Enterprise Bill [Lords]

Catherine McKinnell Excerpts

Tuesday 8th March 2016 Commons Chamber

[Kevin Brennan]

The hon. Gentleman is absolutely right. Clearly, large numbers of public sector workers, who have often given long service, might have to take redundancy—not surprisingly at a time of severe cuts in, for example, local government. The provisions in the local government pension fund require those strain payments to be made, and those will count towards the £95,000 exit payment.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

My intervention very much complements that of the hon. Member for Glasgow South West (Chris Stephens). One of the big concerns about the change, which I am sure my hon. Friend shares, is that the consultation was so inadequate. The Government have also failed to undertake any public sector equality duty review, as required under the Equality Act 2010. The changes could therefore have many unintended consequences, but the Government are not taking the time to explore them.

[Kevin Brennan]

Yes. I will briefly touch on the inadequacy of the consultation later.

Amendment 15 is about workers earning less than £27,000 a year. As I mentioned, it was the right hon. Member for Witham (Priti Patel), when she was at the Treasury, who said a year ago:

“those earning less than £27,000 will be exempted to protect the very small number of low earning, long-serving public servants.”

She was commenting on the Government’s plans to create the public sector exit payment cap.

--- Later in debate ---

[Kevin Brennan]

I recommend that the hon. Gentleman read more deeply into the report of the Committee stage. I commend to him the worked example I gave of somebody on a salary of £25,000 who had given long service in local government and who would be affected.

Obviously, the right hon. Member for Witham did not think at the time that these people were fat cats; she thought they should be protected, and we need to understand why that is not happening in the Bill. Why was a lower earnings floor not included, given that the Conservatives promised they would pursue only—again, I quote from their manifesto—the “best paid” workers? Of course, once the election was over, the Government ignored that.

Problems emerged because the consultation was so poorly conducted, as my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) said. Usually, a full consultation takes 12 weeks; the Government did this consultation over four weeks in the summer—it began on 31 July 2015 and concluded on 27 August. If the Government were serious in their rhetoric that the Bill would affect only the best paid, it would be very straightforward to include a provision to exclude those on £27,000 or less. In fact, what the Minister for Small Business, Industry and Enterprise said on Second Reading, which was alluded to earlier, was:

“What we do know is that there is a very small number of workers”—

that is the figure she gave—

“in the public sector on about £25,000 who could be caught by this…But those are extremely rare conditions.”—[Official Report, 2 February 2016; Vol. 605, c. 886.]

What we want to know, therefore—I think this is what the hon. Member for Bedford (Richard Fuller) wanted to know—is how rare those conditions are. If they are that rare, why not exempt the lower paid?

[Catherine McKinnell]

My hon. Friend briefly mentioned the dates of the consultation—between July and August. Does it not occur to him that if the Government were genuinely keen to hear back from people potentially affected by, or interested in, this change, they would not have introduced the consultation for such a short time over the summer holidays?

[Kevin Brennan]

My only assumption is that they think fat cats should not have holidays. That is probably why they thought it did not matter that there was only a four-week consultation. That is what they think of the people they were supposed to be consulting. The rhetoric used by the Government is shameful; the contemptuous, short nature of the consultation is shameful; and the way in which the policy has been introduced overall can only be described as shameful.

We are concerned about the Government’s reluctance to make the necessary exemptions to ensure that the unfortunate few—that is what the Government tell us they are: a few—are not disproportionately affected. If the low paid and average paid are affected only in rare circumstances, excluding them from the cap will not result in the Government losing a great deal of money, so what is the problem in exempting them?

--- Later in debate ---

[Kevin Brennan]

I agree. My hon. Friend will have noticed that Sellafield Ltd is included in new schedule 1, for the very reason she has highlighted.

As I said, the workers in question are working towards making themselves redundant. They accept that their work is a task and finish activity of national importance. In order to get somebody with the necessary skills to commit to that kind of proposition in their early or mid-30s, we need to ensure that they know that they will be provided for if they successfully complete their task by the time they reach their mid to late 50s, when they might find it extremely difficult to find re-employment, given their very specific skills.

If the companies listed cannot afford the packages necessary to compensate someone for the loss of their role when their task has been completed, they will find it extremely difficult to prevent highly skilled workers, who are mobile in the earlier parts of their careers, from leaving. That in itself will drive up costs for the nuclear decommissioning industry and exacerbate an already difficult skills shortage in the sector.

Legislating now to override the long-standing arrangements in the nuclear industry, as the Government are doing, when employers have kept their end of the bargain faithfully, is, to be frank, unconscionable. How can it be right that workers who have stayed with a company to deliver successfully the safe decommissioning of a site see the Government renege on their promised redundancy compensation when it is due to be paid?

[Catherine McKinnell]

My hon. Friend’s argument is powerful, and I am genuinely at a loss as to why the Government do not take heed of it. The proposal will not only cost individuals in the long term; it is also a betrayal of trust and will only benefit, to a small degree, the company involved. It will not actually benefit the Government, so I do not understand why they do not take action to right what is clearly a wrong.

[Kevin Brennan]

Exactly. The Treasury’s justification is that, even though the companies have been privatised, the workers are still deemed by the Office for National Statistics to be on the Treasury books, because of the nature of their work. It is understandable that their work needs to be underwritten by Government, because they are decommissioning nuclear sites and no one can get an insurance policy for that.

That technical, statistical designation, however, does not mean that applying the cap to those workers is fair or that it necessarily represents value for money for taxpayers in the long term. There is no proof that taxpayers will receive any benefit, as the private operators of the companies often receive higher incentive payments in their contracts as a result of this kind of change. Unless the Government decide to act, employees in the sector will note that the Treasury has excluded them from the public sector when it comes to pension provision and other issues, but considers them within the scope of the capped exit payments.

[Catherine McKinnell]

If the Government fail to take heed of this issue and that of the pensions of women who were born in the 1950s, I think that the mantra for the 2020 election will be, “You cannot trust the Tories on pensions.”

[Kevin Brennan]

My hon. Friend is absolutely right. I hope that the Government will have a last-minute change of heart. Why is a privatised banker not given the fat cat treatment under these provisions?