Catherine has been sitting as a member of the Committee which has scrutinised the Government’s Enterprise Bill line by line, before it returns to the Commons for its Third Reading and Report Stage shortly.
The Enterprise Bill contains provisions on a wide range of different issues, and Catherine has spoken during the Committee sessions on key issues for Newcastle North constituents, including proposals to extend Sunday trading laws and plans to cap public sector exit payments which could affect people who have provided many years of service on modest pay. Both speeches can be read below.
Catherine also questioned the Minister on plans for a new Small Business Commissioner in earlier Committee sessions, which can be read here.
Sunday trading
Catherine McKinnell: It is a pleasure to serve under your chairmanship, Sir David. I am keen to add my voice to those who share deep concern about both the substance of the changes and how they have been introduced by the Government. I do so on behalf of shop workers in my constituency and across the country who are interested in the issue, small businesses and convenience stores in my constituency and across the country and the large number of people who, whether due to religious faith or otherwise, feel strongly that Sunday should be kept as a special day for faith, community or cultural reasons.
It is important to put it on record that although I speak on behalf of a wide range of people, I have a personal interest in the issue in that my husband works in retail, and the changes will have a direct impact on my family. I wanted to declare that interest. It is clearly not financial, but although I am not speaking about my personal experience, it informs my understanding of the impact that the changes will have, particularly on shop workers and communities throughout the country. I hope that it helps inform the debate as well.
There is a big question remaining in my mind, having heard the Minister introduce the proposals and my hon. Friend the shadow Minister make a strong speech setting out clearly why the Government have not made the case for the changes. I genuinely cannot understand why the Government are introducing them, why they are necessary and why they think that they are a good idea. We have a more than 20-year-old compromise on the issue, and the overwhelming consensus is that the public support the current arrangements. A recent Populus poll showed that 67% of the public, or two thirds, support the current rules about trading hours on a Sunday. Another poll by Ipsos MORI back in 2012 found that more than half the public actively oppose any extension to the Sunday trading hours. There is a clear level of consensus about the trading hours that the balance is about right.
The Government argue that this is about localism and giving local areas the opportunity to grow, create more jobs, be more competitive in an increasingly online world and reinvigorate high streets, but the truth is that without any proper consultation or results from that consultation published by the Government, the evidence available to us on whether those claims and intentions stack up shows that it will achieve quite the opposite.
Even large retailers, which the Government claim will benefit from the changes, share many of the concerns. Asda, for example, has admitted that it hopes that the changes to the Sunday trading hours will be dropped altogether, because it has concerns about the workability of the proposals. Other retailers worry whether there will be enough of an uplift in demand to justify the extra costs incurred through longer opening hours. My hon. Friend the shadow Minister clearly outlined the question about the cost-benefit analysis of extending hours for the same amount of trade.
Perhaps the biggest worry for large retailers is how they will cope with the complexity of hundreds of different rules for different stores throughout the country about when and for how long they can open on Sundays. One big supermarket group recently told The Times:
“This is all becoming more and more opaque. The government says it is trying to cut red tape but now it wants to give local councils this subjective ability to pick and choose which areas can have extended trading, and who will benefit from that. It all seems a bit of a shambles…and the data the government is using to support its argument is from 2006 before the recession.”
Surely the new clause flies in the face of the Government’s deregulation agenda, which we considered earlier. Will the Minister clarify whether the Government have undertaken an impact assessment, and whether they will publish it, on how the new clause will affect the Government’s business impact target, which requires Ministers to consider the economic impact of statutory provisions on businesses?
The Government claimed that this change will boost high street footfall, but what of the economic impact on businesses that will have to comply with tens, if not hundreds, of different regulations and Sunday trading restrictions? Far from cutting red tape for businesses, devolving powers over Sunday trading will do the opposite. Businesses large and small agree, and have expressed their concerns about that.
As my hon. Friend the Member for Sefton Central said, the best and only test we have of the effect of extending Sunday trading hours is their temporary relaxation during the 2012 Olympics. He talked about the difference between the retail sales in July, August and September, when that temporary relaxation was in force, and those of the earlier months of May and June, when the restrictions remained in place. ONS figures show that the level across all of those months was the same as the previous year, which calls into question the claim that extending Sunday trading hours will bring an increase in trade. It will, however, increase retailers’ costs.
Although the case for extending Sunday trading hours based on the economic impact on businesses is far from certain, it will have a big impact on small shops and convenience stores. The London Olympics give a useful indication of the impact that a permanent relaxation might have on small businesses and convenience stores, which play a vital role in all of our communities not only by providing post office services, which we have discussed, but by being available as a convenience—hence the name.
My hon. Friend referred to the Oxford Economics study that found that, as a result of the temporary relaxation during the Olympics, convenience stores within 1 mile of a supermarket lost £1,300, or 3.4% of their weekly sales. That evidence is very different to anything the Government have cited in support of the changes. I would be surprised if hon. Members on both sides of the House are willing to support their wish and hope—I have a dream, to go back to the Abba bingo—over the clear evidence from past experience that shows that the change will damage convenience stores and could cost the sector up to 6,500 jobs, far outweighing any projections for the jobs that may be created in the larger stores.
Mary Creagh: My hon. Friend made an interesting point earlier—I have been reflecting on it during her speech—about the risks to the retail sector, and in particular to the large stores. The sector does not have a unanimous opinion on this issue. A risk that has been raised is that if one store opens, causing every other store to feel that they have to do the same, they will end up becoming less profitable because there will not be enough footfall. Perhaps people in Wakefield do not want to go shopping or whatever else at 9 o’clock on a Sunday morning. They might be having a well-deserved lie-in or taking the dog for a walk
Catherine McKinnell: Indeed. My hon. Friend makes an important point. [ Interruption. ] The Minister from a sedentary position keeps repeating the mantra that it is not obligatory. Is that what she is saying?
Anna Soubry: It is not compulsory.
Catherine McKinnell: The Minister says that it is not compulsory, but she seems to misunderstand completely the nature of market forces and retail competition.
Bill Esterson: She has never played dominoes.
Catherine McKinnell: As my hon. Friend says, perhaps the Minister has never played dominoes.
Jo Churchill: Will the hon. Lady give way?
Catherine McKinnell: I will happily give way to the hon. Lady, who has already given us a lecture on market forces. That would be very helpful.
Jo Churchill: Yes, I suppose it is about market forces again. Tesco convenience stores in places where there has been a lack of demand have dropped their hours back down, which indicates that, actually, it is not compulsory; it is up to the business to ensure that it optimises—[Hon. Members: “So why change the system?”] So larger ones have the choice. It is about choice.
Catherine McKinnell: I appreciate what the hon. Lady says, but the Government have a role and a responsibility to balance the interests of communities, the business community, local authorities and local planning decisions, which is where the debate was had 22 years ago when a compromise was struck. That compromise has worked and is sensible, and she has pointed out that some retailers have decided to drop back their hours where there is not enough demand. The difficulty with fully liberalising the retail legislation in this way is that it removes all of the current compromise that allows for that flexibility. Indeed, she makes the point that the current laws are working, and the Government have not submitted any evidence to justify why they need to change the system.
The Federation of Small Businesses and the Association of Convenience Stores, both significant voices for small businesses, are opposed to the measures. Small businesses are the backbone of the UK’s economy, making up 99% of the 5.2 million businesses in the country and employing more than 14 million people. Their voice should be heard, and the restrictions on Sunday trading play a vital role in supporting and sustaining our small businesses. Frankly, I am shocked that the Government seem to dismiss the concerns of small businesses so out of hand when they claim to be champions of small business, but we know that is not the case, and this proves it.
My final point is on the tens of thousands of people who work in the retail sector on Sundays for large retailers and who take comfort from the current arrangements, which enable them to go out to earn a living while still getting some time off with their family on a Sunday and retaining a semblance of a work-life balance. Surely the Minister can recognise that the new clause merely risks heaping more pressure on low-paid retail workers, for whom the Sunday restrictions are considered a fundamental right and protection. It is telling that his contribution to the debate so far was entirely focused on those workers being able to enforce those rights. A measure proposed by the Government that is focused entirely on how individuals and workers can enforce those rights highlights the issue and the difficult situation in which the Government are deliberately putting those workers.
Kevin Brennan (Cardiff West) (Lab): Would it be useful if the Minister clarified that point? We know the measure is controversial, and we will be returning to it on Report; lots of Government Members are also not happy with it. Even if the measures do not go ahead, will the enhanced workers’ rights be delivered by the Government because they think it is the right thing to do?
Catherine McKinnell: My hon. Friend makes an important point, and it would be useful to hear from the Minister that, even if the Sunday trading laws do not go ahead—the Minister should take on board the deep concerns on both sides of the House about the Sunday trading restrictions—he will still commit to the additional rights for workers to enforce the Sunday trading restrictions in their workplace.
Does the Minister recognise the concerns raised about work-life balance? He should address that issue, because it is a well-known aspiration of the Prime Minister to make the UK the most family-friendly country in Europe. Indeed, in 2014 he announced, to much fanfare, his family test, which says that
“every single domestic policy that government comes up with will be examined for its impact on the family… The reality is that in the past the family just hasn’t been central to the way government thinks. So you get a whole load of policy decisions which take no account of the family and sometimes make…things worse.”
I could not agree more. This has just come into my head, and I cannot resist sharing it with the Committee: in the light of the exchange at Prime Minister’s questions yesterday between the Prime Minister and the Leader of the Opposition, does your mother know?
Given new clause 21, under which thousands of retail staff face working longer hours on Sunday—a day when their children are not at school and that is often reserved for family and friends—what will happen to the Prime Minister’s aspiration? Has the family test been carried out and, if so, why has the result not been published?
A recent answer to a written question tabled by the hon. Member for Enfield, Southgate (Mr Burrowes), who is on the Government Benches, suggests that the Minister is “carefully considering” the issues raised in the consultation, and the Minister has promised to publish the family test result shortly. Once again, we are debating an issue without the Government coming forward with any of the information on which a decision should be made. If the Minister can enlighten the Committee now about the result of the family test and enlighten us on what the Government’s deliberations have been and the conclusions they have come to, that will help to inform the Committee—and, indeed, members of the public, who I know take a keen interest in these issues.
It is fundamental that we should be in possession of the facts before we make decisions on these issues. Members of the public who are watching will be astounded not only that this Bill, which started in the House of Lords, did not include Sunday trading in its title, but that the Lords have not been given an opportunity to consider that. We are now debating it in the Commons, still without any impact assessment or information from the Government on the evidential basis for why they are bringing these measures forward. I question whether this is sound policy making at all.
In the absence of a Government family test, we are left to rely on others to inform us about this policy. There is information from the Social Market Foundation. It has done some work on this issue and has found that Sunday working encroaches the most on couple and family time together; fathers who work on Sundays miss out on time with their children not just on Sundays, but throughout the week; and children whose parents have to work on Sundays often spend less time doing activities such as reading or undertaking hobbies. I remind hon. Members that the Government’s family test requires the Government to consider the following:
“What impacts will the policy will have on all family members’ ability to play a full role in family life, including with respect to parenting and other caring responsibilities?”
On the basis of the Social Market Foundation’s findings—the only evidence that we have—new clause 21 clearly does not meet that test, so I wonder whether, as well as speaking to the Minister with responsibility for high streets, the Minister has spoken to the Prime Minister about his failure to take into consideration the Prime Minister’s much-heralded family test when bringing forward this policy.
The Minister will no doubt point out, as he already has, that new clause 21 will strengthen the rights of workers in the retail sector and specifically their rights to opt out of Sunday working hours. It is very important that the shadow Minister has put on record a request for the Minister to confirm that, whether or not these Sunday trading laws go ahead, those rights will be enshrined in law. However, as the general secretary of USDAW has pointed out, the protections will mean nothing to many retail staff. He says:
“Many shopworkers find they are unable to use the current Sunday opt-out due to pressure from management and the possible loss of working hours, which most cannot afford. For these reasons the…so-called protections will mean little or nothing in practice.”
Although we are fighting for those protections to remain on the statute book for those few people who can take advantage of them, the message is clear that the majority of workers will not be able to take advantage of them, whether they are on the statute book or not, and therefore the change in the legislation should not go ahead. USDAW found in its survey of retail workers that 58% say that they are already under pressure to work on Sundays and they are not usually or never allowed a Sunday off, so although there is little comfort to be found in those measures, we would like to see them on the statute book none the less.
Sunday is a special day. It is often the only day of the week when families can be together and parents can spend time with their children. Thanks to the restrictions that have been in place for 20 years or so and that are broadly accepted by the public, even parents who work in retail on Sundays—I speak from experience—are able to enjoy the uniqueness of Sundays.
The measures in the new clause put all that at risk. It is far from certain that Sunday trading will create jobs and reinvigorate the high street. Indeed, the evidence shows it will have the opposite effect and will impact detrimentally on small businesses and convenience stores. It will unravel the Government’s deregulation agenda, heaping yet more bureaucracy on businesses, and it will impact on the ability of retail workers to enjoy a semblance of work-life balance, which we know so many families struggle with already.
I fully support the campaign to keep Sunday special, because I believe that the status quo, which has worked well for more than 20 years and gives everyone a little bit of what they want, should be retained. I will therefore vote against the new clause.
Public sector exit payments
Catherine McKinnell: It is a pleasure to serve under your chairmanship, Ms Buck. My hon. Friend the Member for Cardiff West, the shadow Minister, made a powerful speech to which I hope the Minister has listened. I hope we will hear about changes to the current proposals, and I hope that our logical amendments to what seems to be an irrational approach to dealing with a problem of the Government’s own making will be accepted. Ideologically driven cuts to the public sector have proved far more costly than the Government initially anticipated. We only have to look at the payments made as part of the top-down reorganisation of the NHS, which is estimated to have cost £1.6 billion in six-figure pay-offs alone to 1,000 highly paid officials. That goes some way to explaining the Government’s keenness to claw back some of those payments, or certainly to ensure that that does not happen in future. They appear to be trying to slam the gate shut after the horse has bolted.
Nobody questions the logic of what the Government are trying to achieve in trying to prevent significant pay-offs. However, it seems to be a sledgehammer to crack a nut approach. In my former role as shadow Attorney General, I came across examples in parliamentary questions to the Department that tried to uncover similar practices in the Law Officers Department. The Crown Prosecution Service had spent £83 million since 2010-11 on redundancy packages, and 24% of that went to just 153 individuals who received redundancy payments in excess of £100,000 each.
No one is questioning the principle behind what the Government are trying to achieve. They have clearly said that the measure is aimed at the highest paid officials, but in reality it will hit the redundancy packages of ordinary civil servants on modest wages—even some on wages below the national average—who have given long years in public service. It would, for example, hit a worker on just £24,611 who had worked for 34 years and was over 50.
When their lordships considered the proposal in Grand Committee, my noble Friend in the other place, Baroness Hayter, asked:
“Is this just a rather nasty, crafty little device that they have alighted on simply to help to reduce the deficit, given that the Chancellor seems to be having difficulty with it, by hanging that deficit around the neck of their own employees? Or is this just mistaken drafting, which the Minister will be happy to amend on Report?”—[Official Report, House of Lords, 4 November 2015; Vol. 765, c. GC359-60.]
Unfortunately, the answer given seemed to indicate that it was not a mistake, that it is the Government’s intention and that they do not intend to amend the measure. I very much hope that the Minister tells us something else today. It would be good to hear from her that the Government have taken on board some of the concerns about the impact of the measure. I hope that they will accept the amendments we have tabled or give some indication that they will amend the clause themselves, as they seem happy to do with other clauses. That does seem to have caused confusion with voting in Committee.
I have received a number of representations from extremely worried constituents. Large number of civil servants work in Newcastle, and they are concerned about the impact that the clause will have on very average earners, some of whom are on less than £25,000. Thousands of civil servants work for Her Majesty’s Revenue and Customs and Department for Work and Pensions in Benton in Newcastle, and I have been contacted by a huge number who say that they are concerned about the unfairness in how the cap is being implemented. They want to see it brought more in line with the promises made by the Government before the general election.
The cap should impact on only those highly paid workers who the Government said they were seeking to target, and not on those on modest salaries. Does the Minister recognise those concerns, which are being raised by Members of this House and members of the public? Does she agree that the proposals in clause 35 will inadvertently hit long-serving civil servants on very modest salaries? Or does she consider them all to be fat cats, as they seem to have been characterised in previous comments?
My constituents have also pointed out that their terms and conditions and exit packages were already significantly altered by legislation passed in the previous Parliament. When the changes were introduced by the civil service compensation scheme in 2010, the former Cabinet Office Minister, now Lord Maude, described them as fair for the taxpayer and right for the long term. Given that we are looking at the matter again today, it would be useful if the Government recognised that their approach is deeply disconcerting and in many ways discourteous to public sector workers, who ultimately feel that their contract with the Government is being broken in a manner that is not well considered or thought through.
Alternatively, if the approach is well considered and thought through, it certainly appears to be an abuse of power by the Government. The Minister has placed great emphasis on provisions that allow for special exemptions from the cap, but she has not provided sufficient information as to how and where those exemptions will apply, and that concern is very much shared by employees in the private sector and in the public sector, who will be impacted by the changes. Will she give some consideration to the concerns that have been raised not only by the shadow Minister, very eloquently, but by the hon. Member for Livingston and by constituents and public sector workers up and down the country who want a fairer approach from the Government?