Justin Madders MP: speeches 2024

Speeches

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I agree with my hon. Friend that when the Royal Mail fails to deliver, it is not the fault of the postmen and postwomen; it is about institutional failure in the company that has been allowed to fester for too long. He will be pleased to hear that we have secured a number of commitments to get the investment and security that we need to ensure that the poor performance does not carry on.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I pay tribute to the work my hon. Friend father does, and to his work as an official of the Communication Workers Union. What the union has said about the reset in industrial relations is really important to improving standards; of course, the other part of the agreement—on investment in the company—is much needed. When everyone works together, everyone shares the common goal of the business expanding and improving its performance. I think we have got everyone aligned on that at last, and I hope that we will all see improvements off the back of that.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I thank the shadow Minister for her comments, and I start by joining her in thanking all those postal workers who throughout the year—not just at this time of year, when it is particular busy, but 12 months a year—come rain or shine, sleet or snow, deliver those much-needed communications from friends, family and loved ones. I was pleased to be able to go to my own depot in Ellesmere Port last Friday. I will go to another one in my constituency, in New Ferry, this Friday. All hon. Members should be encouraged to make those visits, because they really show how much we appreciate the work that our postmen and women do. The hon. Lady is right that the Royal Mail is a service that we all depend on. I agree that performance has not been good enough in recent years. That is why we have had a number of discussions with the company and with Ofcom about how we will get things back on track. That is why the agreement is so important, because the deal will get in the investment needed to try to drive up that performance. I turn to some of the hon. Lady’s specific questions. On guarantees of service provision, the legislative framework is already there for the universal service obligation, and I see the takeover having no impact on that. It has not been part of the discussions—it is an entirely separate issue—but Parliament will have its say on that if needed. Next year, Ofcom will have a consultation on the universal service obligation. I think it is recognised that an awful lot of work is needed to bring standards up to the level that we would like, and one of the protections in the agreement will hopefully deliver on that. On jobs guarantees, the hon. Lady will be aware that the general secretary of the Communication Workers Union has spoken positively about the agreement reached. He believes that sufficient assurances have been given on jobs. On employee engagement, she asked whether the employees will own the company. That is not the case, but they will have a say in governance in future as a result of an agreement between the Communication Workers Union and EP Group. That is to be ratified by the Communication Workers Union executive, but that will be a groundbreaking arrangement that we did not have previously. She also asked about tax residency in perpetuity, which is what the golden share does indeed intend to deliver.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  My hon. Friend will not be surprised to hear that some of my early discussions in this role have been with Ofcom, and indeed with Royal Mail about its performance. There is a shared determination between not just the regulator and the Government but the trade union, the workers and the new owners to drive up that performance, because we can all clearly see that it is not good enough at the moment.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  There are a number of safeguards in the deed of understanding that relate to value extraction, so the EP Group will not be able to take profits out of the company unless there is an improvement in performance; there are also safeguards in respect of debt leverage. I hope that gives my hon. Friend the assurances he is looking for.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I can assure the hon. and learned Member that there is nothing in the deal that affects the universal service obligation, and it is our understanding and commitment to continue to ensure that there is a universal service obligation moving forward. There are commitments in the agreement to deliver more investment. On the van network, I know that Royal Mail has purchased a number of vans in recent times, conveniently from the Stellantis plant in my constituency. Hopefully, that will be replicated throughout the country, because it is an ageing fleet. As the company has ambitious targets to meet net zero, I think it wants to improve the make-up of the stock.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I thank the Chair of the Select Committee for his comments. The golden share is to deal with tax residency and headquarters being domiciled in the UK. Obviously, there will be discussions about the universal service obligation. We know that this is a fast-moving market, and that will be for determination by Ofcom some time next year.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  The Secretary of State and I have regularly met the Communication Workers Union. As my hon. Friend rightly points out, there has been considerable industrial unrest in recent years, so it is extremely good news that the Communication Workers Union has talked positively about the groundbreaking deal that it has signed with EP Group. I agree with the union that it is time for a fresh start and a complete reset of employee and industrial relations. We want good industrial relations across the whole economy, so we welcome the constructive way that EP Group has engaged with the trade unions. We hope that that spirit carries forward into the future.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  The hon. Member must be busy at Christmas time if he has eight offices to visit. He makes an important point about the Royal Mail’s vital role in rural constituencies. We have got commitments to improve standards, and hopefully the deal will deliver on that through the increased investment that has been agreed.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  It is not a privatisation—that began under the hon. Lady’s party’s time in office. This is an important step forward, getting commitments that were not previously in place to protect the Royal Mail brand and delivering the investment that we all clearly see is needed.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  My hon. Friend is absolutely right. One of the biggest assets in the Royal Mail is the workforce itself. That is widely understood not just on the Labour Benches but by the EP Group. As I said, commitments have been made between the trade unions and the EP Group on job security. I hope that goes some way to dealing with her concerns.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  With permission, Madam Deputy Speaker, I will make a statement on the ongoing takeover of Royal Mail Group’s parent company, International Distribution Services plc. Royal Mail is an iconic national institution, and this Government are committed to ensuring that it remains one. Since taking office in July, the Secretary of State for Business and Trade and I have been clear that the Government will robustly scrutinise the proposed takeover of Royal Mail and ensure that there are safeguards for its future. While a takeover bid is still ongoing and subject to the relevant regulatory processes, the purpose of this statement is to update the House on the legally binding undertakings that have now been given to the Department for Business and Trade by the bidder, EP Group. I wish to be clear that this does not mark the conclusion of the takeover, and these undertakings will become effective only if the takeover goes through. Should the takeover complete, I am pleased to announce that the Department for Business and Trade has secured significant commitments to promote a long-term and financially sustainable future for Royal Mail in the United Kingdom. It will be helpful if at the outset I set out where Royal Mail was at the time the takeover bid was announced. Before the bid, Royal Mail’s financial position was challenging. In its financial year 2023-24, Royal Mail recorded a loss of £348 million. That loss was in part due to a long-term decline in letters, and the significant fixed costs of the universal service delivery network. At the same time, Royal Mail has not met its quality of service targets set by the independent regulator, Ofcom. Royal Mail’s performance for the 2023-24 financial year resulted in Ofcom fining it £10.5 million. While the previous Government were happy to accept decline, this Government have worked closely with the buyer to secure significant commitments to deliver the transformation of Royal Mail into a sustainable service, and hard-wired in stronger protections for Royal Mail’s identity. When the discussions with EP Group began, my Department’s objectives were: first, to strengthen the financial sustainability of this iconic and important British institution; and secondly, to protect the customers, workers and brand of Royal Mail. Today I can confirm that we have agreed a deed that customers and the workforce alike can welcome, with significant new commitments from the buyer to the Government. This deed is a clear example of the Government’s commitment to working hand-in-hand with business to generate reform and investment in public service. It is also yet another example of this Government fixing the foundations where the previous Government did not. I am proud to announce to the House that we have agreed that the Government will have a golden share in Royal Mail. This golden share will ensure that the Department for Business and Trade now has an ability to prevent Royal Mail from moving its headquarters abroad or moving its tax residency without Government permission. I should make it clear that that is an entirely new measure that was not in place at the time of Royal Mail’s privatisation. Except in very limited circumstances, that measure will remain in place in perpetuity, including when there is a subsequent change in ownership of Royal Mail. I want to be clear that the agreement will not give the Government any role in the day-to-day running of the business—Royal Mail remains a private entity. Not only have we agreed a golden share, but the EP Group has made a number of other commitments in addition, which I will set out at a high level. Those commitments include a commitment to prevent value extraction unless two tests are satisfied: first, a financial test that takes into account the debts of Royal Mail, so that value cannot be extracted if the company is heavily indebted; and secondly—this recognises a key concern of the public—a quality test to ensure that value is not extracted unless specific performance targets are met. All businesses need to adapt and improve in order to respond to change, and Royal Mail is no different. Recognising that there is a need for Royal Mail to modernise, there is a commitment from EP Group to ensure that Royal Mail has the financial means to fund the transformation of its business in the three-year period following completion of the acquisition. In addition, EP Group has agreed to take an immediate step to strengthen Royal Mail’s balance sheet by removing a significant intra-group debt, which is currently due to the remainder of the International Distribution Services group. The agreed undertakings also include a commitment to ensure that Royal Mail retains ownership or access on fair terms to those assets necessary to meet the universal service obligation. Next, EP Group has agreed to meet all the regulatory requirements that Royal Mail Group is subject to, including ensuring that it remains the universal service provider for as long as EP Group is in control. We all know—not just in this House, but across the UK—that Royal Mail is an iconic British brand, and that is why there is a commitment to the existing brand protections in place for Royal Mail. Royal Mail is a respected and revered operator, and not just in the UK—it has various international responsibilities at international fora and with the overseas territories. Those will be respected and continued, maintaining the UK’s prestigious international position. EP has stated its long-term commitment to Royal Mail, and the discussions have demonstrated the wide range of areas of public interest in the work of the company, so I am also pleased to confirm that EP has committed to taking steps to facilitate discussions between any future owner of the business and the Government, be that in 10 or 20 years’ time. These commitments have been offered by EP Group to the Department on a voluntary basis; nothing has been offered in exchange. I take this opportunity to thank EP Group. I am confident that we share the same objective of a reliable and financially sustainable universal service provider, while workers and consumers are placed at the heart of a sustainable Royal Mail. I am also pleased that, as well as reaching an agreement with the Department, EP Group has today announced that it has in-principle negotiated agreements with both unions representing the Royal Mail workforce. The Government welcome those agreements, and I am confident that the constructive and collegiate approach between the unions and the buyer can represent a restart for industrial relations in the Royal Mail Group. I have set out some of the key commitments, but there are further commitments from EP Group that I do not have time to set out in full today. I am therefore placing copies of the deed in the Libraries of both Houses. I will keep the House informed as much as I can as the takeover progresses. I commend this statement to the House.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  We hope that the deal will lead to an improvement in service. Specific investment commitments are being made as part of the deal, which we hope will be used to drive up standards. I think that everyone is committed to seeing an improvement on where we are at the moment.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I thank the right hon. Member for his question. Is he now the rebellious Back Bencher, I wonder? We all share those concerns about the universal service obligation. This deal is not contingent on the universal service obligation. We have had discussions on how we improve the current state of affairs, because it is clearly not good enough. I hope that his constituents will see an improvement in service as a result of this deal.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I thank my hon. Friend for his questions and his service in the Royal Mail. Clearly, arrangements for those currently in the Royal Mail are a matter for the new owners once the deal goes through, and I am sure that that point will be discussed. He is right that the performance has not been good enough, and we are very pleased to have secured a number of commitments in the deal that were not previously in place.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  When I visited my depot on Friday, we discussed the two-tier workforce and the variation in terms and conditions. I think it is generally recognised that it is not a helpful thing; I do not think it has helped Royal Mail with retention. My understanding is that there are agreements to be made between the Communication Workers Union and the EP Group on moving away from that. The detail has yet to be ratified by the union’s executive, but I hope that will mean there is a common basis to try to deal with the issue.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I assure the hon. Lady that the universal service obligation is not contingent on this deal—that is an entirely separate matter for Ofcom to be considering—but a number of commitments that we have secured in this agreement will hopefully improve standards, which in any event have clearly not been as we would all want.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  I have no doubt that the Communication Workers Union and the Unite Communication Managers Association would not have spoken positively about the deals that they had struck had they not received sufficient guarantees about the workforce. As I said, the general secretary of the Communication Workers Union has been on the air today, speaking very positively about the commitments that he has received about not just job security but governance arrangements, and about workers having a “meaningful stake” in the success of the business moving forward. This is a really positive deal, and if the CWU is speaking positively about it, I think the hon. Member should be reassured.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  The hon. Member may have noticed that I was sitting next to the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali), before the statement and we had a brief conversation about that, because we all agree on the importance of Royal Mail delivering our democracy. I assure him and his constituents that it is our intention to see that the universal service obligation is complied with and improved on in future.

• 16 Dec 2024 · Royal Mail Takeover · Hansard source

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  A number of commitments have been made that were not previously in place, and there is no doubt that we are in a much better position than we were post privatisation. As I say, this groundbreaking deal between the unions and the company includes rights in terms of governance, a profit-sharing incentive and guarantees on job security. I am sure that Members will be pleased to hear that we really have made fantastic progress.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I beg to move amendment 55, in schedule 2, page 112, line 36, at end insert— “3A In section 15 of the Enterprise and Regulatory Reform Act 2013 (power by order to increase or decrease limit of compensatory award), after subsection (5) insert— ‘(5A) The power conferred by subsection (1) includes power to provide that, in the case of the dismissal of an employee that meets the conditions in section 98ZZA(2) and (3) of the Employment Rights Act 1996 (dismissal during initial period of employment), the limit imposed for the time being by subsection (1) of section 124 of that Act is a different amount from that otherwise imposed by that subsection. (5B) Subsections (3), (4)(a) and (5) do not apply for the purposes of specifying the amount of the limit in such a case.’” This amendment would enable the Secretary of State to specify the maximum amount of the compensatory award available where an employment tribunal finds that an employee has been unfairly dismissed during the initial period of employment provided for by new section 98ZZA of the Employment Rights Act 1996.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  It is a pleasure to see you in the Chair, Ms Vaz. I refer to my entry in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions. The shadow Minister has posed some questions that underlie amendment 156, which seeks to include redundancy as one of the reasons for dismissal to which the lighter-touch standards will apply during the statutory probationary period. As he has rightly identified, the Bill sets out that the reasons for dismissal to which the lighter-touch standards may apply are the statutory grounds of capability, conduct, illegality and some other substantial reason. It is important to note that those four areas relate to the individual employee, which is why redundancy is not included. Redundancy can affect entire workforces, whereas the other areas are included because of the overlap between the potentially fair reasons for dismissal in the legislation, particularly suitability for work, and the sorts of issues that might come up in a probationary period. A redundancy situation would not ordinarily come up within a probationary period, because it would be about the wider business condition rather than the individual employee’s performance or suitability for the job. I hope that explains why redundancy has not been included. I turn to the shadow Minister’s more general points. We are trying to strike a fair balance between strengthening employee protections against unfair dismissal and maintaining businesses’ ability to hire, assess and dismiss new employees. The Government are committed to ensuring that businesses retain the confidence to do so. We do not wish the new procedures to undermine existing fair dismissal processes for redundancy, which already provide a robust, straightforward and fair process for employees facing redundancy. We will work closely with ACAS, in consultation with businesses and trade unions, to ensure that there is clear, straightforward and easy-to-follow guidance on how to carry out a redundancy process under the new measures. It will be an easily accessible process. One of our concerns about including redundancy is that if an employer decided to make a significant number of their workforce redundant, it would be an additional administrative job for them to identify which employees they did not need to include within a redundancy process because they were part of a statutory probationary period, and which would be subject to the wider process. That would lead to unintended consequences and possibly risk of discrimination claims.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I am not familiar with the particular case law the hon. Gentleman refers to, but I will take that away. It is fair to say that employment tribunals currently do not have the kind of inquiries into a business’s finances and general condition that we are trying to achieve with this legislation. At the moment, there is a fairly broadbrush approach, particularly in terms of redundancies, to inquiries about the business reasons. It is important to draw the hon. Member for Dundee Central’s attention to the words after “likely” in the Bill. It is about an “employer’s ability to carry on the business as a going concern”. That means the alternative is insolvency or redundancies, which is the eventuality that I am sure we all want to avoid. It will ultimately be a question of fact for an employment tribunal to determine whether it genuinely was the only option available to the employer, which is what the Bill will require the employer to demonstrate. There are a legion of examples of trade unions working constructively with businesses to avoid those kinds of insolvency situations, as a result of which terms and conditions have changed. The hon. Member for Dundee Central quoted Andy Prendergast who, in respect of what happened in the 2008 financial crisis, said in an evidence session: “It was heartbreaking, but we had to do it because it was the right thing to do.” –– [ Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 131, Q135.] He was talking about changing terms and conditions in agreement with employers to avoid redundancies and potential insolvencies. The hon. Gentleman’s amendment would take out all of subsection (5) of proposed new section 104I, which is the requirement for the employer to engage with trade unions and have the dialogue that we think is so important in industrial relations. It would say, “That does not matter any more.” The dialogue we are seeking to develop—the tripartite approach—and the move to make the arbitrary take-it-or-leave-it approach that some employers have adopted in fire and rehire a thing of the past, would not matter. The hon. Gentleman has asked some important questions about what we would expect of employers; I think subsection (5) answers many of them. Further regulations and codes of practice will also deal with them, because we want to make sure we have a situation in which the bar for passing this test is extremely high, but in addition to that—in addition to there being no alternative but insolvency—the employer has to then demonstrate that they have carried out a full consultation with the trade union. That will involve a full explanation of the financial situation. As we develop the regulations and codes of practice, we will flesh that out in some more detail.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  The hon. Member may be conflating two slightly different issues. I say to him very clearly that existing laws on redundancy will not be changed as a result of the Bill. We expect employers to follow the same processes, regardless of the length of service of the employee. In that situation, I do not imagine that there would be a particularly lengthy process if it involved only one individual and a small employer. There would not need to be a pool for selection, for example, or selection criteria. We would expect the employer to comply with the law in those circumstances. Amendment 157 questions whether regulations should be able to set steps that an employer must follow for a dismissal to be considered fair when prescribing lighter-touch standards to apply during the statutory probationary period. We have set out clearly our intention to have a light-touch process, and we know that around 9 million employees will benefit from that. The intention behind setting out those steps in regulations is to ensure that we take account of further consultation, which we will undertake not just with employers but with trade unions and civil society, to ensure that we have the right balance of process and fairness in a statutory probationary period. We will be developing that in due course. As is often the case with the ACAS code of practice on disciplinary and grievance procedures, there are already lots of examples of really practical guidance out there, which we intend to replicate. I invite the shadow Minister to withdraw the amendment.

• 12 Dec 2024 · Employment Rights Bill (Eleventh sitting) · Hansard source

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  I take the shadow Minister’s point, but that presupposes that businesses bake into their business plans compensation for unfairly dismissing their staff, and I do not think any business would want to proceed on that basis. This is about a potential liability that might come in at a future point. Of course, we all want employers to retain their staff and have a productive working relationship, but if they do not, we want them to comply with the law and dismiss employees fairly. There will be a small number of cases where that does not happen, but I would not expect a business to be able to anticipate what might happen in two or three years’ time with an individual employee and whether a process was followed or not. That is probably not on a business’s desk at this point. Amendment 55 agreed to . Amendments made: 56, in schedule 2, page 114, line 20, at beginning insert— “(1) The Employment Relations Act 1999 is amended as follows.” See the explanatory statement for amendment 57 . Amendment 57, in schedule 2, page 114, line 23, at end insert— “(3) In section 34 (indexation of amounts, etc)— (a) in subsection (1)(c), for “124(1)” substitute “124”; (b) omit subsection (4); (c) in subsection (4A), for “124(1)” substitute “124”; (d) in subsection (4B)— (i) for “124(1)” substitute “124”; (ii) after “1996” insert “in relation to cases of any description”; (iii) for the words from “such a sum” to “that date” substitute “, with effect from a day within 12 months before that date, a sum specified in that section in relation to cases of that description”.”— (Justin Madders.) This amendment and amendment 56 are consequential on amendment 55 . Question proposed , That the schedule, as amended, be the Second schedule to the Bill.