Pat McFadden
MP for Wolverhampton South East · Labour · United Kingdom
“In his review Alan Milburn considered that issue and said that, “the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years.” As I said earlier, 400,000 more people are in work this year than last year, and the number of young people in employment is up since the election.”
“Since our last DWP questions, both Alan Milburn and the Pensions Commission have published their respective interim reports on young people and on the current state of saving for retirement. I look forward to receiving their final reports later in the year.”
“As Alan Milburn pointed out in his recent report, the UK’s NEET crisis is much more long-term and deep-seated than any decisions taken in the last few years. There are 400,000 more people in work than last year. The number of young people in employment is up by 74,000 since the election.”
“I thank the right hon. Gentleman and send him commiserations for whatever has left him reliant on his crutches today. I am happy to congratulate the businesses he mentioned in his constituency. He raises a serious point: it is important not only to come up with the right policy, but to make it simple for businesses to use.”
“My hon. Friend is right, and I thank Cardiff football club for being a partner. We are supporting nearly 1 million young people and creating up to half a million opportunities for jobs and training.”
“We are making strong progress on expanding youth hubs, with around 130 already in operation across Great Britain. In March, I announced the locations that we want to open in this year, and I have just announced a further 180 locations for the following two years.”
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“Given the hon. Gentleman’s question, I think that he will agree that there is much in the Bill that the Post Office can be enthusiastic about. It will have its own board, which will give it an increased standing. With the Post Office card account contract awarded by the Government just a few months ago, as well as a new contract between the Department for Transport and Post Office Ltd on the renewal of driving licences, there is reason to look forward to greater stability in the network. There is a great deal for the Post Office in the Government’s plans to reform postal services.”
“I am happy to work with the Select Committee on its inquiry into the future of the post office network, and I have already met the Committee to discuss that. Of course we want to see the Post Office build on its provision of banking services, but in any discussion of the expansion of those services we must remember the existing agreements with the Bank of Ireland. However it is done, I am sure that banking services will be a major consideration for the future of the post office network.”
“I assure the House that there is no lack of urgency or energy on the part of the Government about working with the Post Office on securing its future. Only yesterday, I was extolling the Post Office’s potential to provide services for the new identity cards, but, sadly, if the Liberal Democrats were in power that opportunity would not be available to Post Office Ltd.”
“Our Department is focused totally on working with businesses, and, of course, their employees, through the difficult economic times, as well as—importantly—working with businesses and their employees to prepare for the upturn, when it comes.”
“We have no plans to change the Sunday trading laws, but I am happy to discuss my hon. Friend’s point about stores being open and people working. However, we do not plan to change the Sunday trading laws.”
“The Prime Minister fully supports and is committed to our plans for Royal Mail. That is clear. We will take the plans forward and not implement the policy, which I think the right hon. and learned Gentleman espoused on the radio the other day, to privatise Royal Mail. We will keep Royal Mail in the public sector, but transform it for the future.”
“The Prime Minister has said publicly on a number of occasions that he fully backs the policy that we have espoused. It is fair to point out that No. 10 was very quick to say that it was not considering some of the ideas that were floating about in the papers earlier this week.”
“They would allow individuals to obtain compensation for being refused employment or for suffering discrimination by their employer because of their inclusion on a trade union blacklist. Those complaints would be determined by the employment tribunal. In addition, people, including trade unions, could claim damages from the compilers, disseminators and users of the blacklists for financial loss.”
“The Information Commissioner has strong powers to investigate cases in which he thinks the Act is being breached. He used them extensively during his investigation into the affairs of the Consulting Association, which I will call TCA. He secured two search warrants and confiscated a large amount of material. One prosecution has begun. He can also issue enforcement notices, which require persons to act in accordance with the 1998 Act by taking, or refraining from taking steps. One enforcement notice has so far been issued. My hon. Friend mentioned section 3 of the Employment Relations Act 1999, which provides a power for making regulations to outlaw blacklisting. As he said, we have produced draft regulations, on which we consulted in 2003.”
“To run any system, an organisation needs to manage a large amount of data, and organisations or persons managing such data are classed under the Act as data controllers. That means that they must register with the Information Commissioner—failure to do that is a criminal offence. In accordance with the Act’s data protection principles, data controllers must make proportionate and fair use of data. Trade union membership is classified as “sensitive personal data”. According to the Act, it is unlawful, save for a few exceptions, to process such data without the subject’s explicit consent. Since blacklisting is, by its nature, a covert activity, it is impossible to operate a blacklist successfully and stay within the provisions of the Act.”
“I shall come to what we are doing to address that, but first I shall briefly set out some of the protections that currently exist. Sections 137, 146 and 152 of the Trade Union and Labour Relations (Consolidation) Act 1992 make it unlawful for an employer to refuse employment, cause someone to lose out at work or dismiss someone on the ground of trade union membership or activities. Those rights have been in place for decades, although we made some modifications in, for example, the Employment Relations Acts 1999 and 2004, providing more protection against victimising workers for using a union’s services. My hon. Friend the Member for Barnsley, West and Penistone also referred to the Data Protection Act 1998.”
“The freedom to belong to a trade union is a key human right set out in many international treaties, including the European convention on human rights. Trade union representatives and activists—we should not forget that they are mostly unpaid volunteers—perform an important and valuable role in the workplace. For the most part they work in partnership with employers, but of course sometimes they challenge them. That can be when tensions arise, but it is important that trade union representatives are not subject to victimisation. The practice of blacklisting should be anathema in today’s Britain. It is a relic of the past, and if what has occurred recently in the construction industry is blacklisting rearing its head again, of course we will take that seriously.”
“I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing the debate. I begin with something of an apology to you, Mr. Speaker, and to him for the slightly weak nature of my voice tonight. I hope that I manage to get through my response. This subject is important and topical. The Government believe that people have a right to join a trade union if they so wish. That is a free choice and should not result in their being denied employment, so I share my hon. Friend’s concerns about the recent revelations in the construction industry. He is right that that industry is of particular concern, because the safety of workers can be at stake as well as their employment.”
“Friend the Member for Barnsley, West and Penistone described, significant abuse of the data protection principles and data protection law was uncovered. TCA has secretly listed more than 3,300 individuals and kept more detailed information on 1,600 of them.”
“I have already received a letter from one of the companies that have been mentioned, dissociating itself from the activity and claiming that it did not realise that it was buying into it. I will revert to that. We reiterated our position that we would not consider implementing the regulations until clear evidence arose. That was the position in 2003. The investigation began in the middle of last year, when my Department learned that the Information Commissioner was investigating allegations of blacklisting. My officials were involved at an early stage and worked with the Information Commissioner’s office. I pay tribute to those in that office for their diligence in pursuing a complex investigation. As my hon.”
“Earlier this month my officials spent two days at the offices of the Information Commissioner and they have examined much of the material that he has taken from TCA. My noble Friend the Secretary of State and I will closely examine their findings on the material and decide what action to take.”
“The compilers of the list can be prosecuted under the Data Protection Act and one such prosecution is pending. I believe that a fine can be imposed in a lower court, or a higher fine can be imposed in a higher court. The critical question that my hon. Friend the Member for Barnsley, West and Penistone asked is what our response is. Around 25 construction companies appear to have been subscribers to the services of TCA and about 18 of them appear to have used the system recently. The information relates to the employment histories of individuals and in some cases it refers to their involvement in trade unions or their participation in industrial action. The Government need to decide whether those activities fall within the definition of blacklisting found in section 3 of the 1999 Act.”
“I also understand that the Information Commissioner is making further inquiries with the subscriber companies to determine the extent of their involvement with TCA. Those inquiries could lead to further action by the Information Commissioner. My Department will stay in close touch with the Information Commissioner and, as I have said, BERR officials have already inspected many of the records held by the Information Commissioner.”
“I will come to how we are dealing with the problem. Procurement has been mentioned. Any company, whether it works on public contracts or not, should comply with the law of the land. We expect companies not to break either data protection law or trade union law when planning or undertaking work for the public sector. Of course we recognise that construction companies need to ensure that they recruit the right calibre of person for the job, but there is no need to undertake covert and unfair vetting of the kind that TCA appears to have performed. The Information Commissioner is following up his investigation in various ways. First, TCA is to be prosecuted, as I have said. I understand that the case will be heard towards the end of April.”
“We will examine the papers and the evidence and we will come to a conclusion in the near future. Question put and agreed to.”
“I have said that blacklisting is anathema and it should have been left in the past. My officials have already inspected many records. Our objective is to assess precisely whether the activities undertaken represent the kind of blacklisting activity that section 3 of the 1999 Act was designed to cover. The Secretary of State and I will examine the evidence in the case and we will examine the papers. We will take the matter seriously and the Government will make a decision on how to proceed. Let me reiterate that I share the deep concern that my hon. Friend the Member for Barnsley, West and Penistone has expressed about the revelations that have been made. We need to address the matter diligently and speedily. I assure him that we share his concern about the reports.”
“We estimate that the Government will assume total liabilities of £29.5 billion and assets of £23.5 billion. That would mean the Government absorbing a deficit of £6 billion. This assessment of the liabilities in the scheme and the funding position is based on the most recent trustee valuation, from March 2008. However, we anticipate that the funding position of the scheme could well have worsened since that date, so when we have updated figures from the new valuation, beginning this month, we will finalise our assessment of the funding position of the scheme.”
“Our motivation is not about the public sector accounting impact. Our motivation is to give greater security to the hard-working men and women who work for Royal Mail, because the pension fund is an increasing burden for Royal Mail. At the same time, however, if we are to ask the taxpayer to take on those liabilities—I have set out what the scale of those liabilities is—it is equally right that we also give the taxpayer some confidence that the company can be transformed and modernised in the future. It is precisely those two things that are set out in the Postal Services Bill, which was published recently.”
“The scheme was in surplus as recently as 2001, so I am not sure that the deficit can be ascribed to contributions holidays. Another factor that right hon. and hon. Members should consider is that the Government have not taken a dividend from Royal Mail for some years, so the most important thing is to concentrate on what we do now. As things stand, with a combination of the pension fund deficit and falling mail volumes, the company is in a very serious position. That is precisely why we have brought forward plans to deal both with the pension fund and with the transformation of the company in the future.”
“The changes that we propose to the pension scheme will mean that the deficit is handled on the same basis as the pension schemes serving teachers, nurses and civil servants. That will indeed give Royal Mail staff far greater pension security than they get at the moment, when the deficit appears to be increasing year on year.”
“Our intention, through a partnership, is to bring in new investment into the company. We intend to bring in not just investment in Royal Mail, but experience from another European postal or network company that has been through a transformation of the kind that Royal Mail needs, but has not yet gone through. The harsh fact is that if we do not get that investment and experience, the decline in mail volumes will decide the issue for us. As things stand, without the transformation of the company, for each decline in mail volumes of 1 per cent., Royal Mail loses around £70 million. There is therefore an urgent need not only to deal with the pension fund, but to modernise Royal Mail.”
“The Secretary of State announced in December that the Government accepted the analysis set out in Richard Hooper’s review of postal services and that, to maintain the universal postal service, the Government intended to implement his recommendations. I repeated that statement in the House of Commons on the same day. The Postal Services Bill has since been introduced into the House of Lords, and received its Second Reading on 10 March. The Bill proposes a new regulatory framework for postal services, enables the Government to tackle Royal Mail’s pension deficit, and ensures that Royal Mail remains in public ownership, while supporting modernisation through a strategic partnership.”
“The report covers all the issues relating to pensions, pricing and regulation. It is entitled “Modernise or decline”, which is an accurate description of the choice that we face. If we do not act to turn Royal Mail around, the decline in mail volumes will decide the issue for us. For every 1 per cent. decline, the company loses £70 million. There has already been a decline of 7 per cent., and a further 7 per cent. decline is forecast. That demonstrates the urgent need to transform and modernise the company. If we do not take that action, Royal Mail will end up cutting services, which is not a solution that we want it to apply to its current problems.”
“Richard Hooper identified industrial relations as a significant problem for the company, and it is not just the industrial action and the strikes that have taken place, but the regular threat of industrial action—such as, in recent months, over changes to the pension scheme and the closure of a number of mail centres. A fresh start for industrial relations is, therefore, needed in Royal Mail, and I would say to the CWU that the current relationship is not what it should be and that bringing in a new partner may present a possibility of improving industrial relations, given their current very poor state.”
“That will also give Royal Mail the opportunity to be a major European player, and that is not an opportunity that we should shy away from.”
“I have great respect for my hon. Friend, but he is not right to say that we are privatising the Royal Mail. The Bill clearly says that we will keep Royal Mail in public ownership, so it is simply not true to say that we are privatising it. He questions why the Dutch postal service may be in a better position than Royal Mail; that is precisely because it has carried through the transformation and modernisation that Royal Mail has not yet managed to achieve. I cannot comment on any particular potential partner, because there has to be a proper process to get the best agreement for Royal Mail and the taxpayer, but if there is a partnership with another European postal company, I remind the House that liberalisation of postal services will be introduced in 15 members of the European Union by the end of next year.”
“Those clauses, like all the other clauses in the Bill, will be implemented if the Bill is passed by Parliament, but the hon. Gentleman raises a very legitimate point with regard to regulation. That has been a subject of considerable controversy in this House and more widely, and we propose in the Bill to put at the heart of the regulatory system the maintenance of the universal service—of the one price goes anywhere, six-days-a-week universal postal service. That is the foundation of our postal system. We want to legislate to maintain that, not to leave Royal Mail alone to have its finances eaten away by the fall in mail volumes, which is costing it £70 million for every 1 per cent. of decline. That is no future for Royal Mail, but the Bill that we have presented is.”
“The focus of our Department is on working with business and employees during these difficult economic times, and on ensuring that British business is as well placed as possible for the future.”
“I attended the launch of that pamphlet a few days ago. It is right that if the Post Office is to survive and prosper, it needs to look to new areas of business. It cannot survive on nostalgia or by ignoring the changes in people’s lifestyles, such as using the internet and direct debits. The Post Office is already expanding its banking services: it is the leading supplier of foreign exchange in the country and it supplies credit cards, insurance and savings products. I agree with my hon. Friend that an expansion in banking and financial services is a very important part of the Post Office’s future.”
“My hon. Friend is absolutely right to draw attention to that danger. The recession must not be an excuse to deny employment rights to some of the most vulnerable workers in the country. That is why we have changed the law, bringing in tougher penalties for employers who do not pay the minimum wage and better arrears for employees who are denied the minimum wage. We are also putting in extra resources, including a £1 million campaign that was recently launched to inform agency workers of their basic employment rights, including wages, paid leave and so on. It is very important that we come through this recession not only by helping business but by ensuring that the most vulnerable workers do not pay the price.”
“It is true that that is an issue. Many young people want to be famous and there has been a pattern of exploitation, with people setting up in hotels and launching one-day casting sessions. Last year we brought in a new cooling-off period to try to protect people against such activities. We said at the time that if that provision needed to be reviewed we would review it. We have continued to receive complaints, so today we are publishing a consultation document on banning the taking of up-front fees so that young people and their families are not exploited. We do not want to tread on anyone’s dreams and hopes, but we also do not want to see people exploited because of them. That is why we are taking this action today.”
“It is true that the issue has been raised with us, and of course we will consider anything that we think can help people who are unemployed or in economic difficulty. There is a significant contrast between how this Government will respond to this recession and how the previous Government abandoned the unemployed. The previous Government left the unemployed with only a benefit cheque to keep body and soul together, and gave them no real help to get a second chance. In contrast, this Government will stand by people who are losing their jobs.”
“I therefore feel that it is incumbent on us to do as much as we can to make the system simple and streamlined, bearing in mind the duty that we owe creditors in such circumstances. The order is part of that streamlining process. Let me explain what the change means in practice. When a company finds itself unable to pay its debts, a liquidator is appointed to find and distribute the company’s assets. That can be done through compulsory liquidation, members’ liquidation or creditors’ voluntary liquidation. I shall not go into the details of the differences between those types of liquidation, but this order deals with voluntary liquidations.”
“Regulation is a legitimate part of the modern world—we live in a world with rules—but we do not want business, or creditors when insolvency is involved, to be burdened with rules when they no longer serve the purpose for which they were designed, or when it may be possible to do the job in a better way and, perhaps, at a lower cost. The order that we propose would give further help to creditors by reducing the bureaucratic burdens and costs imposed by one of the current elements of our insolvency arrangements. I acknowledge that insolvency can be a complicated business, and that having to deal with a failing business is stressful enough, particularly during the current economic difficulties.”
“I beg to move, That this House disagrees with the Regulatory Reform Committee in its recommendation that the draft Legislative Reform (Insolvency) (Advertising Requirements) Order 2009 should not be approved. The House regularly debates the need for regulatory reform and the need to reduce unnecessary red tape. Part of the backdrop to those discussions is the responsibility of all of us to ensure that rules that may have been cast a long time ago have not become outdated or been overtaken by the way in which people lead their lives, trade and do business, or obtain information. It is incumbent on Government to take that responsibility seriously.”
“I stress that it will still be open to liquidators and companies to use local newspapers if they consider that to be the most appropriate mechanism in the circumstances.”
“If the hon. Gentleman will exercise just a little patience, I shall come to that in a couple of minutes. In the case of a voluntary liquidation, a meeting of the company’s creditors must be called under sections 95 and 98 of the Insolvency Act 1986. Notice of the time and venue of the meeting must be sent directly to all known creditors, advertised in the London Gazette and, at least once, in two local newspapers that are circulated in the areas where the company has its principal place of business. The Government propose to remove the obligation to advertise in two local newspapers. That means that it will be up to liquidators, under section 95, or the company, under section 98, to decide whether advertising is needed, and, if it is, to choose the most appropriate method.”
“That £600 charge may not be a life-or-death sum in each individual case, but when one adds up the sums involved throughout the process, it can increase the costs of insolvency. For creditors who have already lost money, it is important to ensure that their money is spent usefully during an insolvency process, so that as much as possible can be returned to them at the end of that process. The savings from the proposals, together with parallel changes that we propose to the insolvency rules, will combine to mean estimated savings of some £17 million a year. This is not a “narrow” measure.”
“Those reservations are set out in the report, and I am sure that my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller), the Committee Chairman, will explain them, but, in brief, the Committee felt the order was too “narrow in its focus” and that its effects would be “minor”. It felt it may be unlikely to result in further dividends for creditors and would not provide them with enough protection. We have two main reasons for wanting to introduce this order. First, it has the potential to save business and creditors money, by reducing costs. Each advert costs an estimated £300 a time, and since there is a requirement to place two adverts, that cost is obviously doubled.”
“I am sure that it is more in order for me to concern myself with this debate, rather than the next one, in which I will not be seeking to speak, but I will say that we want to ensure that the advertising in terms of the insolvency process is the most effective. That is our concern and why we have proposed the order. The hon. Member for Christchurch (Mr. Chope) asked why I disagreed with the Committee’s verdict. The Delegated Powers and Regulatory Reform Committee in another place was satisfied with the order; it gave it the thumbs-up, to use the colloquial phrase. The House of Commons Committee also stated that all the preconditions in the Legislative and Regulatory Reform Act 2006 and the Standing Order tests had been met, but it expressed several reservations and stated that, in its view, the order should not be approved.”
“There are rules governing charges, which I will come on to, but certainly the motivation behind the order is to increase the pot of money that is available to creditors. As I was saying before the hon. Gentleman intervened, the savings from the proposals, together with parallel changes that we propose in the insolvency rules, will mean estimated savings of £17 million per year. That is part of a wider package of proposals to streamline the process.”
“There is absolutely no reason why what we propose today, and what we propose in the other connected changes to come, should increase fees charged by insolvency practitioners. This is not about increasing fees; it is about avoiding unnecessary expenditure.”
“We believe the costs of introducing the order are minimal, and there is no reason why we should not introduce the changes. The Committee expressed concern about the money going to liquidators rather than to creditors, but protection against that is already built into the legislation. The terms governing the liquidator’s remuneration will be fixed by the creditors and the creditors can apply to the court if they consider the amount of the liquidator’s remuneration to be excessive. Any liquidator taking remuneration that was not justified could find themselves subject to the scrutiny of the courts. I understand that the Committee—this is reflected in its report—was concerned that the savings would not be passed on, so let me make it clear to the House that I want them to be passed on.”
“The £17 million figure is the savings from both the order we have proposed, which has been considered by the Committee, and the parallel changes to the insolvency rules, which are dealt with in a separate order under the negative resolution procedure. The reason we have to do it this way lies in the origins of the insolvency legislation. There will be estimated savings of £17 million a year from the changes. That is only part of a much wider package of proposals to streamline and modernise the insolvency rules and other relevant provisions—part of which, I should inform the House, will include a further legislative reform order—which should save a total of about £40 million per year. Huge sums may not be involved in each individual case, but over the piece the savings gained for the insolvency process are certainly worth having.”
“That may be the case, but, as I said, the fees will be governed by the courts. I stress that the proposal in the order is not about increasing fees for liquidators, but increasing the pot of money that is available to creditors.”