International Women’s Day
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Lord Young of Norwood Green (Lab)
My Lords, and my ladies, I offer my apologies. The fact that I have not been here for a significant part of this debate is not because I was not interested but because I was attending “Learn with the Lords” at the education centre, listening to the views of the next generation of young women and men. It was a difficult choice but probably the right one in the circumstances.
I congratulate the Minister on her opening contribution. She covered the waterfront and showed us that there has been a significant amount of change. You need only to look around this Chamber to know that women are here, here in force and make a superb contribution, whether it is the Leader of the House, the noble Baroness, Lady Williams, our own leader, the noble Baroness, Lady Smith, or somebody such as the noble Baroness, Lady O’Grady, the first woman General-Secretary of the TUC. To say that things have not changed is clearly wrong. I suppose it is a question of whether you see the glass as being half full or half empty; for me, it is half full.
I also want to congratulate someone it is not very fashionable to congratulate at the moment, and that is Liz Truss—although certainly not on her record during her brief period as Prime Minister. Prior to that she was the woman responsible for appointing the noble Baroness, Lady Falkner, who unfortunately is not here today, as chair of the Equality and Human Rights Commission. That was a fundamentally important appointment of somebody who is there to protect the rights of women and who, in doing so, has faced quite a difficult challenge herself. Liz Truss also appointed Kemi Badenoch, who has also been involved in protecting the rights of women in her role as Minister for Women and Equalities. Those were two important appointments.
Obviously, I want to come at this issue in a slightly different way. I look at the people who have fundamentally changed society through what they have done and who, more importantly, have influenced young women. I start with JK Rowling, who has probably encouraged more young people to read books than anybody else I can think of. I can remember queueing up outside Asda at six o’clock to get the next edition of Harry Potter. However, it is not just that. She had the temerity to say, “Didn’t we have a different word for ‘people who menstruate’? What was it? Oh, it was ‘women’. That was it”. As soon as she uttered that word, the people she made multi-millionaires—those who starred in the Harry Potter films—accused her of being transphobic. She is nothing of the sort. She is a woman who has been prepared not only to express her views clearly but to put her money where her mouth is. She has opened a women’s refuge in Scotland and done a number of other things, so it is not just about accretion of wealth.
This country has been through a profound change in the last couple of years. We have been through Covid and had lockdown, which has had a huge impact on the way we work and live. People have discovered the flexibility of working from home. Working women have found that, in fact, life can be improved significantly in those situations. Some 900 companies are now saying to people, “You can work a four-day week and we’ll pay you the same”, and they are finding that productivity goes up. These are important things that actually impact women’s lives.
I listened carefully to the noble Baroness, Lady Jones of Moulsecoomb, and what can I say? Her assessment was that all is for the worst in this worst of all possible worlds. It was almost an anti-capitalist contribution—nothing has changed or improved for women. That is absolutely not true, and the statistics do not support her. Things have changed. Are they perfect? Of course not; much more needs to change. I am cognisant of the fact that we seem to have gone backwards in Afghanistan, given the plight of women there, particularly in terms of education.
I am an acute observer when I go on the train—all of society is there when you take a train journey. Yesterday, I was sitting near to two women who happened to sit next to each other. One had a badge on that said, “Baby on Board”, and the other was carrying a small child in her sling. I was hoping they might engage in conversation, because, after all, there was the future—I do not know whether the baby was a boy or a girl—sitting next to each other. That, in a way, filled me with hope. It is not easy bringing up children and being a working woman. So, I have a question for the Minister: are the Government doing something about the taper in earnings for women who go out to work, so that doing so is still significantly worth while?
I also want to make a point about the books people read on trains; I am incurably nosy. This morning, a young woman was reading Pride and Prejudice, and I thought that was good—written, again, by somebody who had to fight for their recognition in literature.
Finally, I talked about Afghanistan, but it is International Women’s Day and the point I want to make in closing is this. In Iran, young women are laying down their lives for the right to dress as they wish: for the right to wear a hijab or not to wear a hijab. The thought occurred to me that if young Muslim women in this country could show solidarity with their sisters in Iran and take off their hijabs for just an hour, it might be a powerful gesture in the cause of women internationally.
It has been a privilege to take part in this debate, and I regret that I was not present to hear many of the other contributions. I can see that I have not pleased everybody—my noble friend is shaking her head—nevertheless, that is the benefit of the Lords: we have a wide range of views.
Small Business, Enterprise and Employment Bill
Lord Young of Norwood Green Excerpts(9 years, 9 months ago)
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Baroness Perry of Southwark (Con)
My Lords, I want to follow the powerful points made by my noble friend with a small point which has occurred to me while listening to this debate. We heard the very moving thoughts of the noble Baroness about the single mother on a zero-hours contract who has to pay her babysitter when she turns up and then cannot afford her the next day. I, too, have been a working mother who has needed to use babysitters for my children if there was a sudden crisis and one of them was ill and could not go to school on the day that I was due to work. Like that single mother’s babysitter, my babysitter was also on a zero-hours contract. She was able to be paid for the day she turned up but, when she was not needed the next day, she was cancelled. We need to think more broadly about the needs even of single mothers who use a babysitter on a zero-hours contract just as much as we think about the needs of those on zero-hours contracts in other kinds of jobs.
My noble friend made the point that there is a varied range of employment positions and a wide range of ways in which people are employed. The way in which people are employed in domestic situations is usually on zero-hours contracts. We use our babysitters when we need them, not when we do not. Sometimes we cancel them at the last minute because we do not need them after all. We need to stop trying to see everything in terms of good and evil, right and wrong; there are shades. Trying to make regulations across that range would be a very dangerous thing.
Lord Young of Norwood Green (Lab)
My Lords, I intend to be brief. My noble friends Lady Hollis and Lady Drake have given a forensic examination, based on factual analysis, and I do not feel I need to go through it again. I want to address some of the comments made by the noble Lords, Lord Stoneham and Lord Deben, and the noble Baroness, Lady Harding.
On the UK labour market, the first thing we need to understand is that it is probably the most flexible labour market in Europe. Nobody could say that we are like France, Italy or Spain or that we have something that makes it almost impossible for employers to hire people flexibly. I will leave noble Lords with the following thought. On grounds of fairness, are we going to say that a zero-hours contract means zero rights? Just to remind us, under zero-hours contracts there is no sick pay, no holiday, no national insurance contributions and nothing towards a pension—that is a pretty demanding contract as it is, and it is hardly weighted against the employer.
Nobody on this side who has supported these amendments has suggested that we want to do away with zero-hours contracts in their entirety. We accept that, for some people, they are a valid and necessary means of employment, both for the employee and the employer. However, there ought to be some reasonable ground rules. If you are running a business, yes, there will be changes in circumstances; that is undoubtedly right. However, this amendment aims to lay down a principle which it says will be interpreted in regulation and which will not just be dealt with by the spectre of solitary civil servants, who apparently between them have never experienced an hour of work in industry at all. From my brief ministerial career, I know that that does not necessarily apply to all civil servants, so I do not accept the idea that they will work in a total vacuum—that is an unnecessary fear.
Are we really putting forward the basic argument that, if I am being contacted and told by the employer, “I want you to turn up for work”, and I turn up, honouring my side of it, the employer has no responsibility whatever? I listened carefully to the noble Baronesses, Lady Perry and Lady Harding, and there might be other circumstances, but that is a question of taking into account how we phrase the regulations, so we can take those into account. That is not an argument for saying that there should be no control over this situation at all.
The noble and learned Baroness, Lady Butler-Sloss, reinforced the point, which my noble friend Lady Hollis had made, that it is curious that the CBI supports this. That is hardly an organisation that would support something it thought totally inflexible. Surely this is about basic fairness, is it not? If we are enjoying the services of somebody who is working under those conditions, surely it is right that they should have some fairness applied in the way they are summoned to their employment.
Surely we are seeking to encourage reasonable standards of management. I will give another statistic from the Chartered Institute of Personnel and Development: only one in five British managers has any training at all. I point that out to the noble Baroness, Lady Harding, because it is as important as some of the other statistics she quoted. Of course, people will declare that they are satisfied—they need the money and are glad to get into work. However, when we are being served by those people, do we not feel that there should be certain basic rights? This is one of them.
We commend the Government for getting rid of the exclusivity provisions in such contracts, which was clearly unfair. However, because of the way this amendment has been made it ought to attract cross-party support. We are not taking a political stance here, but a stance on responsible and effective management—that is what it is all about—and on giving a reasonable right to the employee. It can be dealt with very effectively in regulations, and I hope that the House will overwhelmingly support it.
Baroness Neville-Rolfe
I thank the noble Lord, Lord Young, for his intervention. I am very grateful to the noble Baronesses, Lady Hollis and Lady Drake, for their amendment and for allowing us the opportunity to return to the important provisions on zero-hours contracts in the Bill, and specifically to the matter of compensation for late-notice shift cancellations.
We had a debate in Committee, but I see that the noble Baronesses’ amendment now seeks to apply their proposal much more widely across the workforce. I also listened to the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Perry, both of whom brought the benefit of their own experience of this matter. I have some myself, as I have four children —although the noble Baronesses are right to say that that is not necessarily relevant to the debate. I thank the noble Lords, Lord Butler and Lord Cunningham, and the noble and learned Lord, Lord Lloyd. I was also pleased to hear my noble friend Lord Deben comment on the dilemma of replacing less good employment with no employment.
The noble Lord, Lord Stoneham, rightly reminded us of the need to be careful not to throw the baby out with the bathwater. We in this country have done a lot with our flexible labour market, which has helped us to create 2 million jobs in this Parliament. I was also glad to hear from my noble friend Lady Harding, who came at the matter as a practical business person and thought about customers and the detailed definitional issues that we always get into on these matters.
Perhaps I should remind those who were not in Committee of what we are already doing about zero-hours contracts. Our consultation identified exclusivity clauses as the biggest issue. We have acted, and as a result of Clause 151, no zero-hours worker will be forced to be exclusive to an employer that does not guarantee them any work. There is also new information. The Government have published today our response to the consultation on zero-hours contracts, Banning Exclusivity Clauses: Tackling Avoidance. We have also published draft regulations that illustrate how the Government intend to use this power in the Bill.
The draft regulations propose that those employed on a zero-hours contract will have protection against suffering detriment on the grounds of working for another employer, and will be able to make a complaint to an employment tribunal. If a complaint is upheld, they may receive compensation. I know from our Committee debates that this is something that noble Lords opposite were keen to see, and I hope it will be welcomed.
In addition, the draft regulations propose to widen the ban on exclusivity clauses to all contracts of employment or workers’ contracts where the individual is not guaranteed a certain level of income. I hope that this, too, will be welcomed by the noble Baronesses, and will improve the situation. The regulations will extend the protection and ban exclusivity terms for other vulnerable groups in the labour market, beyond zero-hours contracts alone. People will be able to work more hours and boost their income if they so wish. This is in line with the responses we received.
What is more, the Government are updating the guidance on zero-hours contracts, and we intend to publish this on GOV.UK before the end of the Parliament. This is in addition to any sectors producing their own codes of practice on the responsible use of these contracts, as some noble Lords suggested.
We consider that a business-led approach is the best way to ensure a lasting culture change in the treatment of zero-hours workers, which the whole House wants. I hope that that demonstrates that we are listening to the concerns raised in this House and are acting to protect vulnerable workers—because I take the point that it is the vulnerable workers whom we are concerned about.
Amendment 58ZZC seeks to provide compensation for short-notice shift cancellations—but it proposes that the rights should apply to all workers, not just zero-hours workers. So it is not, as the noble Baroness suggested, a modest amendment, and I am not sure that the CBI supports the proposal. In March 2014 it said that a simple system of compensation might work for some zero-hours contracts. That was before we introduced the changes in this Bill—and the CBI’s comment did not apply to all workers. More recently, it has, I think, come round to the idea of regulating zero-hours contracts, and has said that the Bill’s,
“ban on exclusivity clauses in zero hours contracts … is a proportionate response to tackling examples of poor practice, and strikes the right balance between flexibility for both employers and workers”.
All those in work in the UK will have an employment status, which determines the protections to which they are entitled. Most commonly, individuals are “employees”, “workers” or “self-employed”. As the “worker” category includes all “employees”, this means that this amendment would potentially extend to the vast majority of the labour market. It requires the Secretary of State to make regulations—the wording is “shall”—and requires employers to pay compensation to workers whose shifts are cancelled without notice.
Baroness Neville-Rolfe
My Lords, our penalty measure provides incentives for full and prompt payment of employment tribunal awards and creates sanctions for non-payment. This is supported by our non-legislative work to improve guidance to help individuals understand how to enforce their rights.
In Committee I agreed to consider an amendment to include costs in the relevant amount on which the financial penalty is to be calculated. We have been persuaded by the principle that the penalty should incentivise workers receiving all that they are owed by their employer, and that where a tribunal has decided that costs are to be paid, an employee is entitled to receive them. Our amendments do exactly that.
The amendments also allow the Government to make changes by regulation if, in practice, waiting for costs to be finalised before financial penalties can be issued causes too much delay. These amendments also deal with some other minor and technical issues. For example, they make it clear that penalties which are payable to the Secretary of State are not included, and clarify technical points such as when an award is considered paid in full.
I hope that noble Lords will be reassured that the Government have listened to the concerns raised in Committee and that we are creating the right environment for a worker to be able to receive their full employment tribunal award promptly. I thank noble Lords for the debates we have had on this subject, and I beg to move.
Lord Young of Norwood Green
My Lords, I thank the Minister for her contribution. If I may paraphrase, “Never look a gift horse or a gift concession in the mouth”. However, in this case I will make a slight exception. We had a useful meeting with the noble Baroness—who has disappeared out of sight now, but not, I hope, out of hearing—and her civil servants. I was asked by the noble Lord, Lord Low, to make his apologies. As the noble Baroness knows, he has been a frequent participant in this debate, and he regrets that he cannot be here tonight, so I said that I would apologise on his behalf.
In the meeting that we had with the Minister I raised the disparity between two cases. If an award is made for a failure to pay the national minimum wage and the employer does not respond after having been contacted by HMRC, and does not pay the outstanding national minimum wage, an enforcement officer takes action against the employer. In the case of somebody who has struggled, probably for a significant period of time, gone through enforced mediation, and who has been successful at an employment tribunal, if the employer still fails to pay, it is true that they now incur penalties—and the Minister has told us about the improvements made in that area. However, we suggested that the successful claimant ought to have first recourse to those payments—but the Minister rejected that, saying that for a variety of reasons it could not be done.
I then suggested in the discussions we had that if that were the case, why at that point in time—which could be anything between a year and two years —should the cost of enforcement fall on the claimant, who will have been through mediation and an employment tribunal, been successful, and won an award? I suggested that the Government should examine the possibility of enforcement, as they are doing with the national minimum wage. That was what I hoped the Minister would take away.
That has not been the case. I am not expecting a detailed response this evening, but I make a plea that she might take that away, and between now and Third Reading perhaps we can meet to see whether any further progress can be made. However, with those few comments, we are happy to support the amendments.
“(4A) An employer must offer a fixed-hours contract to a worker who has worked regular hours for a continuous period, or series of continuous periods, of employment, to be determined by the Secretary of State.
(4B) The Secretary of State shall by regulations make provision for the determination of “regular hours” under subsection (4A).”
Lord Young of Norwood Green
My Lords, we have again had a long debate this afternoon about the flexibility of zero-hours contracts and what constitutes fairness in such contracts. The last Division was on an amendment which looked at the question of cancellation; unfortunately, we were not successful on that. Again, in this area there is an unfairness to zero-hours contracts. The House will note that we have not specified the period; we just wished to draw attention to a serious problem.
A number of contributions this evening talked about the need for flexibility in those contracts. As my noble friend Lady Hollis—who I see is in her seat—made clear, we are not opposing the principle of zero-hours contracts, but trying to lay the foundation for what we believe to be fairness in the arrangements. In a situation where regular hours are being worked for a continuous period or even a series of continuous periods of employment, surely that does not constitute the kind of flexible zero-hours contract that workers ought to expect. In those circumstances, we believe that the employer should be bound to offer the employee a fixed-hours contract.
If we look at the statistics behind the number of workers employed on contracts that last for a year or even two years, we find that they are not the kind of thing that we envisaged, or what was described today by noble Lords who talked of the need for a very flexible contract. That is, we believe, the justification for injecting fairness into a contract that in previous circumstances would probably have been a standard contract of employment. I look forward to the Minister’s contribution, and to hearing about the Government’s attitude to the amendment. I beg to move.
Baroness Neville-Rolfe
My Lords, I am grateful to the noble Lord, Lord Young, for tabling the amendment and giving us the opportunity to return to the matter of zero-hours contracts. I know that he genuinely wants the new regime to work, and I am grateful for that.
The amendment relates to a right to request fixed hours. However, it goes beyond zero-hours contracts and would introduce a right for all workers to demand a fixed-hours contract. This means that it would extend the right to the vast majority of the labour market. I have some sympathy with the noble Lord’s intention, but I am afraid there is a clear risk of negative consequences for the individuals affected, with some unscrupulous employers finding relatively simple ways to circumvent the legislation. For example, some employers could be incentivised simply to let people go before the qualifying period. That would impact negatively on the very people the amendment seeks to help.
None the less, I hope that I can reassure the noble Lord that the spirit of his amendment has already been addressed. The amended flexible working regulations, brought in on 30 June last year, give all “employees” the right to make a request to change their pattern of working after 26 weeks’ continuous service. The amendment would go further, by extending this right to all workers, but it is possible that individuals on zero-hours contracts who can prove a requisite qualifying period of 26 weeks may well be considered to be “employees”, and therefore be entitled to this right.
The Government’s approach has been proportionate in ensuring that employees have the right to request a change to their working pattern, while ensuring that businesses retain the flexibility they need to help drive economic growth. This flexibility will sometimes include a legitimate need to hire someone on a casual contract.
By extending the provision to all “workers”, the amendment could end up capturing many contractors and freelancers who may not want or need this right. What is more, many businesses rely on these individuals and other casual labour to provide specific tasks, and do not expect to hire them on a permanent contract at the end of their contract. A right to fixed hours after a certain period would obviously restrict this ability. I believe that the amendment could open a loophole, and might encourage employers simply to let individuals go before the end of the qualifying period. That is clearly not the outcome that any of us wants. I hope that on that basis, the noble Lord will feel able to withdraw his amendment.
Lord Young of Norwood Green
My Lords, I listened carefully to the Minister. If the wording of the amendment is not perfect, that does not stop her accepting the principle contained therein: and proposed new subsection (4A) does end with the words,
“to be determined by the Secretary of State”.
Yes, there will be a need for regulations, and I accept the noble Baroness’s point about freelancers and so on; there will be some exclusions. However, I return to the basic principle of fairness. We are talking about people who are not necessarily in a traditional freelance role but who, in a significant number of cases, are employed on a zero-hours contract for a year or even two years. We therefore feel that this is an important enough issue to test the opinion of the House.
Lord Newby
My Lords, Clauses 152 to 154 give Her Majesty’s Treasury powers to make UK-wide regulations with regard to public sector exit payments. Amendments 77 to 80 seek to address concerns raised by the Delegated Powers and Regulatory Reform Committee that these powers are framed more broadly than is required for the stated policy intent. The Government are grateful to the DPRRC for its scrutiny of the Bill.
Since the Government have now consulted on the detailed use of the powers, we are able to narrow their scope to match our settled intentions for implementation. This intention is that exit payments may only be recovered within a year of exit from the employment or office in respect of which the payment was made. None the less, in order for the regime to work effectively, it is crucial that we retain sufficient flexibility in the powers to enable the regulations to deliver the policy intent. This flexibility may include the types of exit payments that can be recovered to circumvent any potential for avoidance by using new or novel types of payment. Regulations will also set out prescribed circumstances for recovery, so that subsectors can be adequately defined and in order to accommodate changes in the machinery of government. Both flexibilities will be subject to the overriding requirement of return to the public sector within a year.
Further to the DPRRC’s most recent report, I can also announce today that the Government intend to bring further amendments at Third Reading to enable the first set of the secondary regulations to be made by the affirmative procedure. This first use will be the substantive one, which establishes the exit payment recovery regime. Further regulations which make minor and technical changes, for example to the list of bodies covered by the regulations, will be made by the negative resolution procedure. I should take the opportunity to say that we have also published draft regulations which will provide a further indication of how these powers are intended to be used.
Amendment 81 is a minor and technical amendment to ensure that the Scottish Parliamentary Corporate Body falls under the scope of Scottish exit payment regulations. The body has the duty to ensure that the Scottish Parliament is provided with the property, staff and services required. It controls its own remuneration, and the Government and Scottish Government always intended for it to fall within the Scottish exit payment regime.
Finally, Amendments 82 and 83 are further minor and technical amendments to correct potential ambiguity in the drafting of Clause 159. I beg to move.
Lord Young of Norwood Green
My Lords, I thank the Minister for his introduction to the amendments. He will be pleased to know that at this time of night we do not wish to pick holes in them. We think that they address an understandable concern, which I suppose became apparent in the NHS reorganisation that we thought we would never see where people disappeared out of one door and came back through another. It is right that a hole is being plugged that needs to be plugged. I welcome the point made about flexibility to prevent any avoidance tactics and the assurance that some of the important further amendments will be the subject of affirmative resolution. We are happy to support them.
Small Business, Enterprise and Employment Bill
Lord Young of Norwood Green Excerpts(9 years, 10 months ago)
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Lord Stoneham of Droxford (LD)
My Lords, I apologise for being a little late for the beginning of the remarks of the noble Lord, Lord Wills, but I will say a few words in this debate. Generally on this side we are supportive of moves that provide extra protection for whistleblowers. Clearly, people who feel that they have to whistleblow must be protected and must have the remedy for being protected. Listening to the debate, I think that the idea of having some form of national code that would supersede the many codes that have grown up is on the face of it a good thing. I will say only that speed is always of the essence in these cases. If they are allowed to drag on, they become very bureaucratic —the individuals are put to huge inconvenience and stress while their grievances are dealt with. My only concern about setting up another regulator or ombudsman is about whether that would just create a bureaucracy that would add to the burden on those who try to deal with these issues, and would slow up the process in which grievances can in general be dealt with quickly. Obviously I will be very interested to hear what the Government have to say in response. We are broadly sympathetic to this tightening up of legislation in this area and the encouragement it should give to genuine whistleblowers.
Lord Young of Norwood Green (Lab)
My Lords, we support these amendments. I will preface my remarks by reminding us that in many circumstances this is a matter of life and death. Often the whistleblower finds that his or her life is turned upside down for a considerable period of time and they are put under enormous stress. The lives of the general public can also be affected, as we know from some of the first cases, for example that of the paediatric unit in Bristol. We know that when large organisations get it wrong, they put people and the public at risk, sometimes in extreme circumstances. It is right to remind ourselves of that, and of how much courage it takes for an individual in a large organisation to bring themselves to the point when they feel they have to whistleblow. They might have gone through the procedure of trying to alert their first line manager or even somebody further up the management chain, and still have failed to get any recognition that there was a real problem to be addressed.
We therefore think that the amendments proposed by my noble friend Lord Wills are reasonable; they are justifiable in trying to sort out whether a worker is in fact a whistleblower and is ensured protection. That is extremely important. The amendment enables workers who have been wrongly identified as having made a protected disclosure to be protected under PIDA. Trying to ensure that gagging clauses are finally rooted out is surely another important amendment, and I look forward to hearing the Minister’s response to it. The National Audit Office concluded that many individuals believed that they were gagged regardless of whether or not this was actually the case. Anything that makes that situation clearer and provides adequate protection surely is worth while.
I do not think I need to take much time over the question of whether or not we should include student medical professionals. It seems necessary and I hope that the Government will be sympathetic to it.
Amendment 65 deals with blacklisting. Although we believe that there should be a further inquiry into the general nature of blacklisting, my noble friend Lord Wills has suggested a very reasonable approach to what happens to an individual who, having already lost their job through no fault of their own, finds themselves in a situation where they are unable to gain any further employment, which is surely appalling.
Amendment 63 seeks to ensure that there is not a get-out clause where an employer can suggest that instead of something being a disclosure of information where there is a protected circumstance, that can be got round by considering that it in fact was an allegation, which does not give the employee protection.
I do not need to go into an awful lot more detail because my noble friend Lord Wills and the noble Lord, Lord Low, gave a very detailed analysis. But I will deal with the point about the whistleblowing ombudsman, if only to respond to the noble Lord, Lord Low. One can always make the point about another layer of bureaucracy but when somebody finds themselves in the position of being a whistleblower, we would like to think that these situations are dealt with speedily and promptly but all the evidence tells us that unfortunately these cases go on, in many cases for years, and surely at the end of the day what the individual wants is justice. Having somebody who is genuinely independent as the last port of call is a worthwhile suggestion.
For those reasons, we support these amendments and I look forward to hearing the Minister’s response.
Baroness Mobarik (Con)
My Lords, as a new Member of the House, it has been fascinating to follow this Bill through Committee. I am sorry I was unable to speak at Second Reading but I just wanted to say that I support the Bill as a whole, and Clause 144 on whistleblowing. However, listening to noble Lords, there seems to be a lot of new material here that could hold up this important Bill. I should like to hear from my noble friend the Minister what else may be planned outside the Bill on this very important issue.
Lord Young of Norwood Green
My Lords, I shall speak to all the amendments in this group. It is as well to remind ourselves what an employee has to go through even to get to an employment tribunal.
The Enterprise and Regulatory Reform Act created a number of hurdles that people have to pass. First, they must go to early conciliation at ACAS. If that breaks down, they are issued with a certificate to say that conciliation has been unsuccessful and they must go into the employment tribunal system. An entry fee has to be paid to the employment tribunal service. If they want to take it to a full hearing, there is an additional fee. We do not believe that it is just or fair for a pregnant woman who has been discriminated against at work, for example, to have to pay £1,250 to enter the employment tribunal system.
After going through an incredibly stressful time, including an often expensive employment tribunal, someone might be given a compensatory award that says that they have been wronged at work. The employer must remedy that problem but might decide not to pay. There are a number of hurdles that someone has to get past to be paid, which is why we must try to find a way of remedying the problem, particularly in cases where an employment tribunal sitting in front of a judge has declared that the employee deserves to be compensated and the wrong must be righted.
Amendment 68ZH says:
“Any payments made under this section by the employer must be paid to the employee to the extent that the relevant sum has been fully paid before any sums are payable under the penalty notice”.
Ironically, fines might well be paid to the Government as a result of an employer failing to comply but the compensatory reward could remain outstanding. The Exchequer might benefit but the individual has been denied justice in that the compensatory award has been ignored by the employer. That is why we are recommending that in these circumstances that sum should be dealt with first. Again, I look forward to hearing the Minister’s response to this.
Then there is the question of naming and shaming. We already have a number of circumstances in other legislation where employers are named and shamed. With regard to the national minimum wage, the circumstances in which employers are actually prosecuted or even named and shamed are very few and far between. That is why we believe that this clause ought to include,
“a provision for the publication of the name and other particulars of an employer who does not pay the relevant sum as per the conditions of the notice”.
I beg to move and look forward to hearing the Minister’s response.
Lord Stoneham of Droxford
My Lords, I support the principle of these amendments. I look forward to hearing the Minister’s detailed response. It is right that the Government have introduced a number of reforms on employment tribunals, but in doing so they have introduced fees. I understand that the Government are in the process of starting an inquiry into the impact of those fees. We know that the number of people going to employment tribunals has fallen dramatically, so we need to know the reasons for that.
The principle of fees seems to be right in terms of deterring people from making frivolous claims, but we need to ensure that the integrity of the employment tribunal service is open to people with genuine claims, even if they have low means. Therefore, if we are tightening up on the fees, we should be looking closely at the payment of compensation so that the individuals who are awarded compensation get the money as quickly as possible, and preferably ahead of the fines that subsequently could be due on the employer for not having paid that money earlier.
Baroness Neville-Rolfe
My Lords, I thank noble Lords for their amendments. I believe we share the same aim—that of ensuring the best outcomes for individuals who have been through an employment tribunal, and ensuring that they receive their awards. Our research indicates that, without enforcement, only 40% of awards are paid within six months. That is clearly scandalous. Our financial penalty clause is intended to incentivise prompt payment of employment tribunal awards and to prevent employers ignoring judgments by employment tribunals. It applies to all tribunals, awards and settlements conciliated by ACAS. Employers who have not paid the award will receive a warning notice from the enforcement officer. By paying the award in full, promptly, they will avoid a penalty. However, if they do not pay in full, they will be hit with a penalty of 50% of the award. If they continue not to pay, or to pay only part of the award, they can receive further penalties, each of 50% of the unpaid amount, as well as incurring interest on the outstanding award. We consider that encouraging prompt payment in this way is an effective way of dealing with a problem that we agree exists.
Before I return to the amendment, I will respond to the point made by the noble Lord, Lord Young, about employment tribunal fees. It is reasonable to move away from funding being provided largely by the taxpayer towards a more balanced process, whereby the £74 million cost of administering claims to the employment tribunal system are met in part by those who use the system and benefit from it. However, it is important to emphasise that the Government have been very careful to ensure that fee waivers are available for those people of limited means in order that they are not excluded from seeking redress through tribunals. As the noble Lord, Lord Stoneham, has already mentioned, helpfully, the Government—
Lord Young of Norwood Green
I hear what the Minister says, but surely there ought to be some concern—as I think the noble Lord, Lord Stoneham, mentioned—about a situation where, in some regions of England, the number of employment tribunals has dropped by 80%? Surely that is not an indication that 80% of claims were vexatious. Does she really not have any concern in this situation that fees are deterring people from bringing what could be completely fair and justifiable cases before an employment tribunal? The evidence we hear from trade unions, which are normally the buffer between the employee and employer, is that that is exactly what is happening.
Baroness Neville-Rolfe
My Lords, I am glad that the noble Lord intervened to register his concerns, which to some extent I share. That is why the Government have committed to reviewing the introduction of fees. We are considering the scope and timing of the review, and will bring forward our plans in due course. We need to understand what is going on here, of course, but I was trying to make a general point about trying to improve things. The provisions in the Bill are another example of our efforts to do just that—to ensure that there are fair results and that people who are given awards receive them in due time.
I turn to each of the amendments, acknowledging the spirit of them, but obviously, as is usually my wont, looking to make sure that we do not have any perverse effects. I will start with Amendment 68ZG, which is designed to include costs in the calculation of the money that is considered to be owed for the purposes of the penalty. It is worth noting that “costs” or, sometimes, “preparation time” awards—where people are not paying for attorneys—are made in only a tiny proportion of cases. Costs awards are not related to the compensation for the breach of employment rights—for example, in a case of discrimination—but to the way in which one of the parties has behaved during the tribunal process. A good example would be the deliberate, repeated late disclosure of documents. Indeed, last year only 242 costs orders were made to claimants—in the context of more than 42,000 claims. The Government do not believe that adding costs to the calculation will add a significant additional incentive to pay. But I am sympathetic to the noble Lord’s intention and will consider further whether we need to make a change ahead of Report.
Turning to Amendment 68ZH, we are clear that a penalty regime must incentivise prompt payment in full and not inadvertently reduce the likelihood of individuals gaining their full award. Allowing the penalty to be used to offset the award, as proposed in the amendment, would not, we fear, incentivise prompt payment of the award in full, which is our objective. The point of the penalty is to act as a deterrent and a sanction for non-payment. Conflating money owed to the claimant with a civil penalty would cause confusion and might raise questions about which liability had been met when money was paid. We believe it would be better to keep the civil penalty separate from the money owed to the individual. The clause already encourages an employer to make full and prompt payment to avoid a penalty altogether. As I have explained, the only way in which an employer can avoid a penalty is to pay up in full once they receive a warning notice. This seems to be the most effective approach.
Amendment 68ZJ seeks to introduce a naming scheme. As the noble Lord will be aware, there is already a scheme for the national minimum wage. We are considering naming as part of the Government’s overall approach to increasing the full and prompt payment of tribunal awards. We need to carefully consider the options to ensure that we find the most effective response. I would be happy to update noble Lords on our thinking ahead of Report.
Turning to Amendments 68ZK to 68ZM, I reassure the noble Lord that unpaid awards are already recoverable through the county court, or the sheriff court in Scotland, as they are treated as judgment debts. There is also a fast-track scheme in England and Wales where a court enforcement officer can pursue the money on the claimant’s behalf. Furthermore, interest accrues on those unpaid tribunal awards at 8% per annum. So there is an incentive to pay promptly and in full.
Finally, in response to Amendment 68ZMA, I hope I can provide further reassurance. As I have outlined, there are already a range of mechanisms by which an individual is able to enforce their tribunal award. In addition, under Clause 145, a government-appointed agent will impose penalties for non-payment. The penalty scheme we are introducing through this clause offers an alternative, cost-free way to ensure that the claimant gets the money they are owed. Therefore, the Government do not consider that there is a need to set up a further mechanism at this stage, but we shall continue to monitor the situation following implementation of the new penalty provision.
I hope that my explanations, including about our wider plans, have provided reassurance to the noble Lord and that he will be content to withdraw the amendment.
Baroness Neville-Rolfe
My Lords, I am grateful to the noble Lord, Lord Low, for his comments. I would of course be delighted to host a meeting and go through these important issues—what we are doing, what we are not doing and how to find the best way forward in this important area so that the penalties work and the awards are paid.
Lord Young of Norwood Green
My Lords, I thank the Minister for her comprehensive reply. Are we satisfied? No, I do not think we are entirely, although I welcome the suggestion from the noble Lord, Lord Low, of a meeting; that is a useful and practical possible way forward. The research carried out in 2009 by the Ministry of Justice, which administers the system, showed that 49% of those employment tribunal awards—almost half—went unpaid in the first instance before any enforcement action was taken through the county court system. If it were 4% or 9%, we might say, “Okay, it’s not doing too badly”. Each case represents an individual who has fought their way through all those hurdles, got through to the employment tribunal and won an award but, no matter what the penalties are, they do not yet seem to be convincing the majority of employers. It is even worse in Scotland.
We still have real cause for concern. I have raised the fact that we have seen a dramatic decrease in people being prepared to go to a tribunal, and this seems to be adding insult to injury when they actually do go there. Nearly half the employers are able to say, “We can ignore it. We’re not bothered. We’ll see if we can weary the individual to the point where they won’t continue”. I am sure that some will not go through the county court because by that time they will have had enough. That is our concern.
Baroness Neville-Rolfe
My Lords, I reiterate that I also feel that the current situation is scandalous—I think that is the word I used—and the question is how we can best find measures that will solve the problem and bring the rate of payment in such areas much closer to what one might expect in other areas of the law. I hope that our meeting might assist with that.
Lord Young of Norwood Green
I think that I have made the necessary points, and I beg leave to withdraw the amendment.
Lord Young of Norwood Green
In this situation we have another worrying set of circumstances with regard to underpayment of the national minimum wage, a situation that we have protested about on numerous occasions. There have been only a pitiful number of prosecutions of people who have failed to pay the minimum wage, and even the naming and shaming has not exactly resulted in a large number of employers being brought to the attention of the public and their credibility, image and brand being exposed for failing to meet their obligations under the national minimum wage. That is why we have suggested that the penalty should be increased from £20,000 to £50,000.
As we say in Amendment 68ZQ, we believe that the Secretary of State should provide,
“an annual report to Parliament on the effectiveness of … enforcement of the national minimum wage”.
Does the current enforcement regime have the necessary resource to police the situation and go on to enforce it? As we then say:
“the level of the financial penalty for underpayment, including but not limited to its impact on compliance”;
should also be reported on, as should,
“changes in provisions relating to the national minimum wage improving other measures of pay in the labour market”,
as proposed subsection (c) says. In addition, having looked at how enforcement currently takes place, which is via HMRC, we believe that it would be more effective if it was enforced by local authorities. There are a number of examples where local authorities currently enforce at the local level, whether on environmental issues or food safety. It seems to us that they would be much more effective than HMRC is. I look forward to hearing the ministerial response to these amendments.
Lord Popat (Con)
My Lords, I thank the noble Lord, Lord Young, for his amendments to Clause 147, and for giving us the opportunity to debate the important subject of the national minimum wage. I have heard a number of concerns raised by the Opposition about the underpayment of the national minimum wage. I hope that my notes will cover what the Government are doing about that.
Clause 147 is an important step towards ensuring that employers comply with the national minimum wage legislation. It will amend the National Minimum Wage Act 1998 so that the maximum penalty that can be imposed through a notice of underpayment will be calculated on a per-worker basis rather than per employer. This will substantially increase the penalty for employers who owe large arrears to a number of workers. My noble friend Lord Storey asked this question, so I am pleased to confirm that the penalty of £20,000 is per worker.
By applying the penalty to each worker, employers owing high arrears to a number of workers may be issued with a greater penalty overall, as well as a higher maximum penalty. The higher penalty will deter employers from breaking national minimum wage law in the first place, ensuring that workers receive what they are entitled to and to come down harder on those employers who continue to break the law.
I will now respond to each amendment. Amendments 68ZN and 68ZP are designed to increase the maximum civil penalty available for non-payment of the national minimum wage from £20,000 to £50,000 per worker. I heard what the noble Lords, Lord Whitty and Lord Watson, had to say on this subject, and we welcome the recognition from the Opposition that there is a need to increase these penalties but we do not see the evidence to set the upper limit at £50,000. As the impact assessment for the measure sets out, 6% of cases in 2013-14 involved total arrears in excess of £20,000. None of these cases was anywhere near the upper limit suggested in the amendment.
Under the Bill, the penalty will be applied on a per worker basis, as I said. When you look at the cases where HMRC issued a notice of underpayment in 2013-14, the change means that in almost every case, the employer would have been issued with a penalty equivalent to the total amount of arrears they owed, rather than having the overall penalty capped at £20,000. As a result, the amendment would have had very little impact on the level of penalties in those cases.
However, I reassure noble Lords that if, in future, there is evidence to suggest that a higher maximum is needed, we can make that change through secondary legislation. I hope that I am giving reassurance to the party opposite that if we think in future that £20,000 is not enough and we need to raise it, we can bring in secondary legislation to increase the penalty.
Lord Young of Norwood Green
How many cases were in court for underpayment of the national minimum wage last year?
Lord Popat
I will certainly come back to the noble Lord on that in a minute.
I turn to Amendment 68ZQ. It is designed to impose reporting requirements on the Government’s approach to national minimum wage compliance and enforcement, as well as the impact of the minimum wage on wages more broadly.
I welcome the Opposition’s continued interest in this area and their desire to ensure that the system is working as well as it can. However, we believe that we are already transparent in our approach to reporting on the effectiveness of the national minimum wage and its impact on workers’ wages. Every autumn, the Government submit evidence to the independent Low Pay Commission, including an assessment of the national minimum wage’s impact on the labour market. That evidence is considered by the Low Pay Commission before it makes its recommendations to the Government. If new minimum wage rates are to be set, Parliament has an opportunity to debate them before they are introduced in October. Therefore, I hope that noble Lords will agree that the amendment is not necessary, as it simply imposes obligations that will duplicate reporting that is already taking place.
Finally, I turn to Amendment 68ZR, which would give local authorities power to enforce the national minimum wage. The Government already have an enforcement body dedicated to the national minimum wage, with a strong track record in this area.
I will respond to the question of the noble Lord, Lord Young. Since it started that work in 1999, HMRC has identified more than £54 million in arrears for more than 229,000 workers during more than 65,000 employer interventions. We are doing a lot more. The Bill, as my noble friend Lord Stoneham said, is to give small businesses help and support. We have gone as far as we can to make sure that employers do not break national minimum wage legislation. The noble Lord, Lord Young, asked how many cases of arrears there were last year. In 2013-14, there were 680 cases, with total arrears of £4.6 million.
Lord Young of Norwood Green
My Lords, I heard what the Minister said in response. I do not think that we are not totally satisfied with it. I may have missed in the exchange over the figures the Minister’s response to our view about enforcement by local authorities. Can he confirm what attitude is taken towards that?
Lord Young of Norwood Green
Towards regulations devolving the enforcement of the national minimum wage to local authorities, as proposed in Amendment 68ZR.
Lord Popat
My Lords, we have a very strong HMRC enforcement regime. We do not see any point in giving the power to local authorities. However, HMRC has regional offices to enforce the legislation. Of course, many other government departments play an important role in enforcing it.
Lord Popat
The noble Lord, Lord Morris, raises the important issue of how we help to ensure that people are paid the minimum wage and what guidance we give them on working out by how much they are being short-changed. Since 2013, we have published detailed new guidance on calculating the national minimum wage, which is available on the GOV.UK website. We have also updated several GOV.UK pages which hold information about the national minimum wage. This includes new information about current and future national minimum wage rates, a worker’s checklist, guidance on work experience and internships, information on the increased penalty for breaching the national minimum wage and the revised criteria for naming and shaming employers who breach national minimum wage legislation. Therefore, quite detailed information is available for workers to help them work out by how much they might have been short-changed in cases of people being paid less than the national minimum wage.
Lord Young of Norwood Green
A propos the Minister’s final point, is there not also the employment rights helpline, which we introduced? Does the Minister have information on the level of complaints or reporting of failure to pay the minimum wage on the employment rights helpline?
Lord Popat
I am afraid that I will have to write to the noble Lord with that information. I do not know whether it is available on our websites.
I have just been given some information on how many calls have been received on that subject. From the beginning of 2014 to October 2014, the number of inquiries that we received was 10,086. The number of complaints that we received relating to the national minimum wage was 1,550. I will certainly write to the noble Lord with more information on this subject, which we appreciate is quite important.
Lord Young of Norwood Green
I thank the Minister for his response. We will take into account the points that he has made and reflect on whether we need to come back to any or all of these issues on Report. I beg leave to withdraw the amendment.
“National minimum wage
(1) Section 17 of the National Minimum Wage Act 1998 (non-compliance: worker entitled to additional remuneration) is amended as follows.
(2) In subsection (2), at the end of paragraph (b) insert “including any relevant remuneration the worker would have received in respect of holiday pay or other leave pay”.”
Lord Young of Norwood Green
My Lords, we suggest that this new clause be inserted into the Bill. In the case of non-compliance, we believe it is justified that,
“any relevant remuneration the worker would have received in respect of holiday pay or other leave pay”,
ought to be included as part of the national minimum wage assessment. I beg to move.
Baroness Neville-Rolfe
I thank the noble Lord for his amendment and, indeed, for his succinct introduction, which I do not think I can quite match in responding to the amendment, which introduces a new clause to include holiday and other leave pay within the calculation of the minimum wage.
The Government do not consider that the amendment is necessary. That is because under the Working Time Regulations, a worker is entitled to a week’s pay for each week of leave, and there are already routes of redress if these payments are not made. A worker who believes that they have been underpaid can make a claim to an employment tribunal. This claim has to be submitted via ACAS, which will first offer early conciliation. Where holiday pay has not been paid, workers have a choice as to how they may claim the money they are owed. They can bring an action against their employer under Regulation 30 of the Working Time Regulations or they can bring an action for unlawful deduction of wages under Section 23 of the Employment Rights Act.
Both claims are brought in the employment tribunal. Where the worker is entitled to other leave pay which forms part of his or her wages, he or she will be able to claim any underpayments through an action for unlawful deduction under the Employment Rights Act. In addition, the early conciliation system allows for disputes over pay to be resolved before recourse is made to the tribunal, so without litigation. If a worker believes that he or she has not received the correct holiday pay, he or she can contact ACAS, which I am sure will be very helpful and will offer early conciliation. If that is not successful, a worker can take a claim to an employment tribunal. ACAS offers helpful guidance on holiday pay on its website.
The Government firmly believe that the holiday pay arrangements currently in place are sufficient and there is no evidence to suggest that enforcement in relation to holiday pay should be extended to the National Minimum Wage Act. I did, however, pick up the point from the earlier discussion that perhaps people do not always know what the routes for information and redress are. In writing to noble Lords, as I promised to do on the earlier amendment, I would be happy also to set out the arrangements on holiday pay so that people have a full understanding.
I hope that the noble Lord has found my explanation of the avenues that exist reassuring and will therefore agree to withdraw his amendment.
Lord Young of Norwood Green
I have listened carefully to the Minister’s response. We think there is a connection in that employers who fail to pay the minimum wage are often also in this situation, where they do not respect full holiday pay and leave entitlements. We will take into account the response and consider whether to come back to this on Report. In those circumstances, I beg leave to withdraw the amendment.
“( ) 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 the affirmative resolution procedure.”
Lord Young of Norwood Green
My Lords, I shall speak to a number of the amendments in this group as well as say a few words by way of a general introduction. The rise in the use of zero-hours contracts is a trend that should concern Members across the Committee. While a small number of people find this type of contract suitable, too many people from across the UK are at the mercy of unscrupulous employers who are exploiting this type of employment. The increasing reliance on this form of employment does nothing to promote the jobs that the country needs. For many employees, zero-hours contracts present huge drawbacks in comparison to permanent regular work. There is no guaranteed level of regular earnings to provide any certainty over meeting bills or planning for the future. By our very nature, we human beings need stability and certainty in our lives; these types of contracts do not offer that. The need to respond to calls to attend work, frequently at short notice, disrupts life outside of work and places a particular strain on families and on arranging care for dependants. One of the most concerning aspects about the explosion of such contracts is that women are likely to be disproportionately affected by them.
Zero-hours contracts by share of the workforce are most common in: the arts, entertainment, and recreation services—2.5% of the workforce; in accommodation and food services—2.2% of the workforce; and in healthcare services—1.2% of the workforce. Not surprisingly, they are most common among people in caring and leisure occupations, where it is 1.7%, and among the less skilled—1.4%. These industries have high percentages of female employees.
We welcome Clause 148, which introduces an exclusivity ban in zero-hours contracts. This is a welcome step forward from a Government who had to be dragged kicking and screaming on this issue, but they have fallen far short in bringing forward measures which tackle the exploitative use of such contracts. This does nothing to change the practices of companies that base their entire workforce management strategy on them. Our Amendment 68ZU would reinforce the powers of the Secretary of State. Amendment 68ZW, perhaps in time-honoured fashion, would delete “may” and insert “must”—I cannot think where I have encountered that before—while Amendment 68ZAB would extend the powers of employment tribunals.
This is a huge problem area, and we need to remind ourselves that workers in these circumstances find themselves in situations where they do not attract sick pay, holiday pay or national insurance contributions. While we would not deny that there are some circumstances where zero-hours contracts might be relevant and applicable, the numbers that we are currently encountering place a huge burden on the workforce. This disproportionately affects them in terms of the employment rights and benefits that the vast majority of the workforce would expect to be theirs as of right. In those circumstances, I beg to move.
Lord Stoneham of Droxford
This amendment is all very well but I am not quite sure where it is leading us. It is not very specific. The Government have included clauses to stop people being excluded from doing other work while on a zero-hours contract, which seems to go to the heart of one of the principal problems. Here we are talking in general terms about an obligation on an employer to offer a fixed-hours contract to a worker who has worked regular hours for a continuous period. I am not sure where that is leading to. It is very general, apart from saying, “What we really want is to get rid of all zero-hours contracts and put everyone on a permanent contract on a 40-hour week or 35 hours a week, or whatever it is”. That is not actually what zero- hours contracts are being used for.
I accept that there is some bad practice, which we want to see eliminated. Where there is discrimination or unfair practices, we should work at that. The principal source of exploitation is where people are excluded from doing other work by these contracts. Some of these contracts have worthwhile benefits, as we have seen during the recession. One thing that the recession has done is to enable people to share work around when it is limited. I suspect that as the work comes back, as it is clearly doing as we move out of recession, some of these problems will begin to fade in their severity.
Lord Young of Norwood Green
I want to make it clear that this is an attempt not to rule out zero-hours contracts but to introduce some reasonable ground rules. I shall give the Committee some statistics that it might find interesting. The Chartered Institute of Personnel and Development research last November noted that 83% of staff on zero-hours contracts had been engaged for longer than six months, and 65% had been engaged for two years or more. We have a situation in which 65% of staff on zero-hours contracts have been on them for two years or more; that is not a short-term need. If someone has been employed for that length of time, does the noble Lord really not think that they should be entitled to basic rights such as holidays, sick pay and pension contributions?
We are not embarked on a Don Quixote-like mission, tilting at windmills and hoping to abolish all zero-hours contracts, but we are on a mission to ensure that there is some fairness and reasonable ground rules. We are suggesting that if someone has been employed on a zero-hours contract for a reasonable period of time, it indicates that there is a permanent need for this type of employment. In such a case, they ought to have the employee rights that workers on full-time contracts would enjoy.
Lord Stoneham of Droxford
I thank the noble Lord for his speech and his intervention. I accept that there are issues here which we need to deal with but we are putting very general terms in here. One thing we do not want to do is to lose some of the flexibility which people have benefited from over the last couple of years, when work has been in short supply. One major problem is in the local authority area, where people are doing social care work. The Government should obviously look at and deal with this area, because they have the means to do so through their contracts, but I am not sure whether these general terms that are being looked for will actually do the job.
Baroness Neville-Rolfe
I thank the noble Lord, Lord Young, for these amendments and for the debate we have had on this part of the Bill, which went slightly wider than the amendments. I ought to say that Labour did nothing about zero-hours contracts for 13 years. The number of them went up by 75% between 2004 and 2009. What we have done is to carry out a review into these contracts, so that we can deal with any abuse. As a result, we are banning the type of contracts which mean that employees are not allowed to work for any other employer, while still allowing people such as students to benefit from the flexibility that they offer.
We introduced Clause 148 to deal with this mischief and I am glad to hear the noble Lord’s support for it and my noble friend Lord Stoneham’s perceptive analysis. The noble Baroness, Lady Donaghy, rightly tried to improve our English and not talk about zero-hours contracts. It may be that like one of the terms we were struggling with earlier, the term is an Americanism. Wikipedia does not give its origin but I will hunt it down.
At present, an individual subject to exclusivity terms in their zero-hours contract cannot seek work elsewhere, regardless of whether the employer offers only occasional, minimal, or even no hours of work. Exclusivity terms are unfair for the individual who, as a result, is prevented from boosting their income or building on their work experience. Frankly, it is also damaging to the economy because it prevents people from reaching their full employment potential.
As my noble friend Lady Harding made clear at Second Reading, from her own experience of running a supermarket in Yeovil, zero-hours contracts are an important element of a flexible, vibrant labour market, and they work for employers and individuals alike. I even heard the shadow Business Secretary agreeing that sometimes people quite like to use them. However, I think that we also agree that people working under such a contract must get a fair deal.
The ban on exclusivity terms in zero-hours contracts, as set out in the clause, is straightforward. From the moment the clause commences, individuals can simply ignore an exclusivity clause and work for another employer as well if they wish. There is no process, no admin and no need to discuss this with the employer—I am not sure that people understand this—and any attempt by the employer to stop a second or third arrangement would be unenforceable. This is a major change and a reduction in employer flexibility, but one that we believe is right.
Amendment 68ZU seeks to provide a route of redress for zero-hours workers who need to enforce their rights, allowing for regulations to set out the details. The clause already provides for an order-making power that will allow for this.
Amendment 68ZW seeks to make the use of that order-making power mandatory. However, given the fact that routes of redress will be delivered through the order-making power, I am sure that the Committee will agree that in this case the amendment is unnecessary. The Government will have to bring forward regulations; otherwise, the ban on exclusivity terms in zero-hours contracts will have no meaning. For this reason, I do not believe that we need to make this amendment. The regulations that will be possible under the order-making power will also be able to address the issue of redress that is covered in detail in Amendment 68ZAB; that is, that an employment tribunal will have the power to consider claims related to the exclusivity ban, including providing remedies to the individual and issuing penalties to the employer. The Government recently consulted on using the order-making power. We are currently finalising the details with a view to publishing the government response shortly on how we plan to tackle avoidance.
Amendment 68ZZ suggests that the definition of an exclusivity term is too narrow. However, the Government have looked at this and consider the description in new Section 27A(3) of the Employment Rights Act 1996, which will be inserted by Clause 148, to be sufficiently broad. It covers any provision in a zero-hours contract that prohibits working for others, as well as terms that require an individual to seek permission from their employer to do so.
I believe that our approach will deal sensibly and effectively with both avoidance of the ban and routes of redress for individuals on a zero-hours contract who suffer a detriment. I hope that on this basis the noble Lord will agree to withdraw the amendment.
Lord Young of Norwood Green
The Minister indicates that the Government have had some consultation and regulations will be published. I wonder if she will give some timescale for those.
Lord Young of Norwood Green
Right. Obviously, as we said earlier, we welcome this measure. We are probing a bit to see whether or not the controls that the Minister referred to and the powers of the Secretary of State are sufficient. We will take into account the points that she made in her response, and we will consider whether we need to return to these issues on Report. In the mean time, I beg leave to withdraw the amendment.
“( ) Regulations made under 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 judgments, including the award of any applicable compensation as referred to in paragraph (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.”
Lord Young of Norwood Green
My Lords, again, this amendment seeks to extend the Secretary of State’s powers and to make it more explicit in the legislation. That is justifiable in the circumstances and we have identified the relevant provisions. There is some flexibility in it, so zero-hours workers have a right to be awarded financial compensation, of amounts to be determined by the Secretary of State. Employment tribunals are given powers to enforce their judgments, which is relevant and reasonable in the circumstances. Returning to an issue to which I referred in an earlier contribution, it imposes an obligation on an employer to offer a fixed-hours contract when a worker has worked regular hours for a continuous period or a series of continuous periods of employment, to be determined by the Secretary of State. We are not seeking to do away with flexibility; we recognise that that is appropriate in some circumstances. However, we believe that at the moment zero-hours contracts are, in many circumstances, a bridge too far and that they deny workers basic employment rights.
Amendment 68ZAC is intended to ensure that workers are fully enabled and empowered by understanding the nature of the zero-hours contract, so the employer has to provide basic information about terms and conditions for all zero-hours workers within two months of their start date. Again, we think that is a reasonable requirement. We regard a contract of employment as an inalienable right of workers and we seek to extend that right to those on zero-hours contracts. I beg to move.
Baroness Hollis of Heigham (Lab)
My Lords, I support the amendments in this group. The daughter of a friend works for a burger company and is on a ZHC. She does not know until the previous Friday what hours she will get for Monday. She cannot plan her life; she cannot budget; she cannot buy any large goods; she cannot study. She cannot do another job alongside it—I am delighted that the Government are moving to stop that ban continuing—and, if she were not living it home, she could not rent, as landlords want evidence of steady income. The Unite union, which has done splendid work on this, was told by a call-centre worker, who had worked for a multinational firm for five years: “I am only informed if I have shifts one week in advance and the hours I am given can range from nought to 48. I feel regularly anxious about whether I will be able to pay the rent and put food on the table.” She too is on a ZHC. A third person on a ZHC, a lone parent, expects, and is expected, to work on Fridays and had arranged and paid for childcare, as she must. Her shift was cancelled an hour before and she was told to work on Saturday instead. She had to pay for the childcare she did not need on Friday but could not find childcare for the Saturday when she needed it, so she refused. Her hours were cut the following week as punishment.
As my noble friend Lord Young said, we estimate that nearly 2 million people are on ZHCs in cleaning and domiciliary care, retail, hospitality, catering, call centres, construction and customer services, with wages at or around the minimum wage. Some 75% of those on ZHCs find that their hours vary every week and 40% are not allowed to work for anyone else, although we welcome the fact that this Bill begins to address that problem. They are on call—unpaid—and required at an hour’s notice. They are hoarded but not used, a sort of just-in-time stock control applied not only to tinned tomatoes but to staff. Of course, after six months they should be given a proper fixed-hour contract. We may be in a 24/7 economy, which needs a flexible labour market, but, as Pickavance argued in his report, fluctuating demand—the excuse for flexible labour and ZHCs—is largely predictable.
Baroness Neville-Rolfe
The noble Baroness makes a good point. In a sense, that is a problem for employers, who could previously have a zero-hours arrangement that was exclusive. As I explained in opening, we have decided that that should not be the case in future. I am sure that the new arrangements will take some thinking about and settling in but, as far as I am concerned, if you are on a zero-hours contract, you can offer your services to—I do not know—two fashion magazines rather than just one. That is an excellent move forward. In any event, many people on zero-hours contracts who benefit so much from them, especially those in the categories that we were talking about, are not looking for universal credit, as the noble Baroness acknowledged.
I have probably taken this as far as I can this evening. I have tried to set out why we are proposing this, and I hope that the noble Lord will feel able to withdraw his amendment.
Lord Young of Norwood Green
I was interested when the Minister said that one of our amendments, seeking compensation if shifts were cancelled at short notice, was catered for in the Bill. I had another careful look and I presume that she is referring to new subsection (5)(c) on page 138, which states rather broadly:
“requiring employers to pay compensation to zero hours workers”.
It does not state in what circumstances. I would welcome some clarification. If that is not possible today, it is still an important issue that requires an answer in writing.
Baroness Neville-Rolfe
I thank the noble Lord for raising the issue. I was going to deal with it in my response, but decided not to because of the complexities. I can give him some comfort but the best thing is to consider the questions that he has asked and write to him and copy that to other noble Lords, because this is obviously an important issue.
Lord Young of Norwood Green
I think the noble Baroness for her response. It has been an interesting debate. I thank my noble friend Lady Hollis for her usual forensic analysis. We will need to consider our response in the light of the Minister’s answers. Although we do not necessarily have an agreement on this, we are seeking to improve the Bill. We are not seeking to abolish flexibility or all zero-hours contracts but we seek to create a fairer scenario for workers employed in those circumstances. With those caveats, I beg leave to withdraw the amendment.
Baroness Drake (Lab)
My Lords, I support Amendment 68ZY. My noble friend Lady Hollis has been tenacious in seeking to achieve fairness for a section of the workforce that is excluded from the national insurance system.
As my noble friend explained, this group of workers is caught by the rules whereby someone has to earn, in a single job, an amount above the lower earnings limit—£5,700 a year—to come into the national insurance system, although they do not have to pay national insurance contributions until they earn more than £7,500 in a single job. If, however, they have two or more short-hours jobs—mini-jobs—all of which pay below £5,700 but which may involve them working, say, 30 hours a week, they cannot add the wages of those jobs together to get above the lower earnings threshold and into the national insurance system. The amendment is simple. It proposes lowering the earnings threshold for entering the national insurance system to allow many more of the growing number of workers on mini-jobs and non-guaranteed hours to get into the national insurance system.
In the past, it was thought that perhaps 50,000 people, mostly women, were affected, as they sought to get an income by putting together a series of mini-jobs. But the scale of the problem is now far greater because of the increase in the use of zero-hours and minimum guaranteed hours contracts in the economy, which can deliver little or no wages in some weeks if little or no work is offered. Workers may need several casualised jobs to get an income but then find that not one of them pays above the £5,700 entry level for the NI system.
According to the ONS’s Annual Business Survey in January 2014, there were some 2.7 million zero-hours contracts, of which 1.4 million provided work to people and 1.3 million did not. The 2011 Workplace Employment Relations Study revealed that 23% of workplaces with 100 or more employees used zero-hours contracts. My noble friend has provided far more detail on the growing evidence available but it is clear that the number who find themselves excluded from the national insurance system will increase.
A modem welfare system has to be inclusive and responsive to the realities of the contemporary labour market. Over the years, Parliament has recognised the unfairness of locking certain groups of people out of the national insurance system and has amended the rules accordingly. As my noble friend listed, mothers of children aged under 12, disabled people, carers, a grandparent caring for a child whose mother works, and the unemployed on JSA are credited into the national insurance system. It seems all the more unfair that there is a group of workers whose pattern of employment and earnings does not deliver wages in any one job sufficient to meet the entry point of £5,700 for the NI system and they cannot add their wages from their other jobs to get through the turnstile. A hundred pounds per week, which is below the lower earnings limit, equates to almost 16 hours on the national minimum wage, so a person with more than one such mini-job could be working a significant number of hours but still be excluded.
Universal credit is income-based so it will not provide a comprehensive solution to this problem. For example, if a single person is earning more than £4,000 a year in any job, they are above the level for universal credit so they do not get credited in. However, £4,000 is significantly below the lower earnings limit of £5,700 and if not one of their mini-jobs pays above this level, they still cannot get credited in. My noble friend gave us another example. If a partnered woman is working but has no single job paying wages that reach £5,700, and if her husband is in work and they have two children aged over 12 when his earnings float him off universal credit, the woman cannot get credited through to the national insurance system. The need to address the position of such women is made even more urgent because from April 2016 these women will no longer be able to gain state pension though their husbands, as the married women’s dependency pension will cease. They will be locked out either way you cut it. Yet the ONS report revealed that women make up a greater proportion of those on zero-hours contracts, and that people who report being on such contracts are more likely to be younger and, I presume, to be single.
The Secretary of State, Vincent Cable, and other employer bodies such as the EEF, the CBI and the IoD argue that zero or no guaranteed-hours contracts have a place in today’s labour market and that employers need flexibility in today’s global economy to manage the consequences of economic downturns. If that is the case, the issue of workers who accrue income across one or more contracts but cannot enter the NI system is here to stay. It means also that it is here to be addressed. The right of businesses to employee flexibility should not deprive workers of access to the national insurance benefits system—but that is exactly what it is doing and will do, unless the problem that my noble friend has so tenaciously and consistently articulated is addressed.
It is argued that such zero-hours contracts are required to meet a short-term need of employers but the persistency of zero-hours contracts is evidenced by the Chartered Institute of Personnel and Development, whose findings indicate that of the workers affected, 65% have been on such contracts for two or more years, 40% for five or more years and 20% for 10 or more. The employer’s need may be short term but the employee’s contractual position can be long-term and bring a long-term lock-out from the national insurance system. The Government’s ban on exclusivity clauses in zero-hours contracts allows people to work for more than one employer but will not provide a definitive solution to the problem. The freedom to have several contracts does not provide entry into the national insurance system if none of them produces a wage above £5,700.
My noble friend Lady Hollis has faced varied rebuttals from the Government on her proposed solutions: that it is not reasonable to try to share employer’s NI across mini-jobs; that the women will still not want to pay class 1 contributions; that there are only a few of them; that their situation is temporary; that they have time to make up missing years; that universal credit will solve it and that, if all else fails, there is pension credit. That persistent rebuttal is becoming increasingly hollow, though, since both the Secretary of State and business itself confirm that there is an integral need for these minimum and no-guaranteed-hours contracts as a functioning part of a modern labour market, so we need to find a solution.
I repeat: over the years, Parliament has recognised the unfairness of locking certain groups out of the NI system, including the state pension, and has amended the rules accordingly. As my noble friend has advised, it has rightly accepted that those who are unemployed and in receipt of benefits such as JSA, have no employer and do not pay national insurance are in the national insurance system. Those who are lucky enough to get a single job earning £6,000 or £7,000 do not pay national insurance contributions but are also in the system. Lowering the lower earnings entry point to allow many more of the growing number of those on mini-jobs and no-guaranteed-hours contracts to enter the national insurance system has the merit of simplicity and is the fair thing to do.
Lord Young of Norwood Green
My Lords, after that forensic double examination, I cannot help reflecting that I am glad I am not responding. I support the amendment because it raises a significant issue. I also want to add the point that here are a Government who say that the best thing we can do is to encourage people to get into work, and I think that that is right; people who are locked out of the employment market, for whatever reason, face a real challenge. So these are people who are determined to work, which is what the Government want them to do, and determined to make a contribution not only for themselves but for their families, yet they are being penalised. The case being made is a valid one. We recognise by the nature of the contributions that this is quite a complex issue, so I look forward to the Minister’s response.
Lord Newby (LD)
Such expectation, my Lords. I know that the question of NI eligibility raised by the amendment is one about which the noble Baroness is deeply concerned and has been for some time; this is not the first time the issue has been raised in your Lordships’ House by her and others. I hope that I can reassure them that the Government are already actively considering this matter, and I look forward to working further with her on this outside the debates on the Bill, to see how best it can be addressed. We are in no sense claiming that this is not a valid issue.
I know that officials from a range of government departments have already been in discussion with interested parties, including the noble Baroness, over recent months, and this work has been considering the evidence base around the matter of national insurance eligibility. As the noble Baroness is aware, it remains a work in progress and we believe that we do not yet know enough to make a sensible legislative change at this point. There are many complex issues regarding the scale of the problem and how to address it.
The noble Baroness raised the figure of 200,000 people who might be affected by the problems that she has so graphically described, but these figures do not align with DWP analysis, which suggests that 50,000 individuals are affected and that the group is disproportionately made up of under-25 year-olds. The noble Baroness laughs but the DWP is not coming up with a low figure for the sake of frustrating her; that is its best view. That is why we need to do more work on the issue.
Lord Newby
My Lords, Clauses 149 to 151 give Her Majesty’s Treasury powers to make UK-wide regulations with regard to public sector exit payments. Amendments 68A to 68N and 101A will provide Scottish Ministers with equivalent powers to make regulations to recover exit payments made by relevant bodies in Scotland. They do not enable Scottish Ministers to make regulations affecting payments made elsewhere in the UK. I can confirm that that the Scottish Government have seen these amendments in draft and are content with them. I beg to move.
Insurance Bill [HL]
Lord Young of Norwood Green Excerpts(9 years, 11 months ago)
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Lord Newby
My Lords, I shall speak also to Amendments 5 to 9 and manuscript Amendment 10A, which has been tabled in substitution for Amendment 10. The amendments respond to representations made to the committee that Clause 12 on fraudulent claims in consumer group insurance should be extended to group insurance contracts in the non-consumer context. My noble friend Lady Noakes tabled amendments on this point in Committee. The Government supported this change in principle but were unable to support the specific amendments suggested by my noble friend. As such, her amendments were withdrawn on the basis that the issue would be taken away and considered further.
We have now had the opportunity to consider the amendments needed to the Bill in order to effect this change. Clause 12 currently provides that where a member of a group consumer insurance contract makes a fraudulent claim, the insurer has a remedy against the fraudulent group member but the remaining members of the group policy are protected. Amendments 4 and 5 extend the application of Clause 12 to the non-consumer context, and indeed in respect of contracts that cover both consumers and non-consumers as group members under the same policy. Amendments 6 and 7 correct a small error in Clause 12(3) that was spotted when drafting the main amendment to the clause.
Amendments 8, 9 and 10A deal with contracting out. In the consumer context, an insurer will not be able to put a consumer group member in a worse position than they would be in under Clause 12. In the non-consumer context, an insurer will have to comply with the transparency requirements if they wish to put a group member in a worse position. These provisions are consistent with the contracting-out provisions generally, and are a necessary consequence of extending Clause 12 to non-consumers. I should explain that the only difference between Amendment 10A and Amendment 10, which it replaces, is that the various cross-references to other sections have been corrected.
I believe that these amendments fully address the desire of the committee, particularly my noble friend Lady Noakes, and a number of the committee’s witnesses to extend the application of Clause 12 to the non-consumer context. These are uncontroversial amendments and I hope therefore that noble Lords can support them. I beg to move.
Lord Young of Norwood Green (Lab)
My Lords, I thought it would be appropriate for us to say that we support these amendments. It is a good example of Parliament working to improve a valuable service industry, enhancing its position globally. That is important because the UK is a world leader in this. It is not a subject that I profess a great deal of knowledge about but I cannot help having a slight ironic feeling. My late father, who was a very successful insurance agent, would have been pleased to hear my contribution, brief though it is.
Infrastructure Bill [HL]
Lord Young of Norwood Green Excerpts(10 years, 1 month ago)
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The Earl of Caithness
My Lords, I share the concern of the noble Lord, Lord Lipsey, as to where the heart of the noble Baroness, Lady Worthington, lies on fracking. Her heart on this subject is a little closer to that of the noble Lord, Lord Wigley, but she is putting on a very brave front, because she has to, and says she supports fracking. We have been at hydraulic fracking in this country for more than 50 years. As so many of your Lordships have said, this is a highly regulated industry and Britain is a world leader in it. It is totally inappropriate to compare our standards and form of regulation with some of the scare stories from America. However, it is about presentation and, at the moment, the industry and the Government are losing the presentation battle, although that might be beginning to change. As my noble friend Lord Deben will remember only too well, it is fine to say, “I wish the Government would improve their PR”. It is difficult to do that in practice because if it is a good news story our press do not want to know about it. All they want to know about are the bad news stories.
I made my comment about the noble Baroness, Lady Worthington, because these amendments will make the whole process much more difficult and time-consuming. For example, new subsection (1)(a) in Amendment 113G requires all sites to,
“carry out an Environmental Impact Assessment”.
We know that environmental impact assessments are hugely important. They cover a range of other industries. However, European standards have been agreed on for fracking. Within those standards are certain exemptions for the small fields and for some experimental wells, but there are also restrictions. It is not a total blanket; it is a limited exemption. Why does the Labour Party want to gold plate what is already in existence and covers the whole of Europe?
When I was on Sub-Committee B and we inquired into energy, what came over abundantly clearly was that the rest of Europe—which has quite a lot of shale gas, too, particularly Poland—is looking to Britain for a lead. When Britain does it, the rest of Europe will get on and do it. We in Europe can all benefit from that. If we do not take the lead, the others will not do it by themselves. That is why I support all those who have said that we must get on with it, regulate it and make transparent who is regulating what and why, so that we can give the maximum amount of reassurance to the public.
Lord Young of Norwood Green (Lab)
My Lords, in taking part in the debate, my only interest is that we should make a judgment based on supported evidence, rather than on allegations. If nothing else, the amendment is important because there is a battle of ideas on fracking that we need to win. Noble Lords have said that we are not currently doing so well on public opinion. Unfortunately, the scare stories are believed. There has been an important event since we debated this in Committee: the publication of The Economic Impact on UK Energy Policy of Shale Gas and Oil. It is a very important report. No one has questioned its integrity or the evidence it contains. I stress that point again and again.
Like many others, I looked at Amendment 113G. I was pleased to hear my noble friend Lady Worthington say that she was not opposed to fracking. I suppose the amendment is a bit like the curate’s egg: it is good in parts. It is probably better than the average curate’s egg because most of the parts are good. I support an environmental impact assessment—I agree with the noble Lord, Lord Teverson, that that is something that needs to be done. I support independent inspections of the integrity of wells used; I am pretty sure the fracking companies would as well. They are also prepared publicly to disclose the chemicals used for the extraction process. Again, read the report: they are in there. For the most part they are used in tiny amounts, and for the most part there is no problem with them whatever.
It is true that some practices that went on in the States were not helpful to the process of fracking. That is not to say that everything that happened in the States was bad, because it was not—there are plenty of good examples from there. We should not forget that fracking substantially reduced emissions in the States. It did and has created jobs and it has brought industry back to the States. We should not forget that important aspect.
Lord Wigley
The noble Lord quotes the economic impact report, which I have with me. Paragraph 269 says that the Government,
“must also explicitly address the safety issues”.
The committee that produced that report was clearly not entirely happy on that count.
Lord Young of Norwood Green
Of course, we have to address the safety issues. I am not seriously saying that anybody in the Chamber is recommending that we embark on a process of mining or whatever activity without addressing safety issues. I listened carefully both to the noble Lord, Lord Wigley, and to his companion sitting next to him, the noble Baroness, Lady Jones. They both expressed a deep-rooted opposition to fracking, which frankly puzzles me. If we do not have fracking we will still be dependent on LNG, on which I think about 27% of our energy is based. I do not understand the basis of their opposition. I sometimes do not understand the green analysis of a number of issues because it is not always evidence-based. I could say the same about GM foods, but that is another issue.
To return to this important subject, I, too, want to hear what the Minister has to say. I heard it once in Committee, but it is worthy of repetition. I listened to and understand the concerns of my noble friend Lady Farrington, but I direct her to the report. It said that when people talk about earthquakes, it might be better if we talk about tremors. There was one in Wigan in Greater Manchester, which was of a 1.5 magnitude. It was about the same as a heavy lorry passing.
Baroness Farrington of Ribbleton
My Lords, I thought it was a bomb, living as we do half way between both the aerospace centres, with planes going over all the time. The noble Lord was not in my bedroom.
Lord Young of Norwood Green
That is an indisputable fact and I am glad it has been affirmed. I may not have been there when the earth moved for the noble Baroness, but I am going by the evidence of the recorded seismic shock. I again appeal to the House: that is what we must do if we want to win the battle of ideas. It is a really important one.
Of course we need to get the regulation right, but it needs to be proportionate and evidence-based. We have the capacity to do that. If we do not, we will see what has happened in Balcombe and in various other parts of the country. Instead of fracking being seen as a perfectly valid contribution to energy security, the cost of energy and the capacity to create a significant number of jobs, those who are opposed to it will succeed in creating the view that it is something to be feared. I do not believe that that is the case. Noble Lords do not need to look just at the evidence of the report. Durham University, in a totally independent survey, addressed the issues in a serious way. The industry is not financing it; it is totally independent research.
I welcome the amendments because it is important that the House debates this issue and makes clear what we expect from regulation. We and the public expect a safe, regulated, transparent and accountable process. I look forward to the Minister addressing those concerns.
Lord Donoughue (Lab)
My Lords, these amendments are useful as probes, as my noble friend Lord Lipsey said. They also have important political and economic implications for the whole process of fracking. I will not explore the political side at this hour; I will point out on another occasion how very unproductive it is for the Labour Party to appear—I stress “appear”—to oppose shale fracking by artificial regulatory delay when shale offers the hope of 70,000 new jobs, billions of pounds of investment in the regions, lower energy prices, keeping our energy-intensive industries alive and here, and providing energy security. That seems to me to offer hope, which is still to be fully proved, to millions of ordinary British people. I do not think that Balcombe necessarily represents the majority of them. Public confidence is a factor that is repeatedly raised. In the polls, 75% of the public either support or, to a greater extent, do not oppose fracking.
Leaving the politics reluctantly on one side, I shall focus on the amendments. I support my noble friend Lord Hollick in his argument that all these environmental concerns are apparently covered by existing regulations. They need to be properly implemented, which I fully support. But if there is some need for further gold-plating—my noble friends Lord Hollick and Lord Lipsey mentioned that possibility—that can be pursued later. We should not use the very mixed regulatory experience of the United States to go into this bureaucratic jungle to delay fracking for ever. If one reads some of the official reports that have investigated it—I particularly call attention to that of the Geological Society—one will see that these matters put into perspective the statement that our British regulatory regimes are the best in the world and that we can rely on them. However, we cannot always rely on local authorities to have the resources to pursue them, which is a factor that should be pursued further.
I direct my next point especially to my Front Bench. It has not been explained to me in prior discussions why on earth we need a vote today. These excellent probing amendments explore the matters fully but I do not see the need for a vote. This jungle of bureaucratic regulations, including the existing ones, which I accept have already given excuses for the delay in extracting these precious reserves, mean that we have only one well today. We can express our views and Members have taken part in an impressive debate on all aspects. We can explore the matter but such a vote from this side—I am speaking very much as a lifelong Labour man—will send the wrong message. It will send the message that Labour wants to delay the great shale gas contribution to our economy. Conveying that message, which is hostile to job creation, lower energy prices and energy security, could push me, with my noble friend Lord Lipsey and perhaps others, into the very unfamiliar territory of the government Lobby. I trust that we will not get to that point.
The Government should agree tonight to explore further how genuine concerns about fracking can be allayed. I stress again that our concerns are genuine and that I am not referring to fictional scaremongering. However, we need to bear in mind that the Green Party’s concerns will never be allayed. I think that we are all grateful to the noble Baroness, Lady Jones, for confirming that tonight. They will never be allayed because, in reality, however disguised, the Greens want to stop shale gas because it threatens their beloved windmills. With great reluctance, I shall vote against this amendment if, unfortunately, it is pressed to a vote.
Baroness Verma
My Lords, I am grateful for the correction, and I think I mentioned that issue in my response on independent well operators. Perhaps I may clarify the position as regards the concerns of the noble Baroness. The Health and Safety Executive scrutinises well design and monitors progress to ensure that the operator is managing risk effectively, and will continue to do so throughout the life cycle of the well. An independent well examiner will also review its design and construction. To date, onshore operators have used separate companies to provide this service; they have not delivered in-house.
Lord Young of Norwood Green
As I understand it, seismic monitoring is done on a continuous basis. While I cannot remember the exact figures, I think that if a tremor registers 0.5, the operation is stopped. That is a very low-level seismic shock and reflects a high level of safety precaution. Can the Minister confirm that?
Baroness Verma
I am extremely grateful to the noble Lord, Lord Young. He is absolutely right to point out that exploration is immediately stopped once the level of 0.5 is reached. However, I will clarify the point and write to him, and put a copy of the letter in the Library.
With these reassurances, I hope that I have been able to convince the noble Baroness to withdraw her amendment.
Young People: Alternatives to University
Lord Young of Norwood Green Excerpts(10 years, 2 months ago)
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Lord Young of Norwood Green (Lab)
My Lords, I, too, congratulate my noble friend Lord Monks on what has been an absolutely fascinating debate. I do not envy the Minister having to try to sum up and respond to all the suggestions she has received.
I want to make a few points. If there is one thing that we all share—there are some common objectives—it is that we all want to enhance the quality of apprenticeships as well as increase their numbers. It is sometimes difficult to achieve the quality as well as the quantity. I acknowledge this Government’s commitment to apprenticeships but they are building on the achievements of the previous Labour Government, who, as my noble friend Lady Nye reminded us, rescued a dying apprenticeship scheme. There were just 65,000 apprenticeships, with a 27% completion rate; as my noble friend reminded us, when we left office there were nearly 280,000, with a 72% completion rate.
We did something else that tends to be forgotten: we said that careers advice in schools should span the whole range of careers and we built that into an education Act. As we constantly hear, that is honoured more in the breach than in the commission. We also raised the participation age—not the school leaving age, as people constantly say, but the participation age. We tried to ensure that every young person was either in work, education or training, and if they were in work, that they were receiving some training.
We did not get everything right. I do not go as far as the noble Lord, Lord Baker, who said that we should not have gone for the target of sending 50% of young people to university. We did not get it all right, but we did raise the aspirations of a lot of young people who would not even have thought about going to university. It worked for some and not for others, but it was not the wrong thing to do. I accept that it had the unintended consequence that my noble friend Lady Morris identified. Towards the end we started to rescue the situation when we recognised the importance of apprenticeship and commissioned the Leitch report on skills. This is not an easy thing to get right.
I thank my noble friend Lord Monks for his history lesson on qualifications. It is absolutely baffling and we need to try to rationalise it. My noble friend Lord Macdonald and I are the only ex-apprentices in the Chamber at the moment. There may be others but they have not revealed it. It gives you an advantage in that we went through the scheme and it provided us with great careers in the end.
There is one thing that I criticise the Government for in relation to apprenticeships and that is that they made a fetish of the numbers when, as the noble Lord, Lord Baker, said, we ought to have a narrower focus. I would not be quite so narrow as to say focus on 16 to 18 year-olds, although I regard those as vital. Even if we go as far as 24, if we look at the increase in 25-plus since 2009-10, for under-19s we have seen a minus 4% change in apprenticeships, while for 25-plus we have seen a 352% increase in apprenticeships. It does not matter what figures you look at—I am looking at figures provided by government sources. If you look at the number of starts in apprenticeships in the 2013 academic year, there were 117,800 at under-19, 156,900 in the 19 to 24 age range and 157,000 by those aged 25 and over. Of course, there is a role for reskilling, but whether these should be badged apprenticeships is a question that the Richard review commented on. When we get these huge figures reported by the Government it is, unfortunately, misleading.
The other problem that the Government had to resolve was the emergence of the six-month apprenticeship. The Government have come some way, not enough, in saying that for an apprenticeship to be an apprenticeship, it has to be at least a year. We do not think that that is enough; we think that it should be two years. Worse still, we had employers who were not even paying the minimum wage: that is another problem. If we are talking about enhancing the status of apprenticeships we have got to make sure that we are serious about that so that boys and girls, and their parents, can feel confident about the quality of the career they are going to embark on.
As part of the House of Lords outreach programme I was at a secondary school near me and at the end of the question and answer session I asked how many of them were going to university. All the hands shot up. This is a very diverse but not particularly affluent area. I said that I was glad to see they were not deterred by fees, and then I asked about the alternatives. After about a minute or so, one young girl mentioned apprenticeships, although she did not really know much about them. I said that it was a bit unfortunate that the school was not giving those young people the full range of career options. We know that some of them will regret that university choice, because it will not be for them, and it will cost them a significant amount of money. So if we are talking about getting the status of apprenticeships enhanced, we have to do something about this conflict of interests that seems to infect most schools in the country. They are rewarded if they keep pupils on in the sixth form, and that seems to be their goal. Therefore, advice about alternative career options is just not good enough.
I am glad that the noble Lord, Lord Baker, paid tribute to the late Lord Dearing as regards establishing university technical colleges, which do their bit to enhance vocational qualifications. That is still going to be a challenge for us. So many people have given us such interesting information as we have gone through this debate. My noble friend Lord Bhattacharyya has shown what can be done. But if we are serious about ensuring that there is a viable alternative, we should not pose this as an either/or choice for young people, because it is not a matter of either taking up a vocational choice or going to university. As we know, one can lead to the other, so we should not present it in that way. We want young people to realise that they are both valid and important career choices, and we want to get them both having the same amount of esteem, if they go down that route.
I could not help smiling when my noble friend Lady Nye talked about telling young women that there are alternatives to hair and beauty. I agree, but as a man you have to be careful how you say that. I do not want to demean hair and beauty—and there is an apprenticeship scheme for that choice. There is a danger of an apprenticeship snobbery developing, whereby people think that it is only a real apprenticeship if it is in engineering. There is a whole range of good-quality apprenticeships. That is what we have to ensure.
If we gain power after the next election, we have said that we want to safeguard the trusted and historic apprenticeship brand, which we think has become a bit tarnished under this Government. We have announced that under Labour we would ensure that all apprenticeships are quality apprenticeships, are at level 3 and last a minimum of two years.
I end with a question for the Minister. Why do this Government continue to resist the point that significant public sector procurement contracts should carry with them the requirement of training and apprenticeships? We did it in the Olympics and it was successful, and we did it with Crossrail; something approaching 400 apprenticeships were achieved from that—and not only that, but practically everyone in the supply chain awarded apprenticeships. I am absolutely puzzled about this matter. If the Government have a serious commitment to enhancing the number of apprenticeships, they should ensure that procurement contracts require that guarantee.
Queen’s Speech
Lord Young of Norwood Green Excerpts(12 years, 7 months ago)
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Lord Young of Norwood Green
My Lords, first, I congratulate the right reverend Prelate the Bishop of Durham and the noble Lord, Lord Ashton of Hyde, on their maiden speeches, which were stimulating and interesting. I do not want to say too much about the economy because that has been amply covered by my noble friend Lady Royall in her contribution and the noble Lord, Lord Low, in his analysis. I want to concentrate on the failure to stimulate the economy to produce growth and the impact that that is having on youth unemployment. I will also speak about apprenticeships, which will not surprise anybody I am sure.
On Monday, my noble friend Lord Kennedy asked a Question about youth unemployment and said that there were more than 1 million young people unemployed. The response of the noble Lord, Lord Freud, was that if you took away the students, the figure was only 719,000. He did conclude that that was perhaps a little too high. There is certainly no room for complacency in this area. Students will eventually leave the world of acquiring knowledge and will require jobs. Like thousands of young people, they will be faced with the reality of making hundreds of job applications only to find that they are lucky if they get any response at all to those applications.
Yesterday, I listened to the noble Lord, Lord Ramsbotham, speak eloquently about young people being locked up for hours in cells in institutions. He said how debilitating that was because they were not learning anything. But what about when they leave young offender institutions and fail to find a job? If there is any bigger challenge in dealing with youth unemployment I cannot think of one.
I do not want in any way to denigrate the Government’s attempts to deal with this problem, apart from their economic policy. Their approach to apprenticeships has been good. It has been enthusiastic. If you look at the overall figures, they look like good news. We are told that there are something like 450,000 apprenticeship starts. But if you start to disaggregate those figures, you find that there are large numbers of adult apprenticeships. I do not question the fact that we should have adult apprenticeships, but we need to look at quality not just quantity in terms of apprenticeships, and there is some disturbing news coming through about the quality. I raised in another debate in the Moses Room the recent “Panorama” programme which showed what purported to be apprenticeships were delivering very little training at all and certainly no job at the end of them.
We were criticised when we were in government for having programme-led apprenticeships, and we started to phase those out. We said it was not an apprenticeship unless there was a job at the end. The Government need to focus carefully on this. There is a place for adult apprenticeships. It is an opportunity for people to re-skill, but some of the experiences that we are getting these days in relation to large companies employing large numbers of adult apprentices gives us cause for concern.
There are areas where I believe the Government have an opportunity to ramp up the number of apprenticeships and there are some practical things that they should be doing. If we think that we have solved the problem because numbers are increasing I remind noble Lords of two statistics that should worry us. Only something like 4% to 8% of companies employ an apprentice and only a third of FTSE 100 companies have an apprentice. We have not created a culture of apprenticeships by any means, even though the situation has significantly improved.
What can we do to improve it further? The Government should lead by example. I have said that on a number of occasions and I make no apologies for repeating it. I do not understand why they do not heed that advice. They should demand that wherever they have government or public contracts there should be a commitment for apprenticeships. We did it for the Olympics and we got well over 300 apprentices. We got Crossrail to commit to 400 apprentices. I do not understand why the Government somehow believe that the marketplace will do it. That is not the right way forward and it is something they could demonstrate by leading by example.
If you want to involve more SMEs, giving them £1,500 will not crack the problem. It is a help, but creating more group training associations, where there is a hub that deals with the basic training and administration of apprentices, is a tried and trusted formula. I went on the National Apprenticeship Service website today looking for progress on GTAs. As I read it, I thought that it looked familiar. That is hardly surprising because it is dated October 2009. I know that work is being done, but it is not enough. We need to be driving it harder and further. The same can be said of apprenticeship training associations.
It is a shame that the right reverend Prelate the Bishop of Durham is not in his place. He said that skills are not just learnt in the classroom but they are learnt in the workplace. We need to ensure that things like the green investment bank and regional growth funds start to deliver. He gave a good example when he talked about “shovel-ready” jobs in the construction industry. We should be worrying about the fact that we still have a downturn in the construction industry. I also concur with the other right reverend Prelate who talked about the fact that VAT is to be put on the cost of repairing listed buildings, which seems to be a totally self-defeating policy. I hope that the Government are listening and that they recognise the scale and size of the problem of youth unemployment, and will do much more to create more apprenticeships.