Draft Companies (Miscellaneous Reporting) Regulations 2018
Debate between Bill Esterson and Michael Fabricant(5 years, 9 months ago)
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Bill Esterson
My hon. Friend is quite right to raise that point, given that we are talking about private sector companies. Perhaps it is time for the Government to consider wider corporate governance issues in the private sector. The directors to whom she referred have benefited from public money and success for such companies has come through the Government’s Help to Buy scheme, where unfortunately, despite the Government’s intention, money has gone to the directors rather than helping people who desperately need somewhere to live. Last year, Labour’s manifesto had commitments on the 20:1 ratio for the public sector and companies involved with public contracts. Might the Government be in a position to do something similar?
I agree that improving relationships and consulting stakeholders is important. Doing so with employees is also important, so I will return to employees. Consulting, discussing and publishing the results of those discussions is one thing, and action is quite another. I am interested in the Minister’s thoughts on what can be done with the findings of such consultations. If consultations are just a talking shop and the results have to be published, what is the point? What is a company’s motivation other than to look good in reports?
Members of the Committee will have had the TUC’s briefing. It has raised a number of concerns. It said—the Minister touched on this in his opening remarks—that the whole workforce need to be engaged, and that these regulations should be about engaging with workers as a whole and not just with employees. I remind the Committee that the TUC estimates that 740,000 people in the UK today are working through an employment agency, 450,000 earn most of their income through personal service companies and 500,000 people are in bogus self-employment. Significant numbers of people are in indirect employment and their indirect employment is often with the companies covered by the regulations.
I hear what the Minister has to say about the difficulty of having direct control, but is there not a danger that some employers will take the opportunity to act less than scrupulously and use indirect employment as a way to avoid their responsibility under the regulations? Sadly, we have seen too much of that kind of behaviour in our economy and the mistreatment of people in precarious situations is a growing and dangerous part of how our economy functions. Not only is it bad for working people, but it creates an unfair competitive advantage and undercuts those employers who want to do the right thing—those businesses that want to act in a responsible way. I urge the Minister to take that point on board, in the spirit of its being good for workers and good for businesses.
The TUC also raised the point about the size of businesses covered by these regulations. For listed companies the regulations use the established definition of a large company, which in this case is one with more than 250 employees, but, for reasons that the Minister might want to explain, for private companies the figure is 2,000. The TUC has drawn to our attention the fact that the gender pay gap reporting requirements use the same lower figure for public and private. I stand ready to be corrected by the Minister, but that is my understanding from the information coming from the TUC. Why is there a difference between the reporting requirements for gender pay and for pay ratios, if that is indeed the case? If it is not, and they are both 2,000 for private companies, I would still want to know why there is a difference between private and public.
Michael Fabricant
I always try to be helpful. Does the hon. Gentleman not agree that although these rules of course concern companies and corporate law, perhaps other organisations should fall under such a remit, such as universities, where some vice-chancellors, we hear, earn astronomical wages?
Bill Esterson
Yes, of course—I do not think there is any doubt about that—but this is about the private sector. I quoted the figure in our manifesto for the public sector. Perhaps the hon. Gentleman is advocating that the Conservative party should make similar proposals of its own for the public sector? I welcome his conversion to the cause and support for Labour’s manifesto from last year in the spirit in which his intervention was no doubt intended.
The other point I want to raise with the Minister concerns the FRC’s responsibilities and enforcement. Perhaps he could start by describing how enforcement has happened with the gender pay gap regulations and what examples have been received, in what I think is just over a year since those regulations came into force, of the need for the FRC to intervene and whether they have found companies that are not compliant. He quoted the policy of “comply or explain”; perhaps he can say whether he has considered what happens if the answer is always to explain and if we do not have compliance. I would be interested in his thoughts on the level of enforcement that has already gone on with the gender pay gap, and on how enforcement will happen for these regulations.
A lack of enforcement of the prompt payment code was one reason so many ended up in such a precarious financial position as suppliers of Carillion. The Minister and I have debated before the difficulties of enforcing the prompt payment code. This debate is an opportunity to remind him that good enforcement is essential for the regulations to have any meaning, and to encourage him in that regard. Perhaps the Minister could tell us how he envisages that and also give examples of how the FRC will be able to deliver that enforcement.
Draft National Minimum Wage (Amendment) (No. 2) Regulations 2016
Debate between Bill Esterson and Michael Fabricant(7 years, 7 months ago)
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Bill Esterson
Perhaps the Minister has just told us that she has no intention of putting up the so-called national living wage by very much. I remind her that the Living Wage Foundation says that a living wage in this country is £8.25, or £9.40 in London—not the lower smoke-and-mirrors figure of £7.20 that the former Chancellor introduced.
Michael Fabricant
I was quite involved in the minimum wage when it came in under Tony Blair, the former leader of the Labour party, in 1999. The age of 25 was chosen was because the Labour party got good advice that if it priced the minimum wage for those under 25 at the same amount as for those aged 25 and over, those under 25 would not get employed. The Labour party wanted 21 to 25-year-olds in work; it is as simple as that. It may be that the old Labour party, as opposed to new Labour, resents or rejects that, but that was the view of the Labour party at the time, and it was correct.
Bill Esterson
I remember all too well the all-night sitting—I was a researcher at the time—during which Conservative MPs filibustered as long as they could to prevent the national minimum wage from being introduced, so we will not take any lectures about the implementation of the national minimum wage. [Interruption.]
Michael Fabricant
I was not going to speak, but I have been driven to do so by the hon. Member for Sefton Central. I agree with his last few words—enforcement is tremendously important—but his rewriting of history has been quite remarkable. He may have been here as a researcher when the minimum wage was introduced; I was the Opposition Whip at the time, but they would not put me on that Committee because the only row I ever had with our then leader, William Hague—now a noble Lord—was over the minimum wage. I said to him at the time that the minimum wage was something that we would come to support. He said, “It will never happen”—that was not a very good impersonation—and I said, “Oh yes it will, and it works in the United States.” On that occasion, I was proved right and he was wrong.
Earlier, talking about the level of the minimum wage, I gave the example of the United States, where the federal rate is just $7.25 an hour. Interestingly, there are many exemptions in the US. For example, disc jockeys—I was a disc jockey for a short while on a pirate radio boat—are exempt, and so are waiting staff. That is one of the reasons why people have to tip well when they go to the US—because the waiting staff live on tips. I go to the US a lot for private reasons. I was chatting to a barman who told me that he is on $2.50 an hour, which is only £1.90, so we really can be proud of the UK’s minimum wage.
The rate is tremendously important. It is all very well for the hon. Member for Sefton Central to say that it should be higher, but if people are not employed, the rate is zero per hour. It is always a balance. Tony Blair knew that; Gordon Brown knew that; sadly, the hon. Gentleman does not seem to realise that. If people are priced out of the market, they will not get anything, because they will be unemployed.
Bill Esterson
Given the hon. Gentleman’s belief that the national living wage prices people out of jobs, was he against the former Chancellor’s introduction of the national living wage at £7.20—a rate significantly higher than the then national minimum wage?
Debate on the Address
Debate between Bill Esterson and Michael Fabricant(10 years, 11 months ago)
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Bill Esterson (Sefton Central) (Lab)
It is always interesting to listen to the hon. Member for Lichfield (Michael Fabricant). I can only imagine what it would be like if he really disagreed with the Government: the vehemence of his attack would be something to behold. He made some good points about the impact of the HS2 project and the need to speed it up, as did his neighbour the hon. Member for Tamworth (Christopher Pincher). Speeding up the construction would help the economy, and the blight point was also well made. I live very near to the route of HS1, and that will drag on and on. One of the lessons of HS1 that should be applied to HS2 is the need to deal with blight as speedily as possible.
This feels a bit like speaking in an Adjournment debate. Indeed, I have seen more Members present in the Chamber during Adjournment debates. That may be an indication of the thinness of the fare before us, which may be more worthy of an Adjournment debate. Perhaps that says it all.
I want to discuss the way in which the Queen’s Speech will affect my constituents, and mention some of the proposals that it might have contained which would have affected them far more. Before I do so, however, let me say that I heard the right hon. Member for Sutton Coldfield (Mr Mitchell) come out with the usual Government line about politicians racking up debt around the world. He mentioned his business background and referred to the need for not just cost-cutting but top-line investment. However, he conveniently neglected to mention the role of the banks around the world in contributing to the financial crisis, and the fact that they lent money to people who could not repay it.
The business analogy illustrates the importance of investment. Without investment, business cannot succeed. Similarly, it is the Government’s role to invest in economies, because that is what Governments are there for. When things are tough and there is no one else to invest to stimulate the economy, Governments should step in. The Queen’s Speech did refer to the creation of jobs and growth, but there was precious little to back that up and explain how it would happen.
Let me say something about the Government-backed mortgage scheme, which, it is said, is designed to help people to own their own homes. My hon. Friend the Member for Glasgow North (Ann McKechin) accurately described the current state of the housing market and the problems that exist not just in her constituency, but all over the country. She spoke of the lack of affordable housing, social housing to rent, and low-cost housing to part-rent-part-buy or to buy outright. Developers want to build the most expensive housing they can, because, of course, they want to make as much money as possible. It is no coincidence that over the years about 2 million houses have been sold under the right to buy and we have a shortage of about 2 million affordable homes. We unquestionably have a housing shortage, and according to the Homes and Communities Agency, affordable housing starts collapsed by 68% in the financial year 2011-12. We have seen an increase in homelessness and rough-sleeping, which is particularly affecting families and children.
A proposal that is designed to underwrite mortgages will help the wealthy because it is for new-builds and more expensive housing, but will it help the housing shortage? If it is designed to help the poorest and tackle the shortage of social housing by moving the market further up, is not that use of Government-backed mortgages one of the reasons why we ended up in a financial crisis in the first place? We all remember Northern Rock and 125% mortgages in this country. It is not just me who says this. My hon. Friend the Member for Glasgow North quoted a number of sources, including the Treasury Committee, commenting on the danger of inflating the housing bubble again and the danger of leaving people, at all levels in the housing market, sooner or later unable to pay, with all the consequences of that, which are still going through the financial system now.
Rising prices are another consequence of having a limited supply of housing, which can put housing out of reach for many, or put people into a false, unaffordable state of ownership. On 20 March, The Daily Telegraph said:
“Given the over-dependence of the British economy on the housing market, it is hardly surprising that Mr Osborne has looked in this direction for salvation. But we question whether it is sensible for the state to enter into the mortgage market in this way. It will do nothing to rebalance the economy, and risks stoking another housing bubble. In addition, even though interest rates will probably remain low, it is dangerous to encourage people to buy who might be vulnerable to an increase in lending costs and negative equity.”
As my hon. Friends have said, there is a housing problem and we need to build affordable homes. We must consider the impact building homes would have on the construction sector, the economy and jobs. There is also a lack of investment in the existing stock of empty homes, which the construction industry is keen to see addressed, hence the calls for a cut in VAT on renovation of property to 5%.
The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) mentioned the International Monetary Fund visit, and IMF chief economist Olivier Blanchard said:
“We said that if things look bad at the beginning of 2013—which they do—then there should be a reassessment of fiscal policy. We still believe that. You have a budget coming in March and we think that would be a good time to take stock and make some adjustments.”
The Budget did not do that. We did not see the kind of moves on housing that I have just described, and we have not seen that in today’s announced measures either.
Sadly, the Chancellor chose to ignore the advice and plough on regardless, and no doubt he will stick to that when he meets the IMF this week. I heard calls for him to ignore any advice from the IMF and to carry on regardless, but for my constituents that would mean more austerity. It would mean more pain for hard-working families, for disabled people and for those desperately trying to find work where only zero-hour or part-time, low-paid jobs are on offer.
There was no vision in today’s announcements for the long-term either. There was no suggestion of how the economy might grow so that public borrowing could finally be reduced, and there was no answer to the question of why the Chancellor said the credit rating was the most important factor on which he should be judged. Many Government Members want deeper spending cuts, but just a few weeks ago thousands of people earning more than £150,000 a year, including many millionaires, were given what their friends in government had promised them, which amounted to £100,000 each year to anyone earning £1 million a year.
At the same time, our constituents paid for that through the bedroom tax and in cuts in support for those in work and those looking for work. While the wealthiest in our society have enjoyed the benefits of a handout from the Chancellor, millions of people are wondering how to pay the bills, put food on the table and heat their homes. It is no surprise that 350,000 people are using food banks, according to the latest figures from the Trussell Trust—and that is before the bedroom tax, the council tax localisation scheme and other attacks on the poorest have really started to bite. At least 30% of those in social housing will be affected by the bedroom tax, and offering discretionary payments is simply not good enough. The housing associations and local authorities in my area have already found that that money does not go anywhere near far enough. People are facing real hardship, and the measure has only just been introduced.
Two of my constituents have told me of their circumstances. A man who has been disabled for 12 years was recently declared fit for work in his work capability assessment, despite having a degenerative disease. He is appealing, but while he does so he loses £25 a week; at the same time, the bedroom tax on his spare room is £14.71 a week and he has to pay £34 in council tax that he has not had to find before, because the council tax benefit is not at the same level it was before last month’s reforms. It all adds up to more than £200 a month for a disabled man who is unable to work and his family. We have heard from other Members about the difficulty disabled people have in finding work—they genuinely want to work, but there are not the jobs for them, and when they go to interview people will not take them on.
The other constituent is a lady who has spina bifida. She passed her work capability assessment, but one question a medically trained member of the Atos staff asked was, “How long have you had this condition?” The idea that someone who is medically trained did not understand what spina bifida was, or its consequences, is deeply troubling for everyone. That sums up some of the problems that people face. My constituent also now has to pay council tax for the first time. She used to work, but when she goes for an interview now people take one look at her and say, “No, I’m sorry, we can’t employ you”, because they assume that it will be difficult for someone with spina bifida to do the work that she has applied for, although she is extremely well qualified. She has no choice but to pay the extra money in council tax, if she can find the money from somewhere. I keep meeting people who have been disadvantaged by the benefit changes. At the same time, we see people at the top doing very nicely out of some of the changes the Government have introduced. Nothing in today’s announcements was encouraging for people looking for work and people who are disabled—people who desperately want to work.
We have heard about the attacks on the people in most need, but a number of colleagues have also mentioned the necessity of support for business. Where is the support for manufacturing to help our flatlining economy and our businesses and to create the full-time, well-paid jobs that people need? Why was there not an announcement about a national investment bank and the regional banks to go alongside it—the kind of support that is needed, which we could have done with desperately many years ago?
Some measures have helped the economy in my constituency. When the Government took office in 2010, however, they scrapped Building Schools for the Future, and that had a profound effect up and down the country. With school building programmes not going ahead, the construction industry and the economy as a whole were hugely affected. One school in my constituency, Aintree Davenhill, was in the primary capital programme. The children at that school used to have lessons in disused aircraft hangars made of corrugated iron. As one can imagine, it was boiling hot in summer and freezing cold in winter, and it certainly was not an ideal teaching and learning environment. The previous Government had approved funding, but whereas phase 1—the infants part of the school—had been completed, phase 2 had not been. When the current Government came into office, they stopped the funding for phase 2. Fortunately, Sefton council, which had sufficient capital in reserve for a primary school, stepped in to fund the rest of the project. I was lucky enough to go to the opening two weeks ago of the brand new school, which is a fantastic tribute to everybody who has worked on the project.
Investment in a primary school, however, makes only a very small contribution to the economy. Much more investment was needed, because the construction industry has wound down, hundreds of thousands of construction workers have been laid off, and businesses have closed. It will take time for any announcements now about construction to build the industry back up.
Another project that I am pleased to see in my constituency is the building of the Thornton relief road. It is a £30 million project. It was first proposed in 1934, and I have mentioned it many times in this Chamber since being elected. The building of the road was finally achieved by a combination of Government and local government funding, but it should have been approved three years ago. The previous Government had given the green light to the scheme, but it was also cancelled, and three years of lack of investment and economic stimulus resulted, as with the cancellation of the Building Schools for the Future programme.
We need urgency from the Government, and we did not see that today. The hon. Member for Lichfield mentioned the High Speed 2 project, and he is right that it will make a huge contribution to the economy, but if it is delayed for many years, we will not see the economic benefits now when they are most needed.
Michael Fabricant
I forgot to mention that the Birmingham Chamber of Commerce Group has said that one good thing that can come out of HS2 is the construction of lines and carriages, providing that that work goes to British companies. I will be asking the Department for Transport to ensure that it does.
Bill Esterson
I am grateful to the hon. Gentleman for mentioning the importance of using British manufacturing companies for projects in this country. I will mention Bombardier, and the cancellation of the project at the Derby works—a project that went to Siemens—as an example of where our policy was wrong. We must get that sort of thing right—
Bill Esterson
I am glad that that the hon. Gentleman is nodding. German contracts are let to German companies—there are ways of writing contracts that favour them, and this country must get better at that in relation to our companies.
I mentioned the construction sector and two projects in my constituency. This country should ensure that the supply chain supports local subcontractors and local labour, and that should be written into contracts far more often.