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Delivery of the Warwick Agreement
Improvements in working rights, pensions, public
services and manufacturing
From the Office of Hazel Blears MP
Labour Party Chair and Minister without Portfolio
24 July 2006
A number of Warwick pledges have already been delivered. Good progress is being made on many more. The Government remains fully committed to implementing the entire Warwick agreement over the course of this Parliament.
Talking Points
A number of items of the Warwick agreement have already been delivered such as protection from dismissal for strikers being raised from 8 weeks to 12 weeks or the union modernisation fund helping unions to grow.
Most other issues are in progress to a greater or lesser degree such as a Corporate Manslaughter Bill, the ending of some employers counting bank holidays against the 4 week statutory leave entitlement and the restoration of the link between the state pension and average earnings.
There are still outstanding issues where difficult discussions will need to take place and where details are yet to be finalised but, given the substantial progress on most issues, there are no grounds to make the argument that the Government is not committed to delivering Warwick in its entirety over the course of this Parliament.
Political Narrative
The ‘Warwick Agreement’ was the final report of Labour’s National Policy Forum in July 2004, subsequently endorsed by the Labour Party’s Annual Conference in September 2004.
That Agreement formed the basis of the May 2005 General Election Manifesto – a programme for four years of Labour Government. It included a range of measures from pensions reform to the Energy Review; from the increase in diversity of provision in public services to the introduction of ID cards.
It is only a Labour Government that delivers for working people. Since 1997 the Labour Government has made a sea-change in the levels of rights of working people. Employment rates are at a record high with over 2 million jobs created since 1997. The National Minimum Wage, Tax Credits and 10p income tax band are making work pay. The rights to paid holidays, to time off for domestic emergencies, to request flexible working hours and improved maternity pay have all created a better work-life balance for millions of people. The delivery of the Warwick agreement represents a continuation of that process.
Within that larger agreement, there were a number of issues of particular interest to Labour’s affiliated trade unions in four main areas: public services, fairness at work, pensions and manufacturing. This briefing highlights some of the areas where the government has made progress on those commitments in the first year since the General Election and re-election of a Labour Government.
Labour Party Chair, Hazel Blears, said:
“We are making good progress on the Warwick Agreement. Since becoming Chair I have ensured that the Government mechanisms for delivering Warwick are functioning and that we are focused on the issues that matter.”
“There are still some difficult issues to discuss and details that need to be finalised but we will deliver Warwick in its entirety over the course of this Parliament.”
“But the Warwick agreement is not some arcane process. Rather it is about transforming the lives of working people – improving the services they use, improving their working environment and ensuring they have adequate pension provision.”
Background information – 25 examples of Warwick being delivered
1. The Success at Work DTI strategy paper made a clear commitment to end the practice by some employers of counting the 8 Bank Holidays against the entitlement to four weeks statutory leave, honouring the pledge made at Warwick. The Prime Minister repeated the commitment at the GMB Conference on 13 June 2006 and the Government launched an initial consultation on the same day, seeking views on the potential benefits and impacts of increasing the statutory annual leave entitlement from four weeks at present to 5.6 weeks and, in particular, on measures that may help in managing the additional leave. The consultation closes on 22 September 2006. The consultation proposes that the first extra holiday will come in on October 1 2007.
2. The government has committed to restoring the link between the basic state pension and average earnings in the White Paper ‘Security in retirement: towards a new pensions system’ – exceeding what was agreed on pensions at Warwick.
3. The Pensions White Paper also pledged to compel employers to contribute a minimum of three per cent of their employees’ wages across a defined salary band, provided the employee chooses to pay into the scheme. This meets the Warwick commitment for legislation if necessary following the Turner Commission report to move beyond the current voluntary occupational system.
4. The Government has made enormous progress on increasing family friendly rights, the latest stage of which is the Work and Families Act 2006. Statutory maternity pay will be increased to 9 months in April 2007 with the aim of a year’s paid leave by the end of this Parliament. When maternity leave is extended to a year, fathers will also gain a new right to additional paternity leave during a child’s first year, if the mother returns to work.
5. The Government is committed to legislating on corporate manslaughter. A draft bill underwent pre-legislative scrutiny last Autumn and the Home Affairs and Work and Pensions Committees published their joint report in December 2005 with the Government’s response being issued in March this year. The Bill team in the Home Office introduced the Bill in July 2006.
6. The two-tier workforce protection already existing in local government has been rolled out to the wider public sector through a Cabinet Office statement in March 2005 which extended the Best Value workforce code to all public services. A similar statement for Wales followed in April 2005. A few specific areas of public services are not covered by these statements (such as ISTCs, Housing Transfers and Academy Schools) but the vast majority are. In the Health Service, the nationally agreed joint statement relating to the application of Agenda for Change for contracted-out NHS soft facilities was issued in October 2005 signed by the Department of Health, NHS employers the CBI and UNISON, Amicus, GMB and TGWU. This agreement was applicable to soft facilities management services (cleaners, caterers, porters, etc) only. Consideration was given to hard facilities management services (those concerned with maintenance of buildings) but there was not sufficient evidence to support a similar arrangement for these contracted out services.
7. The Treasury has reformed PFI credits in late 2004 through the new Value for Money appraisal guidance to ensure that there was an equality of funding for local authorities between PFI and conventional procurement. It was also confirmed that PFI did not require the transfer of staff under Treasury rules. The Government will continue to monitor progress on the development of PFI including the future financial implications of PFI.
8. Warwick committed the government to the Public Services Forum continuing to engage unions in workforce development. The Work Foundation report on “Union and staff involvement in public service improvement” was published jointly by the Cabinet Office and TUC in September 2004. A successful DTI Partnership Fund bid was made for the TUC partnership Institute to pursue four case studies where reforms were in progress. These will be written up and published in January 2007 in the form of a toolkit for involving unions in improvements. In addition the PSF continues to engage public sector unions in a range of workforce issues.
9. Warwick committed the Government to reviewing NHS cleaning contracts on their expiry to ensure that they have due regard to quality of outcome as well as the price. The Revised Guide on Contracting for Cleaning was published in December 2004. By including within this document the national Specifications for Cleanliness and the recommended minimum cleaning frequencies NHS Trusts have in one document the required standards and advice on the cleaning frequencies needed to meet them as well as best practice in contract selection. As existing contracts expire, any replacements will fall under these new guidelines. The Government will also use the Health Bill, due later this year, to build on the existing healthcare associated infection control strategy. This will give the Secretary of State powers to issue a code of practice that includes a duty to provide a clean environment and to give all staff education and training on infection prevention and control.
10. Warwick committed the Government to increasing training for NHS Staff. So far, £60million of funding has been announced for Health Care Assistants training. Health Care Assistants are also all eligible for secondment to degree courses in nursing, midwifery and other allied health professional courses. The Department of Health is also currently addressing the question of the registration of Health Care Assistants through a pilot project in Scotland, due to report in December 2006.
11. The Government has given a firm commitment to work in partnership with modern trade unions and to help them grow through the union modernisation fund. The first round of 33 projects was recently announced with Government support of £3million. The Success at Work DTI strategy paper announced a second round.
12. Protection from dismissal for strikers was raised from 8 weeks to 12 weeks in April 2005.
13. A major roll-out of childcare schemes has taken place. The 10-year strategy for child care entitled “Choice for parents, the best start for children” was published in December 2004. Over 800 Sure Start children’s centres are already open. We are on the way to delivering a childcare centre in every town – 3,500 by 2010.
14. The Women and Work Commission’s February 2006 report “Shaping a fairer future” points the way forward to closing the gender pay gap with a number of practical ideas. They included £20million in government funding to raise skill levels; the promotion of quality part-time work; the matching of jobs and skills in a local context; the training of workplace equality representatives; and better careers advice for girls at school. The DCLG’s Women and Equality unit is examining the recommendations to produce an action plan. The Commission will come together in Spring 2007 to receive a report into progress on their recommendations and comment on their effectiveness.
15. The Labour Government recognises the value of facility time for workplace union representatives and has undertaken initial consultations on the challenges faced by such representatives. The Success at Work DTI strategy paper announced a review, reporting within a year, to examine ways in which their role should be adapted to the modern workplace and their contribution maximised.
16. The injustice to women and carers in the unreformed pensions system will be addressed, allowing more women to retire on a full basic state pension. The White Paper on Pensions Reform proposes reducing the number of qualifying years to 30 that both women and men need to build up entitlement to the full basic state pension. It also proposes introducing weekly credits for mothers and carers that will count towards people’s pension entitlements in the same way as national insurance contributions. When they are introduced in 2010, the changes will mean 70 per cent of women reaching the state pension age will be entitled to a full basic state pension, compared to only 30 per cent now. By 2025, over 90 per cent of men and women reaching state pension age will have a full basic state pension, compared to around 80 per cent in the unreformed system. And an additional 1 million - 90 per cent of whom will be women - will accrue entitlements to the state second pension.
17. The Labour Government has honoured its commitment to equalise pension arrangements for same sex partners in the Civil Partnerships Act 2004. In December 2005 legislation was introduced to ensure that civil partners were treated, for the purpose of survivors' benefits, in the same way as widowers.
18. The Government established the Financial Assistance Scheme to help some of the people who have lost their occupational pensions because their employer became insolvent. The first payments were made in December 2005, and in the White Paper on pension reform the government announced it would significantly extend the scheme to qualifying members who were within 15 years of their scheme's normal retirement age on 14th May 2004,. Help will be tapered for qualifying members further away from retirement. This will increase the original £400 million commitment to around £2.3bn over the lifetime of the scheme, helping around 40,000 people.
19. The Government has taken the power to move to at least half of trustees being made up of members of the fund in the Pensions Act 2004. The Government has also improved training for pension fund trustees with the new legal levels of competencies expected from trustees coming into force in April 2006. The Pension Education Fund has been introduced to help achieve those competency levels.
20. In the 2004 Comprehensive Spending Review, £1 billion of extra spending on science was allocated, £178 million was made available for the Technology Strategy to 2007/08 and additional funding of £6million a year for the Manufacturing Advisory Service was announced. The Comprehensive Spending Review also included a commitment to increase the UK’s R&D investment to 2.5% of national income. This is an ambitious target which The Government is working to achieve.
21. At Warwick, the Government committed to review, and enhance where necessary, investment funds for support of manufacturing to ensure that manufacturers are given every opportunity to set up and to continue manufacturing in Britain and to ensure that the UK is not disadvantaged compared to other European countries. In the Pre-Budget Report 2005, the Government announced an extension to first year capital allowances available to small businesses investing in plant and machinery. In the year from April 2006, the first year capital allowance for small businesses will be set at an increased rate of 50 per cent providing enhanced support for new investment.
A ten-year Science and Innovation Investment Framework was published in 2004, and ‘next steps’ were published in 2006. These set a challenging ambition for public and private investment in R&D to rise from 1.9% to 2.5% of UK GDP by 2014. By 2007/8 the science budget will be £3.4bn compared to £1.3bn in 1997/98. This includes increasing DTI and DfES funding for research at an average annual rate of 5.8% in real terms over the SR2004 period.
The Government has supported investment through the Selective Finance for Investment in England (SFIE) and the Small Firms Loan Guarantee Schemes.
SFIE, and its predecessor RSA have between them provided 6,382 grants worth £2.2bn creating £19.7bn investment and creating/safeguarding 388,000 jobs from 1997 to December 2004 - 80% of these jobs being in manufacturing.
80% of private sector R&D is in manufacturing. The Government have introduced the R&D tax credit for all companies, and introduced a new definition of qualifying R&D in 2005, extending the credit to power, fuel, water and software costs (a further £35m of support). The credit has had more than 13,000 claims and provided £778m of Government support for SMEs since its inception, the majority to manufacturers. The large company R&D tax credit introduced in 2002 is worth around £400m a year.
The March 2006 Budget announced that the SME credit would be extended further to provide support to firms between 250 and 500 employees, subject to outcome of state aid discussions with the European Commission.
As part of the 2007 Comprehensive Spending Review, the Government has announced plans to examine what reform and record investment has delivered and what further steps are needed to ensure that Britain is fully equipped to meet the challenges of the decade ahead. The Chancellor confirmed at the 2005 TUC annual conference that “we will give new support to manufacturing by investing in science, technology, our transport and infrastructure and in the manufacturing advisory service”.
22. The Government is committed to a strong skills agenda. So far, the ‘Skills White Paper” released in February 2005 announced the proposals for a massive expansion of apprenticeships, the rolling out of Employer Training Pilots to help employees gain qualifications up to NVQ level 2, a trebling in the number of Union Learning Representatives to 22,000 and Skill Sector Agreements to tackle sectors underperforming on skills. The recent Success at Work DTI strategy paper announced the launch of a new Union Academy with £4.5 million funding up to 2007/08. It also acknowledged the trend towards more workplace dialogue about skills and training (though little evidence that they are subject to collective bargaining) and committed to working with Sector Skills Councils to develop best practice.
23. The Government has ensured that all Regional Development Agencies are implementing plans to deliver the national Manufacturing Strategy in their regions, backed by increased funding and greater flexibilities. RDAs have established and are now leading the regional Manufacturing Advisory Service, which delivers focused business support services to manufacturing firms in each region. RDAs' new responsibilities for delivering Business Links will benefit manufacturing firms directly, enabling Business Links to be more closely connected to the Advisory Service, as well as regional investment in skills and other forms of business support. Many of the RDAs have now established Regional Science and Industry Councils to bring expert leadership to the RDAs’ activities in science and innovation. These bring together business, education and public sector interests to strengthen strategic thinking on science and technology at a regional level and to enable more effective working across regional boundaries.
24. At Warwick, the Government committed to giving support to an EU review of procurement policy. Since Warwick, the government has published Alan Wood’s review of European public procurement, which reported little evidence of breaches in public procurement law, and proposed a range of steps to improve the functioning of public procurement markets across the EU and to ensure that UK firms can compete effectively for contracts. The Government accepted all 15 of its recommendations. In response to UK prompting, the European Commission has begun work on indicators of best practice, covering cross border procurement, price comparisons and the extent to which procurement is openly advertised via the official EU procedures. The Office of Government Commerce’s bilateral contacts with Member states find much support for the sharing of Best Practice as recommended in the Wood Report. Guidance is now available for business on an informal problem-solving mechanism. This removes key barriers for business of the costs and possible adverse consequences of formal legal proceedings. The Commission is also keen to include procurement in its competition sector enquiries and this may be relevant for the enquiry into energy markets.
25. The Government is supporting the commercial success of a publicly-owned Royal Mail by allowing it to invest in the modernisation of its businesses. It has also taken steps to ensure that telecom regulation focuses on service choice and reliability as well as network competition.