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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“The scheme is subject to sectoral restrictions, but my Department has succeeded in lifting restrictions from certain sectors, including the automotive, medical, health services and shipbuilding sectors. It is backed by the working capital guarantee scheme, which is on a larger scale. That scheme is not one to which individual applications are made; it allows banks to share more risk of lending with the Government, and thereby increase funds for lending. It involves businesses with a turnover of up to £500 million a year. The guarantee is available to participating banks, and we are currently in discussion with Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland. They can use the guarantee to cover portfolios of lending to sound, creditworthy businesses with an annual turnover of up to £500 million.”
“We have set out an enterprise finance guarantee scheme—a £1 billion loan guarantee scheme, delivered through the banks, which will enable additional lending to businesses up until the end of March next year. The scheme provides a 75 per cent. Government guarantee on individual loans to viable businesses with less than £25 million of turnover through approved lenders. Some 26 businesses have taken up the scheme so far, with more in the approvals process. That is important in getting new credit to businesses, so that they can continue to operate and avoid the redundancies that the Bill seeks to address. That scheme is already operating. Loans are being made, and more than 80 per cent. of all applications registered by the banks are eligible for support.”
“I will of course come to the specifics of the Bill, but the macro-economic context is important. I began my remarks by cautioning Members, and my hon. Friends in particular, not to judge the Government’s response, or think that the public should judge the Government’s response, to the recession purely in terms of our response to the Bill. That is why the wider context is of importance. I have great sympathy for the concerns that my hon. Friend the Member for Chorley outlined in his opening speech. It is absolutely right that working people should be at the heart of our response to the credit crunch. However, the issue has to be seen in a wider economic context.”
“It is important to set discussion of the Bill in that context because, whatever happens to it—whether it proceeds or not—concern for working people will still be right at the heart of the Government’s response to the recession.”
“We share a common aim, which is to ensure that people at work get a fair deal in our response to the recession. The context should be wider than the measures my hon. Friend proposes in the Bill. This Government have introduced a number of measures that were attacked by the hon. Member for Huntingdon (Mr. Djanogly), but which I stand by. They include the extension of paid leave, the extension of flexible working, measures to help people to balance the responsibilities of work and family life, and measures to get lending flowing in the economy so that we can minimise the number of people who lose their jobs as a result of the recession.”
“However, employers must warn and consult individual employees who are to be dismissed, adopt a fair basis for selection and take reasonable steps to redeploy affected employees.”
“That award focuses on the employer’s failure to comply with the consultation requirements under the legislation. Employers should undertake meaningful consultation with a view to reaching agreement with employees’ representatives. It is not enough simply to go through the motions of a consultation. The consultation should be fair and transparent, and be a two-way process. It should begin when proposals are at a formative stage and encourage an ongoing dialogue between employers and employees. The employer is also required to notify my Department of the projected redundancies. Where it is proposed to make fewer than 20 employees redundant, employers are not under a specific legal obligation to consult employee representatives or to notify my Department.”
“That means that where employees are represented by an independent trade union, the employer must consult a trade union official. Where employees are not represented by a trade union, the employer must inform and consult other appropriate or elected representatives. Issues that should be included in the consultation are the reasons for the proposals, the number of employees it is proposed to make redundant, the proposed method of selecting the employees who may be dismissed and the proposed method of calculating any redundancy payments that the employer proposes to make. If an employer fails to meet the requirements of the legislation governing collective redundancies, an employee or the employee’s representative may lodge an application for a protective award with an employment tribunal.”
“Those are important because they are used to identify who is entitled to a redundancy payment and the amount that they will receive. If the employer is intending to make 20 or more employees redundant at one establishment during a 90-day period, the law requires the employer to consult employees. If the dismissal is wholly or mainly because of closure of the business, or a declining need for employees to do the work, the employee may be entitled to a redundancy payment. Collective redundancies, as I said, occur where the employer needs to make 20 or more employees redundant at one establishment within a 90-day period. Under part 4 of the Trade Union and Labour Relations (Consolidation) Act 1992, there is a specific requirement in such circumstances for employers to consult appropriate representatives of the employees who may be affected.”
“We have heard stories in recent weeks, for example, of companies reducing their employment through voluntary schemes, by restricting or suspending external recruitment, by reducing or eliminating overtime, or by seeking applications for early retirement. Employers can also try to avoid redundancy by maximising redeployment and training opportunities for those likely to be affected in the organisation. Sometimes, however, all those avenues are exhausted and, in such cases, employers turn to compulsory redundancy programmes, which is where people’s statutory entitlements come to the fore. There are two statutory definitions of redundancy, which are to establish the entitlement to a redundancy payment and to establish the right to be consulted collectively.”
“Whether the numbers are higher than those of the recent past, or lower, each redundancy is still the story of a career cut short, not out of choice but because of economic circumstances, with all the worry and uncertainty that that causes for the people involved and their families. It is important that the Government do everything they can to help those individuals and the businesses that they depend on for employment. Redundancy can occur for a number of reasons and it is usually implemented only after alternatives have been considered. No business wants to lose people that it does not need to.”
“The Bill would not block those measures, and I do not suggest that it would. I say to my hon. Friend, my hon. Friend the Member for Chorley and others that it is important that we remember those measures, talk about them and ensure that the public understand that the Government have a response to the recession that has their interests at heart. I shall deal now with redundancies because they are at the heart of what we are talking about. There is no doubt that redundancies are growing in number at the moment. Sadly, that is a feature of the recession not only in this country but right around the world. In the fourth quarter of 2008, there were 263,000 redundancies—significantly up on figures from recent years, although well below the levels of the early 1990s.”
“I will certainly come to how redundancy pay is calculated and how it has changed over the years, but I believe that it is fair first to set out the context of the redundancy scheme and how it works. Once the employer has identified how many employees are at risk from redundancy, the next step will be to identify the pool from which to select those to be made redundant and develop the selection criteria. We believe that, as far as possible, employers should use objective selection criteria that are precisely defined and can be applied independently.”
“Those are at least one week’s notice if they have been employed for between one month and two years, one week’s notice for each year if employed for between two and 12 years and 12 weeks’ notice if employed for 12 years or more. Once an employee is given notice of dismissal because of redundancy, they are entitled to reasonable time off during working hours to look for another job or to make arrangements for training or future employment. The time off must be allowed during the notice period, although employees are entitled to time off in that way only if they have two years’ continuous employment with the employer.”
“The employer would have to show that the selection was conducted fairly and that there had been an objective analysis of the gathered information about the pool of employees. It is also important that, when possible, an employer proposing to make an employee redundant should attempt to offer suitable alternative employment within the organisation. An employee made redundant could be found to have been unfairly dismissed if a suitable alternative position existed and was not offered to them. Once the employer has selected the employees to be made redundant, he must give them notice of dismissal by reason of redundancy. The length of the notice period will depend on the employees’ contracts of employment, subject to the statutory minimum periods.”
“None of that decreases the pain of individuals and their families when a redundancy takes place, but there is a process in place to make the system as fair as it can be in what are always very difficult circumstances. The system is also designed to ensure that employees are not selected for redundancy because of their sex, marital status, race, disability, religion, belief and so on. Selection for redundancy on the basis of trade union or health and safety activities, or because the employee was pregnant or on maternity leave, is also unlawful. Part-time employees and fixed-term workers are also protected from being discriminated against during the selection process. Selecting employees for redundancy for such reasons, if challenged, would result in an unfair dismissal case.”
“Sadly, Sky News is not available in the Chamber, and the Prime Minister has not communicated that to me. Employers should, as far as possible, use objective selection criteria that are precisely defined and can be applied independently. Objective criteria should also help a business to maintain a balanced work force after the redundancies have been carried out. Some examples of selection criteria could be attendance, disciplinary records, experience, capability, relevant skills, competence and so on. It is important, as I have said, that those criteria are applied in an objective and even-handed manner, as that will help to avoid any complaints of unfair dismissal or discrimination on prohibited grounds.”
“It is important to say that we will not take the same approach to this recession as was taken by the previous Government to the recessions that happened before.”
“One of the silver linings in this picture is that the labour market is still dynamic. Most people who lose their jobs find another one within six months. Nevertheless, it is important to set out to the House that this problem affects significant numbers of people and important industries in our country. We are, of course, particularly concerned with the long-term unemployed; that is why we have concentrated much additional help on those who have been unemployed for six months or more. We know that the longer people are outside the labour market, the more difficult it will be for them to find a new job. In the constituency of my hon. Friend the Member for Chorley, and certainly in my own, memories are still fresh about the devastation caused to communities in the 1980s and the 1990s, when whole industries were wiped out.”
“There has been a major increase in the number of job losses for those with qualifications that are not at degree or higher education level. Job losses for people in those groups increased from 9,000 in the fourth quarter of 2007 to 28,000 in the fourth quarter of 2008. Probably the greatest concentration of job losses is in the construction industry, which saw an increase of just over 38,000 over the period—from 9,500 job losses in the fourth quarter of 2007 to 48,000 in the fourth quarter of 2008. The industry now accounts for 18 per cent. of all recent redundancies, up from 9 per cent. a year before. We also have large proportions of redundancies in manufacturing, and almost a fifth of all redundancies are in part-time positions. Some 49,000 part-time employees lost their job in the fourth quarter of 2008, up from 17,000 a year before.”
“There has been an increase in redundancy across all qualification levels, but the biggest increase in the fourth quarter figures that I have quoted was among those with no qualifications. This reaffirms our view that one of the significant challenges in the labour market is to reskill and re-equip workers and to offer them one-to-one help in training. That is a significant part of our response to the recession, which is why I asked the hon. Member for Huntingdon whether he supported such measures in that regard and about his stance in opposing the Bill. People with higher qualifications—those with NVQ level 4 or above—accounted for 27 per cent. of all redundancies before the recession really began to bite, but the proportion is 19 per cent. in the most recent figures.”
“in the fourth quarter of 2007. That is followed by the west midlands, Wales, the north-west and Yorkshire and the Humber. The west midlands has seen the largest increase in recent times. I am afraid that redundancies are increasing among all age groups. They are all experiencing more job losses compared with the same period a year ago. However, it appears that those in mid-career are often the worst hit. Men are experiencing more redundancies than women. Almost 70 per cent. of all redundancies are among the male work force. That figure, too, is increasing, and relatively young men are experiencing significant numbers of redundancies. The situation is affecting various regions and groups of people. Sadly, people with lower levels of academic qualification are also being badly affected by redundancy.”
“The quarterly redundancy figures in the recession in the early 1990s reached about 350,000—significantly more than we are now experiencing—but I do not seek to deny the urgency of the redundancy situation facing many people or the good motivation of my hon. Friend the Member for Chorley in bringing the matter before the House and asking what can be done. Past recessions were sometimes felt in different ways around the country. At the moment, the highest proportions of redundancies are occurring in the south-east and the west midlands. As an MP who represents a constituency in the west midlands, I am sad to say that the largest increase in redundancies since the fourth quarter of 2007 has been in that region. The regional redundancy rates show that the north-east now has a rate of 15.8 per cent., up from 6 per cent.”
“It is automatically unfair and sex discrimination to select an employee for redundancy for a reason connected with maternity leave, birth or pregnancy. If the reason for redundancy is connected with other family leave—paternity leave, parental leave and so on—that is automatically unfair and may be sex discrimination. I have outlined an individual’s rights when faced with redundancy. As I said, redundancies have sadly risen in recent months. I told the House a few moments ago that, in the last quarter of 2008, there were more than 260,000 redundancies reported in the labour force survey, which is the highest level for some years.”
“I think that my hon. Friend will find that I am always happy to be guided by the Prime Minister, as are all Ministers of the Crown. I was talking about how the redundancy scheme works. Upon making any redundancy payment, the employer must give the employee a written statement indicating how the payment has been calculated. If the employer fails to provide that statement without reasonable excuse, they could be guilty of an offence and fined up to £200. The Business Link website, which is an important source of information for all employers and the general public, particularly during the recession, hosts information that will help employers to calculate statutory redundancy payments due to their employees and produce written statements for each employee showing the amount of redundancy pay and how it was calculated.”
“The pre-Budget report in November also announced additional funding to ensure delivery of support for everyone who is made redundant, including a doubling of the rapid response service and an additional £1.3 billion to support Jobcentre Plus. Our package of support includes golden hellos of up to £2,500 for employers who take on and train long-term unemployed people, precisely because we recognise that those who have been out of work for six months or more will find the most difficulty in returning to the labour market. Where redundancies take place, the Government’s rapid response service provides valuable help in trying to find a new job. We have doubled funding for the service and will double it again this year.”
“We cannot always prevent people from losing their jobs; no Government can do that, and we do not claim to be able to do so. I gave the redundancy statistics a few moments ago. I know how painful redundancy is for those involved and for the communities in which they live. However, we will help them to get a second chance and to try to seek new opportunities when faced with the very difficult circumstances of redundancy. That is why we are providing a £129 million package of support for individuals facing redundancy or who are already redundant, and why we are making available 75,000 further education training places for Jobcentre Plus referrals at six months’ unemployment.”
“Thank you, Madam Deputy Speaker. I am afraid that I do think that these matters are relevant to the Bill, because the whole premise of my speech is that it should be seen in the light of the wider response to the recession. That is why how the redundancy system operates is relevant, as are the other measures that we have taken with regard to support to employers. Of course, I will come to the specifics of the Bill. I was saying that we will have a very different response to this recession from the one that the Conservative Government took to recessions in the past. We do not see our role as simply to pay a benefits cheque, which may keep body and soul together but does not in itself help someone to make a new start—to seek out retraining or to build a new career.”
“My right hon. Friend is a skilled linguist, fluent in several languages, and I am sure that that helps him learn what is happening in other countries. Employers and trade unions have raised his point with us, comparing the package that we are making available with that in other countries, which can include a wage subsidy scheme for several months to try to stave off redundancies. I cannot announce today that we will launch such a programme—there are several other issues to consider, for example, deadweight costs of supporting employment that may disappear in a few months—”
“Friend the Member for Chorley did not refer, but which has an important effect on how the uprating works, and has been influential in increasing the weekly limit by £40 over the past two years. After the weekly limit is worked out, and inflation is included, the resulting number is rounded up to the nearest £10.”
“When we came into office in 1997, we were clear that the pattern whereby the upper limit had increased by only £5 a week over the previous six years, and by only £100 over the whole of the 18 years for which the Conservatives held office, could not continue. In times of trouble, employees were missing out on much-needed help. The Government were anxious to address that situation, but in a way that did not put substantial new costs on to either employer or taxpayer. We wanted to insert a greater degree of fairness into the system. Therefore, in 1999, we introduced an annual uprating formula. That increases the weekly limit each year, in line with the retail prices index. However, the matter is not as simple as that, because an additional benefit is built into the system for employees, to which my hon.”
“In 1990, the rebate was abolished altogether. This matters to our discussion. Apart from the increase in the overall limit and reduction in respect of average earnings, what has happened over time is that the costs of the statutory redundancy scheme have in many ways shifted from the state to employers themselves, with the exception—I shall say more about it in a few moments—of where there is an insolvency and the state ensures that people do not lose out on their statutory payments by making payments out of the national insurance fund. For redundancies that do not revolve around insolvency, however, most costs are today shouldered by the employer.”
“Friend is pushing us to do more through his Bill, I am sure he would agree that Labour’s record in the past two years of a £40 a week increase is significantly better than that of the Conservatives—even if we take inflation into account—who, over six years, confined the increase to £5 a week. In tandem with the decline in the real value of the statutory redundancy limit, there has also been a gradual reduction in the rebate, which we have not discussed today, although it was an important aspect of the system when it was first introduced. At that time, the Government covered 77 per cent. of the costs. This rebate then fell to 50 per cent. in 1969, then to 41 per cent. in 1977 and subsequently to 35 per cent. in 1985. At that point in the mid-80s, the rebate was paid only to firms with fewer than 10 employees.”
“That is the difference arising from the different forms of earnings and the operation of the statutory limit. I have talked about the change in the statutory weekly limit over the years, and I believe that Governments of both colours have probably let the real value of the limit slip, but I think that this Government’s record over the past 12 years stands in stark contrast with that of the Conservative Government who preceded us. In fact, over the six years from 1991 to 1997, the limit increased by only £5 a week, whereas in the past two years under this Government, it has increased by a total of £40 a week. Clearly, we have a very different approach to these issues. Although my hon.”
“Our worker has eight years of service past the age of 42, which means he is entitled to one and a half weeks’ pay for every year of service, so he would receive 12 weeks’ pay at £350 a week. In addition, he has served for 12 years below the age of 41, for which he is entitled to a further 12 weeks’ redundancy pay—again at £350 a week. This 50-year-old’s redundancy payment, then, would reflect a total of 24 weeks’ pay, which, multiplied by £350, comes to £8,400. However, if the same worker earns below the £350 limit, he will have his redundancy pay calculated on his actual weekly earnings rather than according to the £350 limit. If our 50-year-old were to earn not £500 as in the earlier example, but £250 a week, we would take his 24-week entitlement and multiply it by £250, which comes to £6,000.”
“Workers receive half a week’s pay for every year of service up to the age of 21. They receive one week’s pay for every year of service between the ages of 22 and 41 and one and a half weeks’ pay for every year of service from the age of 42. A total of up to 20 years of service can be counted. Perhaps the easiest way to understand how the system works is to take a practical example. Let us imagine a worker aged 50 who has just been made redundant and who has 20 years of service in the job. Let us say that the worker earns £500 a week—that figure has been quoted as the ceiling that we should raise the payment to, but I will leave that aside for the moment. Under the scheme that we currently operate, his statutory pay would be capped at the £350 limit that exists today.”
“That was at a time of significantly higher inflation than we have now. From 1979 to 1997—the 18-year period in which the Conservative party was in power—the overall payment went up from £110 to £210. We have made far more significant increases in the statutory redundancy limit since we came into power. When we came in, the limit was £210. The current level is £350. I am sure that my hon. Friend would acknowledge that the progress made by the Labour Government in that regard has been significantly better than the Conservative party’s record of increasing the limit by £100 during 18 years in government. Later I will say a little more about the formula by which the limit is increased. At the heart of the structure lie two elements: the number of weeks of service and the worker’s pay.”
“That is the context of the scheme, and that aim made sense when some industries had protection and some did not. At the heart of the statutory redundancy payment scheme lie two elements. First, the calculation begins by working out the number of weeks of service that are payable. Secondly, the amount of the redundancy payment is calculated after taking into account the worker’s pay and the limit in the scheme. At the heart of the Bill before us is the issue of the statutory upper limit, so it is interesting to note how it has changed—or not changed—over the years. As my hon. Friend the Member for Chorley said, when the scheme was first introduced, the limit was set at £40, where it remained for nine years. Only in 1974 was it raised, to £80, where it stayed for a further four years.”
“What we now regard as the fundamental purpose of redundancy schemes—to help with hardship after workers become unemployed and reward them for length of service—was perceived as a secondary consideration at the time compared with labour mobility. The redundancy scheme was seen very much as an economic measure and a cornerstone of the Wilson Government’s attempt to harness the infamous white heat of technology. It is important to recognise the context of the statutory redundancy payment scheme. As we know, Prime Minister Harold Wilson wanted to modernise the country and modernise industry. He wanted a scheme that would allow people to move from industries that were in decline to industries that were growing. He saw a statutory scheme as an important way of underpinning that.”
“of employees in manufacturing industry were covered by redundancy schemes, although most nationalised undertakings and the public sector had them. It was felt at the time that it was important to plug the gap in the country’s employment structure to encourage workers to be prepared to move from one industry or part of the economy to another. Obviously, we understand that workers might have been reluctant to move from an industry, which offered redundancy protection to another, which did not. The Dunnett committee concluded that the purpose of further action on redundancy should be to encourage greater efficiency in industry and contribute to economic growth.”
“The committee’s terms of reference were: “To examine how far existing provisions by Government and industry for meeting the problems of redundancy are adequate to promote the mobility of labour necessary for economic efficiency and to provide security to workers.” The Dunnett committee based the theoretical justification for redundancy payments on two grounds, one economic and one social, of which the former was held to be overwhelmingly more important. The aim was to induce redeployment from overmanned to undermanned undertakings rather than, as we might naturally assume, purely to assist with financial hardship. In other words, it was a labour mobility rather than purely a social welfare measure. In the early 1960s, before the scheme was introduced, industry operated voluntary redundancy systems. Only around 15 per cent.”
“In that context, it is important to examine the history of statutory redundancy pay and how it developed. As my hon. Friend the Member for Chorley said, the principles of the scheme that we are discussing were devised in 1965, when Harold Wilson introduced the first statutory redundancy payments. The principles were embodied in the Redundancy Payments Act 1965 and essentially formulated in the report of an interdepartmental committee on redundancy, which was appointed in January 1963 under the chairmanship of Sir James Dunnett.”
“I am happy to accept your guidance, Madam Deputy Speaker. As I said, our package of support for people who face redundancy includes extra help with mortgage payments after three months. Most people who lose their jobs manage to find another in six months, so the support is important to help people keep their home. One of the worst things that can happen when someone is made redundant is losing one’s home, too. We are keen to minimise that and to offer help so that it does not happen in any more cases than absolutely necessary through a long-term inability to keep up with the mortgage. The Bill deals specifically with redundancy payments and a fair deal for those who face redundancy. How we ensure that those who are made redundant are properly and fairly rewarded for their service is a fair question to pose to the House and the Government.”
“Friend puts forward is that it might have the effect of reducing redundancy pay. That is not his intention, and I do not accuse him of it for a moment. He will agree that we would not want to replace the current formula with one that would cut redundancy pay.”
“I acknowledge what my hon. Friend says from a sedentary position. I am sure that he agrees, however, that it is an important feature of the system. It might not sound significant, but it means that the weekly limit has almost tracked average earnings for the past 10 years. In fact, for the past three years, the limit has increased by 6 to 7 per cent., which is well above average earnings in the same period. One of my concerns about the Bill is that had it been operation for the past few years, redundancy payments might be lower than they are. The Government’s current formula to increase redundancy payments by the RPI, rounded up to the nearest £10, has produced increases greater than average earnings in recent years. Therefore, one caution about the formula that my hon.”
“When we have introduced the upratings and other measures that I have mentioned, relating to paid leave, to flexible working or to other areas of the economy, we have done so because of a basic belief in fairness. Our statutory measures are not just favours to trade unions, as has been suggested; they arise from a belief in basic fairness in the workplace, which should apply in all cases.”
“The hon. Member for Huntingdon suggested, erroneously—and even the hon. Member for Solihull (Lorely Burt) made similar suggestions—that our action on redundancy pay was designed to please a sectional interest group. That is not true. Statutory redundancy pay is designed to protect workers who lose their jobs, whether or not they are trade union members, and to ensure—especially in cases of insolvency—that those with long years of service do not walk away with nothing. I do not believe that that constitutes acting in support of a sectional interest. It has nothing to do with the funding of the Labour party—that is an accusation that I would completely reject—but it does provide a measure of decency and fairness in the workplace.”
“I hope that I am not being disingenuous. What I am trying to do is explain the possible unintended consequences of my hon. Friend’s suggested formula. Even if it reflected both average earnings and the RPI, I do not think that it would include the uprating to the nearest £10 which has proved so beneficial in the last couple of years. In fact, I would be cautious about accepting either of the formulae that the Bill suggests. As I have said, had either been in operation in recent years there would be a lower weekly limit than exists at present, whereas the interplay of the link with the RPI and the uprating has produced increases of about 6 to 7 per cent. Another part of the context of the Bill is what we said in our manifesto, to which both my hon. Friend and the hon. Member for Huntingdon referred. We do take that argument seriously.”
“Member for Solihull and the backers of the Bill is to increase statutory redundancy payments, I am simply pointing out that the current formula has done that with some effect in recent years. Let me move on to what we said before the last election that we would do. I know that my hon. Friend the Member for Chorley is a right and fair man—most of the time—and he said we should increase statutory redundancy pay. In the light of that, earlier in this Parliament we introduced a provision in the Work and Families Act 2006 to make a one-off uprating to the limit through affirmative regulations. I think that that was attacked by the hon. Member for Huntingdon, who is not in his place at present.”
“I can answer that in two ways. Is the hon. Lady suggesting—as I think she did when she used the word “paymasters” in her speech—that our action on pensions was intended to please trade unions, or anyone who funds the Labour party? That would be completely untrue. We took action on pensions because after a number of years it was clear to us that we had lifted about a million pensioners out of poverty by concentrating help on those with the lowest incomes. The time was right to provide a general uplift. One of my reservations about adopting the Bill’s proposal is the one that I expressed a moment ago. The current formula increases redundancy payments in line with RPI, rounded up to the nearest £10, and, as I have said, has resulted in a higher increase than the formula in the Bill would produce. If the concern of the hon.”