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Mr. Dai Havard (Merthyr Tydfil and Rhymney) (Lab):
As my hon. Friend will know, Hoover, an iconic employer in my constituency, is making redundancies in Merthyr.
Workers there have had a fight about redundancy pay in the same way as a lot of others. I am old enough to remember the arguments for the introduction of redundancy payments back in the 1960s. It was not about someone winning the lottery, having a windfall, or the incidental benefit of them spending the money. It was about giving them a cushion, and the ability to reorder their lives and engage in the training that they needed to move on, the very training that the Government say that they are so interested in—and I welcome their efforts to try to make that possible. The Bill is about more than people having money to spend when they are initially made redundant; it is about reordering their lives.
Mr. Hoyle: Absolutely. All these case studies are being cited not by me, but by Members who are appealing to the Government to take notice and listen. There is no better case than the one put forward by my hon. Friend. Indeed, there is not a Member in the House who has not had constituents affected by the credit crunch or by statutory redundancy.
Judy Mallaber (Amber Valley) (Lab): Will my hon. Friend comment on another example? I note that in the pre-Budget report a large amount of money was allocated precisely to give effective support to the unemployed to find new jobs. The Train to Gain programme and rapid response service were refocused to assist in that. Like others, I have a constituent who lost his job last week, at Denby pottery, and who assumed that he would get extra money, which he had planned to use for a specific training course that would help him get a new job. He has found that he also will probably get only statutory redundancy pay, which is unlikely to give him a sufficient cushion to undertake that training.
Mr. Hoyle: I agree with my hon. Friend, who has cited yet another case study. The Bill would help people by giving them a little more as they finish work; otherwise, they would have to try to claim benefits. The measure would give people a cushion and a little more dignity. It would help them to pay bills—perhaps for a credit card or a mortgage—because there is a gap between them losing their job and getting help with their mortgage. The Bill is one way to help to close that gap. As my hon. Friend has outlined, there are many reasons why we should give such support.
Mr. Robert Flello (Stoke-on-Trent, South) (Lab): I thank my hon. Friend for his kind words earlier about our conversation about Wedgwood. He mentioned mortgages. Does he agree that when obscene amounts of money are going to people who have got us into this mess, and those people do not have a problem with statutory redundancy limits, we should ask why on earth our hard-working people should have such problems?
Mr. Hoyle: Absolutely correct. I am pleased that that point has been made. We all know about the obscene pensions and pay-offs, and hard-working people always seem to be the ones who suffer. Those with the easy life at the top seem to be doing very well, and seem to benefit more from a pay-off than by working. That spells out the difference.
Jim Sheridan (Paisley and Renfrewshire, North) (Lab): Does my hon. Friend also accept that people will have difficulty understanding politicians who seek to deny decent redundancy payments to workers while themselves receive generous redundancy payments when they lose their jobs?
Mr. Hoyle: Absolutely right. The majority of people get enhanced redundancy pay, especially those at the top of the tree—we never see them doing badly. We want to help those at the bottom of the tree. That is what we are here for, and that is why I was elected.
Mr. David Crausby (Bolton, North-East) (Lab): My hon. Friend is absolutely right. This is not a Bill for those who are in well organised trade union shops. The strong trade unions are perfectly capable of looking after themselves. This is a Bill for those who work for small employers and do not have the strength of the large trade unions. Those people deserve the protection of this Government.
Mr. Hoyle: Absolutely right. Those who do not have the protection of trade unions or whatever, rely on this House, and the measures that we can bring forward to protect them. The point cannot be better made than it has been by my hon. Friend.
Paul Farrelly: Does my hon. Friend agree that we should expect the Minister to go further than the Bill, and to prevail upon his Secretary of State in the other place to ensure that, in situations such as that at Wedgwood—where people are being done out of their enhanced severance agreements and banks have brought in receivers—where the banks have been state supported, they should, before repayment of their loans, respect those severance agreements?
Mr. Hoyle: My hon. Friend is absolutely right. The Government can go as far as they wish, but at the moment they do not wish to do anything. That is the shame. It is Friday 13th, but let us hope that it is not a bad day for all those whom we are meant to represent. Let us make it a Friday 13th that will be remembered for the good that we can do.
Miss Julie Kirkbride (Bromsgrove) (Con): I thank my Select Committee colleague for giving way. May I make a point that has not been made so far? The hon. Member for Bolton, North-East (Mr. Crausby) rightly pointed out that we are talking about people in the most vulnerable forms of employment, but does not the hon. Member for Chorley (Mr. Hoyle) worry about the timing of his Bill? We have all been told by employers that they are undecided about whether to lay people off. If employers thought that coming down the tracks was a heavier redundancy payment for their most marginal employees, might that not hasten their action in making redundant people who might otherwise have remained in employment?
Mr. Hoyle:
A case can always be put for not doing something, but I would never have expected that from my colleague on the Committee. I know that she is aware of the importance of keeping people in employment, and that she is very good at putting a strong case. We stood shoulder to shoulder at the time of the Longridge redundancies, thinking of ways in which we could help
people. Well, the Bill aims to offer help in exactly the same way, and I hope that the hon. Lady will accept that it is being introduced at the right and the appropriate time. I know that she is very open-minded, and I look forward to her support in the Lobby.
Mr. David Hamilton: The expression “joined-up writing” is used in my area. Sending the Bill to Committee would allow us to do some joined-up writing. People must currently wait for training packages to kick in six months after they become unemployed, but we could provide for a “free flow” redundancy package enabling them to embark on training immediately, so that they could return to employment sooner.
Mr. Hoyle: I entirely agree with that. We need joined-up writing and joined-up thinking. We need everyone to work on the same side.
Of course the Government’s objective is to help business and families throughout the country, in some cases by bailing out our major banks, as we did last autumn and are continuing to do. We cut VAT to help people by allowing money to circulate in the system. The Bill provides another way of allowing money to circulate, but it also targets that money on the people who need it when they lose their jobs. It is important for us to convey that message not just to the Department for Business, Enterprise and Regulatory Reform but to the Treasury.
Mr. Bob Laxton (Derby, North) (Lab): Let me take up that theme of getting the message over. The vast majority of the population, who have seen so-called ex-masters of the universe such as Goodwin—I prefer not to use the cuddly name “Sir Fred”— walk away with huge sums, would be rightly aggrieved and enraged if the Bill was not given a smooth passage. We are talking about only a small proportion of the sort of money that Goodwin and his ilk have received, and they have received it as a result of personal failure.
Mr. Hoyle: No one could disagree with that. My hon. Friend is spot on. There is real anger in the country when bankers receive those huge payoffs—I said bankers, with a “b”—and there will be real anger in the country if we do not stand by the people at the bottom of the tree.
As I have said, the Government have done a great deal to try to get money circulating. They have propped up the banks, made money available to small businesses and cut VAT. That was the right thing to do, but we also have a responsibility to respond to the problems of hard-working people. Job losses and redundancies are spread across the country, and no part of it is immune from the threat of further redundancies in the future.
Mr. David Drew (Stroud) (Lab/Co-op): The number of redundancies will be greater in this country because many firms on the continent already pay wage-related redundancy compensation. It is because of their higher redundancy costs that they will not lose their work forces. The Bill is an important measure which will keep people in jobs, as well as dealing with the circumstances that would arise were they to lose their jobs.
Mr. Hoyle:
I agree. We should have a scheme that keeps people in work, rather than making it so much easier for them to be made redundant. We should be
giving people extra financial help at the time when they need it most. I keep repeating this: the Bill is about helping people in their hour of need.
Members have rightly cited case studies. Let me now give an example. A Woolworths distribution fork lift truck driver working full time on the night shift earned a basic rate of £10.61 per hour, or £401.11 per week. Because of the SRP limits, that 55-year-old driver, who had worked for Woolworths for 20 years, received £8,580 in statutory redundancy pay. If the SRP upper weekly limit had been increased to above £401.11, he would have received £10,428, an increase of £1,848.95. I cannot understand why anyone would see a problem with giving that sort of help.
Jim Dobbin (Heywood and Middleton) (Lab/Co-op): A Woolworths distribution centre in my constituency has just closed. More than 440 of my constituents lost their jobs overnight. Had my hon. Friend’s Bill been in operation, they would have benefited.
Mr. Hoyle: My hon. Friend is absolutely spot on. He has seen the effects of the closure of that centre, and his constituents have come to him to put their cases, give their views and express their hope that the Bill will help—not them, because they have already suffered, but those who have not yet suffered.
The Woolworths case, and the Rochdale case that I mentioned earlier, highlight the need to ensure that the value of statutory redundancy pay does not continue to decline. Linking the value of SRP to earnings would secure real benefits for people throughout the country. It is not surprising that 178 MPs signed my early-day motion, and that similar motions have been tabled in the Scottish Parliament and the Welsh Assembly. Members of Parliament in all parties realise that during these difficult times we should be doing as much as possible to help people who lose their jobs through no fault of their own. It is strange that it should be those at the top of the tree—the management—who generally receive the pay-offs and, in most cases, affect the business one way or the other, while those at the bottom, who work very hard and do all that they can for the business, are given the rawest of deals. I want to ensure that those raw deals do not continue.
We need only consider the Woolworths employees. Those 30,000 people, many of whom had been poorly paid, were left to survive on the basic statutory redundancy pay. There was a branch of Woolworths in nearly every Member’s constituency. Because we have already witnessed what happened when an employer like Woolworths goes under, surely it is right for us to stand up for people like those 30,000.
Many of the poorest paid employees are women and young people. There are still huge pay differentials in the workplace. I am sure that those women and young people would welcome any measure that would help to maintain the level of statutory redundancy pay. I have met people who have lost their jobs. Other Members have as well, and they will know the real difficulty that is caused by job losses. There is only one thing that we should be doing: supporting the Bill today.
As I said at the beginning of my speech, the Bill has received the support of the trade union movement. It is supported by, for instance, ASLEF, Community, the TUC, the GMB, TSSA, UCATT, Unison, Unite and USDAW.
Mr. Jim Devine (Livingston) (Lab): My hon. Friend has mentioned the support of Members of Parliament, trade unions and other bodies for the Bill, but he has not told us the reasons for the Government’s opposition to it.
Mr. Hoyle: I am not here to apologise for the Government. I will let the Government do that for themselves. No doubt they will come up with some reasons, but, to be honest, there can be no reasons. All of us—the Minister, the Whips and me—stood for election on the basis of the same manifesto. Some of us respect and adhere to what we stood for then, while others, it seems, do not consider it appropriate to stand by their manifesto pledge. I find that very strange, and it worries people in this country, because they believe we mean what we say in our manifestos, so it is no wonder that they question the honesty of politicians. They should never do that, however, because I believe that we are all here for the right reason: to help our constituents. That is why we should stand together. I know my right hon. Friend the Minister is a genuine politician and is very understanding, and I still hope that, even at this late stage, he can help to ensure that this Bill passes its Second Reading and is sent into Committee.
Mr. Dismore: My hon. Friend emphasises how modest his Bill is. His red line is to do with weekly pay, but he has not sought to redefine the multiplier—the fact that people only get one week’s pay for one year’s service. Therefore, the fact remains that under the system of “last in, first out,” the people who are suffering often have very short service, and even under his Bill they would end up with very modest sums.
Mr. Hoyle: There are many anomalies that we need to put right. This Bill is a start, and it represents the progress we are trying to make. We are not trying to put anybody into handcuffs, and especially not the Government. In fact, I have tried very hard to work with the Government to try to ensure the Bill can proceed.
John Bercow: The hon. Member for Hendon (Mr. Dismore) has just referred to the modesty of the Bill. If I understand clause 1(2) correctly, that modesty is underlined in triplicate there, because the responsibility will be to put together regulations within 12 months of the Bill becoming an Act, so there is no question of excessive haste. Instead, there is plenty of time for due consideration of what those regulations should contain, and therefore also of their cost. That is perfectly reasonable.
Mr. Hoyle: I thank the hon. Gentleman for that clarification. As ever, he is absolutely spot on and he explains his point most eloquently. I am sure that there are no closed ears on our Labour Front Bench—I am sure that everybody is listening to what the hon. Gentleman has said, and I hope they take that good advice on board.
I would like to place on record my thanks to all the bodies that have worked tirelessly both in terms of proposing a Bill on statutory redundancy, and in working with me to ensure that we mobilise an effective campaign to persuade our Government to support their own manifesto pledge and accept this proposal. I would also like to thank everybody who has worked so very hard, including in my office. Tireless workers have, in a very
short space of time, brought this Bill together, and have brought us together today to try to ensure we get the numbers we need for this Bill to progress.
Members of the public from across the whole United Kingdom have contacted me to support this Bill, and we have learned that other Members are also being contacted and asked to support it. The Warwick agreement includes references to improving statutory redundancy pay, and we stood on an election manifesto to implement Warwick—so I say to those who do not think it is in the manifesto, that it is in it. In the light of this, I urge Members and the Minister to back the Bill, which will take one step towards helping people who are unfortunate enough to lose their jobs. In their hour of need, we should be giving them that support. I commend the Bill to the House.
10.23 am
Mr. Jonathan Djanogly (Huntingdon) (Con): I have listened to the debate and the internal Labour bust-up, including a review of the party’s manifesto pledges, with some degree of amusement. However, I need to remind hon. Members that Britain is currently facing extremely serious and difficult economic circumstances. Unemployment continues to rise and company insolvencies are increasing rapidly during this prolonged and deep recession. Figures show that the number of companies collapsing increased by more than 250 per cent. in the last quarter of last year, and the knock-on effect of that increase, and of the recession generally, are startling. The amount of people out of work hit almost 2 million at the end of last year, which is the highest level since Labour came to power.
I am sure that the hon. Member for Chorley (Mr. Hoyle) honestly believes that his Bill will help employees, but from the Opposition’s point of view it is, at best, an inappropriate reaction to the crisis that we are facing. Moreover, we are extremely concerned about the damaging effect that it could have on workers in the longer term. In diverting money away from the running of businesses, which could lead to more insolvencies, the Bill could undermine and damage the very workers whom it seeks to protect. Whether or not it is a panicked reaction to the financial crisis, I state now that we do not support this Bill.
What measures are in place for those who face redundancy? The first relevant source for many employees will be their contract of employment. A contract of employment will often stipulate an employee’s entitlement on being made redundant. Such a contract must at least be in line with the minimum requirements for all employees, which are contained in the Employment Rights Act 1996. That legislation provides that employers must pay employees a minimum amount, depending on their age and number of years of service. Currently, the Act stipulates that employers are required to pay laid-off employees a minimum redundancy payment calculated by multiplying the length of service by a specified sum. That specified sum is calculated by multiplying the redundant employee’s salary—up to a capped level—by a figure from 0.5 to 1.5, depending on the employee’s age and length of service.
Mr. Hendrick: Is not the hon. Gentleman hiding behind a piece of legislation that his party opposed in the 1960s?
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