Job Insecurity

Baroness Chapman of Darlington Excerpts

Wednesday 5th February 2014 Commons Chamber

[Mr Umunna]

I am happy to clarify that I was not saying that all the jobs created are as the hon. Lady has suggested.

We want to ensure that the national minimum wage is properly enforced. That is why we want fines of up to £50,000, and we would give local authorities a role in enforcement. To go back to what I said earlier, ultimately, we want more people to be in receipt of a wage on which they can live.

[Jenny Chapman (Darlington) (Lab)]

Is my hon. Friend aware that people who get jobs on the minimum wage through employment agencies routinely have their wages docked to cover the administration of their pay? Very low-paid workers are therefore receiving far less—up to £16 or £20 a week less—than the minimum wage.

[Mr Umunna]

My hon. Friend is absolutely right. I understand that the Secretary of State is investigating that outrageous practice at the moment, and we await the findings of his Department’s investigation.

We have already made it clear that we disagree with heaping job insecurity on people in work, which is why we have opposed and voted against all the measures that this Government have introduced to water down people’s rights at work.

--- Later in debate ---

[Jenny Chapman]

It is pleasing that the Secretary of State has referred to the north-east and acknowledged that we have a particular problem. He said that he would introduce policy once he knew the scale of the issues, but regardless of that, will he commit to doing something about employment agencies’ practice of skimming off tens of pounds from the weekly pay of minimum wage earners?

[Vince Cable]

I am not quite sure what the hon. Lady is referring to. Is she referring to something illegal that needs to be investigated? I think the shadow Secretary of State raised the issue of abuses by employment agencies at the last BIS questions. We had been tipped off about that, and we are investigating where there is illegality.

[Jenny Chapman]

I am happy to explain. A constituent of mine contacted me after taking a job through an employment agency on the minimum wage. He was required to sign away £16 of his earnings per week to pay the agency to process his pay—that is what he was told—so he is now taking home much less than the minimum wage. I can assure the Secretary of State that such practices are widespread. Will he commit to cracking down on this, regardless of the scale?

[Vince Cable]

Of course, if there is illegal abuse of the minimum wage, it needs to be investigated and prosecuted, and we will do that. If the hon. Lady gives me the facts I will ensure that the matter is followed up.

I want to round up on the broad issue of the level of employment. The trend is clear: employment is growing rapidly, unemployment is falling and all parts of the UK are now benefiting. Even among particular groups of the population with past experiences of unemployment —for example, lone parents, disabled people and over-65s—employment is now at pre-recession levels. The overall story in the labour market is a positive one, but there are still large pockets of serious structural unemployment and people who want full-time employment —we acknowledge that—and that is why the recovery still has to be made sustainable.