House of Commons
Wednesday 19 November 2014
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Business Before Questions
Spoliation Advisory Panel
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before the House a Return of the Report from Sir Donnell Deeny, Chairman of the Spoliation Advisory Panel, dated 19 November 2014, in respect of four Nymphenburg porcelain figures in the possession of the Cecil Higgins Art Gallery, Bedford.—(Dr Thérèse Coffey.)
Oral Answers to Questions
The Minister for the Cabinet Office was asked—
Government Digital Service
We have designed and created the award-winning and world-leading gov.uk, the central web domain for Government information. We are redesigning 25 major Government services to make them simpler, clearer and faster to use. That will not only provide savings to the taxpayer, but improve delivery for the public, focused on user need, not Government convenience.
What steps is my right hon. Friend taking to make sure that individuals who are not digitised, many of whom live in rural constituencies such as mine, are not disadvantaged if they cannot access digitised public services or can do so only at low speeds?
My hon. Friend makes an important point. When, on the recommendation of Baroness Lane-Fox, we adopted the digital-by-default approach—if it can be done online, it should be done only online—we stressed that there must be an assisted digital alternative for those who are not online, and we will ensure that that is the case.
May I congratulate the Minister on much of the innovative work he has done in the digital area, thanks to Martha Lane Fox, the Cross-Bench Member of the House of Lords? Will he, however, take on board the fact that older people in this country find it very difficult to make the transition from the traditional to a digital way of communicating with the Government?
I am very grateful to the hon. Gentleman for his compliment. We are trying to make a lot of progress, and the British Government are now regarded as world leading, after having been, frankly, a byword for failure in Government IT. Other Governments are now using the source code for gov.uk, and imitation is the sincerest form of flattery. Baroness Lane-Fox leads the Go ON UK charity, which is dedicated to getting more people online, which is the key purpose. When we provide the assisted digital option, we ideally want to frame contracts so that they incentivise the provider not just to provide a service, but to use it to help individuals to get online so that their lives are enriched more widely.
In answer to the very good question from my hon. Friend the Member for South East Cornwall (Sheryll Murray), the Minister responded that those, like many in my constituency, who have no access to computers and are not online will be given something called an “assisted digital alternative”. Will he perhaps tell us what that is?
It can take many forms, but the point is that the service is provided or the transaction is conducted digitally—it is conducted online—although not necessarily by the citizen themselves. For example, it could be done in a library, where someone sits alongside the citizen to help them to input data or conduct the transaction, or it could be done on the telephone, with someone on the other end to put data into the web service. There are a lot of different ways of providing it, and they will be fashioned around the needs of the user, not the convenience of the Government.
In the spring, the Minister announced his digital inclusion strategy to exclude 5 million people. In the summer, he told pensioners to get online or lose access to Government services. In the autumn, farmers found that they needed a credit reference from Experian to apply for common agricultural policy grants. The list of people he is excluding grows day by day. Next week, a report for the Labour party will highlight the impact of his policies on the most vulnerable, and how a Labour Government will change that. How many more people does he intend to exclude from public services before he is voted out of office?
I invite the hon. Lady to dream on, on that front. Her party is ill-equipped to criticise us. The last Labour Government’s definition of an online service was enabling people to download a form from the web, print it off, fill it in by hand and send it off by post. They regarded that as an online transaction—they were not quite in the modern world. We are glad that she is catching up, but she still has a long way to go.
I met the chair of the Charity Commission, William Shawcross, and its chief executive officer, Paula Sussex, last month, shortly before we published the draft Protection of Charities Bill. I will continue to meet them on a regular basis.
I welcome my hon. Friend to his well-deserved appointment. Does he agree that, under its new leadership, the Charity Commission is proving to be a much more effective regulator than it was a few years ago? Does he agree also that any organisation that encourages extremism of any kind should lose its charitable status and that, although the Charity Commission is getting tougher, it needs to get tougher still?
I do indeed. In the past, the Charity Commission was rightly criticised for regulatory failings. It now has new leadership, as I mentioned, with a strong board and a new chief executive officer. The Prime Minister has just given it an additional £8 million, and it will hopefully get new powers through the draft Protection of Charities Bill.
I think that my hon. Friend was referring to the concerns that were expressed on the front page of The Times this week about the threat from terrorism and extremism. The House needs to recognise that there is a threat to charities of abuse for terrorism purposes. For example, three men were convicted in 2013 for fraudulently using Muslim Aid charity logos to collect £14,000. I am right behind the Charity Commission in its efforts to ensure that it is a strong and robust organisation.
I am glad that the charities Minister will meet the Charity Commission. As a matter of urgency, will he also meet Her Majesty’s Revenue and Customs and his colleagues in the Treasury to sort out the nonsense whereby smaller charities in particular find it difficult to set up the gift aid system? That is a correct tax relief, but it is not going to many charities because of the red tape involved.
I thank my hon. Friend for all the work that he does. I hope that he and people in his constituency will support Giving Tuesday, which is on 2 December. That is a great opportunity for smaller charities to raise substantial sums of money and I hope that he will support it along with me.
Youth Services Provision
We are working to offer practical support to the youth sector at a time when local authorities continue to make difficult decisions on how to deliver services. Our support focuses on promoting delivery models for innovative services, including mutuals, and better measurement of the impact of youth services on the lives of young people.
Last week, BBC Look North revealed that more than £30 million had been cut from youth services across Yorkshire—deep cuts that had been forced on councils by the disproportionate reduction in local authority funding for areas with the highest need. What discussions is the Minister having with colleagues in other Departments about the impact of those cuts on young people?
I am slightly surprised to hear the hon. Gentleman’s criticisms, because I did not notice his campaigning in Sheffield on the cuts made by his local authority and I could not find a single letter that he has written to the Department about those cuts. Sheffield city council is one of 10 local authorities that are co-operating with the Government to transform youth services using the new delivery models that we are talking about. I would add that we are working with the youth sector to launch the centre for social impact, which will make it much easier for the youth sector to justify the things that it does and to get the buy-in of local authorities to keep those services going.
Will my hon. Friend join me in congratulating Gavin Pardoe and his team, who have accessed finance from the Charity Bank, Sport England and many other sources to build a magnificent new skate and BMX park in Stourbridge that opens next week?
I do indeed join in congratulating Gavin Pardoe and the able team that supported him. I understand that it is a state-of-the-art skate park that will draw in people from right across the west midlands. I also congratulate my hon. Friend on her role in bringing it about. It sounds like a wonderful facility for young people in the area.
The Minister will know that youth provision is not statutory provision, and that it is therefore vulnerable to local authority cuts. He will perhaps have seen the early-day motion that has been signed by Members from throughout the House, suggesting that there should be positive discussions now about making youth services a statutory provision.
I have seen the hon. Gentleman’s early-day motion, and we believe in supporting a statutory position, but it is important that local authorities have the right to make decisions about their local area. The Government do not wish to be too prescriptive in directing local authorities on what they should and should not do. For that reason, we do not support his early-day motion.
In my constituency, the Cedars youth centre, which is a partnership between Watford football club, Harrow council and the Government, is an extremely successful example of how youth services can be transformed. Does my hon. Friend agree that such a service is the way forward for youth services, and would he like to visit the centre and see for himself the excellent work that is being done?
I can feel a number of visits to hon. Members’ constituencies coming on. I congratulate my hon. Friend’s council on the work that it is doing. It is possible to innovate and make youth services even better and more efficient, so we do not have to accept the Opposition’s counsel of despair.
11. The National Audit Office has said today in a report on local government funding cuts that the Government fail to monitor the impact of funding reductions on local services. The report into the exploitation of girls in Rotherham cited youth workers as repeatedly having raised serious concerns—they were often the only people to do so—which shows that youth workers are often the only dependable adult in vulnerable children’s lives. Will the Minister assure me that he will monitor carefully the impact of local government cuts to youth services and the effects on child safety, and report his findings back to the House? (906084)
Obviously the Rotherham child sex abuse case is complex, and most of the responsibility for the matter lies within the Department for Education, but the hon. Lady makes a good point. It is important that we all learn lessons across Government, and the Cabinet Office is as keen as any other Department to do so.
SMEs (Government Procurement)
Central Government spend with SMEs increased from £3 billion in 2009-10 to £4.5 billion in 2012-13. They benefited from a further £4 billion in indirect spend through the supply chain, so we are on track to deliver our ambition that 25% of Government’s direct and indirect spend should be with SMEs. In addition, we are implementing further changes to procurement rules that will benefit small businesses.
The majority of local authorities are still not using the Government’s Contracts Finder, resulting in local SMEs losing out on opportunities. What are Ministers doing to ensure that more local authorities submit their procurement opportunities to the website?
I draw the hon. Lady’s attention to the fact that a new and greatly improved version of Contracts Finder will be launched early in the new year. It is a massive opportunity for local authorities to procure better and cheaper, but also to be able to support local businesses. There are now more than 1,000 suppliers on our G-Cloud framework, 87% of which are SMEs, a number of them based in Bolton. They are all now able to provide services directly to public sector purchasers, which helps growth and jobs as well as providing better value for the taxpayer.
We have enabled suppliers who suspect that a procurement is being done in the old-fashioned way that we inherited to raise it directly with my officials in the Cabinet Office, who can then intervene with the public sector procurer-commissioner to ensure that it is done in the modern way, which does not exclude small businesses from supplying to government in the way that was routinely the case in the past. We have made a huge amount of progress, but we still have a long way to go.
Trade Union Subscriptions (Civil Service)
The policy is delegated to individual Departments.
I am interested in the Minister’s response because I understand that the Chief Secretary to the Treasury has been writing e-mails and letters to other Secretaries of State, asking them not to write off. Will the Minister confirm whether that is correct, and will he make clear all correspondence between him and other Liberal Democrat Ministers concerning their opposition to this Tory attack plan on worker representation?
I can do no better than quote a member of the Public and Commercial Services Union—she is just identified as June—who said that direct debit is
“the easiest way of paying my union subs. You know then that it’s going to get paid because you’re not dependent on your employer taking it from your wages. I think it’s better.”
I agree with June.
As the PCS said in the document from which I quoted, check-off is an archaic way of operating that pre-dates the existence of bank accounts and direct debits. Most civil service unions use direct debits, not check-off, because they think that is the modern, direct way for an organisation to have a relationship with its members.
The Department for Work and Pensions estimated that the cost of ending check-off across Departments was £1 million. The Minister denies that, so will he tell the House exactly how much it will cost to implement what is a political attack by the Conservative party, rather than a policy worthy of Government?
I am grateful to the hon. Lady for raising that point and she is completely correct to say that an official produced the figure of £1 million. However, when asked for the workings and calculations that underpinned that number they were unable to produce them, and it turned out to be a completely fictional number. The correct calculation of the cost is more likely to be a negative number and a saving to the taxpayer, as well as being a measure that enables the PCS to do what its members now prefer and have a direct relationship with them.
The Paymaster General has reiterated his support for getting rid of check-off, even though the Chief Secretary to the Treasury has written to Departments saying that there could be legal costs associated with that. A leaked HMRC memo talks about marginalising the unions, which could lead to industrial action among civil service unions. Does that show that Ministers are playing irresponsible party politics with the trade unions, and that the right hon. Gentleman should abandon his plans to get rid of check-off?
My responsibilities are for efficiency and reform, civil service issues, public sector industrial relation strategy, Government transparency, civil contingencies, civil society and cyber-security.
The right hon. Gentleman is also responsible for the list of Ministers’ interests, and it is some time since that was done—I wonder when it will be. I am interested to know whether his right hon. Friend the Prime Minister is still a honorary member of the Irvine Burns club, and whether the Minister still lists the Blind Trust as part of his financial interests, and whether we can see where we are going on this subject.
T3. My constituents Callum Brogan and Parvathi Thara have been selected as National Citizen Service leaders for 2014-15, and have told me how much the NCS means to them. Will my hon. Friend tell me his future plans for the NCS? (906115)
I congratulate my hon. Friend on his work with his local NCS, and all Members across the House who also take an interest in the programme. I wish his two constituents the best of luck next year as NCS leaders. The programme has consistently demonstrated, through independent evaluations, that it delivers more capable, confident and engaged young people, and up to £6.10 in benefits for every £1 spent. It continues to grow and it saw its 100,000th participant this summer.
It is good to see the Deputy Prime Minister this morning talking up family-friendly working, but what is the right hon. Gentleman doing to ensure best practice on family friendly across the civil service, in particular on access to high-quality and high-level part-time and flexible opportunities? Is it not about time that the Government showed leadership, instead of lecturing others on what they are not doing?
I warmly welcome the hon. Lady to her post. I have slightly lost count, but on my reckoning she is the fifth incumbent of the shadow post and I am sure the best. I look forward to a warm relationship with her over the coming period.
On the hon. Lady’s valid point about the need for the Government to exercise leadership in providing family-friendly opportunities for flexible working, I very much agree that we should do that, and we are already doing that. We are providing more opportunities and we think there are significant productivity improvements in enabling people to work more flexibly. However, it is always to be stressed that it is not an entitlement; it has to be according to the needs of the business.
I thank my hon. Friend for that question. I did notice that the Leader of the Opposition had a very compelling economics lesson on TV the other evening, when Myleene Klass said:
“You can’t just point at things and tax them.”
That is hardly a thought-through strategy. We have heard voices within the Labour party itself—
T2. Several Ministers, including, it has to be said, the Prime Minister, fail to handle data with a certain amount of precision. Indeed, two weeks ago the Prime Minister told the House that there were 1,000 extra GPs when in actual fact there are 36 fewer. Will the Minister, who is responsible for consistency and co-ordination across government, clamp down on these bad practices and perhaps help the Prime Minister to correct the record today? (906114)
T8. Like the Minister I, too, have seen at first hand the benefits of the National Citizen Service and believe that every young person would benefit from taking part in the programme. Will he tell the House how he intends to increase both participation and the availability of the programme across the whole UK? (906120)
I thank my hon. Friend for the efforts he is making in his constituency to support the NCS. He spoke this year at the regional awards and promotes the programme in local schools. I am delighted that the NCS has taken part in every local authority across the country this year. There are projects now in Wales and Northern Ireland, and my officials are in discussions with the Scottish Government to explore the possibility of a pilot in Scotland.
T4. During this Parliament, the National Statistics Authority has repeatedly had to write to Ministers to ask them to correct misleading or false statements on the growth of the national debt, the amount the Government spend on flood protection and much else, and to ask the Government in future to publish the figures as quality assured official statistics. Do the Government agree it is now time to change the law? (906116)
I am sure the hon. Gentleman knows that all correspondence to the UK Statistics Authority is publicly available on its website, but he will also know that it has responded to both the Government and the Opposition on the issue of statistics, such as when it wrote on 24 July concerning incorrect employment figures used by the Leader of the Opposition and a shadow Business Minister—
I have previously praised the important role parish councillors play during national emergencies, as they did in my constituency during the flooding last year, but the picture nationally remains patchy in terms of parish councils with emergency plans in place. May I urge the Minister, ahead of this winter, to push again to ensure that parish councils take up their responsibility for emergency planning?
The Prime Minister was asked—
I am sure the whole House will join me in condemning the senseless attack in a synagogue in West Jerusalem this week, in which five people were killed. One of the victims was a dual Israeli-UK citizen, Rabbi Avraham Goldberg, and we send our deepest condolences to his family and friends, as well as to the families of the other victims. This was an appalling act of terror, and we condemn all acts of this kind.
This morning, I had meetings with ministerial colleagues and others, and in addition to my duties in the House, I shall have further such meetings later today.
Thank you, Mr Speaker.
In 2007 the Conservatives gained control of North West Leicestershire district council following 30 years of Labour maladministration and inherited the worst quality council housing in the country. I am pleased to announce that by the middle of next year all the homes in North West Leicestershire will be up to the decent homes standard. Will the Prime Minister join me in congratulating the Conservative group, and does he agree that it is another demonstration of the fact that Labour does not fix the roof when the sun is shining?
I certainly join my hon. Friend in congratulating North West Leicestershire district council on the work it has done. It is vital that we bring poor quality housing up to standard, and the results it has achieved are good, but it is also important that we get Britain building, and that is now well under way.
Let us see whether they are still cheering on Friday, Mr Speaker.
I join the Prime Minister in paying tribute to Rabbi Avraham Goldberg, who was murdered in the horrific terrorist attack in Jerusalem, and to the other victims. It was an appalling act, and all my sympathies are with their families and friends.
Will the Prime Minister tell us why he is so in favour of the bedroom tax but so against the mansion tax?
First, I make this prediction: the people behind me will still be cheering the right hon. Gentleman on Friday.
On the views of close colleagues, it is worth listening to what the new shadow Cabinet member in charge of the election, the hon. Member for Manchester Central (Lucy Powell), said about the Leader of the Opposition. She said there was a
“wider concern in the public whether he has the leadership qualities to lead his own party, let alone the country.”
I knew we had moles in the Labour movement; I just did not know they were that high up.
The spare room subsidy is a basic issue of fairness: people do not get the subsidy if they are in private sector rented accommodation, so in our view they should not get it in public sector rented accommodation. It is as simple as that.
In case he has forgotten, two of the people behind the right hon. Gentleman have jumped ship—and the others are waiting for the result to see whether they should follow.
The Prime Minister tries to defend the bedroom tax. Let me tell him that on the bedroom tax the Government are today going to court against a victim of domestic violence who has been raped, assaulted, harassed and stalked by her ex-partner and is going to be charged the bedroom tax on her panic room. She is one of 280 victims of domestic violence in this category. Will the right hon. Gentleman remind us why that is the right thing to do?
Order. The answers from the Prime Minister have not always been fully heard and they must be, and the questions from the Leader of the Opposition have not always been fully heard and they must be. I remind the House that that is what our voters, the electorate, would expect—some decent behaviour, and robust but courteous exchange.
The Prime Minister does not know the facts. Many of these victims of domestic violence are not getting the hardship payment, and protecting the victims of domestic violence should not be a matter of discretion; it is a matter of principle. Nothing better illustrates the contrast of values between those on this side of the House and those on that side of it.
Now let us talk about the mansion tax—[Interruption.] Yes. A penthouse in Hyde park recently sold for £140 million. Is the right hon. Gentleman really saying that someone living in that penthouse should pay the same annual property tax as someone living in a house worth a fraction of that value?
We have made sure that the richest in our country have made a contribution by putting up stamp duty. We put up stamp duty on empty properties, and we are properly charging foreigners who come and invest in our country. The point is that we need a growing economy that is providing the jobs and the livelihoods for our people. That is what we are getting, whereas what the right hon. Gentleman has had in the last week is a pasting from a pop star.
That is exactly what I expect from this Prime Minister. He feels the pain only of people struggling to find a £2 million garage. That is this Prime Minister. Let me tell him why we need a mansion tax. It is because the NHS is going backwards on his watch. Will he explain why it was announced this morning that the NHS has missed its cancer waiting time target for the third quarter in a row, meaning that 5,500 people waited more than 62 days for treatment?
We are certainly not seeing a Klass act opposite. In the last week, the right hon. Gentleman has been called useless, hopeless, out of his depth, does not cut it and an absolute disaster—and that is just what his Front Benchers think. He asks about cancer standards, and the number of people treated for cancer is up 50% under this Government. We have put £12.7 billion extra into the NHS—money he thought was irresponsible—and we are meeting nine of the 10 cancer standards.
The right hon. Gentleman has absolutely no answer on the NHS. This is a target that he pledged to meet, and Cancer Research UK— [Interruption.] I know they do not want to listen to Cancer Research UK. It says:
“This isn’t just about missed targets…thousands of patients are being failed.”
He is missing his cancer targets—[Interruption.] No, actually, they are doing a better job on cancer targets in Wales than they are here. He is missing his cancer targets and he is missing his A and E targets. Let me put it to him in terms that he might be capable of answering. On his visit to Rochester and Strood, has he had time to explain to people why over the last three months nearly 4,000 people waited more than four hours for A and E, and more than 700 people waited more than four hours on trolleys?
I will tell the right hon. Gentleman what is happening in the NHS. The number of nurses is up by 2,500 under this Government, and the number of doctors is up by 8,000 under this Government. Millions more patients are being treated, all because we put in the extra money that Labour said was irresponsible.
The right hon. Gentleman made a point about Wales. Let me just give him the facts. The last time A and E targets were met in Wales was March 2008. The last time the urgent cancer treatment target was met in Wales was 2008. What is the difference between Wales and England? In England the Tories are in charge, putting more money in and reforming our NHS. In Wales Labour is in charge, cutting the NHS and missing targets.
The truth is that the NHS is going backwards on the Prime Minister’s watch, and the British people know it. We are going to campaign on the NHS between now and the general election, because the Prime Minister has failed—he has failed on the NHS. We all know why this Prime Minister thinks the bedroom tax is great and the mansion tax to fund the NHS is terrible. If you have big money, you have a friend in this Prime Minister. If you have not, he could not care less.
I think it fair to say that the right hon. Gentleman’s week has not got any better. This was the week in which Myleene Klass wiped the floor with him in a television programme, and this was the week in which an opinion poll in Scotland showed that more people believe in the Loch Ness monster than believe in his leadership. The only problem for the Labour party is that he does actually exist.
You are all very kind.
The impact of excessive second home ownership on rural communities is that it removes demand from GPs’ surgeries, village schools, rural bus services and post offices, and those services often close as a result. Will the Prime Minister agree to allow an increase in the council tax on wealthy second home owners in order to create a ring-fenced fund to support those vital rural services?
We have allowed councils to charge more tax on second homes, and many have taken advantage of that. The hon. Gentleman is right to say that we need to build more houses to ensure that the village school, the village post office and the village pub are given the support that they need, and under this Government that is happening.
Q2. The Jarrow NHS walk-in centre, which sees more than 27,000 patients a year, is due to close. The management tell me that that is because of cuts that they have to make. Will the Prime Minister refute that? Alternatively, will he intervene with the reckless management up in the north-east who are cutting the NHS in his name, and stop this stupid closure now? (906059)
Let me tell the hon. Gentleman what is actually happening in the NHS in south Tyneside. Clinical commissioning group funding is going up by 2%, and is more than £225 million this year. As for the specific issue that the hon. Gentleman raised, according to the figures more than 50,000 patients attended South Tyneside general hospital A and E, of whom 60% did not require treatment. That is why new investment is going into the urgent care hub that is being proposed by the local managers and clinicians in his constituency.
Q3. In Salisbury and south Wiltshire, unemployment has fallen by 60% since the Government took office. Youth unemployment is down by two thirds, and across the county of Wiltshire the number of young people in training and employment is set to exceed pre-recession levels. Does the Prime Minister agree that we are on a clear path to improving living standards further for all, and that the Labour party would put that into reverse? (906060)
My hon. Friend is absolutely right. What we have seen in the last year is the biggest fall in unemployment since records began. We have more people in work in our country than ever before in our history. We have seen the first rise in the minimum wage ahead of inflation since Labour’s disastrous recession, and today we are taking further steps by banning exclusivity in zero-hours contracts.
Our plan is working, and the British people are seeing the results. There are still warning signs out there about the global economy, but we need to stick to our plan, and deliver wealth and prosperity for our people.
Q4. Across the United Kingdom, there are two Governments redistributing wealth from the poorest to the richest. The Labour alternative is to have a 50p tax band and a mansion tax to provide money for our vital public services and a bankers bonus tax to provide a compulsory jobs guarantee for young people—policies opposed by both the Tories and the shouting Scottish nationalists. Does that not tell us that in Scotland we face a clear choice in May: you go to bed with the Scottish National party, you wake up with this man as Prime Minister? (906061)
The hon. Gentleman is simply wrong. In this year alone, 500,000 more people are in work. There have been cuts in unemployment and fewer people claiming benefit in his constituency. That is what is happening. I know that it is not convenient for the Labour narrative but the fact is that inequality is down; child poverty is down; the number of people in relative poverty is down. Those are the facts. Labour Members do not like them but they cannot hide from them.
Thank you for calling me, Mr Speaker—I had not spotted the opportunity.
The Prime Minister will know that the Marriage (Same Sex Couples) Act 2013 was built on the twin pillars of equality and support for marriage. Will he now put a rocket under the Ministry of Justice to ensure that, under this Administration, we can deliver the same rights for those who want to celebrate their marriage as humanists?
Q5. Northwick Park hospital, which serves my constituency, has seen an unprecedented increase in the numbers going to A and E, given the closure of Central Middlesex A and E department and the continuing weekday closure of Alexandra Avenue polyclinic. Given that the hospital management believe that an extra 120 medical beds are necessary and local people want the clinic to be fully reopened, will the Prime Minister ask the Secretary of State for Health to address those concerns urgently? (906062)
Of course I will discuss that matter with the Secretary of State for Health, but I will do that in the context of what the hon. Gentleman knows, which is that, in his constituency, the A and E unit at Northwick Park hospital is getting a £21 million upgrade and is due to open in December. That is because our long-term economic plan is working and we are putting money into the NHS. This goes to a bigger truth: we can only have a strong NHS if we have a strong economy.
Q6. The Prime Minister has gone further than his predecessors in recognising our nuclear test veterans, but actions speak louder than words. Given how poorly they have been treated compared with veterans in other countries and the fact that one in three of their children has a serious medical condition, with 20% of conceptions ending prematurely, and in the hope that this PMQ will be third time lucky, will the Government make an ex gratia payment of £25 million to a charitable fund to help those veterans and descendants in need? After all, we only had to ask them once to do their duty and stand in front of a nuclear bomb. (906063)
I pay tribute to my hon. Friend, who has been dogged in pursuit of this very important cause. There is a very important ruling out today that has serious implications and it is right that we consider our response carefully. I have asked the Defence Secretary to meet my hon. Friend to discuss the implications for the nuclear test veteran community. I listened very carefully to what he said about the ex gratia fund. This Government have taken the time to deal with some of the difficult issues, such as war widows, which we effectively solved last week, and the long-term injustice of there not being medals for Arctic convoy veterans and the clasp for Bomber Command veterans. I am determined that we deal with this issue. I hope that my hon. Friend will bear with me while we have further discussions, but I do want us to try to seek a resolution to the issue.
Given the Prime Minister’s observation that red lights are flashing on the dashboard of the world’s economy, does he agree that, in relation to Northern Ireland’s economy, he could take two positive measures very soon: first, to devolve corporation tax powers to the Northern Ireland Assembly; and secondly, to put pressure on energy companies to reduce the price of home heating oil as well as petrol and diesel because of the very high dependence in Northern Ireland on that type of energy? Will he take action on those two fronts immediately?
The right hon. Gentleman makes important points. On off-grid heating oil and the costs, more needs to be done to put pressure on companies not just in Northern Ireland but across the UK. On the issue of corporation tax, I maintain the commitments that I have made before about what we will be saying and when we will be saying it, but as we address this issue we are also going to have to look carefully at the Northern Ireland budget, and to ensure that the budget is working and that the Government of Northern Ireland are working, because that is an important part of the overall picture.
Q7. This week I am launching my latest small business awards in Chester, ahead of small business Saturday on Saturday 6 December. Will the Prime Minister join me in congratulating small businesses that have helped generate our economic recovery and will he commit to shopping small and shopping local on Small Business Saturday? (906064)
I can certainly make that commitment and that is what I will be doing on Saturday. Small business Saturday is an excellent initiative, and I urge all hon. Members to get behind it. In terms of helping small businesses, it is worth noting that we are cutting the jobs tax of businesses and charities by up to £2,000, we are abolishing national insurance contributions for under-21-year-olds, we are extending the doubling of small business rate relief and we have cut corporation tax to small business. Small businesses are the lifeblood of our economy, and they know that in this Government they have got a true friend.
Q8. Is the Prime Minister aware that the hateful bedroom tax will be remembered just like the Tory poll tax, which destroyed Margaret Thatcher’s premiership? He should be ashamed that such a notorious tax came in on his watch. (906065)
What the hon. Gentleman and others on the Labour Benches have to explain is why it is right that people in private rented accommodation who are claiming housing benefit do not get a spare room subsidy but they think people who are living in council housing should get a spare room subsidy. The second question they are going to have to answer is: why did they oppose £83 billion of reductions in welfare which has helped us to maintain spending on health and schools, while taking 3 million of the poorest people out of tax altogether?
Q9. Earlier this year 20-year-old Hollie Gazzard was one of two girls murdered in my constituency by former partners. Her father, Mr Nick Gazzard, has since set up the Hollie Gazzard Trust, one of the objectives being to promote the teaching of personal, social, health and economic education in schools. That is mentioned in the new national curriculum but the trust feels it needs to be compulsory for all schools and that it needs to be taught by external specialists. Will the Prime Minister help with this? (906066)
I will look very carefully at what my hon. Friend says. First, I would like to send my deepest condolences, and those of the whole House, to Hollie’s family, following her brutal murder. I would also like to pay tribute to the Hollie Gazzard Trust, set up by her family, for its high-quality programme of classes aimed at educating young people about domestic abuse. What we have said is that sex education should always include relationship education as well, and that goes for all schools.
Q10. Rents are sky-high and house prices in Brighton rose 13% in the last quarter alone. Nurses’ wages were recommended to go up by 1% yet the Prime Minister’s Government are blocking even this tiny rise. How does he expect hospitals like the Royal Sussex to be able to recruit enough nurses if they simply cannot afford to live in the area? (906067)
First, we are making a huge investment in the Royal Sussex hospital and that will have its effect, but I have to say to the hon. Lady that she says house prices are rising and are unaffordable, but I have never come across a Green party politician who is in favour of building houses anywhere for anyone.
Q11. During his recent visit to Warrington the Prime Minister will have seen at first hand our increasingly severe traffic issues. I thank him for ensuring that the local growth deal will deliver a new crossing near the town centre, but may I say that what we really need is a new high-level crossing, something that has been planned but not delivered for nearly 30 years now? (906068)
I will look very carefully at what my hon. Friend says. I enjoyed my visit to his constituency, and he is right: I could see the problems of congestion, but I could also see how the long-term economic plan is working in his constituency in terms of jobs and growth. He is also right about the local growth deal, which for Warrington and Cheshire is worth over £140 million in terms of Government funding, and that does include support for the new swing bridge, which will help to tackle the congestion as well as unlock important building sites.
Q12. The people of Northern Ireland welcome the success of the Police Service of Northern Ireland, assisted by secret recordings made by the British intelligence services, in bringing seven suspected terrorists, including terrorist godfathers, to court on charges of serious violent republican activity. Customs officials close an illicit fuel plant in Northern Ireland every 10 days. The profits from those operations have bankrolled republican terrorists for years and cost the economy millions, but there is anger that not one person has been jailed for such an offence in the last 12 years. Why are those terrorists and gangsters immune from prosecution? Does the Prime Minister agree that that is an intolerable situation, and will he intervene to enable the immediate full operation of the National Crime Agency in Northern Ireland? (906069)
First, no one who commits crimes in Northern Ireland should be immune from prosecution. The hon. Gentleman is right to pay tribute to the PSNI, which, over the past few years, has shown just what an extraordinarily capable police force it is. We should remember the conditions in which it was built. He also makes an important point about the National Crime Agency. It is proving itself in operation after operation, not just here in the United Kingdom but right around the world, and it should be playing a part in Northern Ireland. That is a discussion that we need to have with all the parties in Northern Ireland, and I hope that over time we can get everyone to see the sense of having that important organisation there for Ulster.
Q13. Christians and others are being murdered for their faith in Nigeria, Syria, Iraq, Pakistan and many other countries. Elsewhere, it is a crime to believe anything other than what the state sanctions. Does my right hon. Friend agree that our United Kingdom stands, above all, for freedom of speech, thought and belief, and that we must do all in our power to protect the persecuted and stand up to the persecutors, whoever they are? (906070)
I very much agree with my hon. Friend; he is right to make this such a cause, and to pursue it in the House and outside it. Britain has a proud record of political and religious tolerance—and, of course, of freedom of speech. In our dealings with other countries, we should always make it clear that we believe that to be the right approach. There is an appalling amount of persecution of religious minorities around the world, and some now say that Christians are more persecuted than other religions in too many countries, some of which my hon. Friend has named. We should make sure that this key issue of religious tolerance is at the heart of our foreign policy.
Two Ofsted reports released today show that local authorities are not equipped to deal with child sexual exploitation. In addition, South Yorkshire police officers are being investigated for failing victims of abuse. I raised all these issues in April. I have raised them with Ministers and at PMQs. What will it take for this Government to help vulnerable people?
First, let me commend the hon. Lady for the work that she has done on this issue. It is important that we learn the lessons from what happened in Rochdale—and, indeed, in the city of Oxford, near to my constituency, and elsewhere. The report released today is important, because the most important lesson that it draws is that we have to get every agency—whether it is the police, social services or schools—working together. That is not happening in enough of our towns and cities, and it needs to. In terms of what this Government are doing, the Home Office is leading this important effort and getting Departments to work together. I am convinced that we will make good progress.
Q14. On the subject of immigration, Greencore—a large sandwich-making company in my constituency— is already employing 1,100 people. It is now expanding massively, thanks to this Government’s long-term economic plan. However, there were reports last week that it was looking to hire staff from Hungary. Labour wants untrammelled immigration, and that is what it gave this country for 13 years, but is not the message for the people of Northampton—and of Rochester, for that matter—that it is thanks to this Government that there are jobs in this country for the people of Northampton? Would we not be a bacon butty short of a sandwich platter if we forgot that? (906071)
My hon. Friend is absolutely right. The case of Greencore shows that we need not only proper immigration controls within and outside the EU but also welfare reform, so that it is not an option for people to live on welfare when they could work. We also need to implement education reform, as we are doing, so that young people can leave our schools and be able to take on the jobs that are available. It also means sanctioning those people who are on unemployment benefit who will not fill out a CV, will not attend a job interview and will not take a job when it is offered. A proper sanctions regime is actually part of a strong immigration policy.
In December last year, the Prime Minister visited Bolton and promised that there would be 200 extra seats on key morning commuter trains to Manchester by the end of this year. Last week, I met the train operator, who said that they did not know how many seats there would be or when they would be available, but that they would certainly not be available by the end of the year. Can the Prime Minister explain why his promise has been broken?
Q15. Is the Prime Minister aware that over the past year unemployment in North West Norfolk has fallen by a very welcome 770? Does he agree that one should look behind the statistics and see nearly 800 families who now have a new breadwinner and a brighter future? Is this not yet another vindication of the tough stances he and his Chancellor had to take? (906072)
My hon. Friend makes an important point. In North West Norfolk the claimant count is down by 50% since the election and the youth claimant count is coming down by 52% in the last year alone. The figures released today show that people who have been in work for a year or more have seen their wages go up by 4%—more than twice the rate of inflation. And of course that is their wages before the tax reductions this Government have made because we have been a careful steward of the nation’s finances. What we would get with Labour is no growth, no jobs and higher taxes.
The Prime Minister apparently admits that his top-down reorganisation of the national health service and the Act that imposed it were mistakes. My Bill on Friday is an opportunity for him to put right some of those mistakes and repeal the parts of that Act that imposed privatisation on our NHS. The Bill is backed by the British Medical Association, the Royal College of Nursing, the Royal College of Midwives, Unison, Unite and the GMB—who represent the workers. Never have so many people been united against the Government about an Act that imposed so much on the national health service. Will he back my Bill on Friday and tell people that the national health service is not for sale—not now, not ever?
At least we now know who is paying for the hon. Gentleman’s Bill—that is one thing. Let me make a couple of points to him. Independent providers made up 5% of the NHS under Labour and they now make up just 6% of the NHS. The Government who had the sweetheart deals with the independent sector were the Labour Government, who handed it money in return for contracts. This is what we see in the NHS: 2,500 more nurses; 8,000 more doctors; and more patients being treated. We see an NHS that is succeeding because we made the reforms and we put in the money.
Thank you, Mr Speaker. In 2009, Burnley was classed as an unemployment blackspot. In 2014, unemployment has fallen to 3.5% and we are no longer a blackspot. May I advise my right hon. Friend that the economic plan of the coalition Government of the Conservatives and Liberal Democrats is working in Burnley?
First, I thank my hon. Friend for what he says. May I also commend his leadership on fighting for more apprenticeships, more skills and more training for young people in Burnley? The long-term economic plan is succeeding in Burnley, as it is in the rest of the country.
Points of Order
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.
National Health Service and Care Sector Workers (Credit Union and High Cost Credit)
Motion for leave to bring in a Bill (Standing Order No. 23)
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.
A particularly talented and handsome group, Mr Speaker, with the exception to that classification being myself.
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).
Small Business, Enterprise and Employment Bill
[2nd Allocated Day]
Further consideration of Bill, as amended in the Public Bill Committee
Amount of financial penalty for underpayment of national minimum wage
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.
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 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.
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.
Our amendment 10 would allow a worker to receive a regular hours contract after a continuous period of employment. If an employer has an employee on a zero-hours contract for more than two years, that must mean that the employee has regular hours and regular employment. Employment law should reflect such a situation. We need flexibility in the labour market—in fact, the UK has the third most flexible labour market in the OECD—but we must prevent flexibility from being used as an excuse for exploitation, with the business risk being transferred from the employer to the employee.
In the House yesterday, the Government refused to stand up for small businesses that are going under simply because they are waiting to be paid by large customers, or for pub landlords who are struggling to make a living because of unfair beer ties. They now have a chance to stand up for workers on zero-hours contracts rather than continuing to allow them to be exploited by unscrupulous firms, and for people on low wages by taking proper action rather than letting them down. If the Government choose not to agree to our amendments, it will be up to the next Labour Government after May to stand up for the many and carry out the changes needed to make our employment market both fair and equitable.
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 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.
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.
This issue was debated not just in the Bill Committee, but also in the Committee on last year’s Care Bill, on which I also sat. We hear sympathy and warm words, but nothing is changing with the way that workers in the care sector in this country are treated, and they are providing a very cheap form of care for the people who most need it. We have to do better than that, not just for the workers themselves, but for those who rely on them. The amendments are important in that they start to tackle some of the scourges and problems caused by low pay and payment that is below the national minimum wage.
The point was made earlier that such measures are important because they lead to far greater commitment. Why would someone carry on working in a sector when they are taking home just over £3 an hour? People will inevitably start to look for somewhere else to work where they can earn more money, and we will not keep the best staff and quality of care unless we pay for it properly. As has been said, some Labour councils are doing a good job and have signed up to the ethical care charter promoted by Unison. They are paying not just the minimum wage in the care sector, but a living wage.
I recently spoke to a director of adult social care who told me that her council has decided to invest half a million pounds in care from a limited and decreasing budget, and in spite of the significant cuts imposed on it—as has happened in many councils, including my own—by the Government. The council realises that unless it takes the drastic step of investing a big sum of money from its budget, quality of care will continue to decline. It has worked out that such investment will lead to an improvement not just in quality of care, but ultimately in efficiency and the financial return that comes from that. People will stay in their jobs, become better at them, and deliver a better standard of care, and that will save money as well as delivering a better service. That has to be the way forward for the care sector, but the situation has not been helped by a lot of what has happened since the Government came to power. Big cuts to social services have made the situation increasingly difficult, and lots of councils would love to go down that route but have not been able to do so for financial reasons.
We have heard from those on the Front Benches about Labour’s plans to give responsibility and power to local councils to enforce the national minimum wage, but cuts to HMRC have made it significantly more difficult to enforce existing legislation—I have also seen that in my area where HMRC employs a significant number of staff. The Government’s efforts to introduce a policy of naming and shaming have been pretty poor.
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?
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 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.
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.
I am not telling him that his constituents are not being truthful in relation to their circumstances, but I am saying that the Government have invested more money in the enforcement of the national minimum wage. HMRC has employed more compliance officers in this area of work. I am sure that on behalf of his constituents he would wish to take up his concerns with the Treasury, but national minimum wage enforcement work has received additional investment from the Government.
I am glad the Minister has made that point. The reality is that those who used to work for HMRC would be very puzzled to hear it. Many staff working at HMRC, whose numbers have fallen in the past four-and-a-half years, would be puzzled by it, too.
The lack of improvement in enforcement is a worry, which is why our proposal to give the responsibility and power to local councils is so important. We propose the real deterrent of a £50,000 fine—the Government have not come forward with anything on that scale—and the aspiration of £8 an hour for the national minimum wage. That would move things forward significantly, while at the same time encourage the payment of a living wage.
All these low pay issues—the people who have to put up with low hours on zero-hours contracts, as my hon. Friend the Member for Central Ayrshire (Mr Donohoe) pointed out; the part-time nature of many of the jobs created in recent years, which the Government are so keen to trumpet; the way in which the minimum wage is undercut; the lack of a living wage; and the fact that people are £1,600 a year worse off—show why it is so important for proper action to be taken. The national average for the number of people in work on low pay is one in five. In my constituency, two in five are paid less than a living wage. For my constituents, the issue of low pay is absolutely crucial. They are crying out for an improvement in the way the economy is balanced, so that far more people benefit from economic recovery and we see a reversal in the year-on-year fall in living standards they have suffered under this Government.
There are very high numbers of people on low pay, which—the point was made in an earlier exchange—has led to low tax receipts. That explains why the apparent improvement in the number of those in employment has not been linked to a reduction in the deficit. The deficit is now going up again, despite the draconian cuts in public spending.
My hon. Friend makes an incredibly important point. As he will agree, the fact that unemployment is falling but tax take is flat tells us a little about employment in this country. On that basis, it is little wonder that the deficit is rising, not falling.
The economic indicators tell the story. Whatever the Government are doing and whatever is happening in the economy, for the majority of people it is not working, but it is certainly hurting. That is the reality for many of my constituents: two in five earn less than the living wage. They are hurting and finding it difficult to make ends meet—to pay their mortgages, their rent, their food bills—and many people in work are going to food banks because they cannot survive otherwise.
I was talking to a nurse the other week on the picket line outside Ashworth hospital. He felt he had no alternative, because of the dire situation he was in, but to strike for four hours over the 1% pay rise he had been denied by the Government. One per cent.—how mean can you get? When it gets to the end of the month, he has to choose between putting fuel in his car to get to work and buying food. That is how precarious an existence he and many in the country are living because of low pay.
As others have mentioned, more and more people are entering self-employment, and their position is incredibly insecure. As anyone who, like me, has run their own small business will know, there are times when money is not coming in and there is no guarantee of a wage. It is a difficult situation and one facing a growing number of people. For some, it is a choice, but many more are forced into self-employment for a variety of reasons, and it is a very insecure way of life.
With all these different forms of low pay, I am afraid that the prospects for prosperity or a recovery in living standards will not be good for many people unless we significantly change how our economy operates and the way we deal with issues such as low pay. For that reason, interventions of the kind proposed by my hon. Friends on the Front Bench are important; they give support and encouragement by ensuring that the rules are enforced, that people are paid according to the law and that action is taken to improve pay.
Amendments 8 to 10 are designed to help raise the pay of the lowest paid in the country and those most affected by our low pay economy and to boost the economy in parts of the country, such as my constituency, where there is a big problem. They are designed to protect workers, enforce the law and support businesses that are being undercut and trying to do their bit. The point my hon. Friend the Member for Edinburgh South made about his own experience in business was a great example of what a good employer should be doing—making absolutely sure they pay their staff decently. My granddad used to run a corner shop, and he said, “If you can’t afford to pay people a decent salary, you should not employ anyone.” If that was good enough for him back in the 1940s and ’50s, it should be good enough for us now. That is how good employers operate. Sadly, however, there are unscrupulous people around who will seek to take advantage where they can, so we need to take action to help the lowest-paid in our society. I hope the House will support amendments 8 to 10.
I apologise for arriving halfway through the Front-Bench spokesman’s introduction and for having to leave soon to chair another meeting.
If the Government cannot support the amendments, perhaps they could consider the spirit in which they have been tabled. I refer in particular to amendment 8 and the annual report into the effectiveness of enforcement. I have raised this issue in the House before, and while the Minister was on maternity leave I met the Minister who stood in for her to discuss the failure to pay the minimum wage in the shipping industry, particularly on ferries to the Channel Islands. Condor Ferries is still paying £2.65 an hour. Its ships sail around the Channel Islands, so they are close to, and come to, our shores, but we still cannot get around the current legislation to ensure enforcement. An annual report could give us shared knowledge of where the minimum wage is not being paid and how we can work together to overcome the difficulties. Problems continue, and even if the amendment cannot be accepted, at least the Government could provide us with a regular report into the enforcement challenges.
On amendment 9, in January I helped to launch the fast food campaign, with the Bakers, Food and Allied Workers Union, to lift living standards, pay and the quality of employment within the fast food sector. It covers all fast food joints operating in this country, such as McDonald’s, KFC and Costa, most of which pay the minimum wage and virtually all of which operate zero-hours contracts. I have not met a fast food worker yet who has voluntarily moved to a zero-hours contract. The right hon. Member for East Yorkshire (Sir Greg Knight), who is not in his place, mentioned end-of-the-pier shows, but the entertainment sector uses fixed-term contracts, rather than just zero-hours contracts, because the latter are so capable of exploitation, victimisation and bullying, as we have found in the fast food sector in particular.
We have stood outside McDonald’s and we have tried to meet the management of McDonald’s, Costa and others to arrange discussions between the trade union, which is recruiting members in that sector, and management, but they have refused to meet and get involved in those negotiations. Recruitment has gone on and there has been some direct action. The fast food campaign will be demonstrating outside this place on Friday lunchtime to expose what is happening in the sector.
I welcome the exclusivity clauses in the Bill—they are really helpful—but even with their introduction, as amendment 9 points out, without the capability to enforce them, they will be almost meaningless. At the moment, the cost and other restrictions over who is entitled to go to an employment tribunal mean that many fast food workers and others on zero-hours contracts will never get their day in court. The amendment is not particularly challenging; it would simply require regulations making it open and transparent how people can enforce their rights. At the moment, it is almost inexplicable to people how they can be enforced.
I think that amendment 10(c), which refers to
“imposing an obligation on an employer to offer a fixed hours contract when a worker has worked regular hours for a continuous period”,
would be welcomed within the sector. Over the past year, I have been working on the fast food sector and have found people being employed on the most exploitative zero-hours contracts. We heard examples of individuals being phoned up and told to race to work to get the hours. My dad was a Liverpool docker in the 1930s. We are going back to the days when the ganger could select individual workers for the day. It means that although some will be selected, others will not, perhaps because of their trade union involvement.
One Costa worker who turned up at a public meeting I arranged had been told that he could not have hours the following week because he had not smiled enough that week. We raised that with Costa, but it was denied; the worker and his colleagues confirmed that it was true. That is the sort of exploitation that goes on. Unless we can get to a situation where we can be completely confident that a person has entered into a zero-hours contract completely voluntarily, people will be open to exploitation.
There is a sliding scale of what people want. Most people want permanent employment; others want to plan their lives over a limited period of time and would want some fixed-contract employment; and others—I think it will be a tiny minority, and not on the present scale—will want zero-hours contracts. The proposed new subsection (1A)(c) in amendment 10 therefore refers to regular employment for a continuous period. The proposed regulations could define that period of time; we could debate the practicality of that. The person should then have the opportunity of having a proper contract rather than a zero-hours contract.
I believe that the amendments are acceptable and advise everyone to vote for them, but even if they are not acceptable to the Minister, the Government need to take it into account the spirit of them. We should first ensure that we are open and transparent about the effect of the enforcement and share the problems of enforcement, so we know what the future agenda will be. Secondly, we must be completely clear that there are practical rights of enforcement. At the moment, I cannot explain to people how under the legislation as drafted we will be able to enforce their exclusivity. Thirdly, there is the issue of continuous employment, which I think needs to be tackled.
Again, all that is being suggested is that regulations should be brought forward to deal with these issues. If the Government are unwilling to accept the amendments, they could at least accept that there is an issue and that draft regulations could be brought forward, enabling the possibility of working on a cross-party basis to make some practical arrangements to protect workers from such forms of exploitation. Let me