General Matters

Fiona Bruce Excerpts

Tuesday 18th September 2012 Commons Chamber

[Mel Stride (Central Devon) (Con)]

I rise to address the issue of increasing the flexibility of labour markets, and the effect that it can have on small business growth. In doing so, I pay tribute to the many actions this Government have taken to encourage businesses, particularly small businesses. The Chancellor of the Exchequer’s huge achievement in maintaining our triple A credit rating status is worthy of note, thus keeping interest rates low, which has assisted businesses up and down the country to invest. Also important is the continuing reduction in corporation tax levels, which I think most businesses feel is most welcome.

When it comes to labour market flexibility, and particularly supply-side flexibility, we might usefully view it through the prism of one of the great macro-economic conundrums this country faces: on the one hand, we have reductions in unemployment and increases in employment, yet on the other hand, we have the apparently contradictory information that growth has been negative over the last three quarters. Some of that could be due to the fact that gross domestic product has been underestimated over that time, which would be consistent with the history of these circumstances when recessions are typically estimated at the time to be more severe than they are subsequently assessed as being. That certainly happened in 1990-91—three years later, economists decided that the recession had been 40% less deep than it had been estimated at that particular time.

Declining unemployment is probably due to increases in part-time employment, but also to the extremely positive action taken by Ministers and the Secretary of State at the Department for Work and Pensions, which has encouraged people off welfare and into work. There is one other reason why the employment figures might appear to trump the growth figures—our extremely flexible labour markets, which are due, in turn, to the supply-side flexibility introduced in the 1980s. Ironically, there are probably many thousands of people up and down this country who owe their current livelihood to the courage Margaret Thatcher had in the 1980s to improve the supply side of our economy.

Why, then, as I would argue, do we need to go further in reducing supply-side rigidities if our labour markets are so flexible as they stand? The reason is that we are competing in an internationally competitive global marketplace in which our future competitors are not going to be simply the likes of France and Germany, as we will increasingly be bumping shoulders with the likes of China and India, which have extremely flexible labour markets indeed.

If we are to improve labour market flexibility, it will have at least two effects on business. One is that it will make it easier for them to transact business; the second is that it will send a very positive message to businesses that the Government are very serious about supporting entrepreneurship and business. That will be particularly important, given that this country currently suffers from a lack of business confidence. UK plc is sitting on some £750 billion-worth of cash, which is not being released to invest in jobs and growth simply because it lacks the confidence to do so.

I think we should take some further action, and I strongly believe in the comments made by the CBI and the Federation of Small Businesses to the effect that we should look at the area of employment-protected leave of absence or maternity and paternity leave, and particularly at how it affects small businesses and micro-businesses.

Let me clarify, first, that I strongly believe in and adhere to the principle of employment rights. It is quite right and proper in a civilised society that companies and Governments should be helpful to women at their time of child birth and beyond. It is also an important tool of policy for ensuring that we increase and improve the engagement of women within the work force. That is my starting point, but I believe that our balance has become out of balance: it is now too much in favour of rights and there is too little emphasis on the onerous provisions that apply to businesses.

Last year, I asked the Library to prepare a comparative grid to show the levels of various maternity rights across various countries in the world. It is certainly the case that we are not the most generous, but we are among the most generous. In Australia, for example, the entitlement is to 18 weeks; in Greece, it is to 17 weeks; in India, it is 12 weeks—but in the United Kingdom, it is 52 weeks. Let us consider the problem that that may cause an employer in the United Kingdom, particularly a small employer whose business consists of, say, between six and 12 people. A key member of staff, such as a senior manager or director, is able to be absent from the workplace for more than a year—over 52 weeks. The employer must then make a contribution to maternity pay, and, in some circumstances, continue to provide a company car and a mobile telephone and pay for any membership of clubs or organisations that may have been granted as a work-related benefit.

Moreover, the absent employee will have been accruing holiday leave, and it is entirely possible that, at the end of the 52 weeks, the business will have to pay in full for the employee to be absent for a further month, or even two months. Any options agreements or share incentive schemes will continue as normal, although the employee may not be present to make any contribution to the success of the business. The employer will also continue to pay in full any pension contributions that have previously applied.

Huge uncertainty is caused by the fact that employees do not have to inform their employers whether they will be returning to the workplace until the period of absence is well under way. It is quite conceivable that, in a company with six to 12 employees, a senior individual who has been absent from the workplace will not inform the employer until the 11th hour—after an absence of at least a year—that he or she will not be coming back.

[Fiona Bruce (Congleton) (Con)]

We should also bear it in mind that replacing expertise does not involve like-for-like funding. Acquiring a locum can be very expensive for a small business, and as a result the owner of the business often ends up doing two jobs throughout the period of the employee’s absence.

[Mel Stride]

That is an extremely important point. One of the problems with excessively onerous employment rights of this nature is that they build up a fair amount of resentment among existing members of the work force who are often expected to work longer hours or, indeed, to change the pattern of their work in order to accommodate the person who is absent.

In no way do I wish to attack the notion of rights of this kind. I think that they are very important, for the reasons that I have given, but I hope that the Government will look closely at the balance in how they operate, particularly in the case of micro-businesses employing 10 people or fewer.

--- Later in debate ---

[Fiona Bruce (Congleton) (Con)]

I am grateful for this opportunity to speak about Sunday trading. The point that I want to make is simple.

As Members may recall, on 30 April this year, the Sunday Trading (London Olympic Games and Paralympic Games) Act 2012 was passed. Its effect was to extend Sunday trading hours temporarily during the limited period of 22 July to 9 September.

During the debate on the Bill, I expressed my concerns about those proposals, and in particular about whether they would be used as a precedent for a further—or permanent—extension of Sunday trading hours. I will not repeat those concerns in detail as they are on the record, but they included: the potentially negative impact on family and community life; the need for us all—as individuals and as a nation—to have a recognised rest period each week for our health and well-being; and the potential consequential pressure to work on Sundays, especially for some of the lowest-paid workers in our society, and the subsequent strain on their families. I also referred to concerns raised by the National Society for the Prevention of Cruelty to Children and the Joseph Rowntree Foundation, and to the fact that for many people of faith, Sunday still has a special significance.

[Ian Paisley]

The hon. Lady is raising an issue that is crucial to our nation’s trade. Was she as concerned as I was on hearing the word “temporary”, which sometimes does not mean what it says on the tin? Temporary provisions in Northern Ireland lasted 30 years, but I hope that through the hon. Lady’s speech, we can obtain absolute clarity that temporary means temporary, and that the extension to the trading laws will cease on the date that was given to Parliament when this matter was first raised.

[Fiona Bruce]

I thank the hon. Gentleman for that intervention because obtaining such clarity is exactly the purpose of my contribution to the debate.

My concerns—and other concerns—were shared by several colleagues during the debate on 30 April. Responding to the debate, the then Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), stated:

“The concern has been expressed that this Bill is somehow a Trojan horse, preparing the way for a permanent relaxation of the rules for large stores. Let me assure hon. Members again that that is not the case.”

Referring to my particular concerns about the impact on families and family time, he stated:

“I think she is absolutely right, so let me say to her that the Bill affects just eight Sundays and the deliberate inclusion of a sunset clause means that the Bill will be removed from the statute book after 9 September. Indeed, as the Secretary of State has made clear, if a future Government were to consider a permanent relaxation, they would have to undertake a full consultation and present new legislation to this House. As the Secretary of State also pointed out, we have no such plans.”—[Official Report, 30 April 2012; Vol. 543, c. 1352-53.]

I was pleased to hear the Minister’s words and I took them as a personal assurance, although I still abstained rather than vote for the proposals. I understood, however, that many of my colleagues also took those words as a firm assurance on behalf of the Government that the temporary alterations to Sunday trading hours would not be further extended or used as a precedent, and hon. Members voted accordingly on that basis.

Some weeks later, towards the end of the wonderful Olympic and Paralympic period of which our nation is so rightly proud, suggestions circulated in the press— I know not from what source they originated—that a permanent deregulation of Sunday trading hours should perhaps be considered, following the limited extension period.

Such suggestions were completely at odds with the statements expressed by more than one Minister during the passage of the Bill. Another Minister in the Department for Business, Innovation and Skills, the hon. Member for North Norfolk (Norman Lamb), stated at the time:

“I want to make it clear that this is a temporary measure and not a test case for a permanent relaxation of the rules in the future”,

and the Secretary of State for Business, Innovation and Skills stated that the Bill was

“not a signal of the Government’s intent on the broader issue of Sunday trading;”. —[Official Report, 30 April 2012; Vol. 543, c. 1293.]

In the light of recent press speculation about a possible further extension to Sunday trading hours, I seek today, either from the Deputy Leader of the House, or after the debate from the new the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), clear confirmation that the assurance given on behalf of the Government still stands, and that despite references to an extension of Sunday trading hours, the Government have no such plans. The Government’s assurance was carefully noted not only by me and many colleagues in the House, but—crucially—by many millions of people across the country.

I hope that the Deputy Leader of the House and the responsible Minister will take this point in the spirit of the utmost courtesy with which I express it, but there is an issue of integrity here. In issuing the confirmation that I seek, Ministers would put an end to continuing speculation that is a cause of concern to many. Of course, the extension of Sunday trading hours was in neither coalition party’s manifesto nor in the coalition agreement.

I turn to some comments that have been made since the summer extension of hours. The British Retail Consortium has recently announced that it does not want to lobby for permanent deregulation of Sunday trading hours. According to Retail Week magazine, momentum for a permanent change among retailers has begun to wane, which may be a result of the BRC’s announcement that retail sales fell by 0.4% in August, compared with August 2011 on a like-for-like basis, with no sign of the Olympic boost that was promoted as a reason for the temporary extension. According to the Association of Convenience Stores, independent retailers reported a loss of sales of up to 20% and a 30% drop in footfall over the Olympic period. That reported negative impact is of considerable concern to many small retailers, which often live on narrow margins, and to their employees.

[Jim Shannon]

Does that not knock the giant supermarkets’ feet away from under them? They said that if they opened longer on Sunday, there would be extra trade and extra jobs, but those figures prove that it did not happen.

[Fiona Bruce]

The hon. Gentleman makes a valid point, and I understand from answers to written questions that I have tabled on the issue that the Government are proposing to produce their own analysis of sales over the Olympic period. May I venture to suggest that any analysis would be of questionable conclusive value due to a number of variables that influenced retail sales during the Olympics, not least the fact that they were a wholly unique event? There was also the differing proximity of retail outlets to Olympic venues, the weather and the coincidental holiday period.

I remind the House that the Government have already given extensive consideration to a review of Sunday trading hours in their retail growth review and their red tape challenge. In both instances the policy was rigorously explored, and I understand that a clear view was formed that there was no need to amend the current trading hours, which represented

“a valued compromise for all parties.”

I should add that many people would welcome more protection for Sundays as a day of rest and a day for families, friends and those of shared faith. I commend the work of the Keep Sunday Special campaign, which continues to make a strong case for keeping Sunday a different and special day in our national life.

If shops were open longer, that would not mean that consumers had the funds or the inclination to buy more goods. Our quieter high streets during the Olympic period showed that, including some of the Cheshire high streets about which I have inquired.

Far from being pro-growth, any proposal further to extend our already long retail trading hours may actually have the opposite impact, as work or productivity expands to fill the time allotted, as the old saying goes. I am reminded of accounts that I have heard from during the war, when factories seeking to increase their production moved to a seven-day working week and found that production actually decreased. A subsequent return to six-day production led to an increase. The day of rest proved its value.

I wish to give two quotations from senior business leaders. They were not necessarily made subsequent to the Olympic period, but they are worth putting on the record. Justin King, Sainsbury’s chief executive, has said:

“We’re content that Sunday is special and we don’t see customer demand for a change in the current law.”

The former Marks and Spencer chairman Sir Stuart Rose has said:

“The fact of the matter is you simply spread the same amount of business over a longer period, but with more operating costs. It’s a zero-sum game.”

Time with family—time to care—is important. So many people at the end of their lives say, “I wish I’d spent more time with my family; I wish I’d spent more time caring.” We have all heard the expression that not many people, if anyone, would say, “I wish I’d spent more time at the office”, and I doubt that anyone will say, “I wish I’d spent more time shopping.”

I have been encouraged to hear it reported recently that the Prime Minister, on being asked whether he would support changes to the law in this regard, responded:

“We said at the time it was a specific thing for the Olympics and that was the proposal that we made.”

I request from the Deputy Leader of the House, on behalf of BIS Ministers, clear and unequivocal confirmation of the assurance given in this House when the Sunday Trading (London Olympic Games and Paralympic Games) Bill was debated and passed that the extension of trading hours for the period of the games was limited to that period and would not be extended. In doing so, he will put an end to the ongoing speculation and concern in this connection. I look forward to his response.