Zero-hours contracts

Debate between Alison McGovern and Ian Murray

Tuesday 9th July 2013 Westminster Hall

[Ian Murray]

There is an argument about whether zero-hours contracts are currently unlawful, but mutuality of obligation is case-law terminology and is therefore not written in statute. That is how, over many years, the case law has built up about the definition of employment tribunals, in terms of whether someone is in work or, indeed, whether they are a worker, an employee or self-employed. So there is a definition. My hon. Friend the Member for Wansbeck has said that what we are talking about is not a job. It perhaps is not a job. It cannot be right for people to be in this situation and not end up with any hours.

Let us consider some of the damaging effects. For staff, zero-hours contracts have huge drawbacks compared with permanent regular work. There is no guaranteed level of regular earnings that provides any certainty with regard to meeting bills, meeting rent or planning for the future. The need to respond to calls to attend work, frequently at short notice, disrupts life outside work and places a particular strain on families in terms of arranging care for dependants. The Government have put a heavy emphasis on being family-friendly, but we have yet to see any evidence of that. Zero-hours contracts fly in the face of the flexible working legislation that the Minister, to be fair to her, has pushed through and championed in government. They slightly contradict that aspect of employment.

There is a detriment to business as well. That is why I cannot see why business wants to use zero-hours contracts, particularly in some of the areas that have been spoken about. There must be reputational damage to employers who use these contracts. There must be an inability to attract and to retain high-quality staff. There is undoubtedly a direct correlation between continuity and the quality of the services involved. Some hon. Members have spoken clearly about health and social care and how continuity and quality of services are significantly affected. A loss of training and skills development tends to accompany zero-hours contracts, particularly if people have to pay for their own training, which is a huge issue with these contracts.

There is an overarching ethos and ideology. The Government have a one-track mind on this issue. They look at regulation and employment law as a burden on business. We have seen that with the Beecroft report. I am delighted that my hon. Friend the Member for Wansbeck used the phrase “Beecroft by the back door”—we have copyrighted that now. This is Beecroft by the back door. There are all these ideological moves, in terms of the legislative programme that the Government are pushing through at the moment, that are simply an attack on workers’ rights and the ability of people to earn a living. Their central argument about removing workers’ rights in order to encourage businesses to grow surely cannot be right. It flies in the face of the evidence. Let us say that we accept that the Government have created 750,000 private sector jobs in the past two years as a fact, whether it is challengeable or not. Those jobs have been created under the current framework of employment rights, so that flies in the face of what they are saying.

[Alison McGovern (Wirral South) (Lab)]

I apologise to fellow hon. Members for not being able to be here at the start of the debate. Does my hon. Friend agree that good regulation could protect employers who do not want to see this sort of practice? It could prevent a race to the bottom, which is what I think we are seeing in the care sector.

[Ian Murray]

That is a valuable intervention because that is what many employers are telling us and what many business organisations are saying: when we undermine workers’ rights, we are undermining as well the businesses that are looking after their staff. I ran my own business before coming into this place. Any business person—any person running a good business—gets up every morning of every day and wants to look after their staff; they know that their staff are their greatest asset. There is a danger here for the Government, and the hon. Member for North Norfolk (Norman Lamb), the Minister’s predecessor, said this quite clearly in a newspaper. Admittedly, it was six weeks before he got the job as the Minister responsible for employee relations, but he said that there was a real danger of undermining job security, which undermines consumer confidence, which sets us up in a spiral of economic decline.

Let me pick up some of the issues that my hon. Friend the Member for Sunderland Central raised. She referred to the disproportionate effect on women. Clearly, we have to look at that. The explosion in the number of zero-hours contracts has had a disproportionate effect on women, and that is probably because of some of the sectors in which we have seen this, such as the care sector and the hospitality sector. These are industries with high percentages of female employees. It is difficult to know whether it is a response to demand for flexible hours, better enabling female professionals to return to work after maternity leave, but it cannot be viewed as a positive trend at a time when equality in the work force is becoming more vital than ever. The Government have to consider whether what is happening is consistent with some of the other policies that I have mentioned in relation to flexible working.

There is also the issue of tax credits. The Government have been very clear about resolving some of the issues in relation to welfare. Their view was that the tax credits bill was too high, but the tax credits system was put in place to ensure that work paid, so again the reality flies in the face of some of the rhetoric and ideology. How exactly does the working tax credit issue interact with some of these zero-hours contracts? How often should HMRC update its system for someone who is on a zero-hours contract? Must they be on a zero-hours contract for a certain number of months? What happens when they get an injection of hours at the last minute? How is all that put together? There are also issues in relation to Jobcentre Plus. If someone is on a zero-hours contract and by law they are neither an employee nor a worker, are they actually in employment; can they claim jobseeker’s allowance? All those issues must be dealt with.

We have heard about the number of staff in this place who are on zero-hours contracts. A press release was issued this morning by my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan). He said that 155 staff in this place were on zero-hours contracts. There are a number of case studies. This issue does not just involve the hospitality or care sectors. Edinburgh university, in my own constituency, has recently done an analysis that shows that 47% of lecturers in the college of humanities and social science are on zero-hours contracts, so there is a real problem there. I know that the University and College Union is taking it up with the university of Edinburgh.

Many hon. Members have spoken about the NHS, so I will not cause delay by making further comments on that, but may I turn to the Government’s recently announced review of zero-hours contracts? The announcement that the Secretary of State and the Minister were to look at this issue was very much welcomed. We must congratulate the Minister on at least going that far, but we need to know whether the Government will issue a call for evidence. Many trade unions have done so much work on this issue. My hon. Friend the Member for Corby (Andy Sawford) mentioned USDAW. It has done a tremendous amount of work on pushing this issue forward. The Government really have to issue a call for evidence. I believe that their review involves only three officials in the Department for Business, Innovation and Skills, so it would be good to issue a call for evidence.

Will the review consider the issues in relation to tax credits? Will it consider specifically the interaction of zero-hours contracts with young people and women in particular? The Minister may not be aware, but there was unanimous agreement from panellists at the Work Foundation’s recent conference on this topic that the review, in its current form, was too lightweight and would not provide the Government with the hard data that they needed to reform the system. I would be interested to hear the Minister’s response.

You have heard from Labour Members, Ms Dorries, the real concerns about zero-hours contracts and the impacts that they have on family life, on income and on people’s ability to plan their daily lives. This is simply an issue of fairness. It cannot be right to demand that someone travels to their place of work and then tell them that they do not have any work. I will be very interested to see whether the Minister will put together a body of work that looks at the mutuality of obligation and whether this is a case in which someone is not an employee, a worker or self-employed and therefore is deemed to be unemployed.

Food Security and Famine Prevention (Africa)

Debate between Alison McGovern and Ian Murray

Thursday 15th September 2011 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I congratulate the hon. Member for Hastings and Rye (Amber Rudd) and my hon. Friend the Member for Lewisham East (Heidi Alexander) on securing this debate on such an important topic.

There is no doubt that even in difficult financial times, when the disposable incomes of people in this country are squeezed, the British public are instinctively generous in their support for those in other parts of the world who are less fortunate. The work of the Disasters Emergency Committee in highlighting the famine and relief efforts in the horn of Africa has been vital in saving the lives of many hundreds of thousands of the poorest people in that region. Many of my constituents who have contacted me strongly support the work of the aid agencies and the resources that the UK Government are putting into the horn of Africa, and people in the region are very grateful for those resources. There is concern, however, that those in the most severe need and the areas most beset by conflict are the least likely to get access to the aid that they so desperately require.

As we have heard, according to the UN, as many as 13 million people across the horn of Africa region need food aid; as many as 750,000 people could die in Somalia alone over the next four months; and, worst of all, half of all deaths have been and will be of children. UN representatives on the ground have described the situation in parts of the region as worse than anything previously recorded. The question has to be asked, therefore: why do we get to such a stage of famine? Famine injects urgency, but it is often too late. That is not a new phenomenon. Since 1980, 42 droughts have occurred in the horn of Africa, almost half in the last decade alone, affecting more than 100 million people.

The situation is progressively worsening, nowhere more so than in Somalia. Not only do people need greater access to food, but there is acute need for safe water, sanitation and disease control. Famine in Somalia is coupled with massive displacement of people both within the country and to neighbouring countries. The large influx of refugees has overwhelmed local host communities, led to conflict over ever more scarce resources, exacerbated the problems massively and had a negative effect on already fragile ecosystems.

There is an urgent need to support countries that are susceptible to drought and to help to mitigate the impact on fragile environments. The summit on the horn of Africa held last week in Nairobi stated that

“we reaffirm that freedom from hunger is one of the fundamental rights of citizens of any nation. Every effort should therefore be made—by governments, citizens and the international community alike—to bring the current emergency to an end”.

More importantly, it went on:

“Every effort should also be made to ensure that in future, drought will not cause undue human suffering, including in particular famine”.

High food prices and price volatility are major contributors to the difficulties, and I want to highlight the impact that food commodity speculation is having on high food prices. That was also mentioned by my right hon. Friend the Member for Oxford East (Mr Smith). Banks and hedge funds are betting on food prices in the financial markets, causing drastic price swings in staple foods such as wheat, maize and soy. Massive food price hikes are catastrophic for the world’s poor because they are more likely to spend more than 40% of their income on food, as opposed to about 10% to 15% in countries such as the UK. Food becomes unaffordable, which leads to increased hunger and malnutrition as less dairy, meat, fruit and vegetables are consumed, so that people can buy staple food; to an increased burden on women, particularly as they are often forced to earn more money by taking up exploitative employment; to households using up savings, getting into debt or selling assets, including critical assets such as livestock and equipment, to pay for food; and to families being unable to afford health care and education, as more of their income is needed to buy basic food.

Historically, futures contracts were set up in US financial markets to help farmers to deal with price uncertainty in growing crops, but those contracts are now being bought and sold by bankers who have little or no involvement in the actual food being traded but who bet on food prices to make money. The World Bank lead economist, Wolfgang Fengler, highlighted that the price of corn reached a staggering 70% above the world average in east Africa as a result of a small number of farmers having control over the market and so keeping prices artificially high. It is extraordinary that it was cheaper to buy corn in the US and Germany than it was in places such as Somalia. Since January alone, the price of corn has increased by up to 200%.

While some are reaping huge profits from betting on food, poor families and people across the world are paying the price of hunger and malnutrition, but the problem could be easily solved by the UK Government backing proposals to regulate betting on food prices in financial markets. The Obama Administration in the US and, as we have heard already, the European Commission are calling for regulation to curb betting on food prices in financial markets. The UK has to play its part in backing the European proposals and not block important progress towards regulation.

[Alison McGovern]

Would my hon. Friend, like me, like to hear at the end of this debate a firm commitment to that?

[Ian Murray]

I am grateful to my hon. Friend for asking that question. It is important that food commodity speculation across the world is dealt with because it is exacerbating many problems. If Ministers gave a commitment at least to consider regulation, as the US and European Commission are doing, it would be incredibly helpful to efforts to deal both with the immediate problems of famine and drought in the horn of Africa, and with the long-term issues, as many of the organisations and the horn of Africa summit have suggested we need to do in order to prevent such crises from arising again.

The World Development Movement has led the charge; now the UK Government have to support two simple proposals that would be hugely helpful—again, it would be useful to hear whether the Government support them. First, all futures contracts should be cleared through regulated exchanges. Most contracts are currently made in private, which means that it is impossible to know how much and what is being traded; monitoring is impossible. Secondly, strict limits should be set on the amount that bankers can bet on food prices.

Combining risky financial gambling with a basic human need is a recipe for global hunger. Excessive speculation on food prices needs to be curbed and the UK Government should back the European proposals for regulation. Drought and famine are avoidable. Just two years ago, the G8 acknowledged that increased investment in agriculture was vital and committed $22 billion over three years to assist affected areas. We have to act now and the G20 summit in Cannes must reaffirm that commitment.