affected by this proposed policy
amendment”. How
can that statement represent any sense of a fair
balance?
Ian
Lucas: It is a fair balance, given that others in our
communities, such as those representing trade unions, have called for
more action and for more financial burdens to be placed upon business.
The Government have made a judgment and the result is the order before
us today. I believe that our judgment is correct. It strikes the right
balance and takes into account representations made by different
organisations within our communities. We have reached the right
conclusion, which is why I ask the Committee to approve the
order. Question
put.
The
Committee divided: Ayes 8, Noes
5.
Division
No.
1] Question
accordingly agreed to.
Resolved, That
the Committee has considered the draft Work and Families (Increase of
Maximum Amount) Order
2009. 5.8
pm Committee
rose.
| 
