Visible Religious Symbols: European Court Ruling

Chuka Umunna Excerpts

Wednesday 15th March 2017 Commons Chamber

[Caroline Dinenage]

Yes, that is really important, and my hon. Friend is absolutely right to point it out. The Government are working so hard to tackle the barriers faced by different black and minority ethnic groups. We are engaging Muslim communities through a number of faith and integration projects; we are developing a new English language offer that will be targeted at Muslim women but available to other groups; and we are trialling new and innovative ways for Jobcentre Plus to engage with and tailor their services to BME communities. I hate to think that all the good work we are doing to build trust and faith in communities would ever be undermined.

[Mr Chuka Umunna (Streatham) (Lab)]

I do not like this word “tolerate.” In this country, we do not tolerate people; we respect and embrace all cultures. Despite that, we know that Islamophobia is not only widespread but rampant. As a solicitor, for the best part of a decade I advised employees and employers on employment law. My worry is that those who read the reports on the CJEU decision will see it as a green light to engage in further discrimination in the workplace. What specifically will the Government do to ensure that employers do not take from the judgments the idea that they can carry on discriminating, particularly against Muslim women, who are more likely to be discriminated against in the workplace than many other groups?

[Caroline Dinenage]

As I have already made clear, we are working closely with the Equality and Human Rights Commission to update guidance for employers on dealing with religion or belief in the workplace. Nevertheless, we will continue to revise the guidance so that it takes account of the judgment. We want to be absolutely clear to all concerned that the Equality Act remains unchanged, as do the rights of women and religious employees, which we will continue to protect.

National Minimum Wage: Sports Direct

Chuka Umunna Excerpts

Monday 14th December 2015 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

(Urgent Question): To ask the relevant Minister if he will make a statement on Sports Direct plc and its compliance with the national minimum wage legislation.

[Mr Speaker]

I call the relevant Minister, Mr Nicholas Edward Coleridge Boles.

[The Minister for Skills (Nick Boles)]

Thank you, Mr Speaker.

I share the hon. Gentleman’s concern that working people are paid the full amount that the law requires for every hour that they work, and I welcome his urgent question. We take the enforcement of minimum wage laws very seriously. That is why we have increased the enforcement budget from £8.1 million in 2010 to £13.2 million in 2015-16. While I am not able to comment on enforcement action in relation to individual employers, I can assure the House that Her Majesty’s Revenue and Customs follows up every complaint it receives in relation to breaches of the national minimum wage. I encourage any employer or worker who is concerned that these laws are not being complied with in their workplace to contact HMRC or ACAS, through its confidential hotline. HMRC undertakes targeted enforcement activity in the most high-risk sectors of the economy.

As the Prime Minister announced in September, the Government are taking a number of further steps to crack down on employers who are not paying workers the minimum wage. We have already increased the penalty for breaches of minimum wage legislation to 100% of arrears, up to £20,000 per worker, and from April 2016 the Government will double the maximum penalty from 100% to 200% of arrears so that employers comply with the law and working people receive the money they are due. Furthermore, a new team of compliance officers will be established within HMRC to investigate the most serious cases of employers not paying the relevant minimum wage. The team will have the power to use all available sanctions, including penalties and criminal investigation. We will also continue to name and shame employers who do not pay their workers what they are entitled to.

As a Government, our message to employers is straightforward. We will work to reduce burdens on business by cutting regulation and corporation tax. In return, we expect employers to pay working people at least a decent legal minimum—the national minimum wage and, from next April, the national living wage for workers aged 25 and over. I can assure the House that we will not hesitate to crack down hard on employers, large and small, who break this social contract by failing to pay the wage that the law requires.

[Mr Umunna]

I thank the Minister for his reply. I am proud that the last Labour Government, in the face of the then Conservative Opposition, introduced the national minimum wage in the first place, when people in our country were earning as little as £1 an hour. I am also proud —the Minister mentioned this—that the overwhelming majority of British businesses, notwithstanding any legal requirements, seek to treat their workers with dignity and respect.

We know enough about the practices at Sports Direct plc, which has a branch in my constituency, to conclude that this company is a bad advert for British business and one with a culture of fear in the workplace, which we would not wish to see repeated elsewhere. As the Institute of Directors has said, it is

“a scar on British business.”

I appreciate what the Minister said about not necessarily being able to respond in specific instances, but may I ask him this question? HMRC enforces the national minimum wage. A complaint has been made by Unite the union, of which I am a member, against Sports Direct, accusing it of being in breach of the legislation. HMRC says it cannot act without evidence being provided by workers in that workplace, but, of course, all of them are refusing to come forward in the warehouses concerned, for fear of the repercussions that will follow. Why cannot HMRC go ahead and carry out an investigation in this case, which surely will render other evidence without workers being required to put their necks on the line?

Secondly, may I ask the Minister a generic question? An issue has come up whereby employees are required to go through body searches to check for potential theft. The time they spend going through body searches is not time for which they are paid. The law is unclear in this area. Can the Minister give industry an indication of whether, in the Government’s view, time spent going through body searches would count as working time for the purposes of the legislation?

Thirdly, employees face having 15 minutes of working time deducted if they clock-in just one minute late. The law is not entirely clear about that situation, either. Do the Government believe that if an employer is engaged in those kinds of practices, they are not in keeping with the spirit of the legislation?

Fourthly, the enforcement of national minimum wage legislation is carried out not by the Minister’s Department, but by HMRC. How can we expect HMRC to do the work that we require of it if the Government are pushing through an 18% real-terms cut in HMRC’s funding over the course of the spending review period?

Finally, I have no doubt that the reaction of the employer concerned will be to say, “We comply with the law,” but surely what it needs to understand is that the British public expect a lot more from it. We often do not do things that the law allows us to do, because we do not think that that is the right way to treat our fellow citizens. Surely that should apply to the company in this case.

[Nick Boles]

The hon. Gentleman asked a series of very important and good questions. The first point I would like to make is that, if any employee of any company has any fear of repercussions, I can reassure them that the ACAS hotline is genuinely confidential. I am sure the hon. Gentleman would be willing to endorse the fact that ACAS is an absolutely, resolutely independent organisation, so people should have no fear of calling that hotline out of hours and reporting a practice.

I did say in my brief response that HMRC enforcement is entitled to conduct targeted enforcement activity in sectors of concern, so it is entirely open to HMRC to investigate proactively in sectors where it feels that breaches may be in evidence. In that sense, it does not necessarily need to wait for a specific complaint to be able to investigate breaches.

I have read the article that revealed some of the allegations being made about Sports Direct. The hon. Gentleman asked about the search and whether the time it takes is working time or not. This is an intensely vexed legal question and he will know, as a former employment law practitioner, how much of his former colleagues’ time it is taking up. I cannot give an absolute pronouncement, but what I can say is that anything that counts as work as part of somebody’s employment contract must be compensated at least at the level of minimum wage. The question is whether such a search counts as work under their employment contract, and that question can be explored legally.

The hon. Gentleman mentioned the second claim that was made—about employees being docked 15 minutes for being one minute late. Although it is legally permissible for time to be docked for late arrival, it is important for every hon. Member to understand that the minimum wage legislation will apply to the 14 minutes as well as to the rest of the time that people work, so employees cannot not be compensated for those 14 minutes if that would bring their overall wage rate down below the national minimum wage. I hope that that goes some way to reassure him.

The hon. Gentleman made a general point about the cut in funding for HMRC of 18% over the spending review period. I will have to take his word for it because I do not have the global figures to hand. I pointed out to him the very significant and dedicated increase in funding for the minimum wage enforcement team. It has gone up by more than 50% since 2010 and will go up £3 million this year alone. I can therefore reassure him that, whatever else is going on in HMRC, this is a priority in which we are investing and on which we will beef up activity.

The hon. Gentleman is absolutely right to make the general point that obeying the law is the minimum we expect of employers. We expect employers to behave responsibly and to be good citizens. We hope they would not be satisfied with just obeying the law, but would want to go a great deal further, and in a sense, our expectations about the behaviour of large and profitable employers are even greater than those for others.

Oral Answers to Questions

Chuka Umunna Excerpts

Tuesday 30th June 2015 Commons Chamber

[Sajid Javid]

I fully agree with my hon. Friend. We will continue to work very hard to cut regulations, building on the very successful red tape challenge in the previous Parliament and the policy of one in, two out. Cutting regulation for businesses is like a tax cut for those businesses. The only difference is that it does not cost the Exchequer anything, so we should cut as much regulation as possible.

[Mr Chuka Umunna (Streatham) (Lab)]

Britain has the worst productivity in the G7, bar Japan. Proper adult skills provision, not just apprenticeships, plays a vital role in addressing that, but the adult skills budget has been cut by 35% in the past five years. Now the Chancellor tells us that a further £450 million is to be taken out of the Department’s budget, which could lead to the end of further education as we know it. In the light of these very real concerns, what assessment has the Business Secretary undertaken on the risks posed for the sector? Will he now guarantee that no college will close as a result of what he and the Chancellor are going to do?

[Sajid Javid]

One of the most important things for businesses, and for a vibrant economy, is making sure we continue to deal with the record budget deficit we inherited from the previous Labour Government. The hon. Gentleman knows that himself. He has been busy telling the press very recently:

“to be running a deficit in 2007, after 15 years of economic growth, was…a mistake.”

He understands the importance of this, and it means the Government have to make difficult decisions. He also said very recently to the Financial Times that

“We are starting from square one.”

I think he was talking about the economic credibility of the Labour party. I do not think that was an accurate statement; I think he was—

[Mr Speaker]

Order. The Front-Bench exchanges have to be brief. A lot of Back Benchers want to get in. It is very self-indulgent to have these long-winded exchanges from the Front Bench.

[Mr Umunna]

When consolidating, you have to make appropriate choices—you do not want to cut off your nose to spite your face. If we want to increase revenue, we need to increase productivity. Look at South Gloucestershire and Stroud College, which the Secretary of State attended: this month it confirmed that 70 staff posts are in danger due to the reduction in its adult learning funding. The principal of that college said:

“we need to reduce our costs in line with the reduction in funding to maintain our solvency.”

Should the alarm bells not be ringing when his own college is citing issues of solvency before we have seen the full scale of what he is going to do to the productive capacity of the economy?

[Sajid Javid]

It was an excellent college—[Hon. Members: “Was!”] And it still is. I know many people who attend the college and they speak of it very highly. The important point is that all colleges, not just that college, have the resources they need to do their jobs. We will not put that at risk, especially as they continue to invest in apprenticeships, which are one of the surest ways to give people the training they want and to ensure they have skills that are wanted in the marketplace.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 26th March 2015 Commons Chamber

[The Minister for Business and Enterprise (Matthew Hancock)]

I do agree with my hon. Friend and I pay tribute to him for his steadfast work in promoting manufacturing. On that subject, I can also announce to the House that we will make a £62 million investment today in ultra-low emission taxis, including support for roll-out by local authorities of charging stations. As a result, instead of being moved to China, production of the next generation London black cab is being secured for Britain in Ansty, with a £250 million investment by Geely in the London Taxi Company creating 1,000 new jobs and apprenticeships.

[Mr Chuka Umunna (Streatham) (Lab)]

This is indeed the last departmental questions of this Parliament and, Mr Speaker, it has been good to see you in your place at all of them. I have enjoyed my exchanges with the Secretary of State and note that during his time no fewer than nine Conservative minders have been sent to ensure, as his former deputy, the Defence Secretary, has intimated, that he does not slip his electronic tag. In all seriousness, despite all the efforts to promote certainty for business, does he agree that the biggest uncertainty facing business in this country is his Tory Prime Minister’s decision to flirt with EU exit and that the biggest mistake for his party would be to go along with it?

[Vince Cable]

I thank the hon. Gentleman for his courteous question on the last day of this Parliament and, for once, I agree with him. It would indeed be disastrous if we were to leave the European Union. There would be a prolonged hiatus before the referendum was held and many options could follow it, all of which would be very damaging for employment in this country. I and my party will certainly not go along with that.

[Mr Umunna]

I know that the Secretary of State does not think that his party’s former president and current foreign affairs chief, the hon. Member for Westmorland and Lonsdale (Tim Farron), has much credibility, but I think that that hon. Gentleman was right to say that an in/out referendum at the arbitrary date of 2017 would

“damage the national interest, compromise our negotiating position and be bad for the economy and jobs”.

Both the hon. Gentleman and the Business Secretary fear that their leader will once again sell out his principles, this time on the EU, and they are worried about our future membership. There are many other reasons to do so, but is not the truth that the best and only way to clear up this uncertainty for business and the country is to vote Labour in 42 days?

[Vince Cable]

I have a longer memory than the hon. Gentleman; I first became involved in debates on the European Union in the mid-1970s, when I was campaigning in favour and the Labour party was against it. I am glad that it has finally seen the light, but my party has been consistent throughout.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 12th February 2015 Commons Chamber

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

Yes, that is the case. I should make it absolutely clear that the non-paper that we have submitted to the European Commission represents a vision for the digital single market. It is our firm belief that consumers should be able to access content in a fair and reasonable way wherever they are, but we do support the right of industries with internet protocol to sell territorial licensing.

[Mr Chuka Umunna (Streatham) (Lab)]

Following their “Maoist and chaotic” abolition of regional development agencies—the Business Secretary’s words not mine—the Government’s flagship regional growth policy this Parliament has been the regional growth fund, which was mentioned earlier. This might be our last Business, Innovations and Skills questions this Parliament, so can the Secretary of State tell me what percentage of those RGF moneys, announced to great fanfare, have actually made it to, and been drawn down by, the businesses concerned?

[Vince Cable]

I am going off later today to talk about the regional growth fund and its latest successes. Most companies that have received RGF awards are highly appreciative of them. The awards have been highly successful in attracting private investment, which might not otherwise have occurred, and a substantial amount of employment. Of course a significant percentage does not go through immediately because of due diligence. Many of the awards are not completed because the projects proceed anyway or are withdrawn, and that is a consequence of the very careful and prudential way in which we manage money under the regional growth fund.

[Mr Umunna]

The fact is that hundreds of millions of pounds of RGF moneys are gathering dust and are nowhere to be seen by many of the businesses that they promised to help. The local enterprise partnerships that were put in place to do the job of the RDAs were left without appropriate budgets or powers, and the local enterprise zones, which we were told would create 54,000 jobs, have so far created less than a quarter of that sum. There has been a lot of grand talk from these Ministers on their plans to rebalance the economy, but as this Parliament comes to an end—never mind the chaos that the Secretary of State talked about—are not the words that best sum up delivery of schemes to boost regional growth, “utter incompetence”?

[Vince Cable]

If the shadow Secretary of State is so critical of the regional growth fund, is he proposing to abolish it? I suspect not. The reason why some money is not spent is that tests of due diligence have not been satisfied. I am sure that he will acknowledge the fact that, under the regional growth fund, public money is spent a lot more efficiently and effectively in drawing in private investment than ever happened under the regional development agencies, which were wasteful and ineffective.

Apprenticeships

Chuka Umunna Excerpts

Wednesday 4th February 2015 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House believes that more high-quality apprenticeships are essential to the future prospects of young people and future success of the economy; notes with concern that the number of 19 to 24-year-olds starting an apprenticeship has fallen by 6,270 in the last year, that 24 per cent of these apprentices are receiving no formal training, and around one in five are not receiving the appropriate minimum wage; calls on the Government to institute a ten-year national goal to grow the number of apprenticeships for young people and boost the standing and value of technical and vocational education so that the same number of young people that go to university undertake a high-quality apprenticeship; and further calls on the Government to use the money it already spends on procurement to require suppliers for large Government contracts to offer new apprenticeship opportunities, safeguard apprenticeship quality with new standards so that all apprenticeships are at at least level three and last a minimum of two years, ensure Government plays its part by creating thousands more apprenticeships in the civil service, give city and country regions a role by devolving money for adult skills and give a central role to business through sector bodies to drive up standards and increase apprenticeship places.

I note what you have said about time, Madam Deputy Speaker. I shall try not to drone on for too long.

I want to put this debate in context. It is not simply a debate on apprenticeships. The issue of apprenticeships is central to a wider debate about our economy and whether it is fit for purpose. The changing nature of the world is full of opportunity for Britain. Technology is transforming the way we live. New emerging economies with ballooning middle classes are providing a mass of opportunity for our businesses, but these forces of change are also bringing challenges: how do we deliver the goods for our people when the uncertainty which follows from all this creates insecurity for many?

As I have said before, the answer is to shape these forces of change and do all we can to ensure that everyone can access the opportunities available—in short, to ensure that everyone is connected to the new global economy and has a stake in the future. That requires an economy producing good, decent jobs that are fulfilling, afford a level of dignity, respect and security, and, above all, pay a wage that people can live off. Sadly, that vision is but a dream for too many in Britain today. Under the current Government, average wages have fallen by £1,600 a year on average. They have fallen by more than £3,200 in my constituency. Almost 5 million people are not earning a wage that they can live off. We are seeing rising insecurity, with 1.4 million zero-hour contracts. There are 3.5 million people in work who say they want extra hours.

As a result of all this, our fiscal deficit remains stubbornly high at £91 billion. The Office for Budget Responsibility was clear in its autumn outlook published with the autumn statement that the Government have failed to meet their two fiscal mandates in this Parliament because stagnating wages have led to a fall in national insurance and income tax receipts. However, the living standards crisis that I refer to and the persistence of the deficit are symptoms of a bigger problem: the failure of Government to help raise productivity across our economy.

Sure, Britain leads in aerospace, the automotive industry, business services, chemicals, the creative and digital industries, food, green tech and pharmaceuticals, among other industries. We should celebrate the success in these sectors, but across the economy overall, the gap between UK productivity per hour worked and the rest of the G7 grew to 17% in 2013, the largest difference since 1992. So on average it now takes a British worker until the end of Friday to produce what a German or French worker has finished before they clock off on Thursday.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I am sure the hon. Gentleman will want to remark on the success in my constituency under this Government, with apprenticeships doubling to 1,500 a year. It is not just a matter of problems; it is also a matter of dealing with success. In many parts of the country where there is high growth and unemployment is falling—in Huntingdon it has fallen to 1%— we need better training so that employers can invest in their staff to deal with the lack of skills that exists as our economy improves.

[Mr Umunna]

I agree that quality is important, but apprenticeships in the hon. Gentleman’s constituency have fallen by 11%. Many apprenticeships are not the high-quality apprenticeships that I think he refers to. Many of them are level 2.

There has been much debate in economic circles as to why we have gone backwards on productivity so fast under this Government. People have pointed to the lack of business investment, which is compounded by the problems that businesses have faced in getting access to finance, but skills shortages in our economy are also holding Britain back. Too many young people in particular do not have the skills our businesses require when they leave secondary education, and even among those who do have skills and qualifications, there is a mismatch between their skills and the demand for technician-level competency, particularly for jobs requiring people with science, technology, engineering and maths skills—the STEM skills.

To address this we need a major expansion of high-quality vocational and technical education, in particular apprenticeships for young people, offering more and better work-and-train opportunities in all sectors of the economy, giving them those skills which employers say are lacking.

[Jake Berry (Rossendale and Darwen) (Con)]

On the number of apprenticeship starts in the hon. Gentleman’s constituency, will he comment on the fact that in 2010 340 people started apprenticeships and last year 880 people started them. Why does he think the number of apprenticeships has doubled in his constituency?

--- Later in debate ---

[Mr Umunna]

I will explain the numbers shortly. The number of young people on apprenticeships in my constituency has fallen by 18%, and in the hon. Gentleman’s constituency the number of apprenticeships overall has fallen by 18%.

[Richard Graham (Gloucester) (Con)]

rose—

[Andrew Gwynne (Denton and Reddish) (Lab)]

rose—

[Mr Umunna]

I will give way to—

[Mr Djanogly]

On a point of order, Madam Deputy Speaker. The hon. Gentleman said that the number of apprenticeships in my constituency had fallen, but I am looking at the House of Commons published figures—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Mr Djanogly, you are continuing the debate; that is not a point of order for the Chair. We are pressed for time, and we need to make sure we hear the opening speeches from both sides and have the debate. You have not indicated that you want to speak, whereas others have. We need to get on to the debate, so I call Chuka Umunna.

[Mr Umunna]

I was going to give way to the hon. Member for Gloucester (Richard Graham), before giving way to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne).

[Richard Graham]

I seek the hon. Gentleman’s thoughts on three quick points—

[Richard Graham]

Thank you, Madam Deputy Speaker. My one point is simply to ask the shadow Business Secretary whether he has considered what the impact of 2 million apprentices is on the wages of the lower earners, and whether it is not natural that a substantial increase in the number of apprenticeships will lead to more people not earning quite as much as they will in the future when they are better trained.

[Mr Umunna]

I thank the hon. Gentleman for his one intervention. I will come on to deal with pay and the 2 million figure he gives, but first I will give way to my hon. Friend.

[Andrew Gwynne]

May I thank my hon. Friend for the support that he and the Labour Front-Bench team gave to my private Member’s Bill in the previous Session? The Government talked it out, and does he not think that that was a wasted opportunity, because for every £1 million of capital investment in public procurement, we could have secured an additional apprenticeship?

[Mr Umunna]

My hon. Friend is absolutely right about that. I congratulated him at the time on his Bill, and we should continue to remind this House of the efforts that were made then and the wasted opportunity to which he refers. The reason he introduced that Bill was clearly because he read the OECD’s review of vocational education and training, which found that few countries achieve strong engagement in vocational education and training without a strong apprenticeship system. Now, that will not automatically happen on its own. Government must play an active role, not in a top-down, command-control fashion, but by using their convening power in an enterprising, entrepreneurial way, working in partnership with business to address the problem and to increase productivity. Before I explain how we aim to achieve that and consider what the Government have done during this Parliament, when I will touch on that 2 million figure, I want to say something about our record, because I am sure it will be referred to.

I accept that when Labour left office there was an outstanding need to increase the number and improve the quality of apprenticeships in our country, but before Government Members get too excited, I should say that it would be wrong to claim we did not make any progress. In government, we more than quadrupled the number of apprenticeship starts from a woeful 65,000 under the previous Major Government in 1996-1997 to 280,000 starts in our final year in office. Apprenticeships were simply not on the radar when we entered office; they were very much on the radar when we left office. We used the weight of government to begin the culture change we need. So from the 2012 Olympics to Building Schools for the Future projects up and down the country, we linked the creation of apprenticeships to public procurement across a number of Departments. We set up a dedicated National Apprenticeship Service to support and expand apprenticeships. I speak to many young people who tell me that they were signposted to the apprenticeship they are now doing by visiting the service’s website. Of course, it was also Labour in government that established national apprenticeship week in 2008, and the week is now an annual event in the national calendar. I am proud of our record. I am proud that this Labour party rescued apprenticeships from the scrapheap.



The current Government have sought to build on the foundations we put in place. They say that since we left office they have overseen the creation of 2 million new apprenticeship starts, and the hon. Member for Gloucester referred to those. I do not think there is any point boasting about numbers if the apprenticeships are not of sufficient quality. I will come to that in a moment, but first let us look at their claimed numbers. How many of the 2 million apprenticeships are really new apprenticeships and how many have emerged as a result of rebadging—in other words, re-labelling existing work a person is already doing in the workplace as an apprenticeship? A very large proportion of additional apprenticeship places created by this Government have come in the post-25 age brackets. The largest percentage rise in apprenticeships under this Government has actually been among the over-60s, where the increase has been 520%. According to the 2014 apprenticeship pay survey, 93% of adult apprentices already worked for their existing employer before starting their apprenticeship. That would suggest that many existing training schemes, such as those delivered under the old Train to Gain programme, have simply been rebadged and re-labelled as apprenticeships.

That is the situation on apprenticeships for adults. The shortage is perhaps most acute among young people, so what is happening to apprenticeship starts there? The number of 19 to 24-year-olds starting an apprenticeship has fallen by more than 6,000 in the past year. In fact, the number of 19 to 24 apprenticeship starts is currently falling in every single region outside London. Overall, the share of apprentices who are under 25 has fallen from 84% in 2009-10 to 64%, and the share of apprentices who are under 19 has fallen from 43% in the last year of the Labour Government to 28% under this one. So the simple fact is this: for all the boasts, there has been some jiggery-pokery with the numbers. The bottom line is that we need many more apprenticeships and we need to raise employer demand for them. Half our large employers do not offer any apprenticeships at all in Britain today—that is totally unacceptable. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), the shadow skills Minister, has said previously, when it is harder to get an apprenticeship with Jaguar Land Rover than it is to get into an Oxford college, it is pretty obvious that more needs to be done.

The numbers are one thing, but I said that I would say something about quality. In most other northern European countries apprenticeships are level 3 qualifications lasting between two and five years, and they include at least one day a week of off-the-job learning, as well as significant on-the-job training. In England, most of the growth of apprenticeships in recent years has been at a level that would simply not be recognised in those countries. Just 35% of our apprenticeships are at level 3 or above, and just 2% are at level 4. In fact, according to the Department’s own figures, published in its apprenticeship pay survey, one in five apprentices does not even receive any formal training at the moment. The figure increases to almost a quarter of those in the 19 to 24 age bracket, who are not being properly trained. If we truly want to ensure more parity of esteem between the academic and the non-academic—between the way people view university degrees and the way they view these types of vocational and technical qualifications—how can we hope to do that when they are not of sufficiently good quality? We have got to raise standards. Even where apprentices are receiving training, far too many of them are still not receiving the appropriate minimum wage—15% are paid below the appropriate national minimum wage, with the figure rising to 20% for 19 to 20-year-olds.

I will come on to address how we intend to encourage more private sector employers to provide more and better quality apprenticeships appropriate to their needs, but surely government, as one of the biggest employers in the country, should be setting an example, both in recruiting as many apprentices as possible and in providing good-quality apprenticeships. The civil service apprenticeship scheme hired just 200 apprentices in 2014. That is 200 out of more than 400,000 civil servants, which is just not good enough. Never mind the Departments themselves, Government should be doing more in this area. They should use their clout as a procurer of goods and services to get more employers in the private sector to provide apprenticeships.

Our Labour colleagues in local government have already been leading the way in utilising procurement to boost apprenticeship numbers. Newham, Knowsley, Sheffield and Manchester have all developed strategies to use procurement contracts to create apprenticeship opportunities for young people locally. Central Government should do the same, as those opportunities are simply not happening to the degree and on the scale required.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend makes the point about the importance of using the procurement system and Government money to drive improvement in apprenticeships. Does he agree that we need do that all the way through the supply chain so that smaller businesses, and not just larger ones, can and do take on apprentices?

[Mr Umunna]

We should do everything that we can to encourage all businesses to take on apprenticeships. We need to be mindful of the fact that sometimes that can be a bit more challenging for smaller businesses, and we should think how we can better support them to take on apprentices. It seems to me that, if there were fewer frameworks and more sector-driven apprenticeship frameworks, we could make the system less bureaucratic. But, absolutely, we should do as much as we can to make it easy for businesses to take on apprentices.

[Jake Berry]

On a point of interest, I have recruited an apprentice to work for me in my parliamentary office. When the hon. Gentleman says that we should do all that we can to recruit apprentices, I just wondered whether he has done so himself.

[Mr Umunna]

My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) says that he has. I have not been able to because I am right up to my limit on my staff allowance, but I would very much like to. One challenge in representing an inner-London seat is the amount of casework that is involved, but I would love to take on an apprentice if we could all convince the Independent Parliamentary Standards Authority to provide us with more money to do so.

I have talked about what our record was and what this Government are doing, but what do we plan to do in the future? At the Labour party conference in 2014, my right hon. Friend the Leader of the Opposition outlined our ambitious six national goals for Britain in 2025, which included ensuring that as many school leavers go on to apprenticeships as go to university. That will require a dramatic increase in numbers. To achieve that, we will work in partnership with employers to ensure that apprenticeships are appropriate to their needs, which in turn will boost employer demand for them.

We will give employers, through sector and industry bodies, a greater role, ensuring that courses reflect their skills needs and that rigorous standards are set. The aim is for a skills system that is better aligned to the needs of employers and that delivers a pipeline of talented employees. We will also look to boost take-up by employers locally, which is best done by colleagues in local government working with their businesses locally and by those coming together to form combined authorities. We need to see more of such practice. Just look at the incredible progress that has been made by the Labour-run authority in Leeds under the leadership of Sir Keith Wakefield. The city’s new apprenticeship hub has doubled the number of apprentices in the city, especially among small and medium-sized businesses. Labour colleagues in Plymouth, Bury and Reading are actively engaging with local employers to boost apprenticeship opportunities, too, and we want to see lots more of that.

Alongside such practice, we would use the money that the Government already spend on procurement to require major suppliers on Government contracts to offer new apprenticeships. In that way, we can create thousands of new apprenticeship opportunities. That builds on the successful approach of the previous Labour Government. It is an approach that has been backed by the cross-party Business Innovation and Skills Committee, which has suggested that a minimum of one new apprenticeship place could be created for each £l million spent on public procurement. So a major project such as HS2 could, under Labour’s plans, lead to the creation of as many as 33,000 new apprenticeships.

As I said earlier, quality matters. Under Labour’s plans, all apprenticeships would last a minimum of two years and be level 3 qualifications to safeguard the trusted and historic apprenticeship brand, which has been tarnished in recent years. Those new rigorous standards would ensure that apprenticeships are, once again, a trusted gold standard and address the way they have been downgraded under this Government.

We were attacked for setting high standards by the Deputy Prime Minister in a frankly embarrassing and cack-handed response by him at Deputy Prime Minister’s questions last March. He lambasted us for apparently wanting to halve the numbers of apprenticeships by requiring that all apprenticeships be set at level 3 and last for at least two years. The truth is that we want to rename intermediate apprenticeships to protect the “apprenticeship” brand. Apprenticeships that do not currently meet the criteria will continue but under a different name.

The Deputy Prime Minister also got very excited about the use of the word “deadweight” in the independent report into apprenticeships that was produced for us. Chaired by the Institute of Education’s Professor Chris Husbands, the report recommended that we adopt those criteria. What the Deputy Prime Minister failed to notice when he got himself so excited about the use of the word “deadweight” is that the Business Secretary had published a report in 2012 with the title “Assessing the Deadweight Loss Associated with Public Investment in Further Education and Skills.” Clearly, the sooner the Business Secretary successfully carries out his coup of his party, the better.

[Stephen Lloyd (Eastbourne) (LD)]

Does the hon. Gentleman agree that a key reason for retaining level 1 as an entry for apprenticeships, is that apprenticeships offer an opportunity for lots of young people who do not have the education or the academic skills? If we do not let them in through a level 1, they will not have the opportunity to go up the apprenticeship ladder. That is a profoundly important point.

[Mr Umunna]

I am talking about not doing away with the qualifications of levels 1 and 2, but calling those levels something different and maintaining the badge of quality for apprenticeships by having them at level 3 and above. That will bring us in line with many other European countries.

[Steve Rotheram (Liverpool, Walton) (Lab)]

My hon. Friend is absolutely right about protecting the apprenticeship brand. Level 1 is a pre-apprenticeship entry qualification. Levels 2 and 3 are recognised by the industry. A person cannot go on to a building site with a level 1, but they can with levels 2 and 3.

[Mr Umunna]

I agree with my hon. Friend.

I have already talked about compliance with the national minimum wage. To tackle non-compliance and non-payment, Labour would give local authorities new powers to investigate and enforce the minimum wage. Hopefully, that will reduce the 15% of apprentices—[Interruption.] There will be headlines about how I cannot pronounce the word “apprenticeship”. Perhaps I should go back to school myself, but, to be honest, people mess up my name all the time. But, yes, we should be giving local authorities more of a role in identifying companies that are not complying with the requirements under the national minimum wage regulations.

Finally, we will make it very clear that we expect Departments across Government to provide apprenticeship opportunities. If we are elected in 91 days’ time and I am given a job by Prime Minister Miliband, I will be working with colleagues in the Labour Cabinet to ensure that we increase the number of apprenticeship opportunities across Whitehall.

I am mindful of the time, Madam Deputy Speaker, so I will conclude. I do not think that there is a huge difference in views across the House, but it all comes down to competent, determined delivery of policy across Government. We are determined, across all Government Departments, to do all we can to reform and grow our economy. The provision of more and better quality apprenticeship is a key part of that and will help us to ensure that more people can achieve their aspirations and dreams. It is for that reason that I commend this motion to the House. I am clear that there is only one thing to do this May and that is to vote Labour.

--- Later in debate ---

[Vince Cable]

It is certainly possible, as I think we shall see when we get the 2014-15 figures. I agree with the right hon. Gentleman that we should be investing more in apprenticeships, not less. That is certainly my clear objective. He might not have noticed, but the autumn statement included a commitment to £40 million extra for higher and advanced apprenticeships over the next two financial years, so we have every reason to be optimistic about achieving continued growth.

The figures I have cited, which I do not think are disputed, actually understate the improvement achieved, and for precisely the reason that the shadow Secretary of State emphasised: the necessary shift to longer apprenticeships and higher level apprenticeships. When we came into government, the share of level 1 was above 40% for that age group, and it is now only 10%. We decided in 2012 not to include level 1 within the definition of an apprenticeship. As the hon. Member for Liverpool, Walton (Steve Rotheram) pointed out, that was entry level. We now call those traineeships, so there is progression. It is valuable to have level 1, but we no longer describe it as an apprenticeship. If we take out the very short courses, in particular, which tended to dominate in the earlier period, we see that the number of people in the 19-to-24 age group has actually doubled, because of the preponderance of very short courses in the apprenticeship programmes we inherited.

Let us look at the higher level apprenticeships. For level 3 the number of starts has doubled. For higher—level 4, foundation degree and above—we have seen a tenfold increase since we came into government, from 1,700, which was negligible, to 18,000. There is an important point to make about levels. I think that the hon. Member for Streatham dismissed too easily the value of level 2 apprenticeships.

[Mr Umunna]

indicated dissent.

[Vince Cable]

Well, he seemed to imply that they were not quite apprenticeships. Actually, there is a lot of statistical evidence that people who do a level 2 apprenticeship and no more have significantly higher earnings than those who do not—about 11% or 12% over a three to five-year period. There are many important trades, such as bricklaying, in which a level 2 qualification offers valuable progression into a badly needed occupation. The hon. Gentleman is right that we should be moving up the level chain, which we are doing, but I do not want him or anybody else to devalue level 2 qualifications or to seek to eliminate them.

[Mr Umunna]

I agree with what the Secretary of State is saying. I am seeking not to devalue level 2 qualifications but to bring us up to—[Interruption.] Well, Mr Graham says that we want—[Interruption.]

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Mr Graham is not taking part in this exchange. Just make your intervention, Mr Umunna.

[Mr Umunna]

What we are proposing is to bring us up to the same benchmarks as our competitors, who are more productive than we are.

[Vince Cable]

I hope that is a clarification that level 2 will not be removed from the hon. Gentleman’s definition of an apprenticeship, should he find himself in government. I hope that the Deputy Prime Minister is not right that this is some kind of ploy to reduce the numbers and save money.

--- Later in debate ---

[Vince Cable]

That is very helpful. The hon. Gentleman clearly speaks from experience and knowledge, and we respect that.

The figures are very clear: we have seen a big increase in volume and a big increase in quality. That did not happen by accident. It is important to talk through the constraints on the public finances that I inherited, and on which the hon. Member for Streatham elaborated with regard to the problems that will face the next Government. When I came into office, I was told that the previous Government had planned to cut the Department’s budget by 25% had they returned to office. That was clear and explicit. Indeed, we have had to confront that in office. Let us be clear that it would have been no different had he been doing my job.

The Department’s budget is dominated by two items: higher education, including teaching and student support, and adult skills. There are other, smaller items such as industrial support and science. We were therefore faced, in office, with some very painful and difficult decisions. The advice I got from the Opposition, in a particularly shrill and angry way, was that we must give priority to university undergraduates—future graduates. We did the calculations and found that had we followed the advice from the Opposition, and had we introduced the policy that I think—it is not totally clear—they are now considering introducing on tuition fees, we would have had to cut the adult skills budget by about 40%. Within that, we would have had to cut apprenticeships by even more, because, being of higher quality, they are more expensive than other forms of training. Apprenticeships, which the hon. Gentleman described as growing steadily throughout the time of the Labour Government, as they did, would have been emasculated as a result of the public spending cuts that I think his party would have made had it been in government, and that I was being advised to make.

I then made a decision, which I think was one of my better ones, to listen to the advice, to reject it, and to do the exact opposite. We took a serious political hit on higher education, but we did the right thing in ensuring that universities were properly funded and that we got a fair repayment system. We also made the decision to invest more, not less, in apprenticeships. That is how we have got to where we are, with not only the volume but the quality. That is because we followed up getting the volume by taking short apprenticeships of below one year out of the system; by significantly supporting advanced and higher level apprenticeships; and, perhaps most importantly—the hon. Gentleman did not mention this at all—by introducing employer ownership through giving business a greater say in how these funds are allocated. In all those ways, we have improved quality.

Let me deal with some of the other critical comments in the hon. Gentleman’s speech and motion. First, he quoted the figure, as he did when he was on television with me the other day, regarding what he calls the lack of formal training—[Interruption.] Indeed, there was a survey that suggested that some apprentices—

[Mr Umunna]

It was your survey.

[Vince Cable]

There were a substantial number of surveys; I am quoting the one that the hon. Gentleman has highlighted.

[Mr Umunna]

It was your survey.

[Vince Cable]

We have published a survey in which 24% of apprentices said that they had not received formal training. The hon. Gentleman has built his criticism around that.

[Mr Umunna]

It was your survey.

[Vince Cable]

I am not disowning the report; it clearly exists. [Interruption.] Perhaps the Opposition could be a little less silly and just try to follow the argument. The key is in the word “formal”. Many people do good apprenticeships in business that involve informal work in the workplace, and many people define good training in that way. The survey that we conducted, which the hon. Gentleman is having a little giggle about, tells us very clearly that 90% of those trainees are satisfied with their apprenticeships, while 72% are very satisfied. Ninety-seven per cent. said that they had been trained—sometimes informally, sometimes formally—and 90% got a job. Perhaps most crucially, there is a very high earnings premium. I have quoted the figure for level 2, and for level 3 it is significantly higher—about 16% three to five years after graduation. The proof of the pudding in is in the eating: these apprenticeships do provide satisfaction, jobs and higher salaries for the people who do them.

Let me address the minimum wage. The survey shows that 15% of people are not being paid the minimum wage. That figure is clearly too high, and unacceptable. The motion says that it is “one in five”. I am not sure who did the maths on this, but one in five is not 15%. Perhaps we need compulsory maths for Opposition Front Benchers as well as apprentices. The key point is that 15% is way down on the 30% figure that we inherited. As the hon. Gentleman knows, because he has been part of these debates during the past year, we have significantly improved enforcement measures. We have increased penalties from £5,000 per firm to £20,000 per person, we have introduced naming and shaming, and we have increased the enforcement budget by 30%. We do take the minimum wage seriously. We believe that it must be enforced and that it should apply to apprentices as it should to anyone else.

The hon. Gentleman is right that procurement is a lever for the public sector to employ. We already have many examples of good practice in public sector procurement. Crossrail is a company that has really committed itself to high levels of apprenticeships. There are a couple of practical problems, as I hope he recognises; I think he hinted at one of them. First, for small and medium-sized enterprises and social enterprises, where we are trying to increase the share of public procurement, there is a conflict of objectives. Do we regard getting SMEs into procurement as more important than increasing their number of apprenticeships? There is no clear answer to that. Secondly, companies that are required to introduce apprenticeships would simply add that to the cost and it would be passed on to the public sector, so instead of a direct subsidy through our 50:50 payment system we would be providing indirect subsidies. These are not crippling objections. We need to reflect on how we can better use public procurement, but crude legislation and compulsion is probably not the best way. I accept that public procurement is a good vehicle, and we have to work on this.

--- Later in debate ---

[Maria Miller (Basingstoke) (Con)]

In my constituency of Basingstoke, the number of apprenticeships this year is double the number in 2009 under the last Government. Over the past four years, there have been more than 6,000 apprenticeships—1,600 in the last year alone.

I thank all the businesses who take on apprentices and the colleges that work so hard to make apprenticeships such a success. I am sure that the Opposition spokesman, the hon. Member for Streatham (Mr Umunna), did not want to suggest that those businesses were simply rebadging existing training programmes, because that would belittle the incredible work that the many hundreds of businesses in my constituency that take part in the schemes put into making them a success.

I welcome the announcement by my right hon. Friend the Prime Minister that a future Conservative Government will make a £1 billion commitment to delivering 3 million more apprenticeships by 2020. That is the sort of commitment that businesses in my constituency want to see.

Why do I think that apprenticeships are so successful in my part of Hampshire? It is for three reasons. First, apprenticeships are part of the culture. We have one of the longest-running apprenticeship schemes in Basingstoke at the Atomic Weapons Establishment. Employers believe in apprenticeships because they have seen how they work, whether it is Fujitsu or MiniTec. Whether they are large or small, businesses have seen how apprenticeships deliver quality staff.

Secondly, businesses in Basingstoke believe in apprenticeships because we have one of the top-performing colleges in Basingstoke college of technology, which delivers hundreds of apprenticeship schemes every year in subjects as diverse as IT, web design and child care. Such organisations are leading the way, and we should be celebrating them today.

The third element, which was picked up on by my hon. Friend the Member for Worcester (Mr Walker) in his intervention, is the role of local enterprise partnerships. My local LEP, Enterprise M3, put apprenticeships at the heart of its skills and employability strategy that was published two years ago. It is that leadership and commitment, which has come right from the top, that has helped us to secure so much support, particularly through growth deal funding, which has supported the establishment of key skills centres right across the LEP. That is just the sort of support that we need for this programme.

I want to make three further points in the time that is available to me. First, the hon. Member for Streatham made it clear in his opening statement for the Opposition that the motion focuses on young people, and rightly so. However, he seemed very dismissive of the role of apprenticeships for older people who have been established in the work force for a number of years. He needs to consider that position more carefully. My local college delivers three quarters of its apprenticeships to people who are over the age of 18.

[Mr Umunna]

It is entirely wrong of the right hon. Lady to describe me as dismissing apprenticeships for older people. My point is that we need to increase the numbers dramatically, particularly in respect of young people. It is totally wrong of her to misconstrue my comments in that way.

[Maria Miller]

I am grateful to the hon. Gentleman for making his position clear. It was a little less clear in his speech. The teaching staff at my local college will want to hear what he has just said, because it is important that we have a lifetime approach to training for people in our work force. Training does not stop when we leave college, school or university; it goes on through our lives. Apprenticeships offer an incredibly strong way for people to increase their skills and ensure that they have a high level of employability, particularly in areas such as mine, where we estimate that 50% of the job opportunities will require a higher education qualification in the future.

Secondly, I want to focus on the quality of apprenticeships. I commend the Government for driving up the standards of apprenticeships in recent years. However, I do not think that we should devalue the importance of level 2 apprenticeships. They are an immensely valuable way of making up for lost time at school or college for youngsters—or, indeed, older people—who do not have basic qualifications. I hope that the Opposition would want to rephrase the motion, because it tends to suggest that they are devaluing level 2 apprenticeships or writing them off altogether. I would not endorse that at all.

Finally, I know that the Minister is looking at funding routes that enable employers to get involved in apprenticeships, and I would like to talk to him about the process used by the Skills Funding Agency to allocate growth funding—perhaps he will meet me separately to discuss that. Currently, the SFA requires providers to recruit additional apprenticeships and then bid for funding. Opportunities to bid for funding are every three months, but the agency does not guarantee that extra funding will be allocated in that process. Colleges and employers should work together to maximise the opportunities for apprenticeships, and we must ensure that we do not lose opportunities simply because of the slowness of the process.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 8th January 2015 Commons Chamber

[The Minister for Business and Enterprise (Matthew Hancock)]

We are strengthening the prompt payment code. We want more companies to sign up to the code and I am writing to all the FTSE 350 companies to encourage them to do so. If a company changes its payment practices for the worse and to the detriment of small businesses, I want to see a situation in which they will be kicked off the prompt payment code so that they cannot wear that badge of pride.

[Mr Chuka Umunna (Streatham) (Lab)]

Following on from the question from my hon. Friend the Member for Coventry South (Mr Cunningham), does the Secretary of State agree that to hear that your job has been put at risk of redundancy not from your employer, but while watching the television news with your family on Christmas day—as was the case with the City Link workers—is an utterly appalling way to be treated?

[Vince Cable]

I certainly agree that for the 2,300 workers involved it was a very sad and dispiriting event. The company can answer for its behaviour, but the fact is that it was no longer viable and was put into administration. [Official Report, 16 January 2015, Vol. 590, c. 9MC.]

[Mr Umunna]

With so many unanswered questions for employees and contractors of City Link, the entire affair stinks. Why, for example, if the firm was technically insolvent on 22 December, as has been reported, was it planning to trade until 26 December? Is it true that contractors were told that rumours of it going into administration were false? Why was a new subsidiary set up on 9 December?

The administrators will do their work and no doubt make a D1 filing with the Department. Given the numbers involved and the public interest in the administration, will the Secretary of State commit to conducting a full and proper inquiry into the matter, as he did with Comet? Those who have lost their jobs and contractors who are owed money deserve nothing less.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 20th November 2014 Commons Chamber

[Vince Cable]

I congratulate my hon. Friend on the active role he plays in supporting his local commercial community. As the Minister for Business and Enterprise, my right hon. Friend the Member for West Suffolk (Matthew Hancock), described a few moments ago, we are actively involved in supporting small business through the start-up loan scheme, through credit flows to the business bank and by creating a deregulatory and favourable tax environment.

[Mr Chuka Umunna (Streatham) (Lab)]

It is essential that we give our towns, cities and regions the tools to be the masters of their own economic destinies to drive jobs and growth. The Secretary of State has said that he established local enterprise partnerships to help achieve that, and the LEP network was set up to support them and take forward their shared programme. Will he update us on their progress?

[Vince Cable]

Enormous progress has been made by the local enterprise partnerships since they replaced the regional development agencies, which, by common consent, were remote and wasteful. The most significant recent development was the growth deals, which all the LEPs now have and which have been enhanced by the specific programmes that have been developed for Manchester, Sheffield, Leeds and other centres.

[Mr Umunna]

I am sorry, but the Secretary of State simply does not appear to know what is happening on a supposedly key part of the Government’s programme. I have here a letter from the chair of the LEP network. He says that the network will close in two weeks and that the CEO has resigned because there is no support to do the job. He says that the network is

“seriously under resourced for such a critical role at such an important time”

and that it is

“now officially overwhelmed and preparing to throw in the towel.”

Four years ago, the Secretary of State said that the regional policy was Maoist and chaotic. Does this not demonstrate that very little has changed?

[Vince Cable]

It demonstrates nothing of the kind. The LEP network is working exceedingly well. LEPs are voluntary organisations; some are outstanding and innovative and others struggle, as this one has done. It is much better that we have a regional network that is business-led and is related to the geography of the area, which was manifestly not the case with the regional development agencies.

National Minimum Wage

Chuka Umunna Excerpts

Wednesday 15th October 2014 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House notes that the value of the National Minimum Wage has been eroded since 2010 as working people have been hit by the cost-of-living crisis and are on average £1,600 a year worse off; recognises that the fall in the real value of the minimum wage since 2010 is now costing the public purse £270 million a year in additional benefit and tax credit payments; further notes that the Chancellor of the Exchequer cruelly misled working people by saying he wanted to see a minimum wage of £7 while the Government has no plans to reach this goal; calls on the Government to set an ambitious target for the National Minimum Wage to significantly increase to 58 per cent of median average earnings, putting it on course to reach £8 before the end of the next Parliament; supports action to help and encourage more firms to pay a living wage through “make work pay” contracts to boost living standards and restore the link between hard work and fair pay so that everyone shares in the UK’s wealth, not just a few at the top; and further calls on the Government to set a national goal of halving the number of people on low pay by 2025.

We are a great country with some of the most hard-working and creative people in the world, but there are challenges and problems that must be addressed. We are the sixth largest economy in the world, yet too many people do not have secure, fulfilling jobs that provide dignity, respect and a wage that they can live on. Most people who are living in poverty in this country have a job. If people do the right thing, play by the rules and work hard, day in, day out, they should not have to live in poverty in this country; but the reality in 2014 is that they do. More than 5 million people do not earn a decent wage.

We can see the economic data and, yes, on paper, GDP growth is better than it was two years ago, but the reality of people’s lived experience suggests otherwise. Just in the past fortnight, the much respected Resolution Foundation has produced research that paints a different picture. Tens of thousands of people are trapped in low-paid jobs with little hope of a pay rise. Among those minimum wage employees who have been employed for at least five years, a record one in four has failed to progress off the minimum wage for the entirety of that period. That compares with just one in 10 minimum wage workers a decade ago.

That is the background to our motion. What each party says it will do to address that situation and to make work pay will provide the context in which the next general election is fought. Before I set out what the Labour party would do if elected next year, I will remind people what we have already done. I have said it before and I will say it again: in 2010, this party left the country in an immeasurably better state than we found it in 1997. [Interruption.] If the Minister waits, he will get his time in a moment. One of the many reasons for that was our utter determination to end the outrage of people being exploited at work, which led to our establishment of the national minimum wage in the face of opposition from Conservative Members.

In 1997, the current Secretary of State for Work and Pensions—I note that he is not here—told the House that if we introduced the national minimum wage, it would

“negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 315, c. 526.]

In the same year, the current Defence Secretary told the House that the Conservative party had “always resisted” the minimum wage and that he thought there were “other better solutions” to extreme low pay. Then, of course, there was the Conservative party leader—now the Leader of the House—who said that a minimum wage would be

“either so low as to be utterly irrelevant or so high that it would price people out of work.”—[Official Report, 17 March 1997; Vol. 308, c. 618.]

They and their Conservative colleagues made those claims and arguments to justify inaction at a time when some people in this country were earning as little as £1 an hour.

We had the good sense to ignore the Conservatives, and in my view establishing a national minimum wage was one of our greatest ever achievements. As a consequence, between 1997 and 2001 extreme low pay fell from 6.9% to 1.5% of the work force, and we are proud of that. All the evidence shows that the minimum wage boosted earnings considerably, without causing the unemployment that we were told would follow. So when people say that we are all the same, I point to the establishment of the minimum wage to illustrate our very different instincts as parties, our different approaches and the kind of difference that a Labour Government make when in office.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I served on the Committee that considered the National Minimum Wage Bill, and the only other person in the Chamber who did that is you, Mr Speaker. We spent many long hours through the night—

[Mr Brown]

I will refer to that later, but it is right that my hon. Friend the Member for Streatham (Mr Umunna) continues to push this issue, because some people out there believe that the national minimum wage would have happened in any case.

[Mr Umunna]

I thank my hon. Friend; that is interesting and I look forward to hearing his comments on who took what position at that time.

Yesterday, I revisited an interview with the great Sir Ian McCartney, a former Member of this House, who was the Minister at the Department of Trade and Industry and pushed the National Minimum Wage Bill through the House. He said that he would have “died in the ditch” to ensure that we got it through, and—my hon. Friend the Member for Dumfries and Galloway (Mr Brown) will remember this—we had a record sitting of the House to get the national minimum wage through in the face of resistance from Conservative Members.

I distinctly remember Sir Ian McCartney at a press conference with the Westminster lobby, explaining why we were doing what we were doing. He was a former kitchen worker and earned poverty wages. I remember seeing the news report of him weeping at that press conference, explaining how he was paid something like 1p or 2p per potato that he put in a bag in that kitchen, and asking the lobbying journalists, “How can you defend that in our country in this day and age?”

As I said, Labour Members are rightly proud of the national minimum wage, and we make no apologies for reminding people of the resistance that we met when we introduced it, and of the difference that a Labour Government make to people’s lives.

[Andy Sawford (Corby) (Lab/Co-op)]

My hon. Friend is right to highlight the stark choice around fairness that people faced in this country all those years ago in 1997, and the different positions that the Labour and Conservative parties took on the minimum wage. Does he agree that today that choice is perhaps best symbolised by the support of Conservative Members for the bedroom tax, which makes me think that they have learned nothing from their opposition to the minimum wage?

[Mr Umunna]

I completely agree with my hon. Friend, and in my constituency I have seen the stress, upset and angst caused by the bedroom tax, causing people to have to leave an area in which many of them have grown up and love so much. My hon. Friend is right: the bedroom tax shows the instincts of our different parties.

Although we are, of course, proud to have established the national minimum wage, which helped to end exploitation and extreme low pay, it did not end low pay per se. Under this Government working people have experienced their wages dropping by an average of more than £1,600 a year. The 1 October rise in the minimum wage is the first real-terms increase during this Parliament, and it is still 4.1% below its 2008 peak and just 2p above its equivalent value in 2005. Therefore, if we are elected next year, our goal will be to halve the number of people on low pay in our country. To achieve that, we need the minimum wage to evolve to address the broader problem of low pay, which is the purpose of the motion.

[Andrew Gwynne (Denton and Reddish) (Lab)]

We need that proposal, but we also need effective enforcement of the national minimum wage. Is my hon. Friend appalled, as I am, to learn that as many as 300,000 people in this country are still being paid below the national minimum wage and yet, in the past four years, there have been only two prosecutions?

[Mr Umunna]

I am appalled by that. My hon. Friend is right to mention enforcement. I will come to that, but I pay tribute to his work—I have been to his constituency—on ensuring that those who work hard get a decent day’s pay, in addition to his work on training and apprenticeships, which he has talked about a lot.

[Mrs Anne Main (St Albans) (Con)]

In the interests of fair pay for a fair day’s work, does the hon. Gentleman share my concern that so many right hon. and hon. Members, including many Opposition Members, pay absolutely nothing to some of the young people who work in this place? He should campaign to ensure that all hon. Members pay a fair wage for a fair day’s work.

[Mr Umunna]

I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.

I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.

[Guy Opperman (Hexham) (Con)]

Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?

[Mr Umunna]

I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.

[Mr Frank Field (Birkenhead) (Lab)]

When the Opposition are developing policy, we should consider that there are clearly some sectors of industry that could pay substantially above the national minimum wage. When we go into the election, should we not only advocate an increase in the national minimum wage, but encourage those sectors that could pay higher wages without unemployment effects to do so?

[Mr Umunna]

I will come to my right hon. Friend’s point on different sectors if he bears with me for a moment.

How will Labour improve on the current arrangements? When the Labour Government established the national minimum wage, we tasked the Low Pay Commission with the discrete and technical job of setting the minimum wage within existing economic parameters. My right hon. Friend was one of the Ministers involved in its introduction. The Low Pay Commission’s job was to play the hand it was dealt, not to attempt to change the game. Over the years, it has played its hand well, but it has remained relatively hands-off. In that sense, those who say that it is more akin to a minimum wage commission as opposed to a Low Pay Commission are right.

Labour wants to transform the Low Pay Commission into a proper, official low pay watchdog, setting out what it believes we need to do tackle low pay, monitoring progress and making recommendations on how to boost productivity and make a higher minimum wage possible in different sectors. My vision for the Low Pay Commission is for it to be far more active. If we give it a bigger, more active role, it can not only challenge the Government more, but challenge different sectors. I would like it to have a much bigger standing in the national consciousness. Currently, I believe that it has around six to seven staff, who are mainly focused on statistical analysis, but I can see it becoming a big, low pay watchdog, playing a big part in the national conversation.

[Mr Field]

I rise merely to say how much I welcome that statement, because it relates to the work of the shadow Work and Pensions Secretary and other Opposition Front Benchers. If we are to control the welfare bill in a civilised way, making people who could pay higher minimum wages pay their due, rather than relying on taxpayers, is a crucial part of the strategy.

[Mr Umunna]

My right hon. Friend is absolutely right. I could not agree more with him.

My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.

Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event, The Sun pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.

[Guy Opperman]

I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.

[Mr Umunna]

I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.

[Mr William Bain (Glasgow North East) (Lab)]

Is my hon. Friend aware that in my constituency 38% of children are now growing up in poverty? Their parents are working harder, but have a lot less to show for it. Does that not demonstrate that the Low Pay Commission needs to take a long-term view and have an ambitious target to raise low pay, and does he regret the Government’s failure to adopt one?

[Mr Umunna]

That is right. On that 38% figure, I must say that I have a similar situation in parts of my constituency. I agree with my hon. Friend but I would add that I think so much of our economic debate takes part around the GDP figures, statistics and data, and of course that is right—we should look at the data—but the question is the lived experience of people in this country: do they think they have never had it so good? When we listen to the rhetoric from Government Members, that is often what we would be led to believe.

[Ms Karen Buck (Westminster North) (Lab)]

Has the Conservative party not got it completely the wrong way round? Is not strong economic growth dependent upon strong earnings growth, which in turn will help us to make sure we have a sustainable recovery that is shared among all the people?

--- Later in debate ---

[Mr Umunna]

I could not have put it better myself; I completely agree with my hon. Friend. We know we have a productivity issue in this country. If people are earning more—if they get better pay—they are more productive. All the research shows that.

I wanted to add a point in respect of our target. Of course the economy might be subject to economic shocks—we had the crash in 2008-09—and the LPC might therefore take the view that the target cannot be met without risk to the economy, and we will build flexibility into the system to account for that.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is it not the plan to get rid of evil zero-hours contracts as well, like those in my constituency—at Sports Direct, Mike Ashley? If that happens, it will considerably add to the wages of more than 1 million people in Britain, and that figure is growing as the unemployment statistics supposedly fall. All that put together makes it an even better package.

[Mr Umunna]

I completely agree with my hon. Friend, and the point he makes about zero-hours contracts shows that, in some respects, the big difference between the two sides of the House is that—[Interruption.] The Minister will have his time in a moment. From our point of view, of course people having work is the absolute priority, and having a job is of course better than not having a job, but we have got to be more ambitious than that given the nature of the work that so many people in our economy are doing.

[Mr Iain McKenzie (Inverclyde) (Lab)]

What does my hon. Friend think of this Government’s lacklustre approach to, and lack of enthusiasm for, naming and shaming employers who pay under the living wage?

[Mr Umunna]

My hon. Friend raises a good point, and I will come to it very shortly.

[Mrs Main]

I can accept that there are some abuses of zero-hours contracts but, as someone who formerly worked as a supply teacher I would caution against getting rid of all zero-hours contracts. Our health and education services rely on people picking up casual contracts—if that is how the hon. Gentleman wants to put it—so that we fill in the gaps when there are shortfalls. It is not always a demon policy to have zero-hours contracts.

[Mr Umunna]

I hear what the hon. Lady says about some zero-hours contracts—if memory serves me correctly, I may have been on one myself when I was a student—but the point is that we are seeing far too many exploitative zero-hours contracts. That is the problem, and we are not going to sit on our hands when we are faced with that situation.

[John Glen (Salisbury) (Con)]

Is it not very important that Government take seriously the failure by employers to act responsibly, and that is why the hon. Gentleman should welcome this Government’s move to increase fourfold the fines on employers who are paying below the minimum wage? That did not happen under the previous Labour Administration. We take those breaches very seriously. What does he have to say about that?

--- Later in debate ---

[Mr Umunna]

As I was saying earlier, there would have been no national minimum wage or any fines if it were not for the last Labour Administration, but I take the hon. Gentleman’s point that fines need to be increased, and I will come to that very shortly as he makes a good point there.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend comment on the experience of my constituent whose fixed-hours part-time job, which fitted in with school hours, was changed recently by a very respectable employer—a large department store, not some unscrupulous employer—to a zero-hours contract in order to make her terms more flexible? She had to stop work because she could not find the child care to help her. That is surely the sort of contract we must do something about.

[Mr Umunna]

Well, that is it, and that is precisely why we will introduce a far tougher package than the sole measure we have seen on zero-hours contracts from the Government, which is basically just a do-away with exclusivity on those contracts. That is simply insufficient given the story that my hon. Friend has just told—and I would be very interested to know who the employer was.

The third point I want to make on the changes we need is that, when the minimum wage was introduced, the hope was that it would have a ripple-effect causing wages to rise up the income scale, but that has not turned out to be the case. Frankly, it is becoming the going rate in some sectors, as my right hon. Friend the Member for Birkenhead (Mr Field) alluded to. This explains why 1.2 million employees currently just earn the legal minimum. That is up from just over 600,000 in April 1999, so we have seen a considerable increase in the number of people on the minimum. Therefore, in its beefed up role, we will ask the LPC to advise on what sectors of the economy could afford to pay more than the minimum wage and how that could be achieved.

Finally, enforcement has been mentioned, and much more needs to be done on that, as the hon. Member for Salisbury (John Glen) said. There has in some respects been a systematic failure in the way the minimum wage has been policed. To address that, we will give local authorities, working alongside Her Majesty’s Revenue and Customs, powers to enforce the law, and we will increase the fines tenfold for rogue companies that do not meet their obligations. In this way, we will evolve the national minimum wage so that it moves beyond the narrow task of setting a minimum wage to avoid extreme low pay to a broader mission to reduce low pay in Britain. As far as the Minister’s party is concerned, I discern no desire to move beyond the status quo and the current arrangements.

[Andy Sawford]

On my hon. Friend’s point about where the Government stand, I had an assurance from the Prime Minister in February that they would name and shame those employers who had been found out and fined for not paying the minimum wage in my constituency. They still have not done that. Does that not show there is no real commitment on this from the Conservative party?

[Mr Umunna]

My hon. Friend’s remarks illustrate a point I have been making.

The Minister has said he would like to see the minimum wage strengthened, but his party has set out no plans whatsoever on how it will make that happen. It is all very well picking holes in, and raising issues with, the suggestions we have put forward, but I do not see any coming from Government Members. All we have seen—as the Minister’s boss the Secretary of State, who I know is away in India, said in June—is the Chancellor, in talking about the minimum wage increasing to £7 earlier this year, simply explaining the arithmetic of what would happen if a real minimum wage were restored; commentary from the Chancellor, but no action.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman talks about how we best deal with the scourge of low pay. Does he not agree that a combination of raising the minimum wage, which he has alluded to, and raising the thresholds at which people begin to pay tax is the answer, so that the people earning £200 or £250 a week retain all of that as their take-home pay?

[Mr Umunna]

I will come to that point very shortly after giving way to my hon. Friend.

[Mr David Winnick (Walsall North) (Lab)]

Is it not a fact that it is often said that the House of Commons is rather remote from the lives of many people outside? Surely one of the ways we can combat the idea that MPs do not care is to do everything possible to overcome the poverty that so many people, and certainly many of my constituents, suffer week after week because of low wages. Of course, had it not been for a Labour Government, as my hon. Friend says, there would have been no national minimum wage.

[Mr Umunna]

My hon. Friend makes a very good point and it makes me reflect on the 2010 general election. In the polling districts covering the most deprived estates in the two most deprived wards in my constituency—Brixton Hill and Tulse Hill, which were most impacted by our introduction of the national minimum wage—the turnout was more than 70%, and sometimes 80%. That is because the people on estates such as the Tulse Hill estate had been directly impacted by our introduction of the national minimum wage: it helped to reduce poverty in those areas. My hon. Friend is absolutely right.

The hon. Member for East Londonderry (Mr Campbell) talked about tax and thresholds. The Minister has said that, in addition to thinking about the national minimum wage, we should consider the impact of tax on the low- paid. I agree. That is why we will introduce a starting rate of tax of 10%, paid for by abolishing the Government’s ill-conceived married couples allowance.

The Minister will no doubt refer to the increases to the personal allowance—[Interruption.] I thought that might provoke a reaction. I will give way to the hon. Member for Elmet and Rothwell (Alec Shelbrooke) in a moment. I am sure the Minister will no doubt refer to the increases in this Parliament to the personal allowance to seek to show that he “gets it”, as my hon. Friend the Member for Walsall North (Mr Winnick) mentioned. I doubt, however, that the Minister will mention the fact that any benefit the low paid derived from the increase in the personal allowance was wiped out by the Government’s hike in VAT and the benefit and tax reductions that we have seen for working people in this Parliament.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Will the hon. Gentleman clarify the thresholds at which the 10% rate and the 20% rate would be paid?

[Mr Umunna]

We will set out in detail the plans we have on the 10% rate nearer to the general election. I cannot give the hon. Gentleman the exact thresholds right now, but I am sure that the Whip will have noticed that he asked the question.

On enforcement, I am sure the Minister will refer to their so-called “name and shame” policy, which the Government announced. [Interruption.] The Whips have already noticed that the hon. Member for Hexham (Guy Opperman) has mentioned the long-term economic plan, so he can quieten down. [Interruption.] I will take no lectures from any Government Member on tax rates, or anything else, when they have made a £7.5 billion unfunded tax commitment. I will take no lectures from them whatsoever. I will return to the point I was making about their “name and shame” policy. Only 25 firms have been named, and even that will be worthless unless Ministers beef up enforcement.

I agree with the Minister on the points I have heard him make about productivity. Increasing productivity enables companies to pay more. As I said before, it is key that we invest in human capital to increase productivity, and that means more investment in skills and training.

Before I wrap up, I just want to say something about the living wage. My hon. Friend the Member for Walsall North talked about what people think of Parliament. We should, on all sides of this House, be proud that the parliamentary estate pays everybody who works here, including contractors, a London living wage. It is very important that we set an example in that respect, and I am pleased to hear that that is happening here.

[Mr Winnick]

There was a campaign on that in the previous Parliament and I am glad if the issue has been rectified. Cleaners who were not in regular employment but contracted from outside were certainly not getting the same wage as those who were in regular employment in the House of Commons. If that has been rectified, Mr Speaker, I am pleased. The conditions and circumstances in which cleaners worked here in the Palace of Westminster were absolutely disgraceful. They reminded one of Charles Dickens’s times. I hope all that has been rectified.

[Mr Umunna]

I do, too. No doubt Mr Speaker will be able to give us more details. I can only talk about my understanding of the London living wage. It is very important that we set an example in this House on paying a living wage. I also think it is very good that this House has set an example in not using zero-hours contracts for people working on the estate.

[Mike Crockart (Edinburgh West) (LD)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Mr Umunna]

I am just going to make a little more progress, because I sense that I have been going on for a while.

The minimum wage is set by reference to economic factors, including growth levels, the labour market, economic forecasts and so on. The living wage is calculated by looking at the basic cost of living and the salary needed for an individual to meet their own or their family’s basic day-to-day needs, including housing, food, clothing and so on. We recognise it is very challenging for employers to pay a living wage, so we would not impose it on them by having a statutory living wage. Instead, a future Labour Government will encourage employers to pay the living wage through new “make work pay” contracts. Firms that sign up to becoming living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000, and an average of £445, for every low-paid worker who gets a pay rise. This will help firms towards a higher-productivity, higher-wage model. The measure will be funded entirely from the increased tax and national insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit. Not just ensuring people are in work but that they get a decent salary when they are working, is the most effective way to reduce the social security bill.

In conclusion, I would like to go back to where I started. This area—what people are paid at work and the nature of the work they do—will be a key battleground at the next general election. That is why we have come out with the most detailed proposals, both in respect of wages and security at work, that will make a difference to people’s lives. Instead of mocking us, and instead of coming forward with proposals of their own, we see Government Members sitting on their hands while we carry on in the situation in which too many people who work hard do not earn a wage that they can live on. Ultimately, that is why the only way to do anything about this is to elect a Labour Government next year. I commend this motion to the House.

--- Later in debate ---

[Matthew Hancock]

The hon. Lady needs to look at the economic statistics: there was no double-dip recession and ours is the fastest-growing economy in the G7. Economic growth has been strong, the number of jobs is growing at a record rate, our economy is turning around and we have the fastest growth in the G7. Labour might want to deny it, but we want to support the plan and, crucially, ensure that economic growth reaches all parts of the country and that all can benefit. That is why we support and are strengthening the minimum wage. We know that the only route to higher living standards is not through more borrowing, more taxes and more debt, but through fair pay for a job well done.

Today was another test of Labour’s economic credibility, and yet again it was found wanting. Instead, the true supporters of the national minimum wage now reside on the Government Benches. First and foremost, a strong minimum wage requires a strong economy.

[Mr Umunna]

The Minister said he supported strengthening the minimum wage. How has he strengthened it or proposed to strengthen it?

[Matthew Hancock]

I will give the hon. Gentleman a couple of examples. We have increased the budget for enforcement by 15%, while the Small Business, Enterprise and Employment Bill, which I am leading through the House, backs up those resources with tougher penalties for those who break the law. While we are at it, we are also tackling the scourge of zero-hours contracts—something Labour failed to do after 13 years in office.

If anybody has ever queried the idea that the plight of the low-paid is linked to the health of the economy, all they have to do is study what happened as a consequence of the great recession. When the economy shrank after 2008, the incomes of the lowest-paid took a hit, through jobs lost, hours cut and wages frozen, and our nation’s finances shrank by 6%, which inevitably had a profound impact on people’s incomes—after all, national income is merely the aggregate of individuals’ incomes. The need to turn that around is why our long-term economic plan is so vital.

The evidence shows that the plan is working. Record numbers of jobs have not been created by accident, but because the economy is growing, but we are keenly aware of the risks that remain and the costs that would be paid, especially by the low-paid, if we abandoned the plan. Those who truly support the minimum wage also support the plan to tackle the deficit and repair the health of the economy, and that is why Government Members are the true supporters of the national minimum wage.

--- Later in debate ---

[Matthew Hancock]

Yes, of course, everybody who is in work should be paid the minimum wage.

[Mr Umunna]

I must say that the comments to which my hon. Friend the Member for Glasgow North East (Mr Bain) referred were absolutely disgraceful and that Minister must answer for them. The Minister talked about how the Low Pay Commission does things and how it works through the tripartite model and we absolutely want to see that go forward into the future. The Minister did not say it, so I will: the issue that some people worry about is the possible politicisation of the Low Pay Commission. I think that can be avoided, in much the same way that having a 2% target for the Monetary Policy Committee did not lead to the politicisation of that process.

[Matthew Hancock]

Unfortunately, the hon. Gentleman says one thing and his party then proposes something quite different. The Low Pay Commission was set up to support that consensus, to ensure that the minimum wage has the support of both employers and employees and to ensure that the low paid are not priced out of work. When politicians such as the hon. Gentleman’s boss get on a soapbox and undermine the Low Pay Commission consensus by clearly stating an amount that should be achieved by 2020, they undermine the very people they claim to support. As the Federation of Small Businesses says—the hon. Gentleman can address this when I give way to him,

“the decision on what the rate is should be set only after consultation with the Low Pay Commission.”

Labour’s proposal, according to the FSB, “does the opposite”.

[Mr Umunna]

As I said, I believe it is possible to move towards a new framework without leading to politicisation and to address the concerns that some have raised. I am taken aback when the Minister says that the Leader of the Opposition’s talk about achieving a certain rate for the national minimum wage undermines the Low Pay Commission, when that is precisely what the Chancellor of the Exchequer did when he talked about a £7 rate.

[Matthew Hancock]

No, because every year the Government present evidence to the Low Pay Commission of what level of pay the economy can support. In fact, I can go further. Today, we are publishing the economic evidence that is going in to the Low Pay Commission. It shows what level of pay the Government believe can be supported. It shows that the recovering economy is creating jobs, with unemployment falling faster than any country in the G7. Indeed, the Low Pay Commission has said that it can raise the national minimum wage in real terms this year only because of that recovering economy. Government analysis underpinning today’s evidence projects that on the Office for Budget Responsibility’s economic earnings forecast, the minimum wage is set to reach £8.06 by 2020—only because of the recovering economy.

[Matthew Hancock]

I was going to come on to that. The hon. Member for Streatham made an important admission today. I think it is the first time that Labour has admitted that if the £8 target was going to damage the economy, there would be “flexibility”, as my hon. Friend said. Within a month the hon. Gentleman has completely undone the promise that was made with such loud cymbals at the party conference. It was a promise made for a party conference by a desperate party leader who is struggling to get his message across. Today, it has been completely undermined by the man who wants to replace him as party leader after Labour loses the next election.

[Mr Umunna]

I have to say that this is really desperate stuff from a desperate Minister. In the same way as there is flexibility for the Monetary Policy Committee in setting the interest rate target, there would be flexibility in our system. The Minister talks as if this were some new revelation. What I have said is absolutely no different from what the Leader of the Opposition has said. The Minister can pick holes in what we have suggested, but he has come forward with no proposals whatever to evolve or move on the national minimum wage—none.

[Matthew Hancock]

I certainly can pick holes in what the hon. Gentleman said, and I intend to do exactly that. I would say that today’s admission that there is no £8 target from the Labour party because there will be “flexibility” around it shows that Labour has nothing to say on low pay, just as it has nothing to say on any other area of economic policy. The grin of the hon. Member for Streatham as he came to the Dispatch Box after the discussion about who will be the leader of the Labour party after the next election demonstrates, I think, that undermining his leader was part of his job today—and he has done it brilliantly.

[Matthew Hancock]

I have said that everybody should be paid the minimum wage. That has been our policy throughout the whole period of this Government and it will continue. In fact, we are strengthening it—an issue I want to come on to. We have rejected the Opposition’s advice that the national minimum wage should be limited to £8 by 2020, not least because, on the central projection from the OBR’s earning figures as reported in The Sun, the national minimum wage will, under the Government’s plans, reach £8.06 by 2020—but only so long as we continue the economic recovery and not if we put that recovery at risk by adopting Labour’s plans.

[Mr Umunna]

I am grateful to the Minister for giving way, which provides me with the opportunity to remind him of what I said earlier, which is that the claim he made in The Sun was complete and utter nonsense. He should have rewritten his speech before delivering that passage.

[Matthew Hancock]

On the contrary, Government analysis underpinning today’s evidence projects that, on the OBR’s earnings forecasts, the minimum wage is set to reach £8.06 by 2020.

--- Later in debate ---

[Alec Shelbrooke]

I do not disagree with a single word of what the hon. Lady has just said. It is absolutely true, and that is why it falls to this place to start looking at the way in which employers have been abusing a flexibility which does work for certain people.

When I was between contracts and doing manual labour, did I want to be wondering whether I would have a kitchen or bathroom to fit in the following week, or did I want a constant supply of work? The fact is that I could not demand that the work would be there. I could not say, “Sorry, Mr Shelbrooke, you will be on a permanent contract whether the work is there or not.” There must be flexibility, but what we must legislate for is stopping the abuse. That is what my party is trying to do now, and my hon. Friend the Minister is working to address these very issues in his Small Business, Enterprise and Employment Bill.

Let me now deal with the minimum wage, which, after all, is what the debate is mostly about. I want to go further than our £12,500 tax threshold. My hon. Friend said that people in full-time work who are paid the minimum wage would not pay tax, but I want to maximise the benefit. If anything, I am a politician of aspiration. I want to make sure that someone who wants to work 42 hours a week, 52 weeks a year, will not have to pay any tax. That gives us a figure of £14,196 at today’s minimum wage rate, and that is my ambition. It is not a new policy. We have seen members of a newly formed political party leap up and say that they want the threshold to be raised to that level. Let me remind them that, back in the 1980s, Nigel Lawson said that no one should be taxed until their income had reached the rate at which it was not necessary to give the money back to them. That is the really important point when we are talking about how we can empower people. We must ensure that they have not only the motivation to go to work but the ability to keep the money they earn. If we have a minimum wage, surely we have to have minimum taxation. That taxation should not start until people start to earn more than the minimum wage full time. That is my ambition for this Government. Yes, I am delighted with our policy regarding £12,500 but I personally would like to go further.

The Opposition Front-Bench spokesman, the hon. Member for Streatham (Mr Umunna), said that there was not enough certainty in our policies. He made a good, considered opening speech but when he was pushed on the detail of where the 10% tax threshold would come in, he had no answer. That worries me. I worry that the policy of increasing the threshold from £10,500 to £12,500 would involve people paying 10% tax. We do not know whether that is the case; the policy is not there. I accept his argument that he cannot answer the question today, but this worries me none the less. I am worried about what these policies on wages for the lowest-paid workers actually mean. I worry that these policies could be inflationary if they are not carefully considered.

[Mr Umunna]

In respect of the increase in the personal allowance that was announced at the Conservative party conference, and of the policy of raising the threshold, will the hon. Gentleman tell us how that £7.5 billion unfunded spending commitment will be paid for?

[Alec Shelbrooke]

The Chancellor of the Exchequer and the Prime Minister made it perfectly clear in their speeches that there would be more reductions in certain areas of public spending. We are looking at a 0.3% further reduction, which can be found. The point that the Opposition do not understand is that if we grow an economy by building on solid foundations, we end up with a growth rate that far outstrips those of the EU or the USA. More importantly, this is in stark contrast to the economy of France, whose policies the Opposition were telling us only three years ago we should be adopting. Their plan B was to follow the French President’s economic proposals, yet that country’s economy is now collapsing round its ears and dragging a lot of the EU down with it. This is simple: we must grow the economy healthily, and the hard-working people of this country who help to grow the economy do not deserve to come home after a day’s work to discover that the Government are taking more of their money. We need to ensure that increases in the minimum wage do not simply involve people doing more work for the same money.

The living wage is an important development. I have gone on record in this Chamber as saying that I do not support a statutory living wage. If we try to chase a living wage simply by upping wages by statute, we will increase inflation, thereby putting the living wage out of reach. The figure for a living wage has gone up since we last had this debate, but the way to reach it is to grow the minimum wage by cutting taxes on business and growing the economy. We cannot do it by imposing stealth taxes on business. We should be saying to employers, “Don’t give the money to the Government so that we can do all the things we want to do. Instead, give it directly to the people who are creating the wealth.” That is a policy that we should be proud of, and that everyone on these Benches will get behind. We want the highest wage figures that we can get in this country, and we want to ensure that people are not being exploited. When new phenomena such as the exploitation of zero-hours contracts are created, it is important that we legislate on them in a way that still allows flexibility for people who are trying to put together a living.

I am worried that Opposition day debates are often simply about electioneering. That is the wrong thing to do in this Chamber. The Opposition have talked about taking things seriously and being the party that truly represents the lowest-paid workers in society, but I must remind the House that they opposed my ten-minute rule Bill to outlaw unpaid internships. The Division was called by Opposition Members. I am still a strong believer that nobody in this country should work for more than four weeks without pay. Work experience has its place, but employing people for months at a time with no pay, claiming that they are gaining experience as interns, is morally wrong. That is why I introduced my Bill.

In that context, we have to look at what we are really discussing. We need to ensure that the poorest in society—those who are working at the bottom and in the most economically sustainable way—see their wages increase without having to give the money back to the Government just so that they can be grateful when the Government then give it back to them. We need to ensure that a good day’s work is properly rewarded. As we grow the economy, we need to ensure that businesses give the money to the people doing the work and not to the Government. When we discuss the minimum wage, we must ensure that we have in place a strong economy and strong policies, and that we are willing to legislate against those who abuse workers in this country. We must ensure that we represent everybody; that is what a one-nation party is all about.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 26th June 2014 Commons Chamber

[The Minister for Skills and Enterprise (Matthew Hancock)]

Absolutely. Through the trailblazer process, we are putting employers in charge of the training involved in apprenticeships, to make sure that, in addition to the big increase in numbers we are seeing, we increase the quality of training so that all young people have the opportunity to use an apprenticeship as an alternative to university in order to reach their potential.

[Mr Chuka Umunna (Streatham) (Lab)]

Does the Secretary of State think it is acceptable for a Government Department to increase reporting requirements twelvefold for businesses?

[Vince Cable]

I am not sure what the hon. Gentleman is referring to, but as the Minister of State, my right hon. Friend the Member for Sevenoaks said a moment ago, we have taken considerable action drastically to reduce the regulatory burden on business.

[Mr Umunna]

I am talking about the disgraceful burden being heaped on the one in five self-employed people in this country who will be in receipt of universal credit. Those businesses are being required to report their income not once a year, but every single month. Their earnings are being computed on a completely different basis from the assessment carried out by Her Majesty’s Revenue and Customs for tax purposes, and the minimum income they will be assumed to have is for 35 hours a week at the minimum wage. That is unjust and unworkable and it does not reflect how those businesses work. Why has this ministerial team sat back and allowed the red tape baron—the Work and Pensions Secretary—to erect this barrier to aspiration?

[Vince Cable]

I would have thought that most reasonable people would welcome the growth of self-employment and entrepreneurship that is happening under this Government. I think they would also probably welcome the fact that the benefits system demands maximum integrity.