2019 06 – Parliamentary Notes

Parliament Notes

Dick Barry

Trade Union (Access to Workplaces) 15 May 2019

Motion for leave to bring in a Bill (Standing Order No. 23)

Faisal Rashid (Warrington South) (Lab) I beg to move,

That leave be given to bring in a Bill to remove certain restrictions on trade unions conducting business in workplaces; and for connected purposes.

Article 11 of the European convention on human rights states:

“Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests”, or her interests.

At present, there are almost 6.5 million trade union members in the UK, making trade unions this country’s largest voluntary and democratic organisations. Trade unions are on the frontline every day, fighting poverty, inequality and injustice, and negotiating a better deal for working people. Their role has never been more critical than it is today, as in-work poverty is on the rise and zero-hours contracts are widespread. British workers face an uncertain and exploitative job market, while it is boom time for large multinational companies.

I have spoken to union officials who have been prohibited by companies like McDonald’s from efforts to unionise their workforce. Employees have been banned from visiting other McDonald’s stores. Union members from the Bakers, Food and Allied Workers Union have recounted stories like that of Mohamed, a worker from north London, who was excited at the prospect of working alongside his colleagues to improve basic things at work, like getting his shifts 10 days in advance so that he can plan his life. Because of these efforts, he was informed by the management that he is banned from every McDonald’s store in the area. Union staff visiting McDonald’s across the UK to speak to workers about the benefits of joining a trade union are being routinely thrown out of stores and having their presence reported to senior regional managers.

Workers at Amazon have reported shift patterns being interrupted and randomised simply to prevent staff from talking to union officials on the way into work. In a members’ survey of workers conducted by the GMB, one Amazon worker described employment there as like “living in a prison”. The strict targets that are imposed on staff mean that 70% feel as though they are given disciplinary points unfairly, while 89% believe that they are being exploited. In its recently published report on InterContinental Hotels Group, Unite documented a culture of fear and bullying, with management pressurising low-paid staff into working for eight to 10 days straight. IHG employees and subcontracted employees have been routinely denied the right to freedom of association and have stood little chance of exercising their right to collective bargaining. Union members are vulnerable and live in fear of reprisals from their employer.

Bupa is one of the largest and highest-profile providers of residential social care in the UK and part of an international health group that serves approximately 32 million customers in 190 countries. It consistently refuses to allow Unison officials access to workplaces to speak to staff and members regarding union rights and representation. During 2017 and 2018, Unison North West regional officers were banned from every Bupa work location, despite assurances that visits could be conducted at the employer’s convenience and with due regard to operational and safeguarding concerns and priorities. In a sector where shift work and long hours are prevalent, and where many care workers also have significant caring responsibilities at home, the workplace is often the only place for the union to engage with workers. Bupa’s denial of access in this case is effectively a refusal by the employer to allow workers to organise a union.

I could go on: I have heard countless stories like these from union officials. As long as these practices are widespread, this country’s commitment to the human right to form and to join a trade union is hollow and meaningless. Why are our democratic trade unions being treated in this way, and why is the human right to join and form trade unions being denied? In part, it is because under current legislation there are no rights of workplace access for trade unions. In the words of one IHG union member:

“In order to exercise our basic human right to freedom of association, workers in the UK need our employers to provide facility time and a space within our workplaces for reps and members to meet and discuss work related issues.”

This is not a far-fetched, unrealisable demand—it is achievable, and I hope that my Bill can achieve it.

In New Zealand, under its Employment Relations Amendment Act 2018, unions have far greater access to workplaces. Workers can speak to union reps visiting the sites. The company provides a space for the union and worker to meet and pays the worker for a reasonable amount of time with their union rep. This, in turn, leads to higher union membership, higher wages, and more just and fair workplaces. Trade unions in the workplace are normalised, leading to a less adverse attitude to working people’s right to represent themselves. Under this legislation, all that is required is that the union provides a short period of notice that they will be visiting the site, allowing management to add the extra staff member required for the duration of the visit. This means that there is no disruption to the business while ensuring that workers’ legal and human right to join and form a union is adhered to. New Zealand’s Employment Relations Amendment Act has restored protections for workers, especially vulnerable workers, and strengthened the role of collective bargaining in the workplace.

If we are to transition away from a low-wage, precarious economy, increasing the collective bargaining power of workers is critical. It is a myth that strong trade unions drive down profit—I emphasise that point. A happy, well-respected workforce is also a productive workforce. I know this from my own experience as a union rep at NatWest. Being able to represent and support my colleagues gave me a clear sense of the value of strong union representation in the workplace. My colleagues felt valued and supported, and as a result provided an efficient, professional service. That is what trade unions are all about: bringing people together to work towards a common goal. The stories I have heard from union officials paint the opposite picture: too many British workers feel exploited and dispensable. By expanding trade union access to workplaces, we can restore dignity​and respect at work, and put an end to the exploitation and misery we see on the rise today. We need strong trade unions and a better deal for working people.

Question put and agreed to.

Ordered, That Faisal Rashid, Laura Pidcock, Ian Lavery, Caroline Lucas, Grahame Morris, Chris Matheson, Ruth Smeeth, Justin Madders, Helen Goodman, Danielle Rowley and Angus Brendan MacNeil present the Bill.

Faisal Rashid accordingly presented the Bill. Bill read the First time; to be read a Second time tomorrow and to be printed (Bill 391).


British Steel 22 May 2019

The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)

With your permission, Mr Speaker, I would like to make a statement about British Steel.

It was announced this morning that the court has granted an application by the directors of British Steel to enter an insolvency process. Control of the company will now pass to the official receiver, an employee of the Insolvency Service, who will run a compulsory liquidation. The official receiver has made it clear that British Steel employees will continue to be paid and employed, and the business will continue to trade and to supply its customers while he considers the company’s position. In fact, employees were paid early, with the May payroll being run yesterday through cash being advanced by the company’s lenders.

As the House will recall, I made a statement on 1 May setting out details of a bridging facility that the Government agreed to provide to ensure that British Steel was able to meet its obligations under the EU emissions trading scheme, which fell due on 30 April. The Government provided the facility to purchase allowances worth £120 million against the security of 2019 ETS allowances, which are currently suspended pending ratification of the withdrawal agreement.

Without this facility, British Steel would have faced a financial pressure of over £600 million—the ETS liability, plus a £500 million fine. This would not only have placed British Steel in an insolvent financial position, but the charge attached to its operational assets would have been likely to prevent any new owner from acquiring these assets in the future. This transaction demonstrated the Government’s continuing willingness to work closely with all parties to secure the long-term success of this important business.

Following this agreement, the Government have worked intensively with the company for many weeks to seek solutions to the broader financial challenges it has been facing. The Government and individual Ministers can only act within the law and this requires that any financial support to a steel company must be made on a commercial basis. In the case of the ETS facility, this was based on the security of future ETS allowances.

To provide liquidity to the business in the face of its cash-flow difficulties the Government were willing to consider making a cash loan to the company and worked hard to investigate exhaustively the possibilities. However, the absence of adequate security, no reasonable prospect that any loan would have been repaid and the shareholder being unwilling to provide a sufficient cash injection itself meant that this did not meet the required legal tests.

I am placing in the Library the accounting officer’s assessment of these proposals, drawing on professional and legal advice, which concludes:

“It would be unlawful to provide a guarantee or loan on the terms of any of the proposals that the company or any other party has made or any others we have considered. You must note that such an offer cannot be made legally and that by making it you would be in breach of the Ministerial Code.”

The insolvency removes Greybull from day-to-day control of British Steel. Given the Government’s willingness to help secure British Steel’s future, demonstrated in the ETS facility, and the discussions that have taken place in recent weeks, the Government will work closely with the official receiver and prospective new owners to achieve the best outcome for these sites.

The Government have provided an indemnity to the official receiver, who is now responsible for the operations. We will take every possible step to ensure that these vital operations can continue, that jobs are secured and that the sites at Scunthorpe and Skinningrove and on Teesside continue to be important centres of excellent steel-working. During the days and weeks ahead, I will work with the official receiver, the special managers and a British Steel support group of trade unions, management, suppliers, customers and the local communities to pursue remorselessly every possible step to secure the future of these valuable operations.

This is a very worrying time for everyone associated with British Steel. Each one of British Steel’s sites has a proud record of steelmaking excellence, and I am determined to see it continue. Britain and the world will continue to need high-quality steel, and British steel is among the best in the world. Today is a very big setback for these operations, but it is far from being the end and we will take every step possible to secure a successful future for these vital assets, both people and plant.

Rebecca Long Bailey (Salford and Eccles) (Lab) I thank the Secretary of State for advance sight of his statement.

This is indeed very worrying news for the workers, their families and the communities who rely on British Steel directly in Scunthorpe, Skinningrove and Teesside and all the way through the supply chain. At least 25,000 people will be worried sick this morning, wondering whether they will have a job this time next week.

As the Secretary of State knows, however, the sector is critical to our manufacturing base and is strategically important for Government procurement from rail all the way through to defence. It is therefore imperative, given that the Government now have some control via the official receiver, that this business is stabilised and confidence is given to customers, workers and businesses right across the supply chain. The message from the Government today must be that British Steel is one of the linchpins of our industrial strategy and to that end they will move heaven and earth to ensure business as usual continues.

It is reported that the owner, Greybull Capital, was asking the Government for a loan of £30 million. The shadow Minister for steel, my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), asked for more information yesterday, but we were given none. Can the Secretary of State confirm today what the asks of British Steel were in the negotiations? Were they just the reported £30 million or was that part of a wider package of measures to support steel production?

I welcome the publication of the accounting officer’s assessment, but can the Secretary of State confirm Greybull Capital’s reasoning in asking for a loan, while reportedly being unwilling to put money on the table and simultaneously investing over £40 million in a French steelworks last week?

The Secretary of State has said in his press statement today that he will “pursue remorselessly every possible step to secure the future of the valuable operations in sites at Scunthorpe, Skinningrove and on Teesside”​

and I welcome that. I also welcome the indemnity he has referred to, but can he outline exactly what other possible steps he will be pursuing in the coming days? Do they include bringing British Steel into public ownership as Unite the union and the Labour party have called for? Do they include discussions with other interested stakeholders to examine options for saving the company, including with Network Rail, which procures 95% of its rails from the Scunthorpe site? It is clear that we simply cannot countenance warm words and no real action as was the case with the SSI steelworks almost four years ago.

The truth of the matter is that the cost of British Steel collapsing is far greater than any short-term outlay the Government must make now. The Institute for Public Policy Research has estimated that British Steel’s collapse could lead to £2.8 billion in lost wages, £1.1 billion in lost revenue and extra benefit payments and that it could reduce household spending by £1.2 billion over 10 years. This is a significant economic disturbance, if the Secretary of State would like to dust off his state aid handbook.

We know Network Rail sources 95% of its rails from Scunthorpe. Last year, Network Rail signed a £200 million contract with the company. The loss of this supply could have serious consequences for Network Rail’s cost base and the quality of the steel used to maintain and upgrade the British rail network. Notwithstanding the great commitment by Network Rail to British Steel, however, we also know the Government’s wider public procurement of UK steel has been disappointing, with only 43% of steel used in Government projects traced to firms based in the UK, according to UK Steel analysis. So will the Secretary of State confirm today what steps he is taking to positively procure British steel for more of our key infrastructure projects?

Finally, there is no doubt that the UK steel industry is in a difficult place. Uncertainty about future trade with the EU and the dangling prospect of no deal are having a severe impact. Domestic issues like uncompetitive electricity prices, business rates and lack of support for steel in the so-called industrial strategy are also undermining the sector’s ability to compete, but UK steel has a proud history in the UK and there is no reason why this cannot continue. The ball is in the Government’s court: they can take action now to save British Steel and support the wider industry, or they can accept that their legacy will, yet again, be industrial decline. We in the Opposition know which side of history we want to be on, and I hope the Secretary of State wants the same thing.

Greg Clark I am grateful to the hon. Lady for the spirit in which she approached her response to the statement, recognising that there is a total common purpose across both sides of the House to provide the confidence for new investors to be able to take on these assets, and we all, wherever we sit in this Chamber, want this to be a change of ownership rather than something that puts a stop to steel production.

The hon. Lady was right to refer to SSI, and she will recall—as will her colleague the hon. Member for Middlesbrough (Andy McDonald)—the situation with Corus in 2010. One thing we know about steel assets is that they are not like other kinds of facilities; once they close, it is very difficult for them to come back into life. So it seems to me that we have a special responsibility to make every effort to ensure there is no interruption whatsoever in production. That is my purpose, and I see it reflected in what the hon. Lady said.

I agree with the hon. Lady about the strategic importance of steel. It presents a strategic opportunity as well, because this country and the world will always need steel and British steel is among the best in the world, so we should be looking to supply it. I think my commitment was demonstrated in the move I made to provide £120 million to make sure that the liability under the ETS was addressed. Crucially, if we had not removed that liability, it would have hung over the assets, preventing any new partner from taking them on.

The hon. Lady also asked about the reports of the £30 million facility. The assessment of the accounting officer gives more information on that. In fact, that £30 million was not for a permanent refinancing of British Steel; it was a contribution to an administration only. The assessment was that the contribution from all parties would not be enough to withstand the cost requirements during that administration. She will see clearly set out the assessment of the proposals that were given. I have been exhaustive in pursuing the possibilities with British Steel over many weeks. If she is in government, she will find that she is obliged to follow the ministerial code, under which we are not allowed to make a decision that would be illegal, immensely frustrating though it is. I would have much preferred to have given the opportunity of this loan rather than go down the route that has been taken, but that is the requirement and there is no possibility of setting that aside.

On the motivation of Greybull in investing its cash in other facilities in France, one of the requirements in the case of any company failure is that the official receiver conducts an investigation into the reasons for the failure and the lessons to be drawn from it. I very much look forward to seeing the official receiver’s report. I dare say that the Chair of the Select Committee will also want to inquire closely, on behalf of her colleagues, into this as well.

On the question of new possibilities, I understand that there are buyers who have already made contact. The hon. Lady is right to say that important stakeholders such as Network Rail, which has been very supportive in recent weeks and has pledged to continue to be supportive, will work together. That is why I have invited everyone with an interest in this, including colleagues on both sides of the House, to work together so that we can make a demonstrable and clear case that the cross-party and cross-House of Commons consensus that reflects the importance of the steel sector is available to any new investor.

Finally, I agree with the hon. Lady’s assessment, relating to the report she mentioned, that the consequences are important not only for the workforce and those in the supply chain, vital though they are; they are also important for whole communities and indeed for the country. This furthers my resolve, which I know she shares, to do everything we can in the days and weeks ahead to ensure that there is continuity in these operations.