On a point of order, Mr Speaker. Earlier, during Cabinet Office questions, I asked what I thought was a reasonable question and I did not even get any answer. What can you do as Speaker to make sure that Ministers come to this House and answer questions properly?

The hon. Gentleman is a very experienced Member of the House and he will know that the responsibility of the Chair is to ensure order. The Chair cannot ordinarily intervene in the content of an answer, for to do so would be to evaluate and it is not for the Chair to evaluate the quality of ministerial responses. If the hon. Gentleman is dissatisfied, others may feel that way or not, as the case may be. The Chair is there to be an umpire but not to offer evaluations of ministerial performance. But I always keep a watch on these matters, and the hon. Gentleman will know that when a Minister chose to go completely off piste, totally inappropriately, and to witter on about matters that were nothing to do with him, I made it clear that he must desist. I am sure that, in the name of leadership, his ministerial boss can be relied upon to do the same. We will leave it there for today.

On a point of order, Mr Speaker. Yesterday, the Deputy Prime Minister said that he was in favour of bringing forward the money resolution for the European Union (Referendum) Bill. The Prime Minister is also in favour of it, so why is that money resolution not on the Order Paper?

As I have become aware over the past nine years, when the hon. Gentleman, who is an extraordinarily indefatigable parliamentarian, wishes to be at his most cheeky, he always opts for a very straight face and an expression of great sincerity. But I know the hon. Gentleman, and I am sometimes wise to his admittedly clever games. I think we will have to leave it there for today.

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to promote membership of a credit union for staff employed by the NHS, other care sector workers, and family members who live in the same household; to facilitate payroll deductions for staff employed by the NHS and other care sector workers who are members of credit unions and to report regularly to Parliament on compliance with these requirements; to place a duty on payday lenders to encourage staff employed by the NHS and other care sector workers to take advice on debt management before acquiring high cost credit; to require the Financial Conduct Authority to report annually on payday lenders’ compliance with this requirement; and for connected purposes.

The Bill is designed to ensure that NHS and other care staff have access to low-cost loans and other low-cost financial services and, as a result, are not vulnerable to high-interest payday loan companies or at risk of mounting debt costs from using credit cards or bank overdrafts. I should declare at the outset that I am a member of my local credit union, M for Money, and also the excellent Rainbow Saver credit union.

For those who are in work and on a low income, debt is an ever-constant fear. One major unexpected financial problem—perhaps the cost of a funeral or a relationship breakdown—can push people into financial difficulty and put them at risk of using high-cost sources of credit, such as unauthorised bank overdrafts, the charges on which can be crippling financially, or other high-interest credit, such as that offered by payday loan companies or credit card companies.

According to the debt charity, StepChange, 6 million adults are using credit to see them through to pay day, and 3 million adults are using credit just to keep up to date with existing debt repayments. These debts are overwhelmingly because of financial hardship, and not over-the-top consumption. Indeed, some economists have suggested that this problem debt could be as high as £50 billion in the UK at the moment. It is a huge social and economic issue. Some of those in trouble with debt work for the NHS or other care services. We in this House surely have a responsibility to do what we can to help those looking after our most vulnerable citizens so that they are not going off to work worried about whether they can make ends meet.

The living wage and higher minimum wages are undoubtedly one part of the answer to the low pay crisis in the UK, but expanding credit unions is another part of the solution too. Sarah is a 44 year-old community nurse with a daughter who is now six years old. In 2010, her husband left, which, quite apart from anything else, left her in real financial difficulty. Up until the separation, Sarah’s income paid the rent, food and nursery fees, while her husband paid for the council tax and fuel bills. When he left, Sarah had to try to find an additional several hundred pounds a month to make ends meet. She found herself getting deeper and deeper into debt and had to face bailiffs coming to her door. She could not afford to pay her daughter’s nursery fees and, rather than have her thrown out, she decided to get a payday loan. Soon she found this loan impossible to pay back and subsequently ended up with five loans with different companies, totalling around £6,000. The stress as a result has been considerable. If Sarah had joined a credit union, linked to her employer, the interest on the loans she paid would have been nothing like as high as she had to pay using payday loans.

I have been given similar examples of nurses and care staff who have got into considerable debt as a result of high-cost credit. To indicate the scale of the problem, the Royal College of Nursing Foundation has reported a 20% increase in applications for hardship grants compared with 2012. In 2012, its average grant was £422; by this year, the figure had risen to £600, which is a 30% increase.

A credit union is a financial co-operative. Members save money with their credit unions and those deposits are used to make loans at far cheaper rates than the high-cost credit offered by payday loan firms, for example. Credit unions help to keep money in communities and offer cheap financial services. In short, this is about people in one community—in this case a workplace community—looking out for each other and pooling their money so that everyone can get a better service.

There are already many successful credit unions in the UK, including police credit unions, Plane Saver, the former British Airways credit union, and London Mutual Credit Union, which has more than 15,000 member-owners and which offers, among its crucial financial services, an affordable payday loan service. For a 30-day payday loan, London Mutual typically charges an interest rate of 27% or £19. For the same loan, a commercial payday loan company could charge in excess of 5,000% or £127 —in short, the loan would be £100 more expensive.

Some credit unions already have a relationship with NHS staff in their areas, but there is not one established credit union serving all NHS and care staff. Little publicity is put out in hospitals and care homes, or by other employers of care staff, to encourage staff to join a credit union. An NHS credit union that was recognised by NHS England would provide a central opportunity for NHS staff to access all the benefits that credit union membership can offer.

If Ministers cannot be persuaded at this point to support an NHS credit union, perhaps they could offer clear guidance to all NHS employers and other care providers that they should offer payroll deduction facilities to help staff who want to join a credit union, and that they should encourage advertising by local credit unions to make staff aware of the benefits of credit union membership.

Credit unions themselves need more sympathetic support from mainstream banks. While several banks are giving financial support, and some branches are signposting to credit unions those whom they have turned down for help, that is small beer, frankly, and the Financial Conduct Authority and the Prudential Regulation Authority should be demanding more from the banks. Credit unions that want to earn interest on their holdings in the UK’s mainstream banks often get very poor rates compared with social enterprises and charities. Given the huge amounts that the banks have received through quantitative easing, I hope that the PRA will undertake a quick review of this issue to determine whether credit unions could be given a better deal.

I am grateful to the RCN, Unison, Citizens Advice and the GMB for their interest in the Bill and for supplying me with case studies of real people hit by debt problems in the NHS and the care sector whom they have helped, and for whom a credit union could have made a significant difference. I suspect that debt and low pay are common themes in many of our surgeries, and we undoubtedly need a significant expansion of credit unions. An NHS credit union would represent an especially powerful way of providing debt assistance to those who do such crucial work in our communities for our most vulnerable, so I commend the Bill to the House.

Question put and agreed to.

Who will prepare and bring in the Bill?

A particularly talented and handsome group, Mr Speaker, with the exception to that classification being myself.

Ordered,

That Mr Gareth Thomas, Stella Creasy, Mr Virendra Sharma, Stephen Pound, John Cryer, Barry Gardiner, Seema Malhotra, Rushanara Ali, Mr Andrew Love, Mr Adrian Bailey, Meg Hillier and Lyn Brown present the Bill.

Mr Gareth Thomas accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 March 2015 and to be printed (Bill 123).

I beg to move amendment 8, page 134, line 4, at end insert—

‘(6A) The Secretary of State shall provide an annual report to Parliament on the effectiveness of—

(a) enforcement of the national minimum wage;

(b) the level of the financial penalty for underpayment, including but not limited to its impact on compliance; and

(c) changes in provisions relating to the national minimum wage improving other measures of pay in the labour market.”

With this it will be convenient to discuss the following:

Amendment 9, in clause 145, page 134, line 27, at end insert—

‘(3A) The Secretary of State shall make regulations containing provisions and measures enabling and facilitating the enforcement by workers of the rights conferred under this section. Those regulations shall be laid before each House of Parliament in draft before being made, subject to affirmative resolution procedure.”

Amendment 10, page 134, line 36, at end insert—

‘(1A) Regulations made under section 27B, subsection (1), shall include provisions—

(a) giving zero hours workers the right to be awarded financial compensation of amounts, and in circumstances, to be determined by the Secretary of State;

(b) giving employment tribunals powers to enforce their adjudications, including the award of any applicable compensation as referred to in section (1A)(a), or imposition of any applicable penalty, in cases involving zero hours workers; and

(c) imposing an obligation on an employer to offer a fixed hours contract when a worker has worked regular hours for a continuous period, or series of continuous periods, of employment, to be determined by the Secretary of State.”

Government amendments 61 to 64.

It is worth reflecting on the debate yesterday. The Minister for Business and Enterprise, who is not in his place and was not in his place for most of the debate yesterday, said that we would take part 4, which deals with pubs, first yesterday because that was most important. By definition, it seems that the Government do not see the national minimum wage and zero-hours contracts as being important. The programme motion has restricted this debate and that on the important topic of insolvency to just two hours, which shows the Government’s view on these matters.

We have tabled the amendments in the same spirit as we did in Committee, to try to make the Bill a much better Bill than it was when it started its passage through the House. We hear from our constituents throughout the country concerns about pay and insecurity in the workplace. Part 11 is an opportunity missed by the Government to deal with the problems of national minimum wage enforcement and exploitative zero-hours contracts. They need to show that they are on the side of ordinary people who have had their wages cut by more than £1,600 per year since 2010, but again the Government have missed the opportunity to do so.

Fifteen years have passed since the introduction of the minimum wage and the Opposition will keeping saying, time and again, that it is one of the Labour Government’s proudest achievements, despite the significant opposition—I was going to say from the Government Benches, but there does not seem to be anybody on the Government Benches, so it would be unfair to level that charge at the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who supported the national minimum wage. This is another example of the pitfalls of writing one’s speech before one sees who turns up to the Chamber. I apologise for aiming my comments at the hon. Lady. The lack of support from her colleagues on the Conservative Benches this afternoon highlights the seriousness with which they take the issue of national minimum wage enforcement and zero-hours contracts. In the run-up to the May election, their constituents will reflect on the fact that they decided not to participate in today’s serious debate on amendments to part 11.

The introduction of the national minimum wage gave 1 million workers a significant pay rise, and now nearly 2 million workers benefit directly from the minimum wage. For women especially, who are most often susceptible to poor pay, the national minimum wage has had a significant impact for the better on their salaries, their pay and their working lives. It has not affected job retention, despite cries from the Government Benches—although there is no one there today—that it would cost 1 million jobs when it was introduced back in 1998.

However, the problem is that the minimum wage has become the maximum wage for far too many, and has fallen in real terms since 2010. That is why the Labour party is pledging to increase the national minimum wage to a minimum of £8 per hour and significantly to promote the living wage in partnership with employers. Amendment 8 would require the Secretary of State to provide an annual report to Parliament on three crucial aspects of the national minimum wage—first, its enforcement; secondly, the level of the financial payment for underpayment; and thirdly and crucially, the relationship between the national minimum wage and how it reflects pay in the wider labour market, particularly in interaction with the living wage. I shall deal with each of those aspects.

My hon. Friend makes some very good points, but does he not think that we restrict ourselves in our brave attempts to get a good standard of living for everyone in this country, and that the national minimum wage should be a national minimum wage plus? The plus should be a guarantee of skills training and much else that supports the minimum wage. I came into politics to provide the good life for the people in my constituency and the people of this country. I am sure my hon. Friend would agree.

I am grateful for the intervention from my hon. Friend. Pay is a only a small element in the workplace, and skills, education and progression are key. As I said, the national minimum wage should be the very bottom, not the top, of people’s aspiration for pay in the workplace. My hon. Friend raises some important points for his constituents and those throughout the country.

I am delighted that the Minister for Business and Enterprise has now joined us. Without proper enforcement, the regulations will be rendered ineffective. Under this Government, enforcement of the national minimum wage has been poor. That is why we are asking the Secretary of State to produce an annual report on the effectiveness of enforcement overall.

The figures speak for themselves. Reports published earlier this year show that the number of national minimum wage compliance investigations has more than halved since 2010. The response to a parliamentary question tabled earlier this year revealed that the number of investigations had fallen from over 3,500 in 2010 to just under 1,700 by the end of 2013. In addition, the number of cases resulting from Her Majesty’s Revenue and Customs risk profiling or targeting enforcement action had fallen from 1,500 in 2010 to a mere 431 by the end of 2013.

On top of that, the naming and shaming policy, which the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire, announced four times—I am sure she is expecting me to say this—up until recently had been announced more times than it had been used. To be fair, I appreciate that there have been more instances of naming and shaming recently, but it shows why an annual report is necessary to ensure that the regulations are working, the deterrents are robust and all avenues are being explored to prevent exploitation of the national minimum wage.

The Opposition have also been clear that local authorities should be given the power to enforce the national minimum wage alongside HMRC. We know that joint working between HMRC and other enforcement agencies, such as local authorities, is sometimes weak, which limits opportunities to maximise resources across different Government bodies. Local authorities, by their nature, have good knowledge of local employers and already conduct significant enforcement activity through their responsibilities for licensing, planning, health and safety and environmental health inspections. In carrying out those duties, councils sometimes come across cases where they suspect national minimum wage violations, but they have no power to investigate them directly and can merely refer them to HMRC’s enforcement helpline.

Local authorities are perfectly placed to enforce the national minimum wage, given their knowledge on the ground. That move is supported by the report “Settle for Nothing Less: Enhancing National Minimum Wage Compliance and Enforcement”, published last year by the Centre for London, which recommended partially devolving enforcement to local authority level to sit alongside and complement the current central function. It would be interesting to hear whether the Minister has considered having local authorities take an active role in national minimum wage enforcement.

My hon. Friend is making an excellent speech, but will he also mention local enterprise partnerships, which are becoming more mature and powerful at bringing a focus to matters? I have noticed recently that their links to small businesses, in particular, are better than those of some local authorities I know.

My hon. Friend makes a good point. There are many agencies dealing directly with businesses, particularly small businesses, that could play a role in national minimum wage enforcement. Poor pay and enforcement should be a job for all of us, whether LEPs, local authorities, the national minimum wage enforcement section, Members of Parliament or whistleblowers. We need a drive towards ensuring that anyone who decides to flout the rules on the national minimum wage knows that there is an organisation out there that can report them and take action against them.

Amendment 8 would also require the Secretary of State to report on the level of financial penalty. Although an increase in the maximum fine to £20,000 per employee is welcome, we are disappointed that the Government did not follow Labour’s lead in Committee by increasing it to £50,000. By setting the penalty at £50,000, Ministers would send a clear message to rogue businesses that they run a real financial risk by not paying the minimum wage. It would also put the fine on a par with other fines, such as those for fly-tipping.

As the Minister might be aware, her colleague and party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), at the start of the year echoed Labour’s calls for a higher financial penalty, stating:

“A £50,000 fine for fly-tipping versus a £20,000 fine for exploiting a human being is just ludicrous. It tells you all you need to know how we, as a society, have our priorities wrong.”

I suggest that it is not society that has its priorities wrong in that regard, but the Government.

Would these changes have an impact on people working in the informal economy who are not paid the minimum wage?

Absolutely. We see in the informal economy forced self-employment, bogus self-employment and people not being paid the national minimum wage. It is a big issue in relation to migrant workers and agency workers. It is a huge issue across not only the formal economy, but the informal economy. It is something we must stamp down on, because it undermines people’s wages and the ability to be paid properly. The crucial point is that it is also uncompetitive for business, because the businesses that do the right thing, pay proper wages and abide by all the legislation are undercut by those that do not, and we have to deal with that. These measures are both pro-business and pro-employee.

Finally, amendment 8 is also crucial to ensuring that the Government consider wider improvements in pay in our labour market—namely, the promotion of the living wage. Under this Government, the number of people paid less than the living wage has risen from 3.4 million to just under 5 million in just four years. That not only impacts on low-paid workers, their families and communities, but piles up costs for the country as more people in work have to rely on the social security system, with tax credits topping up their poverty pay.

Labour councils have led the way in paying their workers a living wage, even within tight budget constraints, and getting more workers in the private sector paid a living wage by using their procurement powers and encouraging the creation of local living wage zones. My local council, City of Edinburgh council, has been paying the living wage for some time now. Other organisations in the private sector are now seeing that paying the living wage is something they should be doing. I must declare an interest as a member of the board of Heart of Midlothian football club, which a few weeks ago took the historic decision to become the first football club in Scotland to pay the living wage to not only all its staff, but all its subcontractors.

Before my hon. Friend moves on, may I commiserate with him about last night’s football result? On a serious point, I do not know what his local university is, but the university of Huddersfield, which is the biggest employer in my constituency, pays the living wage. If universities up and down the country could lead the way, that would have a powerful effect, especially if they pressed that on their supply chains.

I appreciate what my hon. Friend says about what happens in his constituency. Public bodies could really take the lead in promoting the living wage. However, his initial comment about last night’s result means that I will have to demote him from being my hon. Friend to being the hon. Gentleman, but I will not hold it against him for too long.

The Labour party has a proper plan to encourage businesses to pay their employees the living wage. If this Government will not do this, the next Labour Government will launch a national campaign to agree “make work pay” contracts with British businesses, working in partnership with businesses to share in the benefits of the living wage and ensure that people are paid properly for a decent day’s work. The living wage is about bringing employers, employees, campaigners and communities together to build a stronger, fairer economy from the bottom up. The living wage improves the living standards of employees and benefits employers, too. They have found that paying the living wage can make good business sense, generating savings by boosting productivity and increasing staff morale.

I hope that the Government are minded to support amendment 8. It would be a step towards improving the enforcement of the national minimum wage and then improving pay for all working people. If Ministers do not, it will be up to Labour, the party that created the national minimum wage, to strengthen it for all the low-paid. Amendment 8 is about having a report from the Secretary of State to bring forward some of these issues and highlight them through Parliament so that we can ensure that the national minimum wage is being enforced properly, that the level of financial fines is appropriate and that the Government are doing everything they possibly can to promote additional wages through the living wage.

Amendments 9 and 10 to clause 145 relate to zero-hours contracts. The explosion in the use of zero-hours contracts is a trend that should concern Members right across the House. Although a small number of people find that type of contract suitable, too many are at the mercy of unscrupulous employers who exploit it. For many employees, zero-hours contracts present huge drawbacks in comparison with permanent, regular work. The increasing problem of underemployment and zero-hours contracts is highlighted by the recent reports from Her Majesty’s Revenue and Customs stating that income tax take has been flat over the past year despite the Government predicting a substantial increase. Do the Government not worry that they are creating the kind of economy where unemployment drops but there is no additional income tax take to the Treasury? We must use the opportunity of this Bill to prevent exploitative zero-hours contracts and do something about underemployment. It is not just me who is saying this. The Exchequer Secretary told the Bill Committee’s evidence session that it was the Treasury’s goal to have people on better contracts as it is better for tax receipts. I could not agree more.

My hon. Friend is no doubt aware that even the Treasury has admitted in statistical analysis that in the case of someone on a fixed-term contract of 20 hours as opposed to someone on a zero-hours contract with potentially 40 hours—although it will fluctuate over time—the person on the zero-hours contract pays more in national insurance contributions than a similar worker doing the same amount of hours annually. The Treasury estimated that they were about £300 a year worse off than a person on a fixed-term contract doing fewer hours.

That is the way the tax system works. People are allocated their national insurance and tax thresholds on the basis of when they work on a monthly basis. It can be aggregated over the year only if they are in permanent employment through pay-as-you-earn and the national insurance contributions that are made. In Committee, we had the strange scenario of Government Back Benchers saying that it does not matter what the tax take is because the aggregate would be the same if 100,000 people were working on zero-hours contracts than if the same number of hours were being worked by those in permanent employment. That is primary school economics, because the analysis does not work.

The Government have to reflect on the fact that while unemployment is falling, and has fallen by a substantial amount over the past 12 months, tax take, including income tax take, is exactly the same as it was the year before. That means that people are not being paid properly for the work that they are doing, that they are under-employed, or that they are in part-time jobs or on zero-hours contracts. So while they may not be an unemployment statistic, they are certainly not contributing to the economy.

Does the shadow Minister accept that the tax take is possibly down by a lot because of the increased allowances that people now get before they start paying tax? Surely the fact that people are not paying as much and keeping more of their salary would affect tax take.

The hon. Gentleman misses the point. If he was in his place earlier—I have no reason to doubt that he was not; I just did not notice when he came in—he would have heard me say that HMRC had predicted a significant increase in tax take having already factored in the increase to £10,000 in the taxable allowance. Even taking that into account, it was projecting a significant increase in tax take, yet it has been flat. HMRC had accounted for the change in the personal allowance threshold and for the fact that unemployment is falling. Taking all those things into consideration, it projected that it should be getting substantially higher tax revenues, but it is not. That tells us something about the kind of employment market that this Government want to create.

This Government have made much of increasing the personal allowance, as some of us advocated many years ago. Now we are at the point where the personal allowance level is not offering any tangible benefit to those who are on the national minimum wage and are in part-time employment, because they are at or below the level to which the personal allowance has been raised. A combination of factors is required rather than merely raising the allowance.

There is a key balance in terms of raising the allowance. The poorest paid are not affected by any increases in the personal allowance, while everyone else benefits. There is a significant decrease in tax take from every taxpayer, but the lowest paid are not included in that.

One of the pernicious elements of this situation is what we are starting to see in my constituency with agency work, whereby people on zero-hours contracts are being pushed into self-employment when they take hours through an agency. With reference to the tax take, there is some concern that this practice is pushing people into the informal economy and tax is not being paid at the full rate. It is also pernicious in terms of the hours that are offered to people and the insecurity of being in self-employment as opposed even to agency-paid employment.

Absolutely. We are creeping into the wider problems with the employment market. There is a huge issue with bogus self-employment and a huge issue for the Treasury as regards the informal economy. That is why the shadow Work and Pensions Secretary, my hon. Friend the Member for Leeds West (Rachel Reeves), has said that, particularly with regard to the construction sector, we should deem people to be employed unless it can be proven otherwise.

It is certainly an issue in the construction sector in my constituency, but it is now spreading into other sectors, including catering.

It is most prevalent in the construction sector, but it affects other low-paid sectors as well. This goes back to the point I made in response to one of my hon. Friend’s previous interventions about good businesses being hit by the playing field not being level because of people undercutting wages and undermining their responsibilities to society in terms of paying the appropriate tax that they should be paying on the wages that they are generating.

So as not to be too uncharitable to the Minister, let me say that we welcome clause 145, which introduces an exclusivity ban into zero-hour contracts. However, as with yesterday’s pubs debate, the Government have been dragged kicking and screaming into doing anything at all about this issue. They have fallen far short of introducing measures that really tackle the exploitative use of these contracts. They are doing nothing to change the practices of companies that base their entire work force management strategy on zero-hours contracts. As my right hon. Friend the Leader of the Opposition said last week, zero-hours contracts have

“left too many people not knowing how they will make ends meet from one week to the next and unable to plan for the future. And this government won’t do anything to stop it. But we will.”

Our amendments attempt to build on the fact that the Government have tabled an amendment to the law, albeit a minor one, to stop exclusivity by suggesting that they take that one step further. Amendment 9 would require the Secretary of State to introduce regulations so that workers on zero-hours contracts can enforce their rights. It is completely ludicrous that we have been left in a situation where the Government have introduced legislation to ban exclusivity clauses in zero-hour contracts but have not put in any enforcement action so as to be able to remedy the problem. The Minister for Business and Enterprise was pressed repeatedly on this in Committee but could offer only the option of enforcement through the usual employment tribunal channel. Perhaps he should spend less time apologising to the Prime Minister and more time apologising to the millions of workers he is letting down through this clause.

Is that the best you can do?

I haven’t finished yet—just you wait!

Let me go through why not being able to enforce these rights is a real problem. If, as the Minister suggested, people go through the normal employment tribunal channel, there would be a two-year qualification period for unfair dismissal. They would then have to go through compulsory early conciliation at ACAS. If that failed, they would have to pay a disproportionately high fee to enter the employment tribunal system. If they were found to have been wronged in the workplace, they could receive a compensatory award, but in up to 50% of cases those awards are no longer paid, and the chances of them getting their job back, or any job, would be much diminished.

When I used to deal with what were then known as industrial tribunals, I understood that someone had to earn a certain wage before they could make any application to a tribunal. In those circumstances, how does someone on a zero-hours contract get into the position of being able to apply?

That is part of the problem of enforcement, in that we do not know what mechanisms could be used for it. That is why we tabled the amendment to ask the Secretary of State to bring forward proper proposals for enforcing these rights. My hon. Friend is right. If an employer has offered someone a zero-hours contract containing an exclusivity clause, I suspect that most will have done so on a take-it-or-leave-it basis. Does that person then have the qualification period needed to enter the employment tribunal system? The answer is clearly no, because they have not worked for two years. Do they have the status of being a worker or an employee? The chances are that the courts would probably deem them not to be in employment at that stage. That is why it is important for the Government to come back with proposals on how they will prevent exclusivity clauses.

Sarah Veale from the Trades Union Congress said in one of the evidence sessions:

“It is actually quite extraordinary to have a breach of employment rights proposed in a Bill without any kind of penalty—or rather, without any compensation for the individual, because that is largely the way it works in employment law.”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 71, Q162.]

The Government need to be clear about how individuals can enforce the provision against exclusivity. We cannot just hope that employees who refuse to work exclusively for an employer will not subsequently be discriminated against in the workplace.

It is very easy to construct a scenario in which that might be the case, and I have already mentioned one to my hon. Friend. In future, if an employer offers a zero-hours contract with an exclusivity clause, the employee might be incredibly knowledgeable about employment rights, and say, “Under section 145 of the Small Business, Enterprise and Employment Public Act, an exclusivity clause is against the law.” However, the employer could turn round, and ask, “Well, what are you going to do about it? You can either take or refuse the job and the contract, but if you do not abide by its terms, we’ll zero you out,” meaning that the employee would not be offered any hours at all. The employer could in effect have exclusivity by threatening the employee with losing their employment altogether.

That is a very real issue for the economy. I am not talking about businesses or individuals that welcome the use of zero-hours contracts, but mainly about people at the lower end of the employment scale who need to be properly protected. We need to ensure that there is effectively no exclusivity and that people are not zeroed out.

We need the Government to make a proper proposal about how they will enforce the prevention of a practice that is against the law. If someone driving down the motorway at slightly over the speed limit is caught doing 75 or 77 mph in a 70 mph zone, they receive a ticking off and a fine, but if there were no need to pay the fine or if no fine were levied, where would be the deterrent against breaking the law? I shall be interested to hear the Minister’s response on that point.

Amendment 10 is about compensation. People often go to great expense to turn up at work: they arrange child care or pay train or bus fares, and that takes time to organise and costs money from their much-reduced resources. Having been told that they are needed for work, people sometimes get a text a couple of hours beforehand or on arriving at their workplace saying that they are not needed that day. In a modern workplace, that is completely and utterly unacceptable.

The CBI has recognised that point and has expressed its support for it. In its March 2014 zero-hours briefing, it stated:

“a ban on offering short notice for work…is not in the interests of the workers on zero hours contracts, whose interests are best served by always being offered work opportunities with the freedom to decline them. An intervention which creates a simple formula for compensation due to zero hours employees when a shift is cancelled at short notice—two hours’ pay for example—would be better targeted.”

I think that everyone in the House would agree that there should be some kind of compensation if people are unable to do their shift at short notice because the employer has changed the particular shift pattern.

The House needs to look seriously at this matter. It is quite clear that the vast majority of employers in this country are respected for looking after their employees as their business’s No. 1 asset. Many businesses that do the right thing spend an inordinate amount of time—I did when I ran my own small business—making sure that all employees get the hours they want and are contracted to do, so that they can gain the salary they are contracted to earn and can pay their rent or mortgage and maintain their standard of living.

Most reasonable people would say that it was unacceptable for such businesses to be undercut by companies that decide to take on a vast number of workers on zero-hours contracts without offering them regular hours and regular pay. That is why I think that the Government have really missed an opportunity by not going slightly further on zero-hours contracts.

I now move on to the right to fixed hours. My right hon. Friend the Leader of the Opposition said last week:

“We are going to change…the zero-zero economy…Under Labour, if you work regular hours you will have a legal right to a regular contract.”

Iain Birrell, a partner at Thompsons Solicitors, said in his evidence in Committee:

“The Chartered Institute of Personnel and Development research of last November noted that 83% of staff on zero-hours contracts have been engaged for longer than six months and 65% have been engaged for two years or more. We have a situation, then, in which 65% of staff on zero-hours contracts have been there for two years or more. That is not short-term need”.––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 27-28, Q54.]

We appreciate that there are situations in which employers require workers on a zero-hours basis. However, employers should be able to refuse an employee’s request not to be on a zero-hours contract only if they can demonstrate that their business needs cannot be met by any other form of flexible contract. For example, seasonal work may be a legitimate exemption. In the United Kingdom, someone who makes ice cream might require people on zero-hours contracts to deal with seasonal needs.

I shall speak to the amendments, but this debate is about zero-hours contracts, and it is interesting that we have even got to the point at which there is a Bill addressing this issue. That is a good thing, because as this became an ever bigger issue for many people over the past two or three years, there was a lot of resistance from the Government. Initially, they said, “It isn’t really a problem. There aren’t more zero-hours contracts than ever before. People have the choice to work as they want, and we really don’t need to legislate.” The campaigns and the substantial criticisms have now got us to a place where the Bill includes a provision on zero-hours contracts.

The problem is that the provision is very narrow. Outlawing exclusivity clauses in zero-hours contracts deals with only one part of a much larger problem. The Government must have thought, “Well, we’ve come under sustained criticism about zero-hours contracts, so we’ll show that we’ve done something. What’s the least we could do? We will ban exclusivity clauses.” Many people realise that that is a minimal response.

For me, the major factor is the degree of choice that people really have in their workplace. I have heard several Members say on Second Reading and in Committee, where the issue was also debated, “It’s all right. People choose to work in this way. It gives them flexibility as well. It allows them to plan their lives.” Reference was made to people with child care responsibilities, for example. However, it is precisely those people who often find it hardest to cope with being in such a situation. Far from giving them the ability to juggle their various responsibilities, a zero-hours contract may well be the one thing that makes it very difficult to continue in their job while sustaining those responsibilities. People with child care or any other caring responsibilities need to know, day to day and week to week, when they will be working.

Most people cannot arrange child care at the drop of a hat. When my children were young, I used to say that my parents were the only people in the world whom I could phone at 8 o’clock in the morning and say, “My child’s ill. Could you come, please, now?” Not everyone has parents who can drop everything on that sort of warning. I would not want to do that for anything other than a real emergency—the school’s boiler is bust and there is no school, or a child is ill—because if people have to keep doing it, they will quickly lose the support of their friends and family. To fulfil their caring responsibilities, people have to know what is happening. A lot of part-time jobs fit that bill well. It is not a great deal of help if part-time jobs are turned into jobs where people are told, “We’re not really sure which days it will be this week—we’ll let you know.”

Amendment 10 says that there should be compensation if people are called out to work but are not given work. We must understand that there are costs involved in that. My hon. Friend the Member for Edinburgh South (Ian Murray) mentioned transport. People might also incur child care costs to cover the hours they think they are being given, only to find that they are not there.

For many of the jobs where I have seen people on zero-hours contracts, there seems to be no compelling reason why there cannot be a much more organised set of working arrangements and why the arrangements have to be quite so flexible for the employer. In most businesses—even retail businesses—where there are ups and downs in the week, and indeed in the day, the patterns are knowable: they do not suddenly differ from one day to the next.

That is similarly true of caring. The point when I really began to lose patience with zero-hours contracts was when constituents of mine who work as carers found themselves getting texts early in the week telling them which days they would be working. The people they care for are there all the time. The number of people on the books who need care is well known. It should not be beyond the possibilities of management to work out fairly well in advance what the need will be and to allocate the staff accordingly.

Does my hon. Friend agree that one of the most grotesque manifestations of the way in which such regimes impact on those in the caring profession is that they are paid only for the time when they are in attendance on the person who is receiving the care and do not receive the hourly rate while they are logging in, logging out and travelling to the next appointment? That exposes them to great risk on the roads, because they move quickly between appointments. Does she agree that we really must address that in these provisions?

I absolutely agree that such methods are used to manage the process, and they might make it look as though the service can be procured more cheaply. I assure anyone who thinks that we in Scotland somehow do not have a problem with social care because some elements of it are supposedly free that that is not the case—we see all the same things happening.

The insecurity for the worker is huge. I see no reason why that should be the case when the work is there. It might take a bit more juggling, but firms have been trying for years to work out how best to spread the work force over the week.

In the care industry, there may well be a need for some form of emergency cover, but that is different from regular work. I have heard the argument that it is all very well to say that the people who need to be cared for are known about, but if somebody goes off sick or is on holiday, somebody else is needed so that urgent arrangements can be made. That may well be the case, as it is in teaching. There are long-standing arrangements involving supply teachers. We are back to the issue of choice. If people choose to work in that way and it is limited to situations where cover is needed, clearly it has a place. However, the firms that are using such arrangements are not using them just for emergency cover; they are using them for the predictable times, too.

If people end up doing longish periods of regular hours, they should be offered a proper permanent contract. By that stage, people are tried and tested, by definition. There is no reason for the employer to think that they are not capable of doing the job. In many fields of work, the practice would encourage retention, which is a problem in some of the fields that we are discussing. In a job as important as caring for other people, but not just in that job, it is crucial to deal with issues such as turnover—people not staying the course—because they affect the quality of care. This is not just an issue for the people who are employed in these fields; it is hugely important for those who receive the services—they want certainty about the person who is coming into their home.

The hon. Lady is making a passionate speech. I agree that there are a lot of anomalies in the care industry that need to be resolved. However, such contracts have been available for years and nothing has been done about them. Why did the previous Government, who were in office for 13 years, not resolve these problems? I share her passion on this issue, and some of the things that she is saying are right, but it is a bit late to come to this debate and complain about what this Government are doing. Why did the Labour Government not sort it out years ago when they brought the zero-hours contracts in?

That allegation is made frequently. In the years up to 2007 when I was a local councillor, I did not see these things happening in the care industry. I really did not see huge numbers of zero-hours contracts being used in my area. I do not think that what the hon. Gentleman said was a factual statement.

In my constituency—I am sure the same is true of my hon. Friend’s constituency—the words “zero-hours contract” did not exist until very recently. In the past two or three years, I have heard more and more of my constituents talk about these contracts. It is because of the policies of this Government that we are in that position, is it not?

I agree with my hon. Friend.

The hon. Member for Burnley (Gordon Birtwistle) seems to believe that the last Government did nothing on this issue. I do not agree, but even if that were true, it would not be a reason for not dealing with the issue now. On that basis, we would never do anything different or new because a previous Government had not done so. That would be a very strange way of doing politics.

My hon. Friend is quite right. This has become a huge problem in the past four and a half years, so much so that people in this country are, on average, £1,600 a year worse off since 2010. That is a direct result of the failures of the Government who are now in power. That is the reality for people up and down the country.

I thank my hon. Friend for his pertinent intervention.

Does my hon. Friend know whether the hon. Member for Burnley (Gordon Birtwistle) was the Parliamentary Private Secretary to the Chief Secretary to the Treasury in March 2012, when the Government froze the national minimum wage for under-21s?

I do not think that there is any need to add to that observation.

When people work on a regular basis, that has to be accepted and provided for. That is what amendment 10 would do. If somebody genuinely does not want a permanent contract, nobody is saying that it should be forced on them. Amendment 10 says that people should be offered such a contract. If there really are all those people out there who would not want a permanent contract instead—I have to say that I doubt it—they would, of course, be free to turn it down.

Does the hon. Lady accept that there could be circumstances in which amendment 10 would affect an employer unfairly? For example, there is a requirement that if someone has had so many hours of continuous work in previous weeks, they can insist on the same number of hours in the future. What will that mean for people who work in the entertainment industry and those who work in a job that is seasonal, such as a job at the seaside, where there is a demand for continuous weeks for a certain period, but that comes to an end?

I cannot see any reason why somebody should not have a seasonal, fixed-term contract for a particular period. We are talking about people working week after week without knowing what work they will be given. That means that they cannot plan for their caring responsibilities and so on, and as they do not know what money is coming in, they find financial planning, such as budgeting for paying their bills, difficult. This is not about somebody working on Brighton pier over the summer season, and I do not think that the situation is comparable with a zero-hours contract. Using such jobs as reasons for continuing a harmful system is not a good idea.

My hon. Friend is making an important point about the retention of skills and the need to develop people to improve the economy. If there is a dislocation or distance between an employer and an employee, or if their relationship is fragmented, it is hardly conducive to building up people’s skills and the capacity of the economy.

That is an important point, and as my hon. Friend the Member for Edinburgh South said, one reason why we are not getting in the tax take we should is the huge amount of insecure short-hours employment. That is not helpful to the economy and the community. It is not just the people on those contracts who are affected.

My hon. Friend is making the important point that Britain’s productivity is poor and is not helped by zero-hours or part-time contracts, which dislocate people from the workplace and from opportunities to acquire better skills.

And of course that feeds directly into the fact that the Government’s deficit is rising again in this financial year. That is primarily because the tax take has not been as expected, which is a serious problem. A lot of people have been told that they have to make great sacrifices so that the Government can close the deficit, but now they are told that nothing is really improving, or at least it is certainly not improving as fast as they were promised.

It is also disappointing that, when the law on zero-hours contracts is to be changed, a clear enforcement mechanism is not being built into the Bill. A lot of people do not know much about their contract of employment—and that is if they even see one, because many people do not get much chance to see a contract even when they have started a job. People need to get good information about the content of their contract and the rights that they have. We all have people coming to our surgeries for assistance and saying, “I didn’t realise that these were my terms and conditions of employment.” They might only realise when something goes wrong.

To think that people will understand that a certain clause in their contract is unlawful assumes a degree of understanding and information that a lot of people do not have, especially when they are just glad to get any job at all. They think, “That’s great, I’ve got the job”, but they do not necessarily inquire at that stage about all the problems they might face. It seems strange not to make it easier for people at least to enforce the small change that the Government are offering.

I understand and appreciate the hon. Lady’s argument, which she is making with passion, as she regularly does. Does she not recall that in one of the evidence sessions of the Public Bill Committee, the TUC, which rightly represents workers’ rights, was clear that a good number of its members are on zero-hours contracts by choice and said that it was opposed to their abolition?

I am sure that some people would like the Opposition to table amendments to abolish zero-hours contracts, but our position has never been to say that they should be abolished totally. The question is whether people have a genuine choice. Just as an employer can say, “I need you on Friday evening, Saturday afternoon and Sunday morning,” the employee should be able to say, “I can’t do Sunday morning. I want Monday or Tuesday instead.” The question is whether there is a genuine two-way relationship, and in a lot of circumstances there clearly is not. That shows that we have to give people protection.

This is not just about zero-hours contracts. Under the amendments, an employee would be entitled to see their contract within six months of starting their employment. Often, people are not given any view of their contract, and their agreement to the terms and conditions is implied by the fact that they turn up to work. The amendments are about all contract work, not just zero-hours contracts. An employee should have the right to see their contract, and the Government should enforce that right.

That is an important comment, and it illustrates again the importance of giving people protection that they do not necessarily have at the moment. In a lot of situations, the employee is perforce in a much weaker position than the employer.

I fully accept that there can be circumstances in which people can find contracts such as we are discussing a useful way to live their lives, provided that they have equal bargaining power. I remain slightly unclear, however, about why people who want choice would not on the whole be better operating on a self-employed basis. There are a lot of people who have been doing regular work and who everybody knows are employees, but who cannot easily get permanent work. Some employers might find it difficult to rearrange their planning to let them have a permanent arrangement, but things seemed to operate on that basis for many years. I cannot understand why it has suddenly become so difficult for employers to manage.

The fundamental point is about choice, which the hon. Member for Macclesfield (David Rutley) touched on. Does my hon. Friend agree that the power has shifted enormously over the past several years? There has been an explosion in the incidence of zero-hours contracts, and the employee does not have the choice of whether they want one. It is a case of “take it or leave it”, because that is all that is available to them.

My hon. Friend echoes the point that I was seeking to make. If there were equality of arms and people were negotiating on an equal basis, that would be different from a situation of “take it or leave it, and be grateful for what you’re getting. Arrange your life around all the constraints.”

In many ways, the Opposition’s amendments are modest. They are not asking for huge changes, but they go beyond the miserly reforms to zero-hours contracts that the Government are offering. I think the Government want to get brownie points by saying that they are now dealing with the problem of zero-hours contracts—the Prime Minister mentioned them today—but the Bill’s provisions simply do not go far enough. I urge the Minister, even at this late stage, to consider supporting the Opposition’s amendments and strengthening the Bill’s provisions so that the Government can say that they are making a proper effort to deal with the problem.

In evidence to the Committee, Sarah Veale from the TUC said that there is a significant difference between what she called the higher end of the employment market, which is often where trade unions are organised and staff are well paid, and other areas. She stated:

“Our worry is with the unscrupulous employers who use these contracts deliberately as a means of cutting wages and having people available, the flexibility being to their advantage and not so much to the advantage of the worker”.

When talking about provisions in the Bill she said:

“A lot of work will need to be done with the regulations for this to ensure that there are no easy avoidance tactics used by unscrupulous employers.”

That is what the TUC said about what the Bill sets out to do, where the gaps are, and how much more work is needed to make it effective for staff who otherwise would be exploited.

Yesterday we talked about the impact that uncertainty has on people—whether tenants in pubs or small business owners and managers more generally—and on their communities and staff. Today we are considering people in employment, and my hon. Friend’s amendments set out how important it is to look after people who otherwise face uncertainty and difficulty as a result of low pay and everything that follows from it.

Does my hon. Friend agree that the impact of people being subjected to zero-hours contracts inhibits their ability to economically engage? It is bad for our communities and economy if people do not have that regularity of income and cannot plan for their future and families.

That is exactly my point, and I will be developing it during my speech. The lack of certainty leads to difficulties for a large number of people in our society. Whether caused by zero-hours contracts, part-time employment, general low pay, undercutting, a lack of payment or the minimum wage, bogus self-employment or, indeed, a combination of those factors, it all leads to a situation where the reality of the economic recovery is no recovery at all. I mentioned earlier that on average people are £1,600 a year worse off, and although apparently we have an economic recovery, that is not what is happening for the majority of people and their families in everyday life.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) mentioned the care sector, which is important in the context of the amendments. Before she died earlier this year, my mum was looked after by some wonderful women. Two of them came at weekends to look after her, and they visited four times a day. They told me that their working weekend was, on average, 25 hours long, yet they were paid for only 10 hours. Far from getting the minimum wage, they were being paid less than half that for their work, because they did not get money for their travel time and were paid only for the 15-minute slot when they were with the vulnerable elderly or disabled person they were caring for. In addition, a draconian system was about to be introduced in which they had to phone on arrival and when they left, to ensure that their employer knew they had carried out the visit. Whose phone they were supposed to use was a matter of conjecture, and whether they were supposed to ask the householder or vulnerable person, or use their own mobile—presumably at their own cost—was not made clear. The reality was a low-paid existence for people doing one of the most important jobs that anybody can do, which is look after the most vulnerable people in our society.

Proposed new section 6A(c) in amendment 8 states

“changes in provisions relating to the national minimum wage improving other measures of pay in the labour market.”

That obviously means that Labour wants better collective bargaining in workplaces. The best way of ensuring any minimum standard is to have collective bargaining on site as that would reduce the costs of enforcing the national minimum wage at a later stage. Does my hon. Friend agree that one good measure for the care sector and other small SMEs is more collective bargaining in the workplace?

That is absolutely right, and as evidence from the TUC that I mentioned earlier made clear, where we have organised workplaces, we have a better system of pay, conditions and support, and as a result better services in sectors such as the care sector.

Does my hon. Friend agree that the best way to have collective bargaining on site is to pay subscriptions to a trade union? Traditionally, of course, that has been done through check-off. Does he agree that the Government’s current position on check-off, as an employer of their own employees in the civil service, is a demonstration of their lack of commitment on this issue?

My hon. Friend raises an incredibly important point and is absolutely right to raise it in the context of this debate. It is extremely relevant to the points I have been raising, as I am sure you will agree, Mr Speaker.

My hon. Friend referred to the Government policy of name and shame, which I understand has been announced four times. Only 25 firms have been named, despite evidence that as many as 300,000 people in the UK earn less than the national minimum wage.

My hon. Friend must have been reading my speech, because I was about to make exactly that point. He has made it for me. The reality of the naming and shaming policy is that it has not worked: it has not delivered an improvement in the enforcement of the national minimum wage. If 300,000 people are being paid less than the national minimum wage, Government Members should be ashamed of that.

Even if they were paid the minimum wage, working for three hours a week does not, in any shape or form, allow them to live, does it?

We should undoubtedly do everything we can to encourage employers to pay a much higher rate. The real level of the national minimum wage has fallen year on year. I agree that we should push employers to pay the living wage, too.

I am talking not so much about the living wage or the minimum wage as the number of hours people work a week. People cannot pay their keep if they are not working a particular number of hours a week. Regardless of what they are being paid an hour, they need the hours. The introduction of zero-hours contracts has surely been the biggest mistake.

My hon. Friend rightly brings me back to zero-hours contracts and the problems and difficulties they create for people. Working a very low number of hours causes enormous hardship and difficulties: the difficulty of working an uncertain number of hours that can go up or down; the difficulty of claiming benefits to cover some of the gaps when going on and off benefits; and the difficulty in trying to navigate a system deliberately put in place by the Government to restrict what people, who are in work mostly, are paid in social security. I am glad he has made that point.

The use of agency workers, typically from eastern Europe, by companies in this country to undercut local staff is wholly unfair on the migrant workers who work for very low rates of pay and wholly unfair on local staff who are pushed out of the picture by being undercut. That is disastrous both for them and for the workers who are brought in. The knock-on effect is very damaging to the local economy too, because often any money earned, even in such low amounts, is sent back home and not spent locally and circulated around the local economy. The agencies have to be stopped. I am glad that it is Labour policy to take action to reduce the abuse perpetrated by such agencies. My hon. Friend the Member for Edinburgh South (Ian Murray) made the point very well: good businesses want to pay decent wages, but they are undercut in so many ways that they find it difficult to do so when unscrupulous employers exploit the system. Agencies’ use of overseas staff on low rates of pay is just one of the ways in which that happens.

The Bill introduces a penalty for employers who do not pay the national minimum wage. The problem is that there will be no improvement in enforcement. I mentioned the cuts in the number of staff at Her Majesty’s Revenue and Customs.