Job Insecurity

Andrew Percy Excerpts

Wednesday 5th February 2014 Commons Chamber

[Nigel Adams (Selby and Ainsty) (Con)]

I know from personal and family experience that job insecurity, unemployment and long-term unemployment in particular are very damaging to individuals and communities. Unemployment can affect mental and physical health and hold back economic growth. I know what it is like for a family’s breadwinner to be made redundant. I know what it is like to start with nothing, but I also know what it is like to create a business, create jobs and create wealth and opportunities. It is right to help people into work and make sure that work pays. In return, people on out-of-work benefits, for example, should be encouraged to take the opportunities available to help them move off benefits and into work.

I am encouraged that the number of people on jobseeker’s allowance in my constituency has fallen by over a third since the last election. With an out-of-work rate of 2.2%, the situation is a lot rosier than it was in the depths of the financial crisis. Long-term unemployment and youth unemployment are also down by a quarter. However, I will highlight one area in my constituency where job insecurity is real. I make no apology for using most of my speech to talk about this issue.

I am proud to represent a constituency whose two power stations at Drax and Eggborough are responsible for about 12% of the UK’s electricity generation. I was delighted that, before Christmas, Drax was awarded an investment contract to convert one of its units to renewable biomass. This is great news for local jobs. Sadly, Eggborough power station, which recently celebrated 1 million running hours since its opening in 1967, was not so lucky.

Eggborough is a cornerstone of industry for the region, for both the 800 employees on site and the thousands of engineering, construction and procurement workers across the region whose jobs depend on Eggborough’s continuing survival. The station plans to convert from coal to biomass in a project worth £750 million for our region. A number of local MPs and I are deeply concerned that its future could now be at risk, and with that comes increased job insecurity.

[Andrew Percy (Brigg and Goole) (Con)]

This is a big issue in my constituency as well. My hon. Friend is fighting tirelessly for Eggborough. Is not the risk that if these jobs go, they will be replaced by energy generation that is largely constructed overseas? It will probably be offshore wind and most of those units will come from overseas.

[Nigel Adams]

My hon. Friend is right. He has been a great help in the campaign to ensure that Eggborough stays open. There is no sense in creating jobs overseas for technologies that do not produce electricity, when we have right on our doorstop technology that can work with our existing coal plant conversions.

Converting the station to biomass means 800 new on-site jobs and delivers growth right across the region. The majority of the work force, however, will be local to Selby. Of course, it is not just about new jobs for a new generation of workers; it is about preserving existing jobs on and off site. Many workers on site have given most of their professional lives to Eggborough and it is unthinkable that Eggborough should be forced out of business just as they are nearing retirement. I, the management of Eggborough and my colleagues will continue fighting for this project, because it is the right thing to do, not just for our energy security, but because of the hundreds of workers who are dependent on it for their livelihoods. Over the years the Selby area has lost its shipbuilding industry, and in 2004 the large Selby coalfield closed down, but thankfully we are seeing business confidence return and with that come jobs and opportunities.

The problem I have with the Opposition motion today is that it appears to have been drafted by someone who clearly has never been an employer. There seems to be a strategy to try to talk down the British economy at every opportunity for political advantage. Like several of my colleagues on the Government Benches, rather than talking a good game, I took the decision to try to take action in my constituency and organised jobs fairs, matching employers and jobseekers. I have also been into the jobcentre to help with mentoring and interview skills. The jobs fairs have been extremely successful in getting people back into work. We have now had three jobs fairs in the district and will shortly be organising the next one.

I want to take this opportunity to thank Jobcentre Plus for all its efforts in working with me and my team. I also thank Selby college and all the companies and organisations that brought their vacancies to the jobs fairs. I urge Opposition Members please to engage with the private sector in their constituencies and to do something positive, such as organising jobs fairs, because they really work. I regularly visit companies in my patch, and the news is extremely encouraging.

Jobs in this country are up. More than 30 million people are now working, which means more than 30 million individuals taking a pay packet home to their families. Vacancies are also up, which is extremely encouraging. They are now at their highest level for five years. A recent snapshot showed 569,000 unfilled job vacancies across the country. In addition, it is British people who are being hired, as in the past year 90% of new jobs went to UK nationals. The new jobs being created are overwhelmingly full-time, permanent jobs in the private sector.

We are by no means out of the woods, but the Government are delivering a sustainable recovery and making difficult long-term decisions to secure a better future for everyone. Lord help us if the anti-business, anti-aspiration party on the Opposition Benches is ever returned to government.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

I am pleased to follow the hon. Member for North Swindon (Justin Tomlinson), because I want to counter some of the myths that have been perpetuated. It is constantly stated that Labour Governments always leave office with unemployment higher than when they came to office. That is not true. Between 1945 and 1951, unemployment fell under a Labour Government. For much of the 1950s and 1960s, the position was very stable. Let us contrast that with the 18 years of Conservative Government between 1979 and—[Interruption.] Government Members can brush it aside if they wish, but for 13 of those 18 years, unemployment was higher than 10%. When the Conservative Government left office in 1997, unemployment was brought down by the Labour Government and it fell in every year until the financial crash.

[Andrew Percy]

It’s somebody else’s fault.

[Sheila Gilmore]

It would be very strange to place the blame for a world financial crash on the Government of one country.

The other myth that has been perpetuated is that pensioners have this Government to thank for the largest cash rise in pensions ever because they introduced the triple lock. It did not happen because of the triple lock; it happened because inflation was so high in that year, which was largely due to the increase in VAT. If Members care to remember, it was said that that was never going to happen. The rate of inflation is the reason why the cash rise in pensions had to be so high. For pensioners, it was merely an inflationary cash rise. It had nothing whatever to do with the triple lock. If nothing had changed in the policy, the rise would have been exactly the same.

I want to touch on what all this means for a lot of people. We hear a lot about all the private sector jobs that have been created. However, nearly 500,000 of those private sector jobs are in the health and social care field, and most of those are funded by the public sector. They are private sector jobs only because they have been outsourced. For far too many of those employees, the working conditions have worsened. Earlier, a Government Member sought to intervene to say that Labour councils have outsourced contracts. I know of Labour councils that have outsourced contracts. My council has such contracts because it inherited them from the previous Liberal Democrat council.

Private firms are operating social care services on the basis of zero-hours contracts. People who work in the social care sector, much like the McDonald’s workers who have been discussed, wait at home to see how many hours they will get each week. Not only is that bad for the employee who never knows how much she will earn from one week to the next, but it is absolutely atrocious for the person for whom the care is being provided. It is no wonder that people do not know who their carer will be on any given day when the work is organised in that fashion.

The Government cannot escape responsibility for that situation. Why are councils finding themselves in that position? In Scotland it is largely because we have now had the council tax freeze, which has been mentioned, for six or seven years. It is not properly funded; local councils are strapped for cash, and as a result they are looking for experience in how to provide services. If a care service is outsourced, for example, it provides very poor employment circumstances for people.

Another problem that people encounter when on such contracts is how they organise child care. How can they do that if they never know when they will be able to work? One couple I spoke to at the weekend told me that they had to give up the possibility of both working, because they could not organise child care around their work contracts. That has knock-on consequences not just on their working conditions, but also on other aspects of their working life. These real issues are happening in all our constituencies, and we need to change that.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

We have had an excellent debate. When the current Government were elected, we were promised that new policies would lead to

“steady growth and falling unemployment”.

Unfortunately, however, they did not. For three years, there was hardly any growth and unemployment stayed high. Despite all the benefit cuts, over this Parliament the Government will spend £15 billion more on social security and tax credits than they said they would just after the election. As a result, more young people have been out of work for over a year than at any time for 20 years. We urgently need to bring those young people, at the start of what should be their working lives, back into the labour market. In addition, more over-25s have been out of work for over two years than at any time since 1997.

After a long delay, jobs are finally being created, but the priority now is to bring back into the labour market those who have been locked out of it for much too long. That is the damaging legacy of three years without growth, and it needs tackling urgently, otherwise we will face a whole generation of lost economic potential.

[Andrew Percy]

On the subject of legacy and long-term youth unemployment, does the right hon. Gentleman regret the previous Government’s legacy? Under them, the gap between the best-performing and worst-performing schools widened, so we now have a group of young people relatively far less well educated than many of their peers.

[Stephen Timms]

What I am worried about is the apparent collapse of careers advice in schools, with more and more employers saying to us that young people are not getting the advice they need to plan for future employment. I am extremely worried about that.

Despite this legacy, our proposed job guarantee will deliver, unlike the Work programme, which was rightly described by the Chancellor in last summer’s spending review statement as “underperforming”, and the Youth Contract, whose wage incentives have proved a hopeless damp squib. The Secretary of State was right at the outset of the debate to commend the record on employment support in Wales, where the Jobs Growth Wales programme, reflecting our job guarantee, has done a great deal better.

This debate has focused on those in work. For the first time, the majority of people living in poverty are in households where somebody is in work, as was highlighted by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). A staggering number of people in work are resorting to food banks, in Wales and elsewhere, so I welcome the Prime Minister’s agreement to meet representatives from the Trussell Trust, which co-ordinates food banks, next week, overruling the childish refusal to do so by DWP Ministers over the last several months.

Month after month, it is the same. Last month, inflation was more than 2% and pay rises were below 1%. That is what people are experiencing. For the first time—we had an exchange about this earlier—over 1.4 million people are working part-time because they cannot find a full-time job. My hon. Friend the Member for Wansbeck (Ian Lavery) reminded us that the House of Commons Library calculated that the average household was more than £1,600 worse off than at the time of the last election.

The hon. Member for Ipswich (Ben Gummer), whom I am glad is back in the Chamber, made a thoughtful speech essentially arguing that there was nothing new about these problems. He should look at the quarterly Asda “Mumdex” briefing, which I think has been sent to all of us:

“Last year, we saw Mums cutting back on luxuries like holidays, gadgets and meals out. Now families are struggling to afford basics like heating and petrol.”

The intensity of the problem is new. YouGov found last year that the number of people feeling insecure at work had almost doubled since the election—6.5 million then, 12 million now—and the hon. Member for Selby and Ainsty (Nigel Adams) was right to highlight the case of job insecurity at a power plant in his constituency. That kind of problem is widespread.

Our motion refers to health and safety changes. I had an exchange with the Secretary of State about this earlier, but I want to make a bit more of the point. This year marks the 40th anniversary of Labour’s Health and Safety at Work, etc. Act 1974. The disability benefits Minister, the Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning), rightly told me in a written answer last month:

“Workplace health and safety has made an important contribution to vastly reducing the numbers of people killed, injured or made unwell by their work in the last 40 years.”—[Official Report, 30 January 2014; Vol. 574, c. 669W.]

That is as a consequence of our legislation.

The Secretary of State reminded us that Ministers commissioned Professor Ragnar Löfstedt of King’s College London to review health and safety legislation. Some people think it should be dramatically cut back, but not the Secretary of State, and not Professor Löfstedt either. He wrote:

“I have concluded that, in general, there is no case for radically altering current health and safety legislation…There is a view across the board that the existing regulatory requirements are broadly right”.

Ministers said in response that they supported the recommendations of the review, but what they are doing is different. They are trying to shift the balance, even though they have been unable to find evidence to support them. I take the Secretary of State’s point—he is not responsible for this—but in an interview last month Professor Löfstedt described what is happening as ideology in place of evidence-based policy, and safety at work is at risk as a result. I want to highlight in particular the Government’s removal of civil liability for employers breaching health and safety law in the Enterprise and Regulatory Reform Act 2013, which Professor Löfstedt picked out in his report one year afterwards. Given all this, there is now growing concern that health and safety is being put at risk.

My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) highlighted employment rights and the case of INEOS in his constituency. The qualification period for protection against unfair dismissal has been doubled, from one year to two, and fees introduced for employment tribunals. The Government went so far as to consult on the proposal for no-fault dismissal made by Mr Adrian Beecroft in his infamous report. If that had been implemented, it would have allowed employers to fire people at will.

As my hon. Friend the Member for Streatham (Mr Umunna) pointed out at the start of the debate, the minimum wage has fallen by 5% in real terms since the election. The Chancellor has hinted that he plans to do something about that for next year—better late than never; let us hope he delivers—but he should look at enforcement as well. An estimated 300,000 people are paid less than the minimum wage, but there have been just two prosecutions in four years. The Secretary of State said that enforcement had been sorted out, but where is the evidence? Since 2010, Ministers have announced three times that they will name and shame firms that flout the national minimum wage, but so far nobody has been named or shamed. We need much more effective enforcement, including by giving powers to local authorities.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) highlighted the explosion in zero-hours contracts. The Resolution Foundation has found that average pay on them is 40% less than on regular contracts. My hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) gave us a graphic example from his constituency of the reality of being on such a contract. We need a serious effort from Government to promote the living wage. My hon. Friend the Member for Dumfries and Galloway (Mr Brown) argued for “make work pay” contracts, whereby firms signing up to the living wage under our proposal in the first year of the next Parliament would get a tax rebate in that year of up to £1,000 for every low-paid worker who gets a pay rise, the Exchequer cost being entirely covered by increased tax and national insurance revenue.

Step by step, we are setting out how we will deal with the problems this Government’s policies will leave behind— growing insecurity and a big squeeze on family incomes in the middle and elsewhere. What we are proposing is practical, effective action to tackle job insecurity, make workplaces safer, improve pay, particularly for the low paid, and make the cost of living more manageable. We want to build a one nation economy, and the sooner the better.