Chuka Umunna
Main Page: Chuka Umunna (Liberal Democrat - Streatham)
Mr Chuka Umunna (Streatham) (Lab)
I beg to move,
That this House notes the marked rise in the use of zero hours contracts with recent estimates that as many as a million employees are employed on them and that they are used in over a quarter of workplaces, contributing to growing insecurity for families across the UK; and therefore calls on the Government to initiate a full consultation and formal call for evidence on the use of zero hours contracts and on proposals to prevent abuses by employers of such contracts, for example, by stopping employees on zero hours contracts being required to work exclusively for one employer, stopping the use of contracts that require zero hour workers to be available on the off-chance they are needed but with no guarantee of work, banning the use of zero hours contracts where employees are in practice working regular hours and putting in place a code of practice on the use of zero hours contracts.
We are in the midst of the biggest living standards crisis in a generation, a crisis that is affecting every community in the country. We know that at its heart is the issue of pay. People are working harder than ever before but earning less: they have on average suffered a £1,500 pay cut since the Government came into office. We know that at the same time as wages have been falling, costs have been increasing, with prices rising faster than wages in 39 of the 40 months of this Government.
We also know that insecurity goes to the heart of this living standards crisis, too. Those in work now feel less secure and more pressurised at work than at any time in the past 20 years, according to the most recent UK skills and employment survey. The UK Commission for Employment and Skills, which co-funded the survey, says that what we have now is a climate of fear. Indeed, research shows that double the number of people feel insecure at work today compared with three years ago.
Mr John Redwood (Wokingham) (Con)
Does the hon. Gentleman not agree that the biggest collapse in living standards occurred from 2008 to 2010 under the Labour Government, when they bankrupted the country and drove people out of work? We are trying to recover from that position.
Mr Speaker
Order. Just before the shadow Secretary of State responds to that intervention, may I gently say that it is helpful if everybody is clear to whom the Member who has the floor is giving way? The hon. Member for Wrexham (Ian Lucas) is sorely pained as he thinks the intervention was supposed to be his. I know not, but the shadow Secretary should make it clear.
Ian Lucas
I am grateful to my hon. Friend for giving way. I just wanted to correct the right hon. Member for Wokingham (Mr Redwood). In my constituency, the average male wage in real terms was £530.80 in 2010. That fell to £453.50 in 2011, the first year of the Tory-Liberal Democrat Government.
Mr Umunna
I thank my hon. Friend for his intervention, and he is right to point that out. We are in the fourth year of this Government and blame is continually attributed to the Labour party. This Government ought to look at what they are doing to our country and our economy.
My hon. Friend the Member for Coventry South (Mr Cunningham) made a point about insecurity at work. That insecurity is not just born out of three wasted years of a flatlining economy following the Government’s 2010 comprehensive spending review which caused confidence to fall and demand to nosedive; it is also because the nature of work has changed in recent years. Half the rise in employment since 2010 has been in temporary work, driven primarily by people doing temporary jobs because they cannot find permanent work—more than 500,000 people fall into that category—while record numbers of people are in part-time work who would prefer to be working full time, meaning that there is huge underemployment.
But perhaps the most shocking symptom of the changing nature of work is the proliferation of the use of zero-hours contracts, under which a person is not guaranteed any work, is usually expected to be around whenever the employer wants them to be and is paid only for the work he or she gets, meaning, as my hon. Friend the Member for Coventry South said, that individuals engaged under these contracts never know when work will come and therefore whether they can sustain themselves and their families week to week.
Alison McGovern (Wirral South) (Lab)
Is it not tough to listen to the Prime Minister giving answers about rising employment, given the type of employment that that represents, as we have just heard? Should the Government not come clean about the falling claimant count and listen to what my hon. Friend is saying about the type of work people are having to go into?
Mr Umunna
This is a key point. Will any job do? We are clear that any old job will not do. We want to ensure that people have decent work that is paid a salary they can live off and which is secure too. That has to be our ambition for the country.
I do not deny that these contracts have been in use for many years—I will turn to their use in the House a bit later—but until recently they were very much the exception to the rule. The problem is that now they are becoming the norm in some sectors, with the Chartered Institute of Personnel and Development estimating that up to 1 million people are on such contracts.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The hon. Gentleman will understand that across the House there is concern—or there should be—about this issue, and I am glad that we are debating it. He touched on the point I wanted to ask him about. Will he confirm, however, that the Labour Government never addressed this issue by making it illegal, so it remained possible throughout the whole period of their Administration? Neutrally, does he have any objective, accurate statistics on the number of people affected by zero-hours contracts during the last Government and the number of people affected since 2010 under this Administration?
Mr Umunna
I will come to both those points in the remainder of my speech.
Some Government Members trumpet this insecurity and talk about it as evidence of flexibility in our labour market, and it is true that some workers like these arrangements, but for most working families they mean insecurity for them and their families and leave them subject to the whim and demands of their employer to work at short notice, so the flexibility is not a two-way street; it is a one-way street in favour of the employer, and that is insecurity writ large and totally unacceptable.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
On Friday, a heavy goods vehicle driver for Royal Mail and his wife came to my surgery and told me that one week he works two nights, the next he might work three, and his wife explained what that meant for them as a family. What does that say about companies such as Royal Mail that use this practice continually?
Mr Umunna
Some argue that we should not point to bad practice in the business community because to do so is to fuel anti-business rhetoric. I think that it is important that we call out people who are systematically exploiting and abusing others under these contracts. For example, Sports Direct uses these contracts across the board, whereas others, such as Asda, acknowledge that they could use them if they wanted, but do not want to treat their people in that way, and if that means that they have to spend more time drawing up rotas and using overtime arrangements in contracts, so be it; they do not want to treat people in that way.
Helen Jones (Warrington North) (Lab)
Does my hon. Friend agree that firms that exploit people by using zero-hours contracts are undermining good employers who institute flexible working and annualised contracts, meaning that we are in danger of the bad driving out the good?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate my hon. Friend on the excellent points he is making in support of good companies that recognise, as I know from my time in business, that those with insecure jobs will never deliver for their companies the same quality of work or be as motivated as a well-paid, secure employee.
Mr Umunna
That was exactly the point I was just about to make. Of course, insecurity at work lowers a person’s standard of living and makes managing their family commitments impossible. As my hon. Friend says, insecurity is bad for business because insecure, poorly paid workers are less committed and less productive. It is also bad for the public finances, because if people are not getting the hours or earning a decent wage, that means less income tax and national insurance going to the Exchequer and more being paid out in credits, so everybody loses out.
Stephen Mosley (City of Chester) (Con)
A few weeks ago, I was talking to a constituent of mine on a zero-hours contract with the Co-operative group. Is the Co-operative group exploiting its workers?
Chris Ruane (Vale of Clwyd) (Lab)
My hon. Friend referred to the impact on families. Will he expand on that? What is the impact of zero-hours contracts on a mother’s or father’s ability to plan picking their children up from school in a week’s time, to plan family holidays or Christmas or to plan whether they can afford a mortgage?
Mr Umunna
I will come to that point shortly and tell the House the story of a zero-hours contract worker I met recently in exactly that position.
The Government and policy makers can acknowledge the problem, but the question is this: at a time when people feel more insecure than ever, will they just heap further insecurity on them, or will they act to do something about the situation? What have the Government done? First, we have their failed economic plan. Thanks to the policies they have pursued, unemployment and underemployment remain stubbornly high, with almost 2.5 million people still out of work, including, tragically, almost 1 million young people. I do not think that that is cause for celebration. It is welcome that growth has returned, but for all the talk of rebalancing, in the fourth year of the Government, that rebalancing looks as elusive as ever. We just have to look at the statistics that came out this morning. In today’s employment figures, of course it was good to see unemployment fall in parts of our country, but in many regions—London, the north-west, the east midlands and the south-west—it increased.
Mr Umunna
I will give way shortly.
Secondly, what are the Government doing to the protections for working people in the workplace? They are watering them down left, right and centre. They have increased from one to two years the length of service required before someone can enforce their right not to be treated unfairly at work and they have introduced employment tribunal fees of £1,200. The Minister for Skills and Enterprise described that as a moderate charge, but for low-income workers it is the equivalent of several weeks’ pay. The Government have also reduced the consultation period for collective redundancy. I could go on.
Thirdly, what have the Government done on zero-hours contracts? They have done little, if anything at all. Has a full consultation and call for evidence been issued? No. To date, there has been none, despite promises at the Liberal Democrat conference by the Secretary of State to do so. Has the Office for National Statistics been asked to clarify how many of these contracts might be in use, given that research suggests there are far more than in the ONS estimates?
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
indicated assent.
Mr Umunna
I don’t think so, because Ministers keep quoting statistics from the ONS to me, despite its having conceded that there is a real risk that they do not reflect reality.
Have the Government devoted the same energy and time to protecting people from the exploitative use of these contracts as they have to implementing the recommendations of the Prime Minister’s employment law adviser, Adrian Beecroft, for watering down people’s rights at work? No, they have not.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is absolutely right to talk about the insecurity that zero-hours contracts can create, which happens in three ways: by insisting on availability even when there is no work; by requiring workers to work exclusively for one business; and by using zero-hours contracts to erode and water down the basic rights in the workplace of employees who work regular hours. Is that not what we need to clamp down on?
Guy Opperman
The hon. Gentleman was talking about the unemployment figures. Does he accept that in the north-east they have fallen by 17,000 since February this year and are now lower than when we came into office in May 2010, and that youth unemployment is down since February by 7,000, from 12% to 9.2%? Is that not evidence that things are changing for the better?
Mr Umunna
I do not deny that it is welcome to see anybody who is out of work getting into work, but as my hon. Friend the Member for Wirral South (Alison McGovern) put it, the question is: what is the nature of that work?
In fairness to the Secretary of State, I think he wants to act. I know, for example, that he has hit out at people in his Government who want to slash away employment protections, describing them as “head bangers” who see liberalising the labour market as “an aphrodisiac”. Who on earth could he be referring to? I suspect that he is prevented from acting by the Minister of State, the right hon. Member for Sevenoaks (Michael Fallon)—who is sitting next to him—who has described his boss as “slipping his electronic tag” for daring to speak about the need for a more responsible capitalism, which I would argue includes companies treating their workers fairly. In any case, the Secretary of State has allowed what has happened to go on and has therefore been complicit in watering down people’s rights at work in the way I have described.
Where this Government have failed, we will act. To pick up on the point made earlier, there are few firm data on the extent of the use of zero-hours contracts, partly because many people do not realise that they are on them. However, over the summer months, the Office for National Statistics produced revised figures, putting the number at more than 250,000. That is likely to be a severe underestimate, given that others have estimated that more than 300,000 employees in the care sector alone are now on such contracts. Consequently, I, along with my hon. Friend the Member for Corby (Andy Sawford), who has campaigned hard on this issue, wrote to the chair of the UK Statistics Authority asking whether the ONS would clarify the data and publish new figures in the light of the evidence that has arisen. He said that the ONS was reviewing the way it collects the data and looking at whether it can include the data collected by organisations such as the CIPD. However, finding out how many of these contracts are in use is one thing; looking at how they are used is another.
Bob Stewart (Beckenham) (Con)
I do not like zero-hours contracts because of the insecurity they create for people, and we should have planning, but they are a fact of life. Somehow or other, this House and all of us have to find a way to reduce them. There are still six Labour-controlled councils in London using zero-hours contracts, and we have to try to stop it. It is not easy: I like to see people employed, but I also like people to have some security in their lives, and zero-hours contracts sometimes do not give that.
Steve Rotheram (Liverpool, Walton) (Lab)
My constituency has the 10th highest unemployment in the country. In the main, the people who come to my surgeries would prefer to be on full-time contracts rather than zero-hours contracts, which they are all too often forced into. Does my hon. Friend agree that we must try to stop unscrupulous employers taking advantage of those who are less able to support themselves because of their personal circumstances?
Mr Umunna
I completely agree with my hon. Friend, who, as it happens, intervenes just as I was about to talk about Merseyside. I was talking about collecting data on the number of zero-hours contracts being one thing and the evidence about their use being another. He will know that our hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Wirral South and our right hon. Friend the Member for Knowsley (Mr Howarth) produced an excellent report in June detailing the use of zero-hours contracts in the Liverpool area. In that report they told the story of a care worker, whom I have subsequently met and spoken to myself, as I mentioned earlier. She told me that she had to be available to visit clients at their homes at least six days a week, including evenings. Her rota could change in a flash. If visits were cancelled at late notice, she would often not be paid. If visits were added at the last minute, she would have to manage her child care commitments as she best could—a point raised by my hon. Friend the Member for Vale of Clwyd (Chris Ruane). That is the reality of life for people under these contracts.
In July, my hon. Friend the Member for Sunderland Central (Julie Elliott) held a Westminster Hall debate on this issue. Seventeen Opposition Members contributed to that debate, giving further testimony about people’s experiences on such contracts. In fact, my hon. Friend the Member for North Tyneside (Mrs Glindon)—I do not know whether she is here today—talked about how she had been employed on a zero-hours contract for two years in the retail sector. I note that not one Government Back Bencher spoke in that debate—save for the hon. Member for Mid Bedfordshire (Nadine Dorries), who was chairing it—but it is good to see a few more Government Members here today.
Lisa Nandy (Wigan) (Lab)
I was one of the Members who spoke in that debate. I raised the case of my constituent who had to leave her children locked in a car while she undertook home visits that were given to her at short notice under threat of not getting any work in future. In response to that debate, the Under-Secretary of State said that that was clearly “not right”, but since then we have seen absolutely nothing from the Government on how they will protect constituents such as mine and others, to whom my hon. Friend has referred. Does he agree that that is an absolute disgrace?
Mr Umunna
I do agree, and I read my hon. Friend’s speech from that debate. She talked about what the Government are doing. The Secretary of State said he was carrying out an informal review, but given that that consisted of just three officials spending part of their time “speaking informally” with stakeholders—as he told me in answer to a parliamentary question that I tabled on this issue—that is clearly insufficient. Therefore, in August, I and the shadow employment relations Minister, my hon. Friend the Member for Edinburgh South (Ian Murray), formally convened a summit, involving more than 20 different organisations representing employers, employees, legal experts and people employed on zero-hours contracts, to hear evidence and consider what action should be taken to clamp down on their exploitative use.
Two things arose from the evidence we heard and the consultations we have been carrying out. The consensus across all stakeholders and groups was that the exploitative use of such contracts is a problem—everybody agreed with that—particularly in the care sector. Those looking after some of the country’s most vulnerable people are themselves vulnerable under these contracts. Given that it is important for those whom they are looking after to have stable and continuous care from people with whom they are familiar, I cannot see how that state of affairs can have anything other than a detrimental effect on the quality of care received.
That state of affairs creates issues for many local authorities because of the way in which social care services are commissioned. Many of them will tell us that it is helping to drive the use of zero-hours contracts in the care sector. They say—some would say that this is not an excuse, but an explanation—that they are left with no option but to commission in that way because of the huge funding cuts they have been subjected to under this Government. I understand the challenges that local authorities face—I think we all do—but I urge them to follow the example of Southwark council, which is working with providers to eliminate the use of zero-hours contracts, particularly in the care sector.
Simon Hughes
The hon. Gentleman is being generous with his time, and I am grateful to him for giving way on that point, which is directly relevant. He said he would come back to whether there were statistics on the incidence of this form of employment before 2010. To reinforce the point he is making, to my knowledge, the care sector has used zero-hours contracts for many years, under the Labour Government and this Government, and under local authorities of all political colours contracting services. There are real abuses, and if we can reach consensus, without partisanship, that one of the sectors in which we need to address them most urgently is the care sector, that will be a great service to some of the lowest-paid people doing the most difficult face-to-face jobs.
Mr Umunna
I think the right hon. Gentleman will agree that what Southwark is doing is a good thing. I note that he is agreeing with me.
The Office for National Statistics suggests that the numbers under the previous Government were around 140,000 across all sectors, although I acknowledge that the way it has collected those data has been somewhat faulty, in part because it relies heavily on people understanding what their contractual situation is. It is fair to say, however, that there has been a significant proliferation of zero-hours contracts over the past few years. The right hon. Gentleman talked about the care sector. The use of these contracts in that sector might have been a niche arrangement before, but it is certainly now becoming the rule. That is what we need to act on.
I do not believe that there is consensus on advocating an outright ban on these arrangements. There are people who want them, and there are employers who use them responsibly, but, as I said to the hon. Member for Beckenham (Bob Stewart), the key is to outlaw them where they are exploiting people. In doing that, we need to acknowledge the people who are doing the right thing as well as draw attention to those who are doing the wrong thing.
We should also acknowledge the need for this House to get its own house in order in respect of the use of zero-hours contracts. We know that there are people who look after us here and help us to do our jobs here who are engaged on those contracts. That is unacceptable. We should be setting an example. I know that this is being looked into at the moment, but we have not yet had a clear commitment from the House authorities not to use such contracts. I think that everyone would agree that we want to see their use in the House stamped out.
Mr Redwood
I want my constituents to have well paid, decent jobs, and I have a lot of sympathy with those who do not wish to see exploitative contracts. Will the shadow Secretary of State say a little more about how he would define an exploitative contract, and whether there is more we could do by way of leadership? He is an influential and talented man. Surely there is more that he could do with Labour councils and trade unions, just as those on the Government Benches can do more with the Government.
Mr Umunna
One of my colleagues has just said to me that being praised by the right hon. Gentleman will spell the end of my career. People will point to examples of Labour-controlled local authorities, but we do not care who is using these contracts. We simply do not want them to be used exploitatively, and I will explain how we can stop that happening.
Chris Ruane
My hon. Friend has mentioned the use of zero-hours contracts in the Palace of Westminster. I have contacted the Speaker about this matter, and I commend him for his positive response. The problem also exists across the way in Lambeth palace, and I have tabled parliamentary questions to the Church Commissioners about it. The number of zero-hours contracts in Lambeth palace has gone up from five in 2008 to 34 today. Their proliferation is rampant around the country. The problem is out there, and without proper monitoring it will continue to progress. I congratulate my hon. Friend the shadow Secretary of State on securing this debate, which is shining a torch into those dark places and establishing that this is a big political issue that affects millions of poor people out there.
Mr Umunna
I completely agree with my hon. Friend.
In answer to the question of how we should deal with the problem, our motion proposes four measures that we hope the Government can support or, at least, commit to properly consult on. First, we would ban employers from insisting that zero-hours workers be available to work—be on call, effectively—even when there was no guarantee of work to give them. Secondly, we would stop zero-hours contracts that required workers to work exclusively for that employer. The Secretary of State has talked about that aspect of the matter before. Thirdly, we would prevent the misuse of such contracts when employees were, in practice, regularly working a number of hours a week. We would ensure that they became entitled to a contract that reflected the reality of their regular hours. Finally, alongside those measures, we would introduce a code of practice for the use of the contracts that would ensure, for example, that an employee recruited on a zero-hours contract would know that those were their terms of employment. We have announced the appointment of the former head of human resources at Morrisons, Norman Pickavance, to lead an independent consultation on how we could best implement those measures.
In conclusion, I want to say something about where this will fit with the future of our economy. We need to reform our economy so that it is fit for purpose, and so that it delivers better and fairer outcomes for people. We consistently hear from some people that the best way to do that is further to liberalise our labour market, which is already the third most liberal labour market in the OECD. That is why they recoil from taking action on exploitative zero-hours contracts, but that approach amounts to a global race to the bottom in which we seek to compete with China, India and the other emerging economies by screwing down the pay and terms and conditions of working people in the name of growth.
That is not the way in which we should be competing, because it will not deliver better outcomes for the people we represent. We will deliver better outcomes for them, ultimately, by growing those industries that can provide more of the better paid, secure jobs that they want. Of course that means promoting innovation and ensuring that our people have the skills to do those jobs. That is why I am always banging on about the need for an industrial strategy. We must act to protect those who continue to work in low-income, insecure jobs in the less internationally competitive sectors. Heaping insecurity on them is not the right thing to do.
Mr Umunna
No, I will wrap up now as I want to give others time to speak in the debate.
In short, we on the Labour Benches do not think that any old job will do. We aspire to full employment, and to secure and decent work that pays a wage that people can live on. That is our ambition for this country, which is why I hope that Members on both sides of the House will support our motion today.
Vince Cable
The hon. Gentleman is absolutely right, and that is why a rush to ban certain forms of general practice could have serious negative unintended consequences. That is not to say that we should not do something, but a commitment to ban without having obtained the evidence would be highly premature.
Mr Umunna
First, of course people will not want to complain about being on such contracts, because they worry whether they will get the hours of work if they do so. Secondly, the evidence suggests that such contracts were not used during our time in government to the same extent as they are being used now. That is why action was not taken. The right hon. Gentleman said he would do something about the issue back in June. Why was a consultation not started then? Why has he waited until October?
Vince Cable
After years of waiting and a long discussion about the technicalities, the idea that we are somehow failing in our duty because we did not rush to act within weeks or months is utterly absurd. We are taking action. A proper consultation will be launched, we hope, in mid-November. On the back of that, all the organisations that have not yet had an opportunity to make representations to me can do so, and we can proceed to the appropriate action.