| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Baroness Miller of Hendon: My Lords, these draft regulations are 33 pages long, followed by a five-page explanatory memorandum, and are accompanied by 39 pages of a regulatory impact assessment. Before I go further, I must apologise for my voice. Inside my head, it sounds awful and I hope that it does not sound as bad to your Lordships.
In that regulatory impact assessment, we have no fewer than 11 pages of tables setting out what are called,
After those 11 pages of tables, there are two pages of so-called flow charts by which an employer can follow a tortuous route to find out whether his business is actually involved—and, if so, when and how.
I invite your Lordships to look at pages 38 and 39 and perhaps those of you who can make head or tail of it might care to offer their services to what I imagine will be a large number of utterly bewildered medium-sized employers. I refer to medium-sized employers because the regulations apply only to businesses with more than 50 employees after 2008 and against larger employers between this coming April and April 2007. I thank the Minister for explaining them so carefully.
21 Dec 2004 : Column 1709
It was easier than trying to wade through all those pages, but I am not sure how employers will manage to do so.
Fortunately, 97 per cent of businesses in the United Kingdom have fewer than 50 employees and are therefore exempt from this burden. Nevertheless, with perhaps just 3 per cent of businesses which will be burdened by the regulations, the cost will be staggering. On the basis of the Government's own figures set out in the regulatory impact assessment, businesses will incur a total one-off cost of between £24 million and £53 million between 2005 and 2012.
If that wide "guesstimate" is not wide enough, the ongoing running costs will reach between £20 million and £46 million each year—each year by 2012. I venture to suggest that our competitors in China and India, and those in other emerging nations, will not be faced with these totally unproductive and irrecoverable on-costs.
In January of this year during the passage of the Employment Relations Bill, my honourable friend the Member for Eddisbury wrote:
"It is unfortunate that against a backdrop of corporate profitability at its lowest level since 1993, and productivity which has halved under Labour, that the Government believes that it is its mandate to promote regulation rather than innovation".
As we predicted, what is happening is that companies are to be forced to consult staff on the smallest every-day issues, which will be a waste of time for both employers and those employees who actually take part in the consultation. And to what end?
After the consultation, the employer will still have to make his decision based purely on the commercial implications involved. As I have sat on these Benches, sometimes enduring the frustrations of being in opposition, I have watched with dismay how the Department of Trade and Industry, as it has grown, has become the regulator of British business instead of protecting it against a rising tide of stifling regulation. The Secretary of State, especially the present one, has indulged in unprecedented empire-building while her department's budget has ballooned to £8 billion.
We on these Benches would have hoped that the objectives of these regulations could have been achieved by a less prescriptive route. That is not to say that we do not believe that the objectives of the regulations, in making it easier for employees to know what is happening—not simply having it thrown upon them—is not a good one; it is, but there must be another means of doing it. In other words, there should be voluntary co-operation between both sides of industry, where appropriate. This massive hammer to crack a nut, with a one-size-fits-all set of regulations, disregards the needs of individual companies when different circumstances will inevitably prevail. However, I accept what the Minister said, that it is certainly wrong that on major matters of employment the employee should hear what is happening to him only at the very end.
The Minister has commended these regulations to the House. We for our part will follow the usual custom of your Lordships' House, which is, notwithstanding our
21 Dec 2004 : Column 1710
misgivings—we should have preferred the measures to be voluntary—that we shall certainly not oppose the passage of the regulations, and we certainly hope that they work well.
Lord Razzall: My Lords, it will come as no surprise to the Minister to learn that we on these Benches fundamentally disagree with virtually every word that the noble Baroness has just said. The Minister will remember that in the passage of the Employment Relations Bill, certainly in another place and I believe here as well, we pressed an amendment on the Government to try to expedite the introduction of these regulations. We fixed the date of 23 March 2005 as the time by which we wanted to mandate the Government to introduce the regulations. So the Minister has beaten the date, even in our amendment, by three months.
We welcome these regulations. The Liberal Democrats, and the Liberal Party before the Liberal Democrats, has over the past 100 years advocated proposals of this nature. We believe that what has been wrong with so much of British industry has been an absence of consultation between management and workforce, and the "them and us" attitude. We feel that the regulations will go a long way to breaking down a lot of the traditional barriers in British industry. Would that this approach had existed 20 or 30 years ago, before a large element of the manufacturing industry in the UK disappeared. Nevertheless, in relation to those businesses in which manufacturing survives, we feel that the regulations are essential.
There have been some very bad examples recently of workforces having termination of employment redundancies imposed on them without adequate consultation in advance. Academic studies from Warwick University demonstrate that across the board in British industry only a minority of UK companies even remotely, at the moment, match the requirements of the European Union directive and the regulations that flow from it. So we congratulate the Government on introducing the regulations and say all power to their elbow in this matter.
Lord Lea of Crondall: My Lords, I apologise for dashing in at the last minute to make this short contribution. Due to the timetable for the smoking debate I had to attend a meeting and then come to the Chamber.
I declare an interest in that over many years I have worn two or three hats relevant to the subject that we are discussing. I was involved in discussions in Brussels on social dialogue. I hope that I can put the mind of the noble Baroness, Lady Miller, at rest to some extent. I think she will agree that this matter has involved employers' representatives at every stage. Indeed, one of the first things the Labour Government did in 1997 was to sign the Social Chapter. I remember meeting with Robin Cook in Brussels at that time when he was Foreign Secretary.
The Social Chapter is not top of the pops with the party of the noble Baroness, Lady Miller. Nevertheless, it has produced three or four major reforms involving part-time workers, fixed-term contracts and this measure,
21 Dec 2004 : Column 1711
which, as the noble Lord, Lord Razzall, implied, has been the subject of debate for 30 or 40 years. Should a worker have the right to representation vis-à-vis his employer? In TUC jargon that is rung one of the employment rights ladder. We have seen further developments in that regard in the past two or three years. I believe that from November of this year a provision of the Employment Act 2002 was brought into force with the result that every firm of any size must have a disciplinary procedure and every firm must have a grievance procedure. As I say, that is rung one.
Rung three concerns what the Government did some three or four years ago regarding trade union recognition—where a majority of workers have voted for that—and terms and conditions of employment. I refer to the case for rung two—the one in the middle. Many questions involving pensions or training have not been included in the relevant mandatory list. However, rung two—the metaphor implies that you may go to rung three—is good news for many firms that have been faced with requirements regarding, for example, collective redundancy, but which have no ongoing machinery to deal with it. A push or a nudge is required to get that set up. How is that machinery to be set up? It does not happen in 24 hours. It requires a lot of thought, but people have had a lot of notice that these regulations would be brought into force. Everyone knows that agreement has been reached with employers in Brussels and in London between the TUC and the CBI.
The measure is to be implemented in three stages. I do not know whether my noble friend would agree that only a small percentage of firms are covered by the measure, and that many small firms do not add up to many millions of workers. However, if everyone who was entitled to do so went down this track, some 70 per cent of the workforce would be covered by the measure. That is not an inconsiderable figure. The measure constitutes a red letter day in the history of industrial relations in this country. It is odd that a reform of such importance is being discussed in a short debate. However, that is the way that our parliamentary procedure works. I very much welcome the Government's determination to engage in dialogue once they had decided that this was the track down which they were going.
Wearing my other hat as a member of the Central Arbitration Committee, I look forward to considering some of the tantalising questions about existing agreements and interpreting whether the new arrangements are satisfactory. We do not know how this will work in detail, but I am pretty confident that with the experience of the trade union recognition the Central Arbitration Committee will be able to play a constructive role for its part. I congratulate all those concerned on getting us to where we have got to so far.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |