Jobs and Business

Debate between Meg Hillier and Chuka Umunna

Friday 10th May 2013 Commons Chamber

[Mr Umunna]

I will make more progress.

Ultimately, for employment schemes to work, there need to be jobs for people to go into, created by businesses, and for that we need to create the conditions for businesses to expand and for wealth to be created. We need to create an environment in which businesses can grow the top line. On many occasions, the Business Secretary has pointed to how our economy is structured, which he says stands in the way of progress. I agree that we need to restructure our economy, to increase our exports and to diversify the sectors contributing to GDP—there is consensus on that—but I must say to him that blaming the Government’s predecessors starts to wear thin after three Queen’s Speeches and after three years in government. It is time that he and his colleagues took responsibility for their actions.

I have always thought that to achieve both rising and shared prosperity, we need to rethink the relationship between the Government and markets and to be far more discerning about the kind of capitalism we want in this country. We need to set aside the neo-liberal dogma propagated by some Government Members that markets are automatically efficient and best left alone. There is a lot that active Government can do to improve the healthy functioning of markets. Importantly—this is a key point—markets cannot set a strategic direction for our economy; they cannot set a direction for how we will compete and pay our way in the world—Governments working in partnership with business can do that.

Making that a reality requires a modern industrial strategy—the kind of strategies that our competitors are prosecuting with good effect—and an agenda in which the role of the Government is not to step back, but to step up; to work with businesses to create better outcomes at home; to ensure that we can pay our way in the world; and to ensure that growth is more broadly based across sectors and geographically across regions as well. We must also empower consumers as drivers in making markets work more efficiently, not only for themselves but for producers. That helps to provide the foundations for UK businesses to succeed in other markets.

[Meg Hillier]

Does my hon. Friend agree that the Government’s approach to funding for lending has been the polar opposite of what he has just described, and has in fact fuelled the housing market rather than helped businesses such as mine in Shoreditch? It has done nothing to deal with day-to-day finances and only touched potential loans, rather than things such as overdrafts. What would his approach be were he in the Secretary of State’s position?

[Mr Umunna]

My hon. Friend is right to identify some of the risks with the funding for lending scheme. The problem is that it has reduced the cost of borrowing for existing business borrowers without increasing access to finance for those other successful, profitable businesses. The other problem—this is why we advocate setting up a regional banking network, to which I shall turn in a minute—is that the scheme sees as its delivery mechanism the very high street banks that have been the problem. In fact, the transmission mechanism for many of the schemes that the Government have introduced since they came to office has been the high street banks, which have been the problem.

I will continue to discuss industrial strategy in more detail before touching more briefly, due to time constraints, on consumer issues. I do not think that the Business Secretary would disagree that in opposition he did not really share our view of the need for an active industrial strategy or even of the need for a Department, which he now runs, to be its champion—he argued for his own Department to be abolished at the time. After two years in government, however, he appears to have come round to our way of thinking, and we saw his embryonic industrial strategy published last September.

An industrial strategy consists of different elements. I have welcomed some of the sector-specific interventions that the Business Secretary has announced since the Queen’s Speech—in aerospace and with the ongoing interventions and assistance in automotive—and we will scrutinise the Bills in the Queen’s Speech closely to ensure that they support those key sectors. Another such sector is our creative industries, which were disappointed not to see a communications Bill in the programme for this Session. The point is that so much of what we have seen coming from his Department or the Treasury has been rather “piecemeal”—to use the Secretary of State’s own language—and does not meet the scale of the task at hand. As ever with this Government, if we speak to any business organisation, we hear that the problem is one of delivery.

I will focus on a few key areas and the extent to which the Queen’s Speech moves things forward. I will start where the Business Secretary finished. Of course, we must reform our banking sector, not only so our banks are made safe but primarily so that the financial services sector better serves the real economy. We have said, and he referred to this, that we should have better regulated the banks during our time in office. We did not, however, and that is a source of regret. Listening to the Secretary of State lecture us on that, I should say to him that mea culpa in that respect is due across the political spectrum. The tripartite regulatory regime that we put in place in the Financial Services and Markets Act 2000 enjoyed widespread support. In the House on Second Reading of the Financial Services and Markets Bill, the Business Secretary said:

“I want to express broad support for the Bill, whose philosophy and whose architecture of financial regulation reflect a broad consensus. I appreciate the extent to which there has been broad and extensive consultation with practitioners and with Parliament, and the fact that the Government have responded to very many of the anxieties that have been expressed.”—[Official Report, 28 June 1999; Vol. 334, c. 55.]

He went on to say:

“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]

Enterprise and Regulatory Reform Bill

Debate between Meg Hillier and Chuka Umunna

Tuesday 16th October 2012 Commons Chamber

[Mr Umunna]

Absolutely. I completely agree with what my hon. Friend has just said.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

My hon. Friend hit the nail on the head when he talked about abolition by stealth. Anyone who has ever had cause to take an issue to the Equality and Human Rights Commission knows that going to an independent body that has rights over other bodies to take action is vital. Taking an internal route through an organisation is sometimes too slow and inadequate. Will he make a commitment about what the Labour Government will do when we are back in power in 2015?

--- Later in debate ---

[Mr Umunna]

It is absolutely true. The Minister should check Hansard.

With this latest new clause, the Government are doing precisely what they said they would not, and we oppose it, as do more than 70% of those who responded to the Government’s consultation.

[Meg Hillier]

My hon. Friend is making his point very powerfully. My worry is that under the umbrella of saying that they want to get rid of regulation, the Government are affecting some of the most vulnerable workers in our society, who do not have the protection of a well-paid job and education to argue their case but rely on the law in question. Without it, they will just have to shut up and put up with the harassment that they face daily, often in domiciliary situations such as the one that he described.

[Mr Umunna]

My hon. Friend hits the nail on the head and identifies the Government’s real motivation. We are in the third quarter of a contraction, which we will hopefully come out of in the next quarter. We were promised many things in relation to the economy that have not turned out to be the case. In their desperation to get the economy moving, and with their complete refusal to stimulate the economy, the Government are now doing the traditional thing and looking to water down people’s rights at work as a substitute for a proper growth plan.

New clause 13 would abolish discrimination questionnaires, which employees can submit to their employers to obtain further information and make up their minds about whether to institute proceedings, or maybe to assist them in reaching a settlement with their employer. I know those questionnaires well, because I was professionally involved in drafting them on behalf of employees. I was also involved in drafting the responses on behalf of employers.

From the employees’ point of view, there is no doubt that those questionnaires help them access evidence at an early stage, which is incredibly important so that, as I said, they can determine whether to litigate or precipitate a settlement. They will now be all the more important because of the large fees that the Government are levying on people who wish to institute claims in an employment tribunal.

Turning to the employers’ point of view, the Government’s own Equalities Office carried out research on the questionnaires and found that only 2% of private sector employers had had to complete one in the past three years, and that most of those who had done so agreed that responding to them had been straightforward. We do not need to abolish the questionnaires, and I do not accept the reasons for doing so that have been put forward by the Minister. I say that not only from a political point of view but in the light of my professional experience of working for a number of years on these matters.