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Commons Chamber

Volume 489: debated on Friday 13 March 2009

House of Commons

Friday 13 March 2009

The House met at half-past Nine o’clock


The First Deputy Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3).

Statutory Redundancy Pay (Amendment) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

Today is an interesting day—Friday the 13th, red nose day. I hope that we do not have too many red faces on the Front Bench, let alone red noses. I am disappointed that, despite what seemed to be—and what I hoped would be—the sympathetic line being taken by my Government, some strange tactics were being used earlier in the week. Letters in the name of the Whip have gone out to certain Members asking them to come and speak against the Bill. I find that quite appalling and quite underhand. It is a very strange thing to do, especially when the Minister and I were still in negotiations on the Bill and had not yet met to come to an agreement. For somebody to prejudge those discussions is quite appalling, so I hope that there are some red faces.

As my hon. Friend knows, I am a regular attender on Fridays. I have read no letters of that kind and I can assure him that I will not try to talk his Bill out.

I thank my hon. Friend for that assurance. I just hope that other hon. Members will do the same.

The Bill is important and I thank the supporters who have turned up today. It is a Bill—and a campaign—that matters. I would like to thank in particular the major trade unions and the smaller trade unions that have backed the Bill and worked tirelessly with their members to raise the profile of the issue and to rally support among MPs. I would also like to thank our people in the party who made the issue a manifesto pledge. We all stood on that manifesto, and it is one that I am proud to stand by, but it seems that some people wish to drop that pledge along the way. I find that very strange.

I would like also to thank the 178 colleagues from all parties who signed early-day motion 699 on the issue and the 11 colleagues, also from all parties, who have sponsored the Bill. There is cross-party support for the Bill, so it seems strange that the Government oppose it, but there we are. I thank the Secretary of State for Business, Enterprise and Regulatory Reform and the Minister for Employment Relations and Postal Affairs for meeting me to discuss the matter. In fact, we were still discussing it on Wednesday evening, because we had not reached agreement. We tried to change the Bill. We wanted to be amiable and remove any ambiguity from it, so for somebody to decide to try to scupper it while discussions were taking place is quite unacceptable.

I congratulate my hon. Friend on introducing the Bill. My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) and I have been in the same position, with regard to temporary and agency workers. Does my hon. Friend agree that it would be a great shame if any hon. Member voted against a closure motion or against Second Reading, particularly any hon. Member on the Labour Benches? They do not have to vote against the Bill.

My hon. Friend is absolutely correct. The Temporary and Agency Workers (Equal Treatment) Bill ended up being opposed and it caused delay for another 12 months: that did not help the people we are meant to represent. I hope that others who want to oppose this Bill will take note of my hon. Friend’s words.

The Bill calls on the Government to link the value of statutory redundancy pay limits to the level of average earnings, which will ensure that future increases in statutory redundancy pay are linked to average earnings. Before discussing the Bill in detail, however, I would like to inform Members about how statutory redundancy pay is currently calculated so that they can understand why I am introducing the Bill.

The amount of statutory redundancy pay to which an employee is entitled depends on his or her age and length of service and pay. An employee who has been employed continuously for more than two years is entitled to half a week’s pay for each complete year of service between the ages of 18 to 21, one week’s pay for each complete year of service between the ages of 22 and 40 and one and a half week’s pay for each complete year of service after reaching the age of 41. There is, however, a statutory cap on the amount of an employee’s weekly pay that can count towards the entitlement to statutory redundancy pay. Since February, the limit has been set at £350.

When statutory redundancy pay was introduced back in 1965 through the Redundancy Payments Act 1965, the limit was set at £40, even though average weekly earnings for that year stood at £19.95, which meant that it was twice the average weekly wage when people first had the vision back in 1965 to introduce the SRP.

I congratulate my hon. Friend on introducing his Bill. He may be aware that yesterday in my Dundee constituency, a major employer, NCR, announced 250 redundancies, and while I am sure that the local Unite trade union official, Fiona Farmer, will attempt to negotiate some sort of enhanced package, does my hon. Friend agree that if there is no such package, it is precisely that sort of people whom his Bill will help?

I could not agree more with my hon. Friend. He is right that it is all about ensuring that we look after people who do not get an enhanced package. I had a conversation earlier today with my hon. Friend the Member for Stoke-on-Trent, South (Mr. Flello), who made exactly the same point—negotiations had taken place with Wedgwood to give a good package and enhanced payout, but tragically it went into receivership, so those employees lost tens of thousands of pounds and unfortunately ended up with the bare minimum. That just shows why this Bill is needed—to represent those people and others, because I can honestly say that there is not a constituency in the United Kingdom that has not been affected by the issue of statutory redundancy pay. We all have to do the best for the people we represent, and it is usually those people at the bottom of the employment league that we must look after most.

May I draw my hon. Friend’s attention to another problem that people face? Now that we are in a downturn, multinational companies are taking the decision to lay people off, and on account of the poor terms and conditions on offer in the UK compared to Germany, for example, it is much more likely that a British worker is going to be laid off than a European one—and it is the European worker who is more likely to get an enhanced pay-off.

I could not disagree with that. In fact, the Business and Enterprise Select Committee took evidence on that, and I recall that three Opposition Members were sitting on that Committee when we took evidence relating to Peugeot and Vauxhall. One of the key issues that came out in that evidence was that it was cheaper and easier to get rid of someone in the UK, ensuring that people were more protected in Europe. It was people in the UK who suffered the most and who were the easiest to sack, so I agree with my hon. Friend.

I congratulate my hon. Friend on introducing the Bill. Given the economic downturn, the financial crisis and the vulnerability of many people in our society today, is it not important that the Government do not get into the same sort of position as the banks? The banks would only give people money when they did not need it and when the economy was doing well; now that the economy is doing badly, they will not give people the money they need. We do not want a Government who provide an umbrella only when the sun shines.

Very good! My hon. Friend is absolutely spot on. It is all about helping and there has never been a more appropriate time than now to offer help, because we are a Government who care, who are meant to look after everyone, so I could not have put it better myself.

My hon. Friend has mentioned the urgency of the Bill in respect of Stoke-on-Trent and north Staffordshire. Will he say a little about the importance of his Bill for women? Clearly, there are industries in the area that employ a greater proportion of women workers, who would stand to gain from the Bill.

My hon. Friend is absolutely correct about that—some will benefit more than others from the Bill, and women, workers in the hotel and catering trade and others in other sectors will be beneficiaries. My hon. Friend is spot on to say that the Bill is about helping women and others working on low pay and in poor conditions.

As I said, in 1965, the limit for SRP was set at £40, which was around twice the weekly wage, at £19.95, and it is interesting to note that that covered 96 per cent. of the working population. Since then, the relative value of the link to earnings has declined, and in 2008, just 40 per cent. of the working population were covered. That shows how much it has been eroded since 1965. It is only right, then, that we try to address this issue now, particularly given the economic circumstances that people face today.

I am aware of the limitations of attempting to achieve my aims through a private Member’s Bill. Much to my frustration, we cannot propose a Bill that would significantly change expenditure. That is a feature of any private Member’s Bill and it helps to explain some of our frustration, but we are working within the terms of such Bills.

I am pleased to support the hon. Gentleman’s private Member’s Bill, as he knows. Although I do not wish to intrude on private Labour party grief, may I put it to him that Ministers should not seek to prevent the Bill from going into Committee because of any concern about costs? Precisely because the hon. Gentleman is simply suggesting that a link should be made, without being overly prescriptive about it, the Government still have the matter in their own hands. To prevent the Bill from making progress, when an important principle is being established, seems to me perverse.

I thank my hon. Friend for that suggestion, and hope that the hon. Member for Buckingham (John Bercow) will chair the Committee considering the Bill or at least serve on it. I am sure that he would like to see fair wind given to the Bill, which is why I was so surprised and shocked to find out what was going on. I thought that we were negotiating a genuine agreement. Okay, I may not have persuaded the Government to go all the way, but I thought that they would be prepared to see how the Bill went and not to stand in its way. That has not been case, so I hope that there are some red faces in the Chamber, particularly of those responsible for sending out that letter asking Members to speak against the Bill. I think it is shameful and silly. I believe that even at this late stage, whispers are going round with the intention of preventing this Bill from making progress. I hope that people will rethink their attitude and that the Minister will have a word to call off what is happening as we speak. I look forward to hearing the Minister taking a more sympathetic line, because I take him at his word; I believe what he tells me. I think that he will be shocked and embarrassed by what we have found out.

Yes, I would always give way to the Minister. I do think he is an innocent abroad; I am not too sure how far abroad he is at the moment, but there we are.

As I was saying, the relative value of the payments has declined, so a significant proportion of the working population now earn significantly more than what is offered, so it is only right to address the issue, particularly given the economic times. There is no better time than now. Some people say that now is the wrong time, but that is absolutely not the case. When people need us, it is the right time.

It is the right time. The Government have, quite properly, said that now is the time to put money into people’s pockets to give them a greater propensity to spend. They have done that for pensioners by bringing forward to January the biggest increase for about 30 years; they have brought forward increases in child benefit, tax allowances and all the rest of it. The idea behind what the Government are doing is encouraging the propensity to spend. My hon. Friend’s Bill is seeking to do exactly the same, so let me say this to the Minister: do he and the Cabinet understand that my hon. Friend the Member for Chorley (Mr. Hoyle) and the rest of us are engaged in a practice here today of helping the Chancellor to put more money into the economy to help it recover?

I thank my hon. Friend, who always has good advice, not just for me but for the Minister and the Government generally.

My hon. Friend is right that this debate is somewhat redolent of times past. He will have read, as I have, the unfair dismissal legislation, and will know that one of the building blocks of unfair dismissal compensation is the basic award, which is equivalent to the redundancy pay calculation. Will he confirm that the Bill would translate into unfair dismissal law, so that people who are unfairly dismissed, for redundancy reasons or otherwise, will still get the basic award, calculated on the basis of the redundancy pay assessment under the Bill?

Absolutely. I would expect that link to be kept in place, and we need to ensure that that happens.

We ask the Government to adopt new legislation, which would link the value of statutory redundancy pay limits to average earnings and ensure that future increases, if determined necessary by the Secretary of State, are also linked to average earnings. The level at which the SRP is linked to earnings is obviously for the Government to determine, and is not part of the Bill. The Bill is not about putting the Secretary of State in handcuffs, but allowing the Government to set the level. I want to ensure that we get that message across. If successful, however, the Bill will change statutory redundancy pay for the better—that is the key.

Until 2000, the statutory limit was reviewed annually by the Secretary of State, who made the decision whether to increase the limit, and if so by how much. That was very good. In 2000, however, the Government decided to replace the system with a new scheme under which the statutory limit is increased annually by the Secretary of State in line with the retail prices index. The danger with that at the moment is that the RPI could go below zero, which means that, in theory; statutory redundancy pay could be reduced, not increased. That would be absolutely absurd at this time when people will need help, and that is why the Bill is important. We need to reconsider and reword the legislation.

Although the earlier development in terms of the new scheme has been welcomed, and has resulted in an annual increase, statutory redundancy pay entitlement has not been reinstated to its original value in real terms. Therefore, by introducing the link to earnings, as opposed to the RPI, my Bill aims to change the formula that the Secretary of State uses, and would protect the value of statutory redundancy pay in the future. That is what is important.

As my hon. Friend will know, Hoover, an iconic employer in my constituency, is making redundancies in Merthyr. Workers there have had a fight about redundancy pay in the same way as a lot of others. I am old enough to remember the arguments for the introduction of redundancy payments back in the 1960s. It was not about someone winning the lottery, having a windfall, or the incidental benefit of them spending the money. It was about giving them a cushion, and the ability to reorder their lives and engage in the training that they needed to move on, the very training that the Government say that they are so interested in—and I welcome their efforts to try to make that possible. The Bill is about more than people having money to spend when they are initially made redundant; it is about reordering their lives.

Absolutely. All these case studies are being cited not by me, but by Members who are appealing to the Government to take notice and listen. There is no better case than the one put forward by my hon. Friend. Indeed, there is not a Member in the House who has not had constituents affected by the credit crunch or by statutory redundancy.

Will my hon. Friend comment on another example? I note that in the pre-Budget report a large amount of money was allocated precisely to give effective support to the unemployed to find new jobs. The Train to Gain programme and rapid response service were refocused to assist in that. Like others, I have a constituent who lost his job last week, at Denby pottery, and who assumed that he would get extra money, which he had planned to use for a specific training course that would help him get a new job. He has found that he also will probably get only statutory redundancy pay, which is unlikely to give him a sufficient cushion to undertake that training.

I agree with my hon. Friend, who has cited yet another case study. The Bill would help people by giving them a little more as they finish work; otherwise, they would have to try to claim benefits. The measure would give people a cushion and a little more dignity. It would help them to pay bills—perhaps for a credit card or a mortgage—because there is a gap between them losing their job and getting help with their mortgage. The Bill is one way to help to close that gap. As my hon. Friend has outlined, there are many reasons why we should give such support.

I thank my hon. Friend for his kind words earlier about our conversation about Wedgwood. He mentioned mortgages. Does he agree that when obscene amounts of money are going to people who have got us into this mess, and those people do not have a problem with statutory redundancy limits, we should ask why on earth our hard-working people should have such problems?

Absolutely correct. I am pleased that that point has been made. We all know about the obscene pensions and pay-offs, and hard-working people always seem to be the ones who suffer. Those with the easy life at the top seem to be doing very well, and seem to benefit more from a pay-off than by working. That spells out the difference.

Does my hon. Friend also accept that people will have difficulty understanding politicians who seek to deny decent redundancy payments to workers while themselves receive generous redundancy payments when they lose their jobs?

Absolutely right. The majority of people get enhanced redundancy pay, especially those at the top of the tree—we never see them doing badly. We want to help those at the bottom of the tree. That is what we are here for, and that is why I was elected.

My hon. Friend is absolutely right. This is not a Bill for those who are in well organised trade union shops. The strong trade unions are perfectly capable of looking after themselves. This is a Bill for those who work for small employers and do not have the strength of the large trade unions. Those people deserve the protection of this Government.

Absolutely right. Those who do not have the protection of trade unions or whatever, rely on this House, and the measures that we can bring forward to protect them. The point cannot be better made than it has been by my hon. Friend.

Does my hon. Friend agree that we should expect the Minister to go further than the Bill, and to prevail upon his Secretary of State in the other place to ensure that, in situations such as that at Wedgwood—where people are being done out of their enhanced severance agreements and banks have brought in receivers—where the banks have been state supported, they should, before repayment of their loans, respect those severance agreements?

My hon. Friend is absolutely right. The Government can go as far as they wish, but at the moment they do not wish to do anything. That is the shame. It is Friday 13th, but let us hope that it is not a bad day for all those whom we are meant to represent. Let us make it a Friday 13th that will be remembered for the good that we can do.

I thank my Select Committee colleague for giving way. May I make a point that has not been made so far? The hon. Member for Bolton, North-East (Mr. Crausby) rightly pointed out that we are talking about people in the most vulnerable forms of employment, but does not the hon. Member for Chorley (Mr. Hoyle) worry about the timing of his Bill? We have all been told by employers that they are undecided about whether to lay people off. If employers thought that coming down the tracks was a heavier redundancy payment for their most marginal employees, might that not hasten their action in making redundant people who might otherwise have remained in employment?

A case can always be put for not doing something, but I would never have expected that from my colleague on the Committee. I know that she is aware of the importance of keeping people in employment, and that she is very good at putting a strong case. We stood shoulder to shoulder at the time of the Longridge redundancies, thinking of ways in which we could help people. Well, the Bill aims to offer help in exactly the same way, and I hope that the hon. Lady will accept that it is being introduced at the right and the appropriate time. I know that she is very open-minded, and I look forward to her support in the Lobby.

The expression “joined-up writing” is used in my area. Sending the Bill to Committee would allow us to do some joined-up writing. People must currently wait for training packages to kick in six months after they become unemployed, but we could provide for a “free flow” redundancy package enabling them to embark on training immediately, so that they could return to employment sooner.

I entirely agree with that. We need joined-up writing and joined-up thinking. We need everyone to work on the same side.

Of course the Government’s objective is to help business and families throughout the country, in some cases by bailing out our major banks, as we did last autumn and are continuing to do. We cut VAT to help people by allowing money to circulate in the system. The Bill provides another way of allowing money to circulate, but it also targets that money on the people who need it when they lose their jobs. It is important for us to convey that message not just to the Department for Business, Enterprise and Regulatory Reform but to the Treasury.

Let me take up that theme of getting the message over. The vast majority of the population, who have seen so-called ex-masters of the universe such as Goodwin—I prefer not to use the cuddly name “Sir Fred”— walk away with huge sums, would be rightly aggrieved and enraged if the Bill was not given a smooth passage. We are talking about only a small proportion of the sort of money that Goodwin and his ilk have received, and they have received it as a result of personal failure.

No one could disagree with that. My hon. Friend is spot on. There is real anger in the country when bankers receive those huge payoffs—I said bankers, with a “b”—and there will be real anger in the country if we do not stand by the people at the bottom of the tree.

As I have said, the Government have done a great deal to try to get money circulating. They have propped up the banks, made money available to small businesses and cut VAT. That was the right thing to do, but we also have a responsibility to respond to the problems of hard-working people. Job losses and redundancies are spread across the country, and no part of it is immune from the threat of further redundancies in the future.

The number of redundancies will be greater in this country because many firms on the continent already pay wage-related redundancy compensation. It is because of their higher redundancy costs that they will not lose their work forces. The Bill is an important measure which will keep people in jobs, as well as dealing with the circumstances that would arise were they to lose their jobs.

I agree. We should have a scheme that keeps people in work, rather than making it so much easier for them to be made redundant. We should be giving people extra financial help at the time when they need it most. I keep repeating this: the Bill is about helping people in their hour of need.

Members have rightly cited case studies. Let me now give an example. A Woolworths distribution fork lift truck driver working full time on the night shift earned a basic rate of £10.61 per hour, or £401.11 per week. Because of the SRP limits, that 55-year-old driver, who had worked for Woolworths for 20 years, received £8,580 in statutory redundancy pay. If the SRP upper weekly limit had been increased to above £401.11, he would have received £10,428, an increase of £1,848.95. I cannot understand why anyone would see a problem with giving that sort of help.

A Woolworths distribution centre in my constituency has just closed. More than 440 of my constituents lost their jobs overnight. Had my hon. Friend’s Bill been in operation, they would have benefited.

My hon. Friend is absolutely spot on. He has seen the effects of the closure of that centre, and his constituents have come to him to put their cases, give their views and express their hope that the Bill will help—not them, because they have already suffered, but those who have not yet suffered.

The Woolworths case, and the Rochdale case that I mentioned earlier, highlight the need to ensure that the value of statutory redundancy pay does not continue to decline. Linking the value of SRP to earnings would secure real benefits for people throughout the country. It is not surprising that 178 MPs signed my early-day motion, and that similar motions have been tabled in the Scottish Parliament and the Welsh Assembly. Members of Parliament in all parties realise that during these difficult times we should be doing as much as possible to help people who lose their jobs through no fault of their own. It is strange that it should be those at the top of the tree—the management—who generally receive the pay-offs and, in most cases, affect the business one way or the other, while those at the bottom, who work very hard and do all that they can for the business, are given the rawest of deals. I want to ensure that those raw deals do not continue.

We need only consider the Woolworths employees. Those 30,000 people, many of whom had been poorly paid, were left to survive on the basic statutory redundancy pay. There was a branch of Woolworths in nearly every Member’s constituency. Because we have already witnessed what happened when an employer like Woolworths goes under, surely it is right for us to stand up for people like those 30,000.

Many of the poorest paid employees are women and young people. There are still huge pay differentials in the workplace. I am sure that those women and young people would welcome any measure that would help to maintain the level of statutory redundancy pay. I have met people who have lost their jobs. Other Members have as well, and they will know the real difficulty that is caused by job losses. There is only one thing that we should be doing: supporting the Bill today.

As I said at the beginning of my speech, the Bill has received the support of the trade union movement. It is supported by, for instance, ASLEF, Community, the TUC, the GMB, TSSA, UCATT, Unison, Unite and USDAW.

My hon. Friend has mentioned the support of Members of Parliament, trade unions and other bodies for the Bill, but he has not told us the reasons for the Government’s opposition to it.

I am not here to apologise for the Government. I will let the Government do that for themselves. No doubt they will come up with some reasons, but, to be honest, there can be no reasons. All of us—the Minister, the Whips and me—stood for election on the basis of the same manifesto. Some of us respect and adhere to what we stood for then, while others, it seems, do not consider it appropriate to stand by their manifesto pledge. I find that very strange, and it worries people in this country, because they believe we mean what we say in our manifestos, so it is no wonder that they question the honesty of politicians. They should never do that, however, because I believe that we are all here for the right reason: to help our constituents. That is why we should stand together. I know my right hon. Friend the Minister is a genuine politician and is very understanding, and I still hope that, even at this late stage, he can help to ensure that this Bill passes its Second Reading and is sent into Committee.

My hon. Friend emphasises how modest his Bill is. His red line is to do with weekly pay, but he has not sought to redefine the multiplier—the fact that people only get one week’s pay for one year’s service. Therefore, the fact remains that under the system of “last in, first out,” the people who are suffering often have very short service, and even under his Bill they would end up with very modest sums.

There are many anomalies that we need to put right. This Bill is a start, and it represents the progress we are trying to make. We are not trying to put anybody into handcuffs, and especially not the Government. In fact, I have tried very hard to work with the Government to try to ensure the Bill can proceed.

The hon. Member for Hendon (Mr. Dismore) has just referred to the modesty of the Bill. If I understand clause 1(2) correctly, that modesty is underlined in triplicate there, because the responsibility will be to put together regulations within 12 months of the Bill becoming an Act, so there is no question of excessive haste. Instead, there is plenty of time for due consideration of what those regulations should contain, and therefore also of their cost. That is perfectly reasonable.

I thank the hon. Gentleman for that clarification. As ever, he is absolutely spot on and he explains his point most eloquently. I am sure that there are no closed ears on our Labour Front Bench—I am sure that everybody is listening to what the hon. Gentleman has said, and I hope they take that good advice on board.

I would like to place on record my thanks to all the bodies that have worked tirelessly both in terms of proposing a Bill on statutory redundancy, and in working with me to ensure that we mobilise an effective campaign to persuade our Government to support their own manifesto pledge and accept this proposal. I would also like to thank everybody who has worked so very hard, including in my office. Tireless workers have, in a very short space of time, brought this Bill together, and have brought us together today to try to ensure we get the numbers we need for this Bill to progress.

Members of the public from across the whole United Kingdom have contacted me to support this Bill, and we have learned that other Members are also being contacted and asked to support it. The Warwick agreement includes references to improving statutory redundancy pay, and we stood on an election manifesto to implement Warwick—so I say to those who do not think it is in the manifesto, that it is in it. In the light of this, I urge Members and the Minister to back the Bill, which will take one step towards helping people who are unfortunate enough to lose their jobs. In their hour of need, we should be giving them that support. I commend the Bill to the House.

I have listened to the debate and the internal Labour bust-up, including a review of the party’s manifesto pledges, with some degree of amusement. However, I need to remind hon. Members that Britain is currently facing extremely serious and difficult economic circumstances. Unemployment continues to rise and company insolvencies are increasing rapidly during this prolonged and deep recession. Figures show that the number of companies collapsing increased by more than 250 per cent. in the last quarter of last year, and the knock-on effect of that increase, and of the recession generally, are startling. The amount of people out of work hit almost 2 million at the end of last year, which is the highest level since Labour came to power.

I am sure that the hon. Member for Chorley (Mr. Hoyle) honestly believes that his Bill will help employees, but from the Opposition’s point of view it is, at best, an inappropriate reaction to the crisis that we are facing. Moreover, we are extremely concerned about the damaging effect that it could have on workers in the longer term. In diverting money away from the running of businesses, which could lead to more insolvencies, the Bill could undermine and damage the very workers whom it seeks to protect. Whether or not it is a panicked reaction to the financial crisis, I state now that we do not support this Bill.

What measures are in place for those who face redundancy? The first relevant source for many employees will be their contract of employment. A contract of employment will often stipulate an employee’s entitlement on being made redundant. Such a contract must at least be in line with the minimum requirements for all employees, which are contained in the Employment Rights Act 1996. That legislation provides that employers must pay employees a minimum amount, depending on their age and number of years of service. Currently, the Act stipulates that employers are required to pay laid-off employees a minimum redundancy payment calculated by multiplying the length of service by a specified sum. That specified sum is calculated by multiplying the redundant employee’s salary—up to a capped level—by a figure from 0.5 to 1.5, depending on the employee’s age and length of service.

Is not the hon. Gentleman hiding behind a piece of legislation that his party opposed in the 1960s?

The hon. Gentleman can go back to the 1960s if he wants, but I will return to the matter of the current recession.

For example, for each year’s service when the employee was aged between 41 and 64, 1.5 weeks’ pay are factored in. There is a maximum of 20 years’ service which counts towards the calculation. There is also a maximum limit on the amount that constitutes a week’s pay under the Act. It is currently set at £350. That means that the maximum redundancy payment is £10,500. Importantly for our debate, however, it should be noted that pursuant to section 34 of the Employment Relations Act 1999, under existing law these sums already increase in line with inflation on an annual basis. I am not entirely sure whether the hon. Member for Chorley made that claim in his opening remarks.

The Bill would serve to increase the statutory maximum limit on the sum applied for a week’s wage. It is currently capped at £350, but the Bill, in linking the cap to average weekly earnings, could increase it to as much as £500 on a one-off basis, and then maintain the link to average weekly earnings on an ongoing basis.

As I have said—and as the hon. Member for Chorley failed to say, I believe—the current legislation provides for increases in relation to inflation. I have the figures to hand: in 1998, the sum was £220; in 2004, it went up to £270; in 2007, it was raised to £310; and in 2009, it became £350. I am not here to make the Government’s case for them, but the fact of the matter is that measures that the Government brought in have been increasing the amount, and I do not think that came out in the hon. Gentleman’s comments.

Of course I am going to try to do so. I made the point that there had been increases. In fact, I made the point that we are in the very dangerous situation of having inflation falling and every other economic indicator dropping, and statutory redundancy pay could drop, too, because it is linked in this manner. That is why we want to broaden the link. I am sure that the hon. Gentleman would not want to support a cut in statutory redundancy pay, but that could happen under the current terms.

The economic situation changes, but I assume that the hon. Gentleman is hoping that we do not move into a deflationary economic situation. We will leave that to those on his Front Bench, who are at present doing a pretty good job of taking us towards such a situation. That is something we may have to deal with, although I hope we do not.

I understand, although I do not agree with, my hon. Friend’s argument that statutory redundancy pay should not be increased in line with earnings because we are in economic bad times. As a demonstration of good faith on the issues, can he identify an occasion of economic good times in which he did support such an increase?

One does not have to support such an increase, because it is in legislation that it happens. My hon. Friend just mentioned good faith. He has also discussed how clause 1(2) provides for the Government, in good faith, to bring in regulations over 12 months, and I must say to him that it is the looseness of the Bill’s wording that causes me great concern. Rather the opposite of what he maintains is the case, he should realise that the looseness of the Bill’s drafting will mean that business does not really know what is going to happen, and that problem causes much concern.

The hon. Member for Chorley made the point that because money is involved, the format of the private Member’s Bill makes it difficult for him to draft the measure precisely and he is therefore drafting on principle. He must appreciate that the Bill’s implications for business are significant, and that when loosely worded Bills are presented to Parliament, people will have concern.

May I draw hon. Members’ attention to the current situation? Every hon. Member will have worries about their high streets. We face the possibility of an amalgamation of banks, and the tellers—the lowest-paid people—will be pushed into taking redundancy packages. How will the hon. Gentleman and other Front Benchers explain that although those at the top of the tree—the people who created the problem—are walking away with millions, we will make other people suffer, such as the young and the loyal workers who will walk away with the minimum redundancy arrangements?

The hon. Gentleman makes two important points. The first concerned the general state of the economy. I totally agree with him that this country, and its economy, is in an utter mess. We place the blame for that on this Government; their missed opportunities for reform over the past 10 years have led us to where we are now. His second point was that the poorest are having to bear the brunt of the situation. Of course it is very sad that working people are losing their jobs because of the failed policies of this Government, but it is also important to realise that the more wealthy one is, the more one suffers under these redundancy provisions.

Let me finish my point, because it is an interesting one. When I discussed the Bill with several employment law experts who do not act for unions, they told me that the main shocks that they see involve wealthier people who think that the law will provide them with some form of fair redundancy—it does not. [Interruption.] But the law is right. Labour Members are maintaining that it works only against poorer people, but that is not the case, for the more wealthy someone is, the more the existing law is prejudiced against them. Someone earning a vast amount who asks their solicitor whether they are going to get a few months’ pay because they are being made redundant will get the answer, “No, because it is capped.” In our view, given the economic circumstances, that is right, but it is wrong for the hon. Member for Midlothian (Mr. Hamilton) to say that this is a problem simply for poorer people—it is not.

The hon. Gentleman has slightly missed the point, which is that the arrangement used to represent and help 90 per cent. of the working population, but it now helps only 40 per cent. That, in itself, tells him that the measures have been eroded over the years and that they have not helped in the way they should. Perhaps he would therefore like to reconsider what he has said. I respect his views and I know that he is more liberal than most on the Conservative Benches. I would have thought that there had never been a more appropriate time for this Bill than now, when people are struggling. Surely it is when people are struggling that one should give them help. He knows, as I do, that money is being found for family allowance increases and so on. This is a case where we ought to help those people now, just as we did with the minimum wage. There is no difference here. We should annually review these arrangements in the way that we stated. Why can he not support us?

Providing help to working people in this country means making sure that we have an economy that will create and sustain jobs, and that includes getting credit moving in a way that this Government are consistently failing to do. We simply believe that this proposal would be damaging to our economy, to our companies and to the workers who drive our economy.

The hon. Gentleman has said that part of his opposition to the Bill relates to its vagueness and the fact that he does not know what would happen as a result of its introduction. Will he re-read it and note that it provides that the Secretary of State is required to make further regulations “within twelve months” and that those would be in the form of “statutory instrument” that would come back to this House and could be considered by it? Does he accept that that means that the Bill is not vague and that it contains procedures that would enable him and all other hon. Members to consider fully any proposals that come forward under it?

I am afraid that I cannot agree with the hon. Lady. As she points out, clause 1(2) states:

“The Secretary of State must, within twelve months of the day”,

and so on. Subsection (3) states:

“Before making regulations under subsection (2) the Secretary of State must—

(a) have regard to the desirability of including in the mechanism an annual comparison”,

and so on. That is pretty vague stuff; it is one set of possibilities backing up another set of possibilities, and she must realise that as far as business or indeed anyone else is concerned, it effectively means nothing—it means what the hon. Member for Chorley said in his speech and what might transpire; it does not mean what is in the Bill.

What about subsection (4)? It states:

“Regulations under this section shall be made by statutory instrument.”

That means that there will be every opportunity for the hon. Gentleman, if he wishes to do so, to oppose the regulations when they come back before the House.

That introduces a third level of what might happen; using statutory instruments means that things are basically decided by Ministers. I had thought that the idea of a private Member’s Bill was to have the House decide things on the Floor of the House.

I see red when I hear Conservative Members advance this argument that somehow the wealthy people—the Sir Freds of this world, whom we hear the hon. Gentleman standing up for now—are the ones who are going to suffer as a consequence of such a proposal. The fact remains that this measure is primarily aimed at helping the less wealthy. The numbers that the hon. Gentleman read out earlier are not significant sums to the wealthy, but they are significant to the less well-off people, who are less likely to have skills, more likely to be made redundant and more likely to be out of work for a lot longer than the wealthy people for whom he is making special pleading. The wealthy may well have resources to fall back on, unlike poor people who live from hand to mouth, and they are more likely to be able to be re-employed more quickly. His special pleading is a bit out of place.

I totally disagree with the hon. Gentleman’s assertion that someone who earns more is more likely to walk into a job more easily in this current climate. It is possible that the opposite is true. In his earlier remarks he made an interesting point which I shall analyse later in my speech.

On that point, I would assert that the person whom the hon. Gentleman has described would be the least likely to rely solely on statutory redundancy payments, and it is those at the lower end of the earnings scale who will be most likely to be entitled only to statutory redundancy arrangements if and when they lose their jobs. The higher up the pay bands one goes, the less likely it becomes that someone will rely solely on statutory redundancy payments.

Unfortunately, given the current economic situation, that is often proving not to be the case.

I maintain that the increase from £350 to £500 is considerable, and its impact on thousands of vulnerable employers and businesses could be substantial, with a possibly devastating knock-on effect on workers. The measures in the Bill would further burden employers, who will often have no choice but to make more redundancies as a result, in an attempt to consolidate their position and stimulate a revival. The British Chambers of Commerce has calculated that this one-off increase would cost businesses nearly £200 million this year. Revenue needs to be injected into businesses to encourage their long-term prospects rather than diverted by Labour in a short-term bid to appease the unions. If cash is clawed away from where it is most necessary, even more businesses may collapse, leading to even more redundancies and unemployment.

Like my hon. Friends, I am horrified that the hon. Gentleman spends so much time worrying about the better-off, who will clearly have other resources on which to rely and far more opportunities to find further employment. He must surely agree that the trade unions have often improved conditions for their people, and the concern under this Bill is for those people who have not had the benefit of good trade union agreements, perhaps because they are in temporary employment or areas of under-representation by trade unions. The point of the Bill is to look after the very people who miss out most because they are not part of good, strong collective agreements.

If the hon. Lady thinks that I and the Conservative party are not concerned about the 2 million unemployed, she has seriously misunderstood what I have said. We accept that the unions have a part to play in the life of this country and in negotiating employment conditions. The question is whether legislation should be drafted purely on the basis of the unions’ interests. I shall maintain that the interests of the country go beyond the narrow union interests that are on display today.

I am interested by the hon. Gentleman’s line of argument. I accept completely that if the House is interested in helping people who face losing their job as a result of the recession, the redundancy pay package is only one part of the picture. But it is also the case that the Conservatives have opposed the extra Government spending in other areas, such the rapid response service—funds for which have doubled—and training places. If he opposes the redundancy pay increases in the Bill, is he also opposed to the extra expenditure elsewhere in the system for those who lose their jobs?

We cannot group every single Government measure—I should say “proposed” measure, because most of them have not actually been implemented—together and say that we support them. As the Minister knows, we have supported some, but not others. More importantly, we have made our own proposals, not least on loan guarantees, to which the Government came rather late in the day. They said that they would put similar proposals in place, but they have not yet delivered on that. It is not fair to say that we have been doing nothing or that we have failed to address the Government’s proposals.

We are hugely concerned that, in this economic downturn and with unemployment already predicted to rise to 3.5 million, this diversion of cash will only add fuel to the fire. Essentially, the Bill could damage those whom it seeks to protect. Although some redundant staff will enjoy a short-term monetary gain, it could also have negative effects. First, the additional financial strain on companies could lead to more businesses becoming insolvent, so there could be fewer businesses to offer jobs once the economy begins to recover and, perversely, there could be more workers to compete for those limited job opportunities.

Secondly, the Bill may lead to employers ceasing to offer more generous contractual provisions in case of redundancy. As we have heard, some 50 per cent. of organisations offer workers more than the statutory minimum. In an attempt to improve conditions for those who enjoy only statutory protection, the Bill might indirectly harm a host of other workers. Thousands could potentially be put under pressure to renegotiate their contracts, and many new workers would simply be left with the statutory minimum.

Thirdly, the Bill might lead to employers looking to avoid its provisions. For example, they might seek to avoid potential payments by increasing staff turnover so that workers do not qualify for statutory redundancy, or through complex contractual means. More worryingly for workers, employers may simply be unable to pay the enhanced sum. Fourthly, the Bill might also lead employers to make workers redundant pre-emptively, for fear of incurring far higher costs by delaying the process in the hope of recovery. Young and newer workers, who are comparatively cheap to make redundant, would likely be sacrificed. Rather than softening the blow of redundancy, the Bill might actually make it more frequent and more financially painful, particularly for newer employees.

Finally, we need to appreciate that this measure is not designed to help the poorest employees. That is because increasing the maximum week’s pay would provide no increase in statutory redundancy pay for the lowest paid employees—those earning less than £350 a week. To that extent, this Bill seems to be out of line with the Government’s policy of “protecting vulnerable workers” and “supporting good employers”. Indeed, it is quite feasible that the poorer workers who receive nothing under this Bill could have less job security because of the benefits given to higher earning employees.

So why would the hon. Member for Chorley introduce a Bill that supports only the better-paid employees? Let us put the potential negative impact of the Bill on workers to one side for the moment and consider the motivation for the Bill—the trade unions. It is clear that they are the driving force behind this Bill. The Warwick agreement made between the Labour party and the trade unions contained a promise to increase the maximum statutory redundancy payment, and the Bill is a belated attempt to fulfil that commitment.

The Bill has scant regard for the economic crisis facing Britain, and comes despite disastrous figures for businesses and the economy generally. It is nothing more than a thinly veiled attempt to save Labour’s blushes in failing to honour the foolish promises made during the peak period of Labour’s boom and bust era. Since coming to power in 1997, the Labour party has made concession after concession to the trade unions that fund it. During the boom years, the public—and, to some extent, business—paid little attention to that fact, while all appeared to be rosy with the economy. So despite the Government’s obedience to union demands, businesses were willing to turn a blind eye while the economy remained stable. We need only look at legislation forced through by the Labour Government to see this. Among other measures, the working time directive and the Employment Relations Act 1999 are examples of legislation that is extremely favourable to the unions. For example, the 1999 Act introduced protection from dismissal during the first eight weeks of an official strike for workers taking part in industrial action.

The hon. Gentleman is pursuing a dangerous argument. His party has spent the past two to three years trying to change its image and to say that it is no longer the “nasty party”, to quote one of his colleagues, yet he seems to be embarking on an attack on a series of measures that were all designed to improve the lot of working people. That raises an interesting question. Is he saying that at the next election, whenever it should come, his party will say that it wants to reduce the rights to paid leave granted under the working time directive, for example? Will it reduce the rights to trade union recognition contained in some of the legislation that he cites? I do not know what was coming next in his speech, but I am sure that he will take my point. Is his party going to stand on a platform of taking those improvements away?

Again, the right hon. Gentleman generalises. If he thinks that we are happy with the Government’s £10 million bung to the trade unions—the so-called modernisation fund—he should realise that we are not happy with it, and we might well consider those issues following a general election. In the run-up to the 2005 general election, the trade unions won more than 60 commitments from the Government on employment legislation. Since 1997, about 20 Acts and more than 280 statutory instruments have been passed that directly deal with employment law. In other cases, such as that of the Legal Services Act 2007, the unions have been exempt from regulations to which other entities have been subject. The Conservative party supports the interests of businesses, which include companies and their employees, and so we will act in their wider best interests and not in the narrow interests of the unions.

It is of little surprise that the unions also represent a considerable source of donations to the Labour party. Since 2001, trade unions have donated more than £76 million to Labour, equating to some 61 per cent. of all the donations that Labour has received. In 2006, Labour received a total of £11.8 million of donations, of which £8.6 million came from the trade unions— 73 per cent. of the total. As we move deeper into the recession, Labour has become more and more reliant on the unions for funding. It is against that backdrop and that of the more specific obligations in the Warwick agreement that we view this Bill with a degree of suspicion.

Effectively, the hon. Gentleman is saying that he is going to take his red pen out and redact great swathes of people’s employment rights. This shows the real distinction between his party and ours. We believe in standing up for working people and protecting their rights, and he believes in taking them away.

I hasten to add that it is the hon. Gentleman’s party that has been having an internal row today in front of the nation about whether it has been keeping its manifesto pledges. I have not come here today to give manifesto pledges for my party. I have come here to debate this private Member’s Bill, and we believe that what has happened is indicative of Labour’s increasing isolation from economic and business realities. Red tape is already choking businesses that are struggling to keep afloat, yet Labour MPs and MEPs are seeking to place further hurdles along the path to recovery. Labour MEPs have even been speaking and voting against the Government’s position. They recently voted to remove British workers’ ability to opt out of the 48-hour week. At a time when thousands are hoping to work as much as they can rather than face redundancy or poverty, Labour politicians are voting to reduce people’s ability to work. Neither are we the only force of dissent. Business organisations and even the unions that the Bill seeks to placate have recently criticised the Government for failing to advance a unified, consistent strategy for tackling the recession. The Bill is another example of the Labour party’s having lost its way.

The mass of new employment regulations over recent years has meant that the UK labour market has become increasingly inflexible, which will impact on our ability to come out of the recession. So we urge the Government to make the right decision and to be considerate of wider non-party political concerns. The narrow political interests of the trade unions and the outdated Warwick agreement should be irrelevant in the current economic climate. Will the Minister also confirm that the Government have no intention of getting around today’s situation by invoking the time-bomb provisions of section 14 of the Work and Families Act 2006?

In looking to move out of the recession as soon as possible, we should be focusing on resolving the issues and challenges ahead rather than exacerbating the unfortunate consequences of past Government failures. The Bill is reactive, retrogressive and entirely inappropriate for the desperate economy that we have in this country today.

I congratulate the hon. Member for Chorley (Mr. Hoyle) on sponsoring the Bill. As he said, it is Friday the 13th, and on a Friday I and the vast majority of my colleagues are normally working in our constituencies, so why are we here today? We are here because the Government have failed to deliver to the unions the promise that was made out before the general election and specifically in Warwick I. The promise to link statutory redundancy pay to average earnings was also enshrined in the 2005 Labour general election manifesto, so it is no wonder that we are here today. Labour failed to fulfil its promise to its paymasters and, specifically, to the direct sponsors of many Members who were on the Government Benches earlier and who now seem to have gone—perhaps to the Tea Room. Business also donates large amounts to the Labour party, so the Government are between a rock and a hard place: if they please one paymaster, they will upset another.

The Conservatives, on the other hand, are not in thrall to two masters. They have only one: big business. Big business, as we have heard, does not like these proposals one bit, and nor should it.

Before the hon. Lady goes too far into how we are in thrall to big business, I want to point out that more than 50 per cent. of companies currently pay more than the statutory limit. She will find that those companies tend to be from big business.

I am grateful to the hon. Gentleman for that intervention, and I take his point. He said that big business should not like these proposals and I can understand that because they will increase the cost to business just when times are the hardest they have been for business in living memory.

My party and I are not in thrall to the unions or big business and we seek to steer a path that achieves fairness and prosperity for all. That is not easy, and in times such as these it is probably not even possible, but I am going to try.

It is worth considering the decision that we are being asked to make today in the context of the history. When the Redundancy Payments Act 1965 was introduced, average earnings were £19.60 and the cap was £40 a week, which was just over twice average earnings. That cap remained unchanged until 1974, when it was doubled to £80. However, there was no automatic mechanism to operate the cap until 1999. In 1999, the retail prices index was introduced as that mechanism. As wages regularly surge ahead of the RPI by an average of 1 to 2 per cent. in most years, the cap has fallen behind average earnings. At £350, it is now worth only 57 per cent. of what it was in 1999. A person who has worked all their life for a company can be made redundant with a maximum of £10,500 in redundancy pay. I personally feel that that is hardly fair compensation for a lifetime of work and dedication to one company.

To put the system into context, it is interesting to compare how generous we are in calculating redundancy with how generous our European neighbours are. Indeed, the hon. Member for Chorley kindly provided examples showing that countries such as Italy, Spain and France are much more generous than the UK. That is interesting but not necessarily relevant, because to make sense those statistics would need to be related to the relatively large burden of social insurance paid by employers and employees alike in those countries. High taxes are not the only cost; inflexible employment rules also make it harder to fire and less attractive to hire employees in those countries.

The allegation is frequently made that it is easier to fire workers in the UK compared with other countries and that it leads to higher unemployment in the UK than elsewhere. If that were true, would unemployment in the UK not be higher than in Germany and France? In fact it is lower, so it seems to me that the frequently made allegation that it is easier to fire people in the UK is not reflected in the unemployment figures for the various countries usually cited as examples.

I am grateful to the Minister for that intervention, although I wonder whether the degree of unemployment in other European countries is also related to other factors that are not necessarily linked to how easy it is to hire and fire. However, I take his point.

In the UK we have a relatively low-tax, more flexible economy, and that flexibility has gone against us in that the UK has sunk into recession faster than many of our European neighbours. My hope is that our flexible labour force and low set-up costs will enable us to be one of the first to climb out of the recession.

Let us consider the case against the Bill. For an employer it is the worst possible time to increase minimum rates of statutory redundancy pay. For the employee it is the best time; with more people being made redundant, they will need the money. In an intervention, the hon. Member for Bromsgrove (Miss Kirkbride) suggested that higher redundancy payments would make employers accelerate redundancies, but surely the opposite is the case. The more it costs to make someone redundant, the more likely it is that the employer will think twice.

The CBI says that the increased costs would reduce the savings made for each redundancy, so employers would have to make more people redundant. There is certainly a lot of wisdom in that statement. The CBI also says that the annual increase is intended to reflect living costs, so the retail prices index is a more appropriate tool for uprating the cap.

However, we have seen what happens when RPI is used as a measure: the amount becomes out of touch with the general standard of living for those who are working. The current maximum is 56 per cent. of average earnings—it was 200 per cent. when the measure was introduced. The rate paid to pensioners is now only 52 per cent. of what it would have been if Mrs. Thatcher had not withdrawn the earnings link during her reign. The Government have slowly but finally agreed slowly to restore the earnings link for pensioners. Surely the same principle should apply to redundancy pay.

The CBI cites the Government’s “Success at Work” policy paper of 2006, and makes a point similar to that made by the hon. Member for Huntingdon (Mr. Djanogly): given that the Bill will take two years to come in and that it addresses only the upper limit, not the lower, it is not in keeping with the Government’s policy of

“protecting vulnerable workers, supporting good employers”.

The Engineering Employers Federation takes things a step further. It would be minded to support a minimum rate for redundancy rather than a new maximum, and suggests that the minimum rate should be £200. However, would that not disproportionately affect employers at the other end of the scale? Would not even more of the lowest paid workers lose their jobs as a result? I should be interested to hear what the Minister thinks about the EEF’s suggestion.

The EEF commented that the proposals would disproportionately affect manufacturers because they pay relatively higher wages. Surely the real factor is the percentage of total wage costs compared to overall costs. I suggest that the impact would be lower overall.

I turn now to the benefits of the Bill. I do not accept the argument put forward by the hon. Member for Bolsover (Mr. Skinner) that giving people more redundancy pay would stimulate the economy—as in Keynesian economics. When someone has just lost their job and does not know when they will find another, the last thing they will do is splash out on a new freezer, carpet or conservatory. They will squirrel their money away. The rainy day has come and people need the comfort of knowing they have something to fall back on when the economic winter becomes even harsher.

Giving people some means of surviving economically until they can get back on their feet is right and fair. The Bill does two things. It promotes a method of calculating statutory redundancy pay that links it

“in such a manner as the Secretary of State considers appropriate, to average weekly earnings”

within 12 months. It occurs to me that there is a fair amount of wriggle room for the Minister or the Secretary of State to take fair and proportionate action. It would be above my pay grade to suggest exactly what that fair and proportionate action should be, but I am sure that the Minister has excellent advisers who could come up with some good suggestions.

Secondly, the Bill links the figure in subsequent years in

“an annual comparison…with average weekly earnings.”

We thus know that if we are to have a cap it must be linked to something that protects the relative prosperity of our society and not to the price of a loaf of bread.

In conclusion, something needs to be done in the interests of fairness. I should like the Bill to make its way to Committee where the Government can propose amendments to make it a fair and realistic proposition that employers can cope with, or I should like the Minister to offer enough comfort to the hon. Member for Chorley so that, in the knowledge that the Government will introduce their own Bill, he does not push for a vote. The Minister is a man of great talent, and I am sure that with his advisers he can come up with a solution that is proportionate and fair for all.

I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on his success in the private Members’ ballot. The issue he raises in his Bill is important, both in itself and in terms of our response to very difficult economic times.

I begin with a note of caution: in our attitude to the Bill, we should be careful not to make a judgment about the whole recession and the set of economic circumstances we face. It would be a mistake, particularly for my colleagues on the Labour Benches, to judge purely in terms of our response to the measure whether we were acting in the interests of the working people we care about. They are at the heart of everything we do in response to the recession. I will have more to say about that in relation to the help offered to people who are in difficult circumstances, having lost their job.

As my hon. Friend said, people expect the Government’s response to the recession to be focused on the concerns of ordinary families. They expect it to be about real help for those at the sharp end. That has been the central concern in everything that we have done in recent months. He suggested that on the Government’s side, there had been some attempt to encourage people to speak against his Bill. I was puzzled by that suggestion. I have tried to find out whether that was the case, and I am told that it was not; it is certainly not something of which I have any knowledge.

As my hon. Friend remarks, the evidence shows that that was not the case. When we intervene in response to the recession, it is very much because the interests of ordinary, hard-working men and women who do their jobs faithfully, day in and day out, are at the heart of our concerns. There is sometimes confusion about that: when people see us intervening in the banking system, or see us acting as an insurer or a guarantor of lending risk, they may feel that we are doing that purely because we feel concern for the banks, or indeed the investment bankers who took some of the decisions that led to the problems that we face, but that is not the case.

We intervene because a properly functioning banking system is an essential prerequisite of a modern economy. It is a basic necessity for companies that employ millions of people. Of course, banks are the home of the savings of the hard-working men and women who are at the heart of our concerns, and the home of the savings that those who have retired have built up over the course of their life. Although the intervention is in the banks, the concern is not for the bankers but for those who have invested their trust and their savings in the banks.

The same is true of the other measures that we have taken in response to the recession. We have taken a dual approach to the downturn, which involves both tackling its causes—the international banking crisis and the lack of adequate lending—and dealing fairly with the consequences. That means providing the right support for people and businesses. The Bill is concerned with support for people who are at the sharp end of what is happening in the downturn. For example, with regard to the credit crunch, we believe it is important to try to maintain lending to businesses, so that they can keep employing the people with whom the Bill is concerned, as well as lending to households, which is vital for growth and jobs.

The health of the economy also matters to banks, as growth and jobs determine whether borrowers can repay their loans, and whether the banks can make new loans. That is why the Government took decisive action in October and since then to ensure that the banking system does not collapse, and to ensure the certainty and confidence needed to get credit flowing again.

This is not just a British response. After the steps taken in October in the United Kingdom, similar action was taken by countries around the world. The detail of the response may differ from state to state, but across the world there is a common approach, which is to try to stabilise the banking system and engage in fiscal stimulus in order to restore confidence, get credit moving and ensure that the recession is shallower and less long-lasting than it might otherwise be. Our response is not just national; it is also about calling on other Governments to join us in taking action to get credit flowing again, because that is central to getting the world economy moving. Here in the UK, we have announced a number of measures to help businesses and employment. That is about delivering real help to businesses that are in urgent need of credit, which is important if we are to stop the job losses to which the Bill is designed to respond.

My right hon. Friend is setting out a cogent case on the macro-economic position and the Government’s overall policy, but will he nose his speech into the Bill? The Bill is not a red flag-waving measure; there is not a great deal of red meat in it. It is a modest measure. Will he please get on to the Bill, and say what he objects to in it, rather than giving a great macro-economic description of what is going on in the wider world?

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.

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.

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. By guaranteeing portfolios of working capital, the package will release capital held by banks against those portfolios—capital that those banks have, in turn, agreed to lend to businesses with turnovers of less than £500 million. That will help to ensure that banks do not reduce or withdraw working capital lines on renewal; as those lines are short-term, they can be easy to cut. It will also ensure that banks have new capacity to lend to UK businesses, which are suffering from the withdrawal of certain lenders from the market. Those credit schemes are particularly important to restoring confidence and trying to avoid redundancies.

That is an important part of our response to the recession, but I come now to the specific response for people affected by job losses and what we are doing for them. A number of people are affected by job losses and short-time working. In essence, there are two elements to the context of the Bill: the economic circumstances that we face, and what we said we would do about the issue before the last election. I assure my hon. Friend and the supporters of the Bill that the issues raised by it are under consideration, although he will understand that I cannot set out the conclusions of Government discussions on these issues.

I share my hon. Friend’s belief that people should have a fair deal at work, and next month we will see further improvements to people’s employment rights through, for example, the extension of paid leave and the introduction of extended rights to request flexible working, to help people to balance the responsibilities of work and family life. I hope he does not mind me saying that, during the past week or so, we have discussed the fact that when pressing for a new or additional measure it is important not to ignore what the Government are doing for working people, which includes some significant changes that will come into force next month.

I am more than happy to put it on the record that I have been in discussions with my right hon. Friend, and with the Secretary of State. Quite rightly, we have been through this, and certain objections have arisen. I think the Minister will agree that we have to go a long way to meet those, which is why the Bill has changed. We were still in discussion as late as Wednesday night.

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. 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.

I am listening carefully to my right hon. Friend, but what is it about this Bill that would prevent the Government from pursuing those laudable measures in any case?

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. 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. 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. 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. 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. 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. 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.

I am sorry to stick my nose into a fascinating speech, but the process for deciding who is made redundant and how it should be administered has nothing to do with the Bill and the calculation of the weekly pay element of the multiplicand. What does my right hon. Friend object to about that?

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.

My right hon. Friend might not be aware that Sky News is carrying a story that the Prime Minister is more than happy with the Bill. Will he reflect on that, and does he now believe that he can support the Bill? Instead of skirting around the outside of the Bill, will he now go into the depth of it?

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.

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. 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. 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.

I cannot help noticing that my right hon. Friend has a considerable sheaf of papers in front him. If the Prime Minister does support the Bill, will that in any way alter the content of the Minister’s speech? Should he be sending out a runner to find out what the latest news is?

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.

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. 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. 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. 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. 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.

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. 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.

My right hon. Friend has now been speaking for well over half an hour. He has given us lectures on the economy, on the credit crunch and the Government’s response, on redundancy law and procedure, on discrimination law, on redundancy statistics, and on help for the unemployed in the labour market, and he is now going back to where he started—the recession. Is he ever going to address the detail of this extremely modest Bill? None of these issues has anything to do with the Bill, which deals with a straightforward, narrow point on the weekly multiplicand.

Order. May I remind the hon. Gentleman that the decision as to whether the content of Members’ speeches is relevant is determined by the occupant of the Chair?

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. 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. 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 appreciate many of the measures that the Government have set in train. However, one matter concerns many of us, especially those from steel industry communities. In the rest of Europe, efforts are made to keep workers at work, with part of what might be a future unemployment subsidy transferred to allow that to happen. The Government are resisting such action, and I received a most disappointing reply on the matter this morning from the Minister’s master in another place. Will my right hon. Friend try to get officials to think a little bit out of the box—a little laterally—and perhaps even learn some German or Dutch? They speak quite good English over there. Good things are happening in Europe, so will my right hon. Friend consider applying them to our steel industry? If not, we will face much graver problems, which could be avoided with a little more flexibility and innovation from the Department.

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—

Order. I appreciate that the Minister is responding to an intervention, but I warn him against going too far down that road and getting too far from the Bill’s contents.

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

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. 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.

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. 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.

In fairness, the Minister is being disingenuous. As I have said clearly, the formula is linked not only to average weekly earnings but to the RPI, so the position is covered two ways, not one as at present. He has it the wrong way round. The danger is that if inflation drops, statutory redundancy pay could drop rather than being increased. I am putting in the safeguard, and he ought to acknowledge that.

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. 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.

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.

I entirely agree with what the Minister says about fairness, but given the Government’s concession relating to pensions, which are now to be linked to average earnings, why can he not allow the same degree of fairness to operate in the area covered by the Bill?

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. 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.

The right hon. Gentleman has suggested that the Government are wholly motivated by altruism, but a rather helpful Library note makes it clear that there was a Warwick agreement in 2004, and the trade union Unite has categorised this particular legislation as “red” under its traffic light system, which means:

“Those policies and priorities where there is a disagreement between affiliates and the Government over interpretation or delivery.”

Is the right hon. Gentleman in denial over the Warwick agreement?

I am not in denial over anything we said before the last election, and I have just referred to—and, indeed, quoted from—that, so I am hardly in denial over it. What I am saying is that when we act to improve the position of people at work, we do so not to please any sectional interest, but because the Government believe in fairness at work. Sadly, that is not a belief that is shared by the Conservative party, as has been made very clear today. I completely acknowledge our manifesto commitments, and it is because of this belief in fairness that the position of people in work in the UK today is significantly better than when the hon. Gentleman’s party was in power. If he went back to those days, he would find no rights to paid leave, no minimum wage and no right to flexible working.

Lest the hon. Gentleman be tempted to attack these measures too much, I add that it has been a significant part of his party’s repositioning over recent years somehow to pretend that they like these measures. That mask appears to be slipping today, however. The Opposition appear to be reverting to type, and I think that people at work who look at the record of this debate will see the signals, and will know that the Conservative party appears to be setting itself up to promise at the next election a reduction in the rights of people at work. I am therefore perfectly happy to talk about what we said and what our motives have been in recent years.

I was referring to the Work and Families Act 2006 and the one-off uprating to the limit through affirmative regulations. We have not yet made use of these powers, in part because the weekly limit has grown strongly in recent years. Although I understand the wishes of my hon. Friend the Member for Chorley and the other supporters of the Bill, it is fair to point out the degree to which redundancy payments have been increased in recent years.

The Government have done something else to improve the existing redundancy regime, as well as introducing the uprating formula. Under the original scheme, service below the age of 18 did not count towards the redundancy calculation. There was also a taper in the scheme that meant that redundancy payments were progressively reduced from the age of 64 and not payable at all from the age of 65. We removed both the lower and upper age limits in the Employment Equality (Age) Regulations 2006, benefiting both younger and older workers. That was an additional important measure of fairness; no doubt, we will be accused of implementing it for reasons other than our belief in benefiting older and younger workers, but such an accusation would be as spurious as the others levelled at us today.

We have also reviewed other elements of the existing scheme to ensure that it continues to be fair. I mentioned age bands. Under the scheme, the older someone is, the more pay they receive when they are made redundant for a given length of service. In 2005-06, we reviewed the bands as part of the age review, finding that both younger workers aged up to 24, and older workers aged 50 and above, were the most likely to be made redundant. We also found that young workers tend to find work more quickly and experience a smaller drop in their pay when switching jobs or when affected by redundancy, and that older workers are typically out of work between jobs for much longer and experience, on average, an 18 per cent. drop in pay when switching jobs. Those data suggest that older people have a greater need for higher compensation than younger people do. Consequently, after very careful consideration, we concluded that the current rules on age bands in the redundancy scheme were still relevant. After all, one of the recognitions built into the scheme since the beginning has been that it is in place to reward length of service. That seems to be reflected in how we operate the scheme.

The Government also looked again at the link between length of service and the final redundancy settlement. We believe that the burden of providing a safety net for those made redundant should fall, in part, on the employers whom they have served. That is the way that the scheme works, so it seems sensible that redundancy payments should reflect the level of commitment demonstrated by a worker to his or her employer throughout the length of their service. We carried out a consultation on this issue as part of the age review in 2005, and we found that our approach was recognised and supported by the vast majority of those who responded to that consultation; just under 90 per cent. of people agreed with the principle that length of service should be reflected in such a way, and we decided to retain that element of the scheme. That is how the redundancy scheme operates and has been uprated in recent years, and the £40 a week increase over the past two years is the benefit that people have seen from the current uprating formula. We share a concern with my hon. Friend the Member for Chorley for a fair deal for people who are made redundant, and I believe that most of us would agree that much progress has been made in recent years, particularly because of how the formula has operated.

Let us consider some of the specifics of my hon. Friend’s Bill and whether such further changes would be appropriate, were we in a position to make them. As I said, I share much of the motivation of my hon. Friend and the many supporters of the Bill. The Bill says that the Government shall review the limit and come back within 12 months to introduce a mechanism that links the weekly limit to average earnings. It also provides that the Government will ensure that the limit is increased in line with average earnings in subsequent years. I hope that what I have said today has left no one in doubt about the Government’s commitment to supporting those who have been made redundant through no fault of their own. The underlying intention of the Bill—to provide more help and to ensure that workers get a fair deal—is one that we share, but although I have much sympathy with its intentions, there are some specific reasons why I believe that the Bill, as drafted, is flawed and would not be the best solution.

The first of those reasons revolves around cost and affordability. My hon. Friend may argue differently, but the natural reading of the Bill is that the Government should set the weekly limit at average weekly earnings. Much of the supporting material and publicity has been clear on that point. The figure for average weekly earnings has varied, depending on the supporting material. Some people have talked of £500 a week, and there has also been talk of £585 a week. It is important that we examine the costs of setting redundancy pay at such a level.

Let us take at face value the claim that average weekly wages are £585 a week. If we raised the limit from the current £350 a week to £585, it would increase the cost of redundancy by approximately £500 million a year. Most of that cost would fall on business, and as I have said, one of the features of the redundancy system since its introduction has been the gradual transfer in the burden of payment from the state to employers, save in those cases in which insolvency is a factor, or when a business is threatened with insolvency and applies to the Insolvency Service for a loan to cover redundancy payments that might otherwise tip it into insolvency. Such a feature is an important part of the system, because we are trying to avoid businesses going into insolvency if they do not have to do so. If we keep employers in business, they can continue to employ people and keep redundancies to a minimum. The state’s role in this is not restricted to the point after which insolvencies have happened; it can also play a role in lending money to businesses to pay for redundancies when not to do so might result in an otherwise avoidable insolvency situation.

Even taking both aspects of the state’s role into account, most of the cost of raising the limit will fall on business. The effect of the Bill may in fact be greater, because it is not uncommon for contractual redundancy pay to be based on a multiple of the statutory rate. A fairly common feature of employment contracts is that the contractual redundancy pay will be set at one and a half or two times the statutory weekly limit, so any increase in the limit—as I say, we have increased it in recent years—will have an on-cost in terms of contractual redundancy pay, too.

Taking all those factors into account, we think that the cost will be about £500 million, without also taking into account the contractual redundancy pay. That will tend to apply more in the better organised workplaces and the union-organised workplaces. Unlike the Opposition, I can see the benefits of being in a union-organised workplace where a contract with such a provision might be negotiated. One would always hope to avoid redundancy, but if one could not and the company was not in an insolvency situation, the worker would benefit from such a contractual provision.

How the exact costs worked out would depend on how we defined average weekly earnings. I believe that £585 is the average for full-time weekly earnings. The figure does not include part-time workers and if we included them it would fall. I do not know whether my hon. Friend the Member for Chorley intends to include part-time workers in his calculation of average weekly earnings or whether he would just include full-time workers, but the figures are different. The average for purely full-time workers is £585, but if part-time workers were included the average would be £450 a week. The current weekly limit represents about 73 per cent. of average earnings as things stand, if we include part-time workers in the calculation. Even if we took that figure as our baseline, raising the weekly limit to £450 would increase the cost of redundancy by about £260 million a year. Again, we have to consider the impact on contractual redundancy pay to get a full insight into the costs. That is an important factor to consider.

I am not arguing that we can never impose costs on employers. We have done so when we thought that that was right, and it is not always wrong, but it is a legitimate factor to take into account, especially at a time of economic difficulty such as now. The cost is one factor that it is important to consider. If we raise the limit, about three quarters of the cost will be borne by employers.

There is clearly a case for providing additional help to employees, as I have said. I went through some of the measures that we are taking in response to the recession. I have talked about the measures that Jobcentre Plus and the rapid response service are taking when people are faced with redundancy. We also need to be conscious that businesses are struggling to keep their heads above water. We must consider the need to do everything we can to help keep people in work as well as the package that should be made available to them if they lose their jobs.

Of course, it could be argued—perhaps by my hon. Friend the Member for Chorley—that the Government could deal with the problem of costs to business by shouldering more of those costs and reintroducing the rebate. His Bill is silent on whether the state should carry more of the burden of the cost of redundancy payments but, even if we went down that road, it would not be an easy answer. Pressures on spending exist in that area too. At present there is sometimes confusion, because people hear about the big numbers involved in bank rescues, with the Government underwriting loans of many billions of pounds, and indeed sometimes underwriting loan books stretching to hundreds of billions of pounds; but that is not the same as spending hundreds of billions of pounds. Acting as an insurer is very different from one-off expenditure on a school or a hospital. It is certainly not the case that the Government are free to spend taxpayers’ money without limit. There are implications for public spending, too.

Even in the first scenario, where we did not introduce the rebate and carried on with the present system, the Government would still have to bear a proportion of the costs. As I said, that is because the Government are obliged to meet the cost of redundancy payments when employers become insolvent. The average full-time earnings figure of £585 would leave the state carrying an annual burden of something more than £100 million.

Apart from costs, we have to consider another factor that arises from the Bill: the question of time. In an intervention on my hon. Friend the Member for Chorley, my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) raised the question of urgency. Timing is a legitimate factor. We have already raised the limit. In the Work and Families Act 2006, we took the power to make a one-off increase to the limit. The Bill offers an alternative road for doing that, but we have to consider the timing. I suspect that the motivation of my hon. Friend the Member for Chorley is not just to increase the statutory redundancy payment limit but to do so quite quickly—probably in the context of the current recession.

In two or three years’ time, we hope that the country will have turned the corner and be pulling out of recession and on the road to recovery. I think my hon. Friend’s aim is that his measure should be part of our response to the recession, but in terms of timing, how would the Bill work in practice? He says that within 12 months we should come forward with a proposal, and that in the meantime the Government should consult the CBI and the TUC. My Department regularly consults not only the CBI but other employers organisations, and not only the TUC but other trade unions. We are always happy to do that, and the quality of the responses to those consultations makes a valuable contribution to Government policy. However, if we did that for the Bill, the responses to such consultation would be fairly predictable.

The unions, for reasons I understand, would call for the limit to be increased substantially. Employers, for reasons I also understand, would argue that they could not afford such an increase. They would say that we were in the middle of a recession and the Government should understand that we should not impose new costs at such a time, and so on. In the end, the Government would have to square the circle and make a judgment. We could make such a change at any point, but if we took a further year to do so, there would be more redundancies during that year. There is a timing issue involved, if we want to increase redundancy payments.

My hon. Friend the Member for Chorley will understand that I am not in a position to make promises about public spending today. I cannot suddenly tell him what will happen in future. If we were to increase redundancy payments, it might be quicker to do so through the measure in the Work and Families Act 2006, which has already passed through the House. That way, we would not have to pilot a new Bill through the House—we can never predict quite how long that will take—and carry out a 12-month consultation after that. I suspect that my hon. Friend wants urgency and speed on the issue, but I am not sure that the Bill would give him urgency and speed. In fact, there is already a measure on the stocks that could be used, if the Government made a decision on the subject. I stress again that I am not making any announcement about an increase today. He knows that I am not able to do that. The issue of timing, and whether the Bill is the right vehicle, is perfectly legitimate, as is the issue of the uprating, which is at the heart of his Bill.

If the Bill was passed, it would in practice be 12 months before any changes could be introduced—and it would first have to complete all its parliamentary stages. My hon. Friend has quite fairly raised the issue of redundancy payments today. He knows that the issue is under discussion in Government. He has made his point; he has explored the issues and laid them before the House. He spoke with great skill and passion on behalf of the people about whom he is concerned. I simply ask him to think about whether, if we increased redundancy payments, the Bill would be the vehicle for doing so. He has perhaps underplayed the fact that the Government already have a power that they can use to make such an increase, if we judge that that is the right thing to do in the current circumstances. If we used that power, any increase would, in all likelihood, come into force more quickly than it would under the process set out in his Bill, which would be required to undergo the full, normal parliamentary procedure of a Committee stage and so on. That would be followed by the 12-month consultation mentioned in his Bill. So there are issues of content, effect and timing.

I now come to the third matter to which I wish to draw the House’s attention. If we were increasing statutory redundancy pay, would the formula in my hon. Friend’s Bill be the right way to do so? Under the statutory scheme, everyone earning above the weekly limit would receive a redundancy payment based on the limit. Someone earning £400, £500 or even £1,000 a week would receive, if they were dependent on the statutory scheme, a redundancy payment based on the figure of £350. However, anyone earning below the weekly limit receives a redundancy payment calculated using their actual pay. If we concentrate all our efforts on increasing the upper limit from £350 to whatever it may be—the average earnings of £450 a week including part-time workers or average full-time earnings set at £585 a week—only those earning £350 a week will benefit. Workers earning below that limit would not be affected by the changes proposed in the Bill.

Let us look at an example of how that might work. In the supporting papers for the Bill, my hon. Friend circulated tables of constituencies and employment rates, which showed how many people in each constituency earned above the £350 limit. If we take his constituency of Chorley, the figures showed that 47 per cent. of people earn above the weekly limit—roughly half. So half of his constituents are earning above the current weekly limit, and half earning below. If we had a limited amount of money and we concentrated it purely on increasing the upper limit, we would benefit the better-off half of the workers in his constituency. That is not an ignoble thing to do. I am not pretending that £350 a week is high earnings, but that would be the effect of concentrating purely on the weekly limit. The lower-paid half of workers in the constituency would not see a rise in their redundancy pay.

That issue should be considered when we take a sectoral view. My hon. Friend mentioned workers in the hotel and catering sector. In that sector, around 22 per cent. of workers earn above the weekly limit, which would mean that only the better paid 22 per cent. of people working in that sector would benefit from a measure that was focused on the upper weekly limit. The 78 per cent. who earned below the weekly limit would not benefit. I am not arguing that £350 a week is a huge amount of money because it is not, but as well as considering how the formula would have impacted in recent years and how long it would take for the Bill to come into effect, we have to consider content. If we had a limited amount of money and we wanted to do something about redundancy pay, would the Bill be the best way to do it? Would it concentrate help on those who needed it most? It has been a significant and justified part of our Government’s approach to try to concentrate help on the lowest paid and we have done that. The hon. Member for Solihull referred to pensions, and we took such an approach to pensions during our early years in government. We took the same approach with the minimum wage, and that is a perfectly understandable and fair principle.

From a nationwide point of view, about 7.2 million workers in the UK earn below £250 per week. About 5 million of these are people working part time. Three quarters of them are women. A further 2 million people are earning between £200 and £250 a week—in other words, at or perhaps just above the national minimum wage level.

As I have said, I am not in a position today to announce extra help for redundancy pay. I know that my hon. Friend the Member for Chorley would like me to do that, but I pose this question: if we were in a position to identify extra Government resources and ask business to contribute more to redundancy pay, should we not also ask where it was best to direct that help? Should it be directed to lifting the upper limit or to concentrating help more on the low-paid? That is at least a legitimate question for debate. It is incumbent on us to consider that matter as well as the timing of the Bill. As I have said, I cannot promise that there is money available to do any of that, as the House will understand. However, whether we help those earning above £350 or below, it is a legitimate issue for debate, as are all the other matters that I have mentioned.

It is absolutely right and fair for us to consider redundancy payment, but it is important that we do not see it in isolation. Our response to the recession should also take into account the other things that we are doing to help people. When people are faced with redundancy, what matters is not just the redundancy payment, although that is very important. It is also what we can do to help them to find a new job and give them a second chance. We wish to do more than simply pay benefits as in the past. The Government must have an eye on the future and on ensuring that those affected by redundancy take their second chance by reskilling, upskilling and giving themselves a better opportunity to find a job in future.

The economy that emerges from this recession will not be based simply on pressing the rewind button to 2006 before the sub-prime crisis, the troubles at Northern Rock, the collapse of Lehman Brothers and the other traumatic events of the past couple of years. As we navigate the downturn, we must also ensure that those affected by redundancy can compete in the British economy in years to come. My Department has talked of industrial activism. That does not mean that we are going to try to pick winning companies, but it means that we see those affected by redundancy as needing to be equipped for industries in which we know this country will have to succeed in future.

For example, my noble Friend Lord Carter has published a strategy to help to ensure the provision of broadband throughout the country, knowing that the information and creative economy is critically dependent on a modern communication infrastructure. Similarly, we know that the way we heat our homes and offices, transport ourselves and manufacture our goods will change radically in future so that Britain is at the forefront of the skills and jobs needed in an ever-expanding green collar labour market.

That is why I believe that, in debating these issues, we should concentrate not solely on the financial payment available to people but on the real and practical help that they get from the Government in terms of retraining, new skills, and so on. Several years ago, we published the Leitch report, which identified the skills shortages in this country.

If we think back to Harold Wilson’s motivation for introducing the statutory redundancy scheme in the first place, we see that it was about labour mobility. It was about giving people that second chance, not just about the perfectly legitimate concern to ensure that people were rewarded for their years of service. It is a mistake simply to view this issue in isolation without taking into account the doubling of the budget for the rapid response service or the £1.3 billion that has been made available to the Train to Gain scheme, which means that it is available for shorter-term courses and available to people who already have qualifications. They are not excluded from taking part in it because they have already had some training. The scheme is now much more flexible, and it is there precisely so that people who may be affected by redundancy or by short-time working are equipped for the jobs and industries of the future.

Our response to the recession and to the problems created by rising unemployment and rising redundancy is to ensure that a fair system of statutory redundancy payments is available. We have increased it by £40 per week in the past two years, compared with an overall increase of £5 per week in the last six years of the Conservative Government. We have introduced a new formula, with the provision that it not only increases by the level of RPI but is rounded up by £10 per week. That has resulted in an increase in payments at the weekly limit of beyond-average earnings in recent years. That is a completely legitimate thing to do, but it would be wrong to say that it is purely where we should concentrate our efforts.

In saying that, I do not mean that we should rule out further action, but I do mean that we should see it in a wider context of help for the unemployed, retraining and skills for the future. That is precisely the challenge that was put before us in the Leitch review several years ago. It highlighted the importance of investing in skills to maximise economic growth, productivity and social justice in a globalised economy. Hard skills matter, as do, in a world where services are more important economically, soft skills and people skills. In the economy of the future, we will find that many people facing redundancy have to find new jobs in new areas. That was the original motivation behind the statutory redundancy scheme, and it remains the motivation behind the scheme today.

Our response to all this is a major investment programme. More than £11 billion a year will be invested in education, employment and training. We have expanded apprenticeships, with more than £1 billion in Government funding to increase overall places by more than 400,000 by 2010-11. As colleagues know, we plan to lift the education and training leaving age to 18 by 2015.

Schools are also critical and we have made a historic commitment to raise the participation age to 17 by 2013 and to 18, as I said. That is an important part of our approach.

My hon. Friend the Member for Chorley is motivated by the impact of recession and job losses on his constituency and others. The Bill is well intentioned and we certainly need to do more to help those who need it most. However, I do not believe that the measure is the right way to achieve that goal and I have set out reasons for that.

Some of my reservations are about the formula and how it would work. We have a formula that has worked well in recent years and we also have a power to uprate, which would act considerably more quickly than the mechanism for which the Bill provides. If we intended to use any improvement to redundancy payments to help those affected by the recession, the existing power to uprate the formula would be a much quicker mechanism for doing that than the method that the measure sets out. I ask hon. Members to keep that point in mind, although, as I said earlier, I cannot make spending announcements today. There is also the question of whom we should help if money were made available or if we asked business to make a contribution in the way that the Bill sets out.

My hon. Friend claimed that there was no spending commitment and that the measure is merely a guide to the Government. There is a logical flaw in that argument. The Bill either commits us to increasing redundancy payment in line with average earnings, and to introducing a new formula to increase it in line with future average earnings after the one-off increase, or it does not. If it does not, what is the point? What is the point of legislation that is simply declaratory when we already have a power on the statute book to increase redundancy payment quicker than the Bill would? There is a logical flaw in arguing that the Bill would have no impact on spending because it would leave all power in the hands of Ministers. We have that power anyway under the Work and Families Act 2006, and we do not need the Bill.

My hon. Friend has made his point. He wants redundancy payment to be addressed—that is a fair point. As I have told him, discussions about the matter are going on in Government, but there is a logical flaw at the heart of the Bill. Either it has the implications for cost to business and to the Government that I outlined or it does not. We already have powers to increase redundancy payment. Of course, that would not be a decision for me, but for Government as a whole, and we would not announce such a decision today, as he knows. Those are the reasons for my reservations about the Bill and for being unable to support it.

I want to consider the notion of average earnings as our guiding light. Even if we wanted to do more about redundancy payment, why should average earnings be that guiding light? To begin with, we do not have an agreed definition of what average earnings are. We are not just talking about how much they increase by every year, as we would with the pensions system, which has been referred to; we are talking about setting the weekly limit at the level of average earnings. Is the figure £450, which includes part-time workers, or £585, which refers purely to full-time workers? It is not clear from the Bill which definition my hon. Friend is using.

Other elements of the redundancy package would include pay for the notice period to which the worker is entitled, pay for outstanding leave owed to the worker, unemployment benefit, tax and child credits, and retraining to help the worker gain new skills and find work as quickly as possible. There is not necessarily a magic level for redundancy pay within that overall package. However, we should not let the level atrophy, as it did in the past. I do not want us to return to the days when the Conservative party let it waste away, increasing it by only £5 over six years. We have increased the level from £210 to £350 while we have held office and by £40 a week in past two years. However, I question whether the level of average earnings is necessarily the right level for any future increase.

The Bill is flawed in its approach, although I share my hon. Friend’s concern for people at work. I would not want anyone to go away from today’s debate thinking that we were not concerned about people at work. We have made many changes to improve the lot of people at work. It would be a great mistake to ignore those changes, some of which come in next month. We should celebrate them and campaign on them. We should point out that those changes would never be granted by the Conservative party. If we find ourselves in the position of increasing redundancy payments, we have a quicker way to do so than we would under the Bill.

I hope that my hon. Friend will consider the points that I have made and understand that I cannot promise him an increase today. However, I assure him that we will do more to help people affected by the recession. I will remain in dialogue with him about the issues. The dialogue that we have had so far has been constructive and positive. However, I hope that he will understand why, for the reasons that I have set out, I cannot support his Bill today, even if I share his concern that people at work should get a fair deal and the best possible package of support. Crucially, that should apply not only when people are made redundant, but in respect of the whole package that they are offered: to help them find a new job and reskill for the future, to ensure that losing a job, while it is a setback and a crisis for every family, is not the end of that family’s opportunity, and to ensure that we stand with people in those circumstances to give them a better second chance in the future.

I have to say that my right hon. Friend the Minister for Employment Relations and Postal Affairs has given a sterling performance with his longevity. His prostate must be much better than the rest of ours: he has taken on the water and managed not to go and relieve himself, but we now have the pleasure of allowing him to do so.

The Bill is very important. We have worked hard with my right hon. Friend’s Department and the Secretary of State and we have had good, constructive meetings. There is a great opportunity here to help the Government. Indeed, through this Bill I have offered the Government time to carry on with the very good business of looking after this country and fighting the world recession. I recognise that that is at the top of the agenda and I want to give the Minister the time to carry on doing that.

We should give a fair wind to the Bill, as the majority of Back-Bench MPs support it. What is important is that we want to carry on sending out the message. People may well have different views, but that suggests the advantage of taking the Bill into Committee where differences can be overcome. The Bill should not be blocked now. I hope that the Opposition recognise that democracy is important and that any differences can be discussed in Committee. I am pleased to bring the Bill before the House today. It should go forward into Committee.

Question put, That the Bill be now read a Second time.

Bill read a Second time.

On a point of order, Mr. Deputy Speaker. During yesterday’s debate on the possible use of the Chamber by the UK Youth Parliament, the Deputy Leader of the House said—it is at column 529 in Hansard—that he hoped there would be an opportunity for the issue to be put to the vote so that the will of the House could be established. Given the way in which matters are proceeding today, it is obvious that the item on the agenda to be dealt with at 2.30 pm, which concerns the Youth Parliament, will not be reached before that time, and if it is reached after that time, it will not be possible to put it to the vote. I wonder whether a Minister could indicate whether the Government intend to move the motion at 2.30 pm, or to withdraw it.

Order. I must say to the hon. Gentleman that it is not acceptable to address the House without being properly attired.

Let me deal with the point of order from the hon. Member for Christchurch (Mr. Chope). The Chair cannot determine whether a statement will be made, or whether any indication will be given, from those on the Government Front Bench. We are faced with the Order Paper that we have today. The hon. Gentleman may draw a conclusion about the likelihood of any further progress on the matter, but that does not preclude progress on another occasion, at which point it is possible that the intention, or hope, of the Deputy Leader of the House will be fulfilled.

Organ Donation (Presumed Consent) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

May I start by paying tribute to my constituent, Sean O’Brien, and his wife, Samantha, who I am pleased are able to be present in person for the debate today, as it was Sean O’Brien’s initial intervention in bringing this matter to my attention that inspired me to introduce the Bill? He suffers from a liver cancer affliction and is in need of a transplant. Therefore, like many thousands of people in the country, he has a direct stake in this legislation and how the Government tackle the issue.

I would also like to pay tribute to another constituent of mine, Gill Stapleton-Smith, who has been very helpful in providing me with an insight of how people live when they are afflicted by a serious organ problem and in need of a transplant. She received a new kidney, and that had a transformative effect on her, and enabled her to go back to work and contribute to society. That enhanced her quality of life, and that of her wider family.

I propose to divide my speech into three sections. First, I shall explain the problem I am seeking to address. Secondly, I shall explain the essence of the Bill and what effect it will have. Thirdly, as I know that several Members have concerns about some of the implications arising from the legislation, I intend to address those concerns and see if I can reassure any Members who might be minded to oppose the Bill.

What is the problem that I am seeking to address? At present, about 8,000 people in the UK are on the organ donor list awaiting an organ transplant. That figure is rising at a faster rate than the numbers of people who either receive a transplant or, sadly, die before they are able to receive one, so the number of people on the waiting list is increasing. Approximately 1,000 people in the UK die every year waiting for an organ transplant because a suitable organ does not come up in time to save them. The terms of the Bill therefore represent a pressing issue for those people and their families and friends.

Under the current system, all of us are free to decide to donate our organs, and about a quarter of the people in the country—26 per cent.—have opted to do so: they are on the organ donor register and, in the event of their dying unexpectedly, their organs could be used to help somebody in need. However, the number of people who say they would be willing to countenance having their organs used is about 90 per cent. Therefore, at present a quarter of the population have signed the register, yet 90 per cent. say they have no objection in principle to their organs being used. I seek to address that sizeable gap, which represents those people who, for whatever reason, have decided not to put themselves on the list and yet are agreeable to the principle of doing so.

I have encountered precisely that situation, because—I am slightly embarrassed to admit it—before I met my constituent, Sean O’Brien, I was not on the list. People can find themselves in that situation for a variety of reasons: it might be to do with laziness, or a feeling of, “It will never happen to me in any case”, or an element of superstition might be in play. If it achieves nothing else, I hope my Bill will help raise sufficient awareness for that gap between 26 per cent. and 90 per cent. to be bridged.

I congratulate the hon. Gentleman on introducing the Bill, but is he aware that 40 per cent. of people on the kidney and liver transplant waiting lists are from the black and Asian communities, and Asian people have to wait twice as long as other people for an organ transplant, yet only 3 per cent. of the people on the organ donor registers are Asian? Will the hon. Gentleman congratulate Komal Adris and Shabbir Lorgat for mounting their organ donor campaign in this place on 12 January 2009, with the specific intention of persuading more people from the black and minority ethnic communities to donate organs?

I certainly will, because I am delighted that they are campaigning on that issue. I do not claim particular medical expertise, but I must say that there are some genetic predispositions to which people of different ethnicities are more prone and we need to ensure that the maximum number of people donate to the list, if that is what they wish to do and if, in the event of their dying unexpectedly, they are in a position to help somebody.

My hon. Friend the Member for Taunton (Mr. Browne), like my hon. Friend the Member for Solihull (Lorely Burt), is a keen supporter of the Bill. I represent Guy’s hospital, which has a huge tradition of renal surgery, and I have met many kidney patients awaiting transplants. Does he accept that for hon. Members such as me, it is difficult to explain the situation to those people, given the frustration of knowing that they could be dealt with much more quickly if many more kidneys were available? Looked at from the position of those families, many of whom I have seen over the years, this Bill is exactly the sort of step that this country ought to be bold enough to take.

I am grateful for that intervention, because I strongly agree with it. When I met Gill Stapleton-Smith, who has had exactly that transplant, she not only told me that it had saved her life, but she described her quality of life and the impact that the transplant had had on not just her, but all those around her. She now works at Musgrove Park hospital, which is the main hospital in Taunton, saving the lives of, and helping, other people and making a meaningful contribution to our community, including through paying her taxes—she helps out in that financial way. She also said that the stress her illness had caused her children and the rest of her family had now been removed. If anyone in this House were to meet her, they would be struck, as I was, by just how fit, energetic and vibrant she is.

That takes me on to an interesting point, which I was going to make in passing but I should make now because it is relevant to our deliberations. Some 90 per cent. of people say that they would be willing to donate their organs but only 26 per cent. are on the organ donor list. The figure I have been unable to find is the number who say that they would like to receive an organ were they in a position where if they did not receive a transplant, they would die—I suspect that that figure is considerably higher than the 26 per cent. of people who are voluntarily putting their names forward. This deliberation contains a large element of quid pro quo; there is a reciprocal nature to the debate. It is not just about the individual choice of the people choosing to donate their organs, because it also involves the choice of the people who need the transplants and have the surgery that they would otherwise not receive. We are trying to balance all kinds of important competing criteria. That is the problem that I am trying to address.

I turn to what my short Bill—it is only a couple of pages long, so it is easy for everyone to read and digest—seeks to achieve. Its essence is extremely simple: instead of having the current opt-in register in the United Kingdom, there would be an opt-out register. There would a presumption that people’s organs would be available for transplant unless they specified that that was not what they wanted. Just as in the current arrangements, where one can also choose to give only certain organs, people would be able to opt out of giving some organs and not others or to opt out altogether. Some people have been slightly cynical about this. I received a letter from somebody—they were clearly untrusting of policitians—who said that they did not doubt for a moment that all of these barriers to opting out would be extremely difficult and cumbersome. I wrote back to him saying that that was not my intention. I want to make it as easy for people to opt out as possible. Furthermore, the Bill puts additional safeguards in place, for example, if someone had not decided to opt out during their lifetime, but their parents or next of kin felt strongly that that would have been their wish, they would have the ability to override other considerations. I am not just trying to get the opt-out figure as low as possible: I want to ensure that anybody who has reservations, whether for ethical, religious or superstitious reasons, can opt out easily. I do not want to coerce anyone into doing something that they do not want to do.

There is widespread support for my proposals. The chief medical officer, Liam Donaldson, has said:

“To meet the current demand for organs, the number of people on the NHS donor register would need to approximately treble. I believe we can only do this through changing the legislation to an opt-out system with proper regulation and safeguards.”

That is precisely what I am trying to do, and I hope that the regulation and safeguards will reassure those who would otherwise be anxious about the Bill.

The British Medical Association has also been supportive. It has said:

“The BMA believes that genuine choice over organ donation can be facilitated through a soft system of presumed consent whereby adults—who have been well informed of the options—can choose to opt out of organ donation during their lifetime, rather than having to opt into donation, as is the status quo.”

Such measures have also received considerable high level political support. The right hon. and learned Member for Rushcliffe (Mr. Clarke) has said—although, admittedly, it was in 2004—

“We have the worst record of any part of western Europe and this weakness in our law should be addressed…presumed consent can be operated in a perfectly sensitive way.”

We now have a higher percentage on the organ donor list than in 2004, but the right hon. and learned Gentleman—a distinguished Member of Parliament—was willing to support the principle of presumed consent then. Indeed, the most senior Member of Parliament—the Prime Minister—has indicated support for the principles behind the Bill. He said in November 2008:

“I’m not ruling out a further change in the law. We will revisit this when we find out how successful the next stage of the campaign has been.”

I am delighted to have the support of Members from all parties.

Such legislation has been proposed before. My short Bill is modelled on such legislation with a couple of significant changes that I should point out. The last time that the House discussed this measure, the age of application was 16, and I have changed it to 18. We can discuss the appropriate age, but I believe that while 16 and 17-year-olds should be able to opt in, the presumption of consent should not apply to those under the age of adulthood.

I am glad that the hon. Gentleman has made this change. Does he agree that parents may be thrown into utter turmoil and confusion if their child is lying in a bed waiting for their organs to be taken for transplant? It is right to increase the age to 18.

That was my instinct, and I am grateful for the hon. Lady’s support.

The other change, which came out of my meeting with the BMA, was that the period between the Bill becoming law and taking effect should be three years. In previous attempts, it was six months. I am sure that those people who are enthusiastic about the measure would prefer the time scale to be shorter, but the BMA made the point that it is not easy to go from a system under which 26 per cent. of organs are available for donation to one in which 90 per cent. are available in a very short time. An educational process is necessary to inform the population, and there are also practical issues such as the availability of facilities in hospitals. A three-year timetable would therefore be more appropriate. I would hope that during that three-year period we would see more people opting in as awareness of the issue increased—in fact, I think that that is inevitable.

The hon. Gentleman talks about the register, and his Bill refers to “persons”. It does not specify that they have to be UK nationals. What protection would there be for foreign visitors to this country or illegal migrants whose identity was not known to the authorities? They would not wish to feature on the register, but because they were not on it their organs could be used in the way that his Bill suggests.

I am grateful to the hon. Gentleman for that intervention, because of the three issues I wanted to speak about. The first was the problem, which I have dealt with; the second was the Bill, which I have tried to explain as best I can; and the third, which I was just coming to and to which his point neatly leads me, was some of the concerns that have been expressed to me.

I want to attempt to allay some of those concerns. The hon. Gentleman’s point was one of the concerns expressed. It leads into an interesting and perhaps separate discussion, because it could apply equally to wider access to NHS services such as blood transfusions and so on. The nature of the arrangement, however, is that there should be an element of quid pro quo. If I put my organs up as being available for donation, I would hope that if I needed organs I would receive them. I would be happiest if this were a system that applied to UK nationals and which was administered by the national health service. I know that a lot of people would be very uncomfortable if they thought that their organs would be sold, for example, as that would breach their moral trust in the system. It will be interesting to hear what the Minister has to say on this point, because it can be widened to cover access to drugs in the NHS and other areas. It is not unique to this field.

The hon. Gentleman will be aware that the question of the number of transplants that are finding their way into non-EU nationals has been topical over recent days. He said that there was an element of quid pro quo and I want to ensure that we are referring to the right things. There has been a finding that more than 800 organs are going into non-EU nationals, but close to 100 are coming as part of the quid pro quo. The situation is clearly asymmetric and out of balance, and I am glad to see that after the campaign that has taken place, which I have had something to do with, the Government are holding an inquiry. That is an important point regarding confidence and trust.

I have read the hon. Gentleman’s Bill very carefully and I support it. I have carried a donor card for nearly 25 years, and whether it is right or wrong to do so, to get over the problem that is being described I have written on it, “NHS patients only”. That is my personal preference. However, the question I want to put to him concerns the fact that his Bill deals with organs. Has he considered the position of other tissue that might be used, such as bone tissue, which is dealt with in the tissue bank in my constituency?

Inevitably, the Bill could have a wider scope and, of course, there are new fields of scientific research that make it more useful to have different parts of the body available for treatments that would not have been available in the past. The Bill is fairly narrowly drawn and its scope is confined to the organ checklist that one can opt into at the moment—the organs that one can choose to donate if one does not want to donate the entire list.

I want to divide the concerns that have been expressed to me into two groups: practical and ideological concerns. Let me skip quickly through the practical concerns—I might not have them all—to ensure that people appreciate that they have been considered. The first is the question whether the measure will compromise the relationship between the patient whose organs will be taken from them after their death and the doctor. A number of people have asked me whether the patient will be sufficiently confident that the doctor has his or her best interests at heart. I put that question directly to the BMA, which was adamant that that would not be a practical concern and that the processes for deciding who is a suitable donor and who is a suitable recipient work separately in the NHS. The idea can be that two people would be lying at opposite ends of a ward with one donating directly to the other, and that the doctor would have to make some sort of judgment about which was the more worthy person to have the organ, but that situation would never arise in practice. I have never worked in a hospital, but the BMA is adamant on that point, so I was reassured by the description of the procedures that would apply.

A second concern is that it would be administratively difficult to make a transition to the arrangements, which is precisely why I have provided for a three-year time scale rather than the six months specified in previous attempts to introduce similar legislation. I recognise the administrative difficulty and I have tried to change the measure accordingly.

A third concern is cost. All changes have cost implications, but the implications would not be particularly dramatic for my Bill, although it is hard to be certain about them because we cannot be certain how many people would choose to opt out. I imagine that fewer people would choose to opt out than currently opt in, so the number of names on the register could be smaller. Although there would obviously be cost implications in transferring and holding the additional number of organs available, a number of people have pointed out that the cost of drugs for people who languish on the list for a donated organ but cannot receive one is far greater than the cost of carrying out a transplant. As I said when citing the example relating to my constituent, if the person can be put back into productive life, there are all kinds of cost benefits.

I was just about to make that point. It is important to take all the costs into account. We can never quantify the cost of quality of life for people who have been in pain and suffering for a long time, but the Bill makes a great deal of sense simply in terms of economics and I congratulate my hon. Friend on introducing it today.

I am grateful to my hon. Friend for that intervention.

The final practical concern that has been put to me was whether there would be sufficient ease in opting out. I hope that I have already addressed that point, because I have bent over backwards to try to make the safeguards as large as I can. If there is a criticism to be made of my Bill, it is probably that the safeguards are too widely drawn, such that some people who died unexpectedly would have been willing to donate but their parents or next of kin decided otherwise. I do not accept that the safeguards are too narrowly drawn; they are as wide as I can possibly make them, to reassure as many people as possible.

Those are the practical concerns. The ideological concern is expressed to me far more often by Members of Parliament than by members of the public. There is nothing inherently wrong with that; Members of Parliament tend to think in more political and ideological terms—that is often the nature of politics. MPs have expressed concern that the measure is tantamount to the state requisitioning our bodies. Many Members have told me somewhat airily and dismissively, “Oh, you’ve got that presumed consent Bill; I’m against that”, and gone on their way without, I fear, engaging in the logic of their argument as much as I would wish.

I have quite libertarian instincts. If people look at my voting record since I came into the House four years ago, they will see that my votes tend to conform to a fairly libertarian perspective. I have an innate suspicion of the state wielding excessive power, so given those instincts, why have I come to the conclusion that I am comfortable—indeed, enthusiastic—about the Bill? I think the reason is that the subject is in a different category from some of our other debates where there is a divide between MPs of more libertarian or more authoritarian tendencies.

There is inevitably a reciprocal element in our deliberations. We talked about blood donation earlier. Everybody is free not to give blood, but the implication of that is that if we need blood for treatment, none will be available. There is an obvious mismatch between what people with busy lives, who may have other pressures on their time, are willing to put themselves forward for, and what they would like to be in a position to receive if they suddenly found themselves severely medically compromised. On how we can try to bridge the gap between how people behave when they do not anticipate being unwell, and the treatment that they need when they are unwell, there is a responsibility to the people who are on the list, waiting, but who did not necessarily give the issue much consideration when they were healthy. I think that Conservative Members are keen on what is called nudge theory, the theory that one does not compel people to make decisions—that is too authoritarian—but nudges or encourages them to go along a certain route, and tries to make it easier for them to take the position that one would like them to assume. However, one gives them the option of not doing so. That is essentially what I am trying to achieve.

If I were in a road accident on the way home today, and I was unconscious and bleeding heavily, I assume that the paramedics—if they arrived in time—would seek to treat me without first acquiring my assent, and asking whether I had opted in to treatment. The presumption would be that I would wish to be treated. It is the same with inoculations. I remember having all kinds of inoculations when I was a child. There has been some controversy about the new human papilloma virus vaccine, which is being introduced for 12 and 13-year-old girls. I understand that there is the choice to opt out of those measures, but the presumption is that people will be treated and that there is a broad benefit to being included. Nevertheless, there is scope for parents to opt out on the girl’s behalf.

The same is true of blood transfusions. Some people, such as Jehovah’s Witnesses, have expressed opposition to receiving blood transfusions. There have been notable cases in the past in which parents have sought to prevent doctors from giving a blood transfusion to their child for religious or ethical reasons, and the courts have overruled the decision of the parent and decided that it was in the interests of the child to receive the transfusion, even though there was religious hostility to that.

I suppose that the point I am trying to make is that we are talking about a complicated subject; it is not as straightforward as the right to free speech, say, or issues such as smoking bans, which have been discussed in Parliament. There is a reciprocal nature to health care, and that is very obvious when it comes to organ donation.

Ought not the essence to be the right to choose? Surely it should be possible for a person to specify that they are willing to give their organs, provided that it is to a member of their own family?

I am being tempted down a slight side path. I wish to conclude shortly, but I point out that there are difficulties. Of course, there are examples of people giving a kidney to their spouse or brother, because they themselves can function without one, but obviously it is easy to exercise that choice when one is living and in good health. There are some difficulties with organs being allocated only to certain people, because one may get into difficult ethical issues. What if a person is willing to donate a liver only if it is not used for somebody who has been an alcoholic, or, more controversially still, willing to donate an organ only if it goes to someone of a specified ethnicity and unwilling to give it to someone of a different ethnicity from theirs? We will get involved in a lot of difficult moral judgments. In the example that I just gave, the doctor might presume that medically, the best beneficiary of the organ was someone of a different ethnicity from that specified by the donor. Although I am tempted by the point that the hon. Gentleman makes, because it does, on the face of it, look reasonable, I fear that it will open up all kinds of unanticipated difficulties.

In conclusion, I am in favour of choice. Most opinion polls show that 90 per cent. of people—I think that the figure is generally accepted—would like their organs to be used if they died unexpectedly and prematurely. I would like that choice to be reflected in what actually happens. At the moment, it is often the case that when something terrible happens to that person, what would have been their wish had they been alive is not exercised because they never got around to putting themselves on the register in the first place. I want to ensure that the choices of people who do not wish to donate are completely respected and that it is easy for them to exercise that choice and opt out.

Ultimately my test is this: we can have protracted ideological discussions, and I have no problem with that because there are important issues to consider, but it is incumbent on all of us to say what we would do if confronted by a constituent, or anyone else, who said to us, “I have months or weeks to live unless I receive a new organ. At the moment, 1,000 people a year are dying in the United Kingdom because they do not receive an organ. What are you as a Member of Parliament doing to ensure that I have a chance of staying alive at a time when lots of perfectly useable organs are being discarded because we did not take the time or trouble before someone’s death to ascertain whether they would be willing to have their organ used for a transplant?”

When meeting a constituent or any other person in those circumstances, it is hard to give them a convoluted ideological answer, and they would see it as entirely reasonable and sensible if we went for a properly administered presumed consent opt-out scheme. It would be widely accepted very quickly and it would be in the interests of the country as a whole, particularly those who are gravely ill at the moment. Who knows whether in two, three, four or five years from now we may be in that position ourselves? Think how pleased we would be that we gave the Bill a Second Reading this afternoon.

I start by congratulating the hon. Member for Taunton (Mr. Browne) not only on selecting this subject for a private Member’s Bill, but on putting his case in a reasonable and measured way while seeking to cover the points on the minds of all those considering the matter in this House and beyond. I declare that I am on the organ donation register—hopefully, along with most of my colleagues—and have been since 1986. I still have my card from that time; I seem to recall that it replaced what was then known as the kidney donor card, which I had no problem getting well below the age of 18. I had my first card when I was 14 in 1971, but that is going back a long while.

To discuss organ donation is literally to discuss life and death. We must recognise that, and I am sure the whole House will join me in paying tribute to all those who are donors, whether of blood, plasma or bone marrow, and all those on the organ donation register— 15.8 million people, according to NHS Blood and Transplant. I am glad to note that it was my right hon. Friend the Member for North-West Hampshire (Sir George Young) who, in his first debate in the House after he was elected in 1979, sought to move forward the donor campaign. We must pay tribute not only to all those who have given up their organs in death so that others might live, but to their friends and families who, in their moment of grief, were prepared to take or support that step.

When contemplating those who have not, for whatever reason, registered for organ donation—and the hon. Member for Taunton mentioned this—I would say that it is probably not a matter of laziness, although there is certainly a lack of knowledge and education on the part of some. Often, people are worried not so much about themselves, but about the turmoil for those they leave behind, and whether it would be an extra stress for them to face the idea of their loved one’s body having an organ taken from it. When talking to those who have been through this process, we find that some families, oddly enough, found the process helpful because the fact that their loved one was useful to the future life of someone else gave them a focus. Although that would not apply to all, it is useful to bear it in mind when seeking to persuade people that they ought to consider being on the organ donation register.

Although all hon. Members no doubt hold strong opinions on this issue and will seek to hold the Government to account, as we do all the time, I have no doubt that in our minds the debate will be underpinned by the selfless acts of hundreds of people across the country. Many of us will remember the first heart transplant, performed by Dr. Christiaan Barnard in South Africa in 1967. It is one of my first memories of news on TV, along with Churchill’s funeral and the first man stepping on the moon, all during the pioneering days of the late 1960s.

As of today, 7,981 people are waiting for transplants, but only about 3,000 transplants are carried out each year. Tragically, that leads to more than 1,000 people a year dying for want of a transplant. The chief medical officer has stated that others are dying silently because doctors who know that there is no hope of their getting treatment are not putting them on transplant waiting lists. In Britain we have about 13 donors per 1 million people in our population. Spain is the best in the world in that regard, with 35 per million.

As hon. Members will know, this issue was last raised in legislative terms during the passage of the Human Tissue Act 2004, with the hon. Member for Oxford, West and Abingdon (Dr. Harris) pushing for a system of presumed consent. Then, as now, the issue was one of conscience. It is therefore free vote territory for the Opposition and, I believe, for all parties. As the Conservative spokesman on health, and on this matter in particular, I emphasise that my words today do not constitute a party line. I believe that that is also true of the words of the hon. Member for Taunton, although I know that he has been able to attract the support of some of his colleagues. Hon. Members will know how they voted in 2004. For my part, I voted against introducing a system of presumed consent, as did the current Prime Minister.

We were also able to debate the matter in a Westminster Hall debate on a motion to adjourn on 20 November last year. That provided an opportunity to debate the Organ Donation Taskforce’s report on presumed consent. The taskforce was commissioned by the Prime Minister in January to look into the matter, following his apparent damascene conversion. In his homiletic article in The Sunday Telegraph of 13 January, he wrote:

“I want to start a genuine debate”.

He also suggested that a move to presumed consent would make us a “more compassionate Britain”.

Irrespective of the change of mind that anyone might have had, it was right that the matter be referred to an expert panel—the better for being a panel that was focused on evidence rather than framing any judgment, moral or otherwise. At the time I paid tribute to Elisabeth Buggins and her team for the thorough and thoughtful process that they had undertaken. It was refreshing to see a progression of thinking in the report from a group with disparate views to broad consensus.

Does the hon. Gentleman find it surprising, as I do, that this Parliament, unlike many others, does not have a parliamentary bioethical Committee?

That is a very interesting point. Such a Committee would most appropriately be considered for the other place. Committees in this House tend to shadow Government Departments, whereas the other place has a fine tradition of taking a discrete subject and bringing a great deal of expertise to it. I suspect that the hon. Gentleman’s point, which is well made, should be heard in that forum.

On the taskforce, not only were the views disparate, but it was originally disposed in favour of presumed consent. Some even suggested a touch of gerrymandering —I did not, and far be it from me to do so. Even Michael White, writing in The Guardian, stated that members of the panel had been picked because:

“Ministers had been assured that a majority of its members”

at the time of its constitution favoured presumed consent. In paragraph 2.7 of its report, the taskforce crystallised its task as seeking to

“check whether the intuitive answer”—

presumed consent—

“is, in fact, correct.”

We cannot escape the fact that this subject touches on people’s notions of what is appropriate in death and on the sanctity and ownership of our bodies, through either any form of living will before death or next of kin after death. The primary hurdle to overcome before legislating is the existence of evidence that any change in the law would lead to an increase in organ transplants and universal access to them across the country. There is no evidence to suggest that. True, the taskforce did not completely write off presumed consent. It noted that it “may deliver real benefit”, but its stronger concern was that it

“carries a significant risk of making the current situation worse.”

In other words, the taskforce ultimately opposed the move to presumed consent at this stage. I submit that that was an important, objective report and a good basis on which to build policies and a direction for the future.

Equally, it is worth noting that the report of the Organ Donation Taskforce says that clinicians from intensive care, where the majority of deaths leading to donation occur, are in the forefront of opposing presumed consent, while according to the Intensive Care Society, they are pretty evenly split on the question. Those who oppose it do so vehemently. In the words of the report,

“the strength of feeling among those who are opposed is considerable”.

This is in contrast to the cry of doctors’ leaders such as those at the British Medical Association, who continue to push the presumed consent model in the face of evidence from their members. Any movement on the presumed consent question will have to be predicated on the satisfaction of these front-line intensive care professionals with the protection of their patients and the work that they do—in particular, preserving patient trust as regards fears of the temptation to “harvest” organs. In that context, it is hard to see how hon. Members supporting the Bill can justify their position; rather, it seems incumbent on the Government to take forward the measures that they have promised. I will leave it to the Minister to touch on those rather than do so myself.

I should quickly deal with the experience in Spain. It is worth noting that although Spain is often prayed in aid for presumed consent, in truth transplant surgery is so widespread in so many categories that prior consent of the individual or next of kin is established without the presumption of consent needing to be relied upon. The question therefore becomes whether presumed consent is the best way of educating a populace about organ donation and convincing them that it is the right thing to do. The architect of the Spanish system, Professor Rafael Matesanz, has explicitly rejected the argument that legislation provides a solution, saying:

“There is no country in the world where there has been sustained improvement after changing the law.”

Instead, he argues that the comprehensive transplant programme accounts for their success. In Spain, it is also extremely well done in lots of local areas, so it is not all to do with long distances and a lack of ownership, as it were. Spain changed the law to introduce its opt-out scheme in 1979; however, it had no impact until 10 years later, when the Spanish Government invested in specific training for health care professionals, appointing donor transplant co-ordinators in every intensive care unit.

Another opt-out country, Sweden, has fewer organs available for donation than Britain. Equally, the USA has achieved an impressive increase in donor numbers at the same time as rejecting any legislative move towards presumed consent. If the experts cannot produce evidence that this will increase transplants, there is no case to change the law, and we should focus on increasing education and capacity. There is an opportunity for the Government, as they take forward the results of the report, to focus on those as the dynamic way forward that is most likely to increase the amount of take-up in the donor population in our country.

In an intervention on the hon. Member for Taunton, I referred to organs going to people living outside the UK: there have been 800 since 1997, with only 140 having been “imported”. I am pleased that after the application of significant pressure, in which I have been involved, the Government are now investigating that. It is a moot point for debate, particularly as we have so many wise heads considering this issue. There are not many Members in the Chamber at the moment, but those who are here care deeply about this issue: we saw that in the intervention by the hon. Member for Hendon (Mr. Dismore) who told how he had qualified his donation card. It is a matter for debate whether we should reserve organs donated by British people for British people alone. This has a big effect in terms of the black and minority ethnic population, which the hon. Member for Bolton, South-East (Dr. Iddon) mentioned. We need to be careful to disaggregate these issues so that we do not find ourselves proceeding in an emotive way but look at this in a purely pragmatic and “health opportunities” way.

I am keen to ensure that the Government have an opportunity to respond, so I do not intend to speak for more than another minute or so. However, I should like to refer to yesterday’s news from America, where the new President has overturned the prevention of the use of embryonic stem cells. That will also have an effect in this country. The Minister will be aware of the operation reported last year to give Claudia Castillo a new trachea using a donated windpipe stripped and then covered with stem cells from her hip. Although the operation was undertaken in Barcelona, scientists at Bristol university transferred the windpipe. The particular advantage is that Miss Castillo does not need to use immuno-suppressant drugs because of the presence of her genetic material in the windpipe. I hope that the Under-Secretary can tell us what action will follow from that. We should note that the House’s mature and measured approach to stem cell research has proved beneficial, and I am glad that US citizens can now participate in such research. There has been a marked difference between the scientific and research bases of the two countries.

It is clear from the Organ Donation Taskforce’s autumn report that it does not believe at this stage that presumed consent is the best way to achieve the desired outcome of more successful transplants. It is also clear that there is much that the Government need to do, and that questions have been asked about their performance so far in increasing transplantation rates. The taskforce was saying that to us when we were in office, so we must push forward together on education and opportunity.

The report’s outcome is slightly embarrassing for the Prime Minister because of his change of mind, but I do not blame him for changing his mind on a conscience issue.

One could argue that the happiest state of affairs is one in which an opt-out system is not necessary because so many people opt in. I hope that the least that will happen as a result of our deliberations is that people watching the debate and the resultant media coverage are more inclined to become organ donors.

I say, “Hear, hear” to that. We are all keen for the number of people who are prepared to give their organs to increase enormously.

I hope that the Under-Secretary has an opportunity to allay the concern that not enough action is being taken. On current evidence, it is impossible for me to support the Bill.

I congratulate the hon. Member for Taunton (Mr. Browne) on introducing the Bill. I commend him for his explanation, in relation to his constituent, Mr. O’Brien, of what gave rise to the measure, and I am pleased that Mr. O’Brien is able to be with us today. Of course, no one has more interest in the outcomes of such discussions and the decisions on such matters than people who are waiting for transplants and suffering, as so many people are.

Transplantation is one of medicine’s great success stories and I know that the hon. Member for Taunton has always expressed a keen interest in it. I also associate myself with the remarks of the hon. Member for Eddisbury (Mr. O'Brien). I agree with him about the 1960s and the triumphs then. He made a thoughtful contribution about the way in which science and medicine have advanced our ability to care for patients and enabled us to look forward to a quality of life that was previously not thought possible.

As a nurse, I have been in situations, when nursing patients in intensive care or in accident and emergency, in which we have had to ask families to sit with us and make difficult and traumatic decisions. After such discussions, when a decision is made to donate, I have witnessed the relief of those families to know, even at their most difficult time of grief, that their loved one’s life had a purpose.

As hon. Members know, the Government are absolutely committed to increasing the number of organs available for transplantation so that many more people can benefit from the life-saving procedure and have the quality of their and their families’ lives transformed. In many ways, the success of transplantation surgery and advances in technology have led to the current challenges of unmet need.

Almost 8,000 individuals currently require a transplant, and the number is rising by approximately 8 per cent. each year. The figure does not reflect the true extent of need, as many clinicians are reluctant to list more patients than are realistically likely to receive organs. The true need is, at a minimum, 50 per cent. more than what is currently available and it is rising rapidly with demographic changes in the UK. Despite that, only around 3,000 operations a year are carried out, owing to a lack of available organs. Because of that, around three adults or children die every day waiting for a transplant or after being taken off the list because they had become too ill.

That is why we established the Organ Donation Taskforce—to consider options for increasing organ donation rates within existing legal frameworks. Hon. Members will know that the taskforce’s recommendations, which were published in its first report, “Organs for transplants”, in January last year, were broadly based on the need for investment in the donation infrastructure. That is to ensure that the UK maximises its potential for donation rates and makes organ donation a usual part of health care.

The taskforce made 14 recommendations, which are as follows. A UK-wide organ donation organisation should be established. The establishment of the organ donation organisation should be the responsibility of NHS Blood and Transplant. Urgent attention is required to resolve outstanding legal, ethical and professional issues, in order to ensure that all clinicians are supported and are able to work within a clear and unambiguous framework of good practice. In addition, an independent UK-wide donation ethics group should be established. All parts of the NHS must embrace organ donation as a usual event, not an unusual one. Local policies, constructed around national guidelines, should be put in place. Discussions about donation should be part of end-of-life care when appropriate. As hon. Members will be aware, our end-of-life strategy, which we launched last year, will also embrace that delicate and difficult issue and, with the appropriate training and facilities, that would be the right place for it. Discussions on that are ongoing.

Each trust should have an identified clinical donation champion and a trust donation committee to help to achieve that goal. Minimum notification criteria for potential organ donors should be introduced on a UK-wide basis. Those criteria should be reviewed after 12 months in the light of evidence of their effect. The comparative impact of more detailed criteria should also be assessed. Donation activity in all trusts should be monitored. Rates of potential donor identification, referral, approaches to the family and consent to donation should be reported. The trust donation committee should report to the trust board through the clinical governance process and the medical director. The reports should be part of the assessment of trusts through the relevant health care regulator. Benchmark data from other trusts should be made available for comparison.

Brain stem death testing should be carried out in all patients where brain stem death is a likely diagnosis, even if organ donation is an unlikely outcome. Financial disincentives for trusts facilitating donation should be removed through the development and introduction of appropriate reimbursement. The current network of donor transplant co-ordinators should be expanded and strengthened through central employment by a UK-wide organ donation organisation. Additional co-ordinators, embedded within the critical care areas, should be employed to ensure a comprehensive, highly skilled, specialised and robust service.

That is an important area and I am sure that what the Minister is saying is giving considerable reassurance to both the hon. Member for Taunton (Mr. Browne) and his constituent, my namesake, whom I am pleased to acknowledge. The experience in Spain is important. Has the Minister asked people from Spain who have been through the process over a number of years to advise the Department on how this important initiative will be designed and implemented?

We are taking advice from all areas and I am confident that that would be guaranteed. That is always the right process where best practice is being delivered.

There should be close and defined collaboration between these teams, clinical staff and trust donation champions. Electronic online donor registration and organ offering systems should be developed. A UK-wide network of dedicated organ retrieval teams should be established to ensure timely, high-quality organ removal from all heart-beating and non-heart-beating donors.

The organ donation organisation should be responsible for commissioning the retrieval teams and for audit and performance management. All clinical staff likely to be involved in the treatment of potential organ donors should receive mandatory training in the principles of donation. There should also be regular update training.

Appropriate ways should be identified of personally and publicly recognising individual organ donors, where desired. These approaches may include national memorials, local initiatives and personal follow-up to donor families. I join the hon. Member for Taunton in paying tribute to all our citizens—and their families—who have so bravely given in order to give life, especially when one takes life for granted so many times in our daily lives. To be part of the giving age is very important. There is an urgent requirement to identify and implement the most effective methods through which organ donations and the “gift of life” can be promoted to the general public, and specifically to the black and minority ethnic population.

Does the Minister agree that an essential part of the negotiation as regards people from black and ethnic minority groups is to understand the faith issues that may or may not be involved? I congratulate those who are very keen to ensure that people understand that there are no objections to transplantation from either the Muslim or Hindu faiths.

I thank my hon. Friend for that intervention. Of course, the taskforce was able to gain much knowledge during the consultation period, although one cannot gain enough of it on such an important topic. It is about education and awareness and, most of all, about providing real reassurance about possible outcomes.

Research should be commissioned through Department of Health research and development funding. The Department of Health and the Ministry of Justice should develop formal guidelines for coroners concerning organ donation. The taskforce believes that its recommendations, if implemented, could increase organ donation rates by at least 50 per cent. by 2013. We have accepted all the taskforce’s recommendations and made extra funding of £11 million available for implementation for 2008-09. Significantly more will follow in future years. An additional £4.5 million made available over the two years between 2008 and 2010 will fund a major publicity campaign to raise public awareness and help encourage people to register on the organ donation register.

We have also strengthened the leadership structures by appointing Chris Rudge as the first ever national clinical director for transplantation. Mr. Rudge has been tasked with driving forward the implementation of the taskforce recommendations and championing change and innovation. A programme delivery board has been established to ensure implementation work is co-ordinated and the board is overseen by the NHS medical director, Professor Sir Bruce Keogh. All the major stakeholders with a role in implementation, such as NHS Blood and Transplant and professional organisations, are represented.

I am pleased to report to the House that, one year on from the publication of the taskforce’s recommendations, there are already good signs of progress. Donation and transplantation rates are up compared with the same time last year. In January this year, the number of people on the organ donation register reached 16 million people, representing 26 per cent. of the UK population.

Following two recruitment campaigns, 39 new donor transplant co-ordinators have been recruited, and a third campaign was launched in February with the aim of recruiting a further 20 new staff. We anticipate that a total of 265 staff, including donor transplant co-ordinators and office administrative support staff, will be in post by 2010-11. The national health service has a huge role to play, and is already taking action. At least 48 clinical donation champions are now in post, with more being appointed every week. It is anticipated that every acute trust will have a clinical donor champion in place by March next year. The champions will help to ensure that local policies supporting organ donation are developed and implemented. NHS Blood and Transplant has started reimbursing trusts for donation activity. That will remove some of the current financial disincentives within the NHS.

All Members will agree that it is vital that we fully optimise the opportunities for people to donate, that relatives and friends have confidence in our transplant services, and that more people agree to donation. Research shows that the majority of people in the UK support transplantation. Organ donation in this country operates on the basis of explicit consent. If, before they die, the deceased person consented to donation, their organs may lawfully be removed for transplantation. If there was no such indication, relatives are asked about the wishes of the deceased and whether they consent to donation. The Bill aims to change the basis of organ donation to a presumed consent or opt-out system, in the belief that that would lead to a significant increase in the number of organs available for transplantation.

The Government’s view is that the arguments in favour of moving towards a system of presumed consent, as opposed to retaining current arrangements, are finely balanced. We therefore welcome this opportunity for all Members to debate fully the principle of presumed consent and the practicalities of introducing such a system in the United Kingdom. Members may recall that the other place considered the issue of presumed consent in its 2008 report on increasing the supply of donor organs within the European Union. The other place recommended that the Government’s top priority in seeking to raise UK organ donation rates should be to implement the reorganisation of organ donation and transplant services. It also recommended that before a decision is taken about presumed consent, the Government should implement national and local education programmes to improve public understanding of the issue. If at a later stage a decision is taken to switch to presumed consent, the other place advised that that should not be implemented until considerable progress has been made in strengthening organ donation services.

Does the Minister accept that a lot of public concern is centred, for instance, around stories about the Falun Gong? There was an article in the Journal of the Royal Society of Medicine in March 2007 entitled, “The Falun Gong, organ transplantation, the holocaust and ourselves”. The contents of such articles are enough to deter a lot of people from wanting to have their organs transplanted.

The hon. Gentleman raises the issue of misleading, disgraceful articles, and it would be a wonder that we made any progress if they were taken seriously. However, the British public have good common sense. With the right approach of taking the matter in stages, and the correct training and balance within our national health service and education service in general, the British people will treat such articles with the contempt that they deserve.

It would be helpful to the debate if I also reminded Members that the Organ Donation Taskforce has recently considered presumed consent in considerable detail. It carried out an in-depth analysis of the issues around an opt-out system, setting up six expert working groups to report on specific areas—clinical, communications, cultural, ethics, legal and practical. The taskforce commissioned an initial analysis of the cost of setting up a new consent system, a systematic review from the university of York of international literature on presumed consent systems across the world, a comprehensive series of deliberative events in seven regions across the UK, and one-to-one interviews with leaders of 17 different faith and belief groups. In addition, the taskforce—

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on Friday 19 June.

Business without Debate

Employers’ Liability Insurance Bureau Bill

Motion made, That the Bill be now read a Second time.


Bill to be read a Second time on Friday 26 June.

Pharmaceutical Labelling (Warning of Cognitive Function Impairment) Bill

Motion made, That the Bill be now read a Second time.


Bill to be read a Second time on Friday 26 June.

Scottish Banknotes (Acceptability in United Kingdom) Bill

Resumption of adjourned debate on Question (6 March), That the Bill be now read a Second time.

On a point of order, Mr. Deputy Speaker. Is there any way of recording in Hansard that my Employers’ Liability Insurance Bureau Bill was objected to by the hon. Member for Christchurch (Mr. Chope)?

The official record will show that there was an objection.

Use of the Chamber (United Kingdom Youth Parliament)

Resumption of adjourned debate on Question (12 March),

That this House welcomes the work of the United Kingdom Youth Parliament in providing young people with an opportunity to engage with the political process and bring about social change; notes that many hon. Members from all parts of the House are actively involved in the work of the UK Youth Parliament; and accordingly resolves that the UK Youth Parliament should be allowed for this year alone to hold its 2009 annual meeting in the Chamber of this House.

West Sussex Primary Care Trust (Review)

Motion made, and Question proposed, That this House do now adjourn.—(Mr. Spellar.)

I am delighted to have secured the debate.

It strikes terror in the hearts of most of our constituents, and certainly in the hearts of Members of Parliament, when they hear that there are to be health service reviews in their areas. In Crawley, we have been in the unfortunate position of being subjected to our fifth review since the early 1990s. It is without doubt a difficult experience, but the purpose of this debate is to demonstrate that we can do things decently, and ensure that reviews truly represent the views of not only local people, but local commissions and health experts. I firmly believe that the recommendations of the West Sussex primary care trust review of health services in the north-east of the county, which produced a report in January, will be implemented over the next year or so.

I mentioned that Crawley’s health services had been reviewed several times. In 1998, they were reviewed by a citizens’ panel. There was a consultation involving Mid Downs community health council in 1999, and West Sussex health authority organised a further consultation in the same year. The independent Bagnell review, which began in 2000, continued for two years. In the years leading up to 2005, we underwent a further review in the form of the fit for the future consultation conducted by West Sussex primary care trust.

I want to make clear that I am not opposed to the reviewing of health services. They are unrecognisable in comparison with their condition at the time when I was nursing. Until three weeks before the general election, I was still giving people bedpans. The health service has transformed itself since then, with the help of fantastic, dedicated staff—a third more staff, along with three times as much money. That has helped to ensure that our health service is something of which we can be justly proud. Last year we celebrated its 60th anniversary with fantastic events around the country.

Many Members of Parliament may find it easier to say “Please leave things as they are.” People become fearful and anxious about reviews, and many things may flow from that, including quite a difficult life for Members of Parliament. However, I became convinced that our health services needed to be reviewed. I suspect that most Members took a very different view.

I was convinced of the need for such reviews not only because I was a nurse in the service for 25 years, but because I understood that my constituents deserved better. Many of the decisions went against the views we in Crawley held, and were difficult to take. The way to overcome that is to have a new process, and that is what I want to concentrate on this afternoon. The way in which a review is undertaken can utterly change how recommendations are received at the end of the process.

All the people who took part in all the reviews undertaken in the last decade or so—the clinicians and the residents of Crawley—made a fantastic contribution. They were committed in their views, and they understood what was being asked of them, but I believe the process let them down in the end. They became confrontational; it looked like a “them and us” process. It is very sad to see constituents who just want improved services for their area in conflict with their local health services. I believe the north-east review by West Sussex PCT has avoided that this time, and we should congratulate it on that. If further reconfigurations and reviews of service have to be undertaken, I hope that the best practice of the north-east review will be used as an example of how to conduct business within the service—how to include our communities and give people a voice within the service, and allow clinicians the opportunity to put their point of view, and sit down around the table and discuss any proposals in detail.

One reason why the process was so different was that we were quickly told that there would be an independent review by the panel chairman, who was Sir Graeme Catto, the president of the General Medical Council and an eminent clinician in his own right. He was appointed to the post, and quickly grasped the subject of the health services under review—those in the north-east of the county of West Sussex—in order to understand how they were working. Therefore, he quickly got up to speed with how things were. He started to talk to all sorts of people—including Members of Parliament, clinicians and local people. He then set up a panel of very good people to listen to the views of local people. Importantly, at that point a stakeholder group—comprising many people—was set up and invited to many meetings, to hear and share evidence with the panel, and to look very closely at particular services. I cite the example of the children’s services in and around my constituency, which are vital, especially for those families with children with long-term conditions who need constant care and attention. Improving the pathway of care for those children, and their ability to access services more quickly, was vital. We did not just spend a couple of hours trying to decide how best to do that. One of our local GPs, and a leading expert on children’s services—someone who has taken a lead in making sure we have good well-being programmes in Crawley—undertook to examine those services, which included lots of people contributing their views. What we have now is a proper programme for improvement, which I believe will transform children’s services. That was just one strand of the work undertaken in the review.

I remember that in previous reviews there was talk of closing the paediatric unit, and we were all out on the streets marching in protest. We were incredibly cross that the proposal had been put to us with little or no care by the local health chiefs. This time, we spent a lot of time sitting down together—some 50 or 60 people were involved, including some parents of children with long-term conditions. We were all given an opportunity to contribute to a discussion about how best to improve children’s services. That is now firmly part of the north-east review recommendation and something to which we can sign up.

The process has involved the panel and the stakeholder group meeting regularly. I tried hard to attend most of the panel’s meetings, because I wanted to listen to other constituents and clinicians who have a particular view, even if it is an opposing one. Sometimes difficult issues were aired, but everybody dealt with each other with courtesy and kindness, and listened to the views of others in a manner that should be replicated in this House when we discuss crucial issues that make us feel incredibly anxious and worried that somebody might not share our view. The whole process took almost a year, as was necessary; it needed to be inclusive and to ensure that, each step of the way, those who were assisting with the process on the stakeholder group, and the public, were consulted. The people who took part were decent, good and honest, and they had to come to some difficult decisions.

We followed a programme, looking at particular parts of the service in detail. This was not just about saying, “Look you are going to have to change. We are going to keep changing our minds about how we are going to provide this service.” We started with a blank sheet. We started by asking what we wanted and what was the most important thing for us. We started by looking at the fantastic radiotherapy services that we receive St. Luke’s hospital in Guildford, but getting to that hospital involves a very difficult and long journey. People are very grateful for those services, but what if we were to have a linear accelerator in Crawley? Would that not be the most amazing thing to set up to supplement our cancer services? That was one of the recommendations of the review.

We wanted to examine how we can genuinely help carers in our homes and support them in a much more meaningful way. We wanted to consider how we ensure that we protect children. Even before our debates yesterday on the publication of the Laming progress report on children’s services within local authorities, our review had already decided that there should be more health visitors for the Crawley area to assist parents—the review was ahead of the game in saying that we know how to protect children and we know what will be needed for the future. Our experience was far from combative; it was collaborative and co-operative, and it allowed us all to contribute in a atmosphere in which we did not feel fearful about raising our voice or having a different point of view from other people in the room. This was a good way of reviewing our services.

Astonishing changes are contained in the review; because we started with a blank sheet, it did not have the flavour of clinicians just saying, “This is what we need to do, because we are going to save money this way. The service will then be better.” Often I am sure that that is true, but we addressed the issues that were really important to people. We examined the expensive 0844 numbers to which many GP services have signed up; we were committed to examining how to ensure that people do not have to pay too much to contact their valuable GP services. We wanted to find a way to re-establish good links between Crawley and East Surrey hospital—there used to be a shuttle bus, but sadly it was withdrawn by the acute trust at the time, and that made people extremely angry. The review accepted that that change made people angry, and brought everyone around the table, including the trust, the borough council and county council, to discuss how to re-establish a decent link between the towns in the area and the acute hospital that serves the most-ill patients.

Given that the principle that we needed a 24-hour accident and emergency department that would accept seriously ill patients—such as those with heart attacks, who can get an angioplasty done in next to no time—had been accepted, we also needed to accept that people need to be able to access the hospital. That is why I was delighted that the review recommended that Crawley hospital should have more beds. Because of its grass-roots nature, the review understood the pressure on beds in the acute trust and the need to provide valuable services. The hospital makes a valuable contribution to health care in the area, and it is probably the largest such hospital run by a PCT.

The review process now has a different feel to it, and we all feel that we can sign up to it. I hope that the Minister will feel able to use it as an example of how to approach continuing reconfigurations. Our fabulous NHS will continue to change. For example, we will have more care at home and we will begin to lose the reliance on the hospital as the front door of the NHS. I hope that the Minister will be able to tell me that she will use this review as a good example of how to change services locally.

I congratulate my hon. Friend the Member for Crawley (Laura Moffatt) on securing this debate on health services in the north-east area of West Sussex. If I may say so, this is a unique occasion, as two nurses are discussing business in the House today. I know that this matter is of great importance to my hon. Friend and her constituents, and I appreciate the comments that she has made. She is known for her commitment to her constituents and to health services. She is in a unique position in being able to assist in the review, and she has shown great leadership in doing so.

I congratulate NHS staff in West Sussex on the hard work that they have put into improving services and performance. Millions of people receive high quality and safe services every day. The best of the NHS is among the best health care in the world and we should all be proud of its achievements.

The review of health care and health services in the north-east of West Sussex was commissioned by West Sussex primary care trust in May 2008. That followed the “Creating an NHS fit for the future” programme and consultation, which took place during 2007-08.

In terms of acute health care, the fit for the future programme was concerned primarily with services in the south of West Sussex, along the coast at Chichester and Worthing, and at Haywards Heath in mid-Sussex. It was therefore felt that further work was needed to look at the future of services in the north-east of West Sussex.

An important point that I wish to stress at the outset is that the organisation of health care is decided not by Ministers or civil servants in Whitehall, but by local health care professionals on the ground. Organisational change conjures up a host of images, not all of them positive, and has become a euphemism for closures and downgrading of hospitals, as my hon. Friend outlined. It is not about closure or downgrading, but about the NHS adapting itself to new patterns of care, using leading edge technology and care pathways to treat people more quickly, more safely and in more convenient settings.

The north-east review was therefore set up, and it was led by a panel of nine professional and lay people chaired by Sir Graeme Catto, president of the General Medical Council. The review panel was asked to identify significant gaps in health care provision in the north-east sector of West Sussex. It was then asked to make recommendations to West Sussex PCT on a way forward to help improve the health and well-being of people living in the north-eastern area of West Sussex. Furthermore, the aim of the review was to ensure not only that people have quality services but that they have better access to these services.

Led so admirably by Sir Graeme Catto, the review undertook an extensive consultation process whereby it engaged with health care experts, local authorities, voluntary organisations and a 100-strong stakeholder forum that met on a number of occasions. The review also engaged with special interest groups including older people, people with long-term conditions and the black and minority ethnic communities. West Sussex PCT’s board received the review panel’s report on 29 January 2009. The panel made a total of 45 recommendations, which the PCT board has supported in principle while it develops a detailed response and action plan.

The north-east review panel reported a number of key findings, a few of which I shall now mention. Generally, the area had a healthy and relatively wealthy population, but a number of deprived wards were identified in the Crawley area. Although the PCT, in partnership with local authorities, had targeted initiatives to support those deprived communities, the take-up of some health services by black and minority ethnic communities was reported as low. Although the greatest proportion of the population lived in urban areas and towns, a number of people living in rural areas were adversely affected by poorer access to health care. It is estimated that the population of the area is likely to increase by a greater proportion than that of the county as a whole.

There had been less investment in a number of services in the north-east sector than in the rest of the county, especially as regards therapy services and some aspects of nursing. I am sure my hon. Friend is pleased that one of the review’s recommendations is that a shortfall in in-patient capacity should be met by patient improved pathways and improving productivity at Crawley and Horsham hospitals. I understand that West Sussex PCT has agreed to consider the opening of closed wards at those hospitals to supplement the overall secondary care system in the area.

West Sussex is planning to address the current shortage of health visitors in Crawley by this autumn to ensure equity of provision in the area and to support the arrangements for the safeguarding of children. The review also recommended more female GPs for black and minority ethnic communities by spring 2010 to encourage take-up of health care services by members of the minority communities.

I understand that the West Sussex health overview and scrutiny committee has been involved with the review process. It established a taskforce in June 2008 to scrutinise the north-east review. The taskforce met on a number of occasions and took part in panel and stakeholder forum meetings. The West Sussex health overview and scrutiny committee was presented with a review of the consultation process in December 2008. I understand that the committee was broadly satisfied with the consultation process. The content of the report was discussed at a committee meeting on 24 February and 18 recommendations were made. That will help the PCT board make a final determination on the original recommendations in due course.

I am advised that as well as the West Sussex overview and scrutiny committee a majority of the stakeholders engaged with during the review are supportive of the process and have welcomed the recommendations in the report. They include the mid-Sussex and Crawley practice-based commissioning groups, local district councils and the stakeholder forum. That support is encouraging and will enable the process to move ahead smoothly. It is obvious, as my hon. Friend said, that the consultation looked at good practice in the area.

I am sure that my hon. Friend agrees that the decisions being taken in her area about health are being led by the local NHS, with the support of local clinicians, the public and, indeed, their Member of Parliament. The local NHS is determined both to improve the quality of service that the public receive and to provide better access to services. I urge her and fellow MPs to continue to work constructively with local NHS organisations and NHS South East Coast to ensure that the residents of north-east West Sussex are provided with the very best health services now and in the future.

Those services are funded by taxation but they are also supported by many different organisations, and with your permission, Mr. Deputy Speaker, I should like to mention today’s fundraising event. It relates to health not only in the UK but around the world. On this special day—red nose day—I congratulate in particular the brave celebrities who climbed Kilimanjaro to raise more than £1 million: Gary Barlow, Chris Moyles, Cheryl Cole, Fearne Cotton, Alesha Dixon, Denise Van Outen, Ben Shephard, Kimberley Walsh and Ronan Keating. The British public are supporting red nose day and Comic Relief to raise money not only for health and children in the UK, but for much-needed help in the developing world.

I thank you, Mr. Deputy Speaker, for allowing me to make those remarks on this day, and I thank my hon. Friend for raising such an important debate.

Question put and agreed to.

House adjourned.