Small Business, Enterprise and Employment Bill
Debate between Chuka Umunna and Richard Fuller
Mr Umunna
I thank my hon. Friend for that intervention; I shall quickly be coming on to zero-hours contracts.
In the context of the national minimum wage having become disconnected from levels of growth and productivity, there is a wider problem, because it has led to a squeeze on wages and a fall in the real value of the minimum wage. That is why we would set a long-term ambitious target for the Low Pay Commission to increase the minimum wage to a more stretching proportion of median earnings over the next Parliament. It is a shame that the Secretary of State has set his face against that. We also want to promote—I think the hon. Member for Bedford (Richard Fuller) mentioned it—the payment of a living wage through “Make Work Pay” contracts, but there are no provisions at all that touch on the living wage, which is disappointing once again.
Let me turn to zero-hours contracts, which my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) mentioned. There are 1.4 million such contracts in use in the UK at present.
Richard Fuller
Before the hon. Gentleman moves on from the living wage and in the context of the important issue of Government contracting, will the Labour party table amendments to ensure that, when local authorities contract, there is the potential for companies to pay the living wage?
Mr Umunna
I may have the figures wrong, but I think that at least 29 Labour-run local authorities have become living wage employers, and I think we should absolutely do all we can to encourage them to pay the living wage. That may take time because current contracts are left to run, but the more who sign up to become living wage employers, the better.
On zero-hours contracts, it is worth reminding Members what we are talking about. Let me quickly tell the story of a lady I met last year who was on such a contract—I have, of course, met many others, including my own constituents, since. She worked in the care sector and had to be available to visit clients in their homes on at least six days a week, including evenings. Her rota could change in a flash. If visits were cancelled at short notice, she would often not be paid. If visits were added at the last minute, she would have to manage her child care commitments as best she could. That was because she had a zero-hours contract which did not oblige her employer to offer guaranteed hours of work.
Thankfully, that lady has managed to find a permanent job, but she has left behind several hundreds of thousands of other care workers who are still on zero-hours contracts in England. She featured in an excellent report produced by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), my right hon. Friend the Member for Knowsley (Mr Howarth), and my hon. Friend the Member for Wirral South (Alison McGovern). Her experience illustrates the reality of life on zero-hours contracts for many people. Such contracts put a strain on families who cannot plan and do not know when the next pay cheque is coming. They create a huge obstacle for people who aspire, for example, to obtain mortgages so that they can own their homes and do things that many others take for granted. And what is the Government’s answer to all that, in the Bill? To ban exclusivity clauses.
Job Insecurity
Debate between Chuka Umunna and Richard Fuller(10 years, 6 months ago)
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Mr Umunna
In relation to business reform, if the hon. Gentleman looks at the comments that we made during the passage of the Enterprise and Regulatory Reform Act 2013—[Interruption.] The hon. Gentleman has asked me a question, so he should let me finish the answer. There are elements of the 2013 Act that we thought were commendable, such as instituting the Competition and Markets Authority and setting up the green investment bank, which we started to do in government. However, we did not entertain the proposals to water down people’s rights at work so that they would be scared out of their wits, because that would have an adverse impact not only on them and their families, but on the economy.
The hon. Gentleman also talked about social security. There are two ways in which we can reduce the social security bill. First, we can ensure that more people get back into work. I very much welcome all the examples that have been given of that. Secondly, we can ensure that people earn a wage that they can live off. They will then pay more in national insurance and we will pay out less in tax credits, which is good for the Exchequer.
Richard Fuller (Bedford) (Con)
The shadow Secretary of State is making a thoughtful speech. Many Members on this side of the House would like to see him as shadow Chancellor. Unfortunately, it seems that we will have to wait until after the next election to see that.
The motion refers to increasing wages and to the living wage. However, there is a tapering effect that means that if somebody on the minimum wage has a pay increase of 23%—the difference between the minimum wage and the living wage for people living outside London—the increase in the money in their pocket turns out to be only 1% or 2% because of the changes in benefits. If the shadow Secretary of State were in charge, how would the Government address that?
Mr Umunna
It is the aim of all Labour Members not to be in the shadows at all. We are happy to give the shadow positions to Government Members.
On the hon. Gentleman’s point about wages, it is important that we incentivise employers to pay a living wage. Imposing a living wage on employers would have an adverse impact. We intend to introduce Make Work Pay contracts, through which we will give employers a tax incentive to pay the living wage. The Exchequer will easily get back the cost of that through national insurance.
Mr Umunna
I will try to make progress, because I am conscious that I have been going on for some time.
We would clamp down on false self-employment. That is the practice by which employers classify their workers as self-employed in order to pay lower levels of national insurance. Of course, that leaves workers without the protections that are enjoyed by employees, even though most people would regard their relationship as one of employment. That is a particular issue in construction. The last Labour Government proposed that workers should automatically be deemed as employed for tax purposes if they met the criteria that most people would regard as obvious signs of being employees rather than self-employed contractors. That will be the starting point for the next Labour Government.
To conclude, we have a bigger goal. Our ambition must be to transform our labour market from one that has too high a percentage of low-wage and low-skill jobs into a high-wage, high-value and high-skill labour market. Of the 25 economies in the OECD, we rank fifth in the percentage of our labour market that is low-waged and low-skilled, and we must tackle that.
Enterprise and Regulatory Reform Bill
Debate between Chuka Umunna and Richard Fuller
Mr Umunna
I hear what the hon. Gentleman says, but we sought to deal with the issue through the Equality Act 2010 and then by providing for further action to be taken thereafter. It is not fair for him to say that we took insufficient action during our time in government: we needed to allow time for the communities concerned to adjust and to provide an opportunity for the education which he talks about. Despite the time that has passed—the Act was passed back in 2010—it is clear that more still needs to happen.
We do not believe that the Government are doing enough on this issue, which is part of the reason why we will vote against the Government’s motion to disagree with the Lords amendment. I hope that further discussions can take place here about the implementation of action against caste discrimination before the matter is discussed again in the other place. People on both sides of the debate have said loudly and clearly that they would like far more consultation on the subject. We hope that that can happen. The goal—the place where we all want to be—is to reach agreement on a way forward over the next few days before the provisions arrive back in the House of Lords.
Mr Umunna
I will move on, because we are short of time and I want to ensure that others can come into the debate.
I shall move on to deal with health and safety. Clause 61, to which Lords amendments 38 and 39 apply, is designed to remove civil liability for breaches of duty imposed by health and safety regulations. In so doing, it overturns an accepted and established health and safety regime that has been on the statute book for a very long time—for over a century. What the Government are seeking to do is overturn legislation that has been in place since a ruling in 1898. The consequence of that is serious. The clause removes the existing and long-established right of an employee to rely on a breach of health and safety in any claims for personal injury. As was said in the other place, in respect of employer liability it will force injured employees to face
“a near impossible evidential burden.”—[Official Report, House of Lords, 6 March 2013; Vol. 743, c. 1502.]
The Association of Personal Injury Lawyers has stated that the clause will favour negligent employers over those who take health and safety considerations seriously and who treat people with the care that they are due.
The Government have not been able to provide evidence on the matter to support legislative change. They justify their amendment by referring to a recommendation in Professor Löfstedt’s report “Reclaiming health and safety for all”, published in November 2011. However, Professor Löfstedt himself has expressed doubts about the Government’s plan. In his review of progress a year on from his report, he states:
“the proposed amendment to the Health and Safety at Work Act reverses the current position on civil liability. This means that, unless exceptions apply, claims for compensation in relation to breaches of health and safety legislation will need to prove that the employer has been negligent. The approach being taken is more far-reaching than I anticipated in my recommendation.”
Richard Fuller
I will speak in support of Lords amendment 37, which would provide people with legal protection against caste discrimination in the workplace.
I have listened intently to the debate. A number of speakers have said that this is a complex issue, including the Minister, the shadow Secretary of State and my hon. Friend the Member for Reading West (Alok Sharma). I regard all those colleagues with great esteem, so I hope that they will forgive my saying that the idea that this is a complex issue is rubbish. This is a straightforward issue. Caste discrimination in the workplace is wrong and the people who suffer from it deserve legal protection. That is the beginning and end of the matter.
To help the Minister, who with the best of intentions has found herself on the wrong side of the argument, I will answer three questions that I expect this Government and the previous Government asked on this issue. Is there evidence of a problem of caste discrimination? Is legislation the best approach? Is a delay to implementation justified?
On whether there is evidence of a problem, I have received a petition signed by more than 300 of my constituents in Bedford and Kempston. I have received representations from the Valmiki community, the Ravidassia community and the Dr Ambedkar Mission Society in Bedford. Those who saw “Newsnight”—a current affairs programme on the BBC—will have seen, towards the end of the programme, personal testimonies from three of my constituents: Mr Ram Dhariwal, Mr Sam Kalyan and, most movingly, Mr Prithi Kaeley.
On behalf of those constituents and many others, I must say that I cannot see how people can argue that there is no evidence of a problem. Some may say that the studies by the Anti Caste Discrimination Alliance and the NIESR did not provide sufficient evidence. Those reports made me angry and made me cry. They made me feel that action on this issue was all the more important.
I repeat what I said to the Minister earlier on the evidence for a problem. She should listen to her colleague, the Under-Secretary of State for International Development, the hon. Member for Hornsey and Wood Green (Lynne Featherstone), who said:
“The evidence is compelling—so hopefully the Government who said that they would consider any evidence coming forward will now bring forward their own amendment to include caste.”
We are not talking about caste discrimination in social or personal circumstances. However, I understand that when the Equality Act 2010 was debated, the then Solicitor-General accepted that the evidence showed that caste discrimination was prevalent in personal and social situations. I ask the Government, and in particular the Minister, whether we can rest comfortably on the assumption that discrimination that persists widely in personal and social situations will magically halt at the threshold to the shop floor or the door to the office. That is a hard position to take.
On whether legislation is the right approach, I say to the Government that Talk for a Change is an inappropriate and insufficient measure. The NIESR report advised that education would not be sufficient. I ask the Minister whether she would rest on education alone as the answer to racist or sexist behaviour in the workplace. If not, why should we rest on that alone in this case? On the basis of my constituents’ experiences, I disagree with the argument that caste discrimination is a diminishing issue. Does the Minister not see that the provision of education without the provision of legal remedy is the worst possible solution, because it raises knowledge but does not afford consequences for discriminatory actions?
The current laws do not provide sufficient protection for those who face caste discrimination. I draw the House’s attention to the judgment in the employment tribunal case of Naveed v. Chilli Pink in November 2011, which stated:
“We consider in the light of the above provisions”—
meaning section 9(5) of the Equality Act 2010—
“that the Claimant’s complaint of discrimination based on his caste was doomed to fail… First, no order has yet been made extending section 9 of the Equality Act 2010 so as to provide for caste to amount of itself to an aspect of race.”
The current situation is hostile to people who want to bring discrimination cases based on caste, and delay in that matter is serious.
Hon. Members have already said that we need legislation so that some of those cases can move forward. There was an important case recently. I will not talk about it specifically, but the impediments faced by the person trying to bring the case to justice in terms of understanding among the police of the issues involved, access to legal advice and legal aid, and the personal costs in such circumstances, would put anybody off doing so.
On whether a delay is justified, the EHRC’s position seems perverse—we heard earlier about its flip-flops on other issues. Yesterday, the policy statement on its website stated:
“The Equality and Human Rights Commission supports the enactment of Section 9 (5) of the Equality Act 2010”,
yet after being given this job by the Government, it recently stated:
“What is clear is that caste is an extremely complex area,”.
I would be interested to hear from the Government—perhaps the Minister will respond—whether the EHRC is researching this issue or looking at ways in which companies could move forward with rules on implementation should the Government enact this measure. Would it be possible for the EHRC to bring cases to court or support cases going through the courts?
I tried to intervene earlier on the shadow Secretary of State because I want to be absolutely clear about the position of the Labour party on this issue, and specifically on whether it would like this measure on caste to be enacted. That was not clear from what the shadow Secretary of State said because he also talked about consultation and other things. It would be helpful to have clarification on that. I argue that whether or not the issue of caste is diminishing over time—that may or may not be true—is not material. Discrimination today deserves remedy today. It is no good telling people that we can sort the issue out and that their grandchildren and great grandchildren will be fine. We need a remedy today.
Mr Umunna
I am conscious that I shall not get the chance to intervene again. The Labour party’s position is clear: more needs to be done and if we are to do more in legislation, further consultation must be carried out and the issue must be looked at properly. That is why we support the amendment so that it can go back to the Lords and we can have a discussion about how to get more consultation and how agreement can be reached. We are clear that more needs to be done and I remind the hon. Gentleman that we touched on this issue in the Equality Act 2010, although we did not bring into force by order the inclusion of caste in the definition of race in that Act. However, the fact that we addressed the issue in that Act shows we were alive to it. As he and I know, practically implementing such measures in a way that does not lead to a plethora of litigation is something of which we must all be mindful.
Richard Fuller
If I can hear that as a clarification—I do not wish to misstate what I heard—the position of the shadow Secretary of State and the Labour party is precisely the same as that of the Government on the key issue of whether it is abundantly clear that discrimination based on caste is wrong, and that we should enact the relevant measure today. The hon. Gentleman’s answer is “Let’s have more time; let’s do more consultation”, which is what I heard the Minister say. Perhaps I misheard.
Mr Umunna
There are two points. First, if our position was the same as that of the Government we would reject the Lords amendments. Secondly, we are clear that more needs to be done and we must look at legislation and at what measures to introduce. I cannot be clearer than that for the hon. Gentleman.
Richard Fuller
If I may say so, the hon. Gentleman could try a lot harder to be much clearer than that. I am not asking specifically about the amendment but about the provision in the Bill that the people who campaigned hard on this issue want to see. I believe their expectation is that the Labour party will support that provision, but I am hearing that it does not yet support it.
Enterprise and Regulatory Reform Bill
Debate between Chuka Umunna and Richard Fuller
Mr Umunna
I acknowledge the hon. Gentleman’s great wisdom and experience, but I respectfully disagree with his overall depiction of employees blackmailing their employers willy-nilly. I say that as a former employment law solicitor who has advised business people like him, but employees too.
Richard Fuller
May I point out that this is the Secretary of State’s Enterprise and Regulatory Reform Bill, not mine? I am sure that mine would be somewhat different. The shadow Secretary of State talks about job protection, and about the recession and demand, but does he accept that it goes a little deeper than that? Recent experience in the UK and the US shows that when we have recovered from recessions, we have not created jobs as swiftly as we did in the ’50s, ’60s and ’70s. In that context, does he not think it is worth looking at the recommendation made by Beecroft?
Mr Umunna
I am not sure exactly which proposal the hon. Gentleman thinks it is worth having a look at. If he is talking about the proposal to allow no-fault dismissal in firms of fewer than 10 employees—which I believe is what he spoke about earlier—the answer is no. I do not agree that it is worth looking at, partly because there is no evidence that having no-fault dismissal encourages or helps firms to grow, as was previously made clear in business questions by the Minister responsible for employment relations, the Under-Secretary of State, the hon. Member for North Norfolk (Norman Lamb).
I do not deny that employment law and regulation more generally are matters of concern for small businesses. It would be absurd of me to make such a claim, and I am not making it. However, it is the state of our economy that has been consistently identified by small and medium-sized enterprises as the main barrier to their success. We know this because that is what they have been telling Ministers. In the Government’s latest “SME Business Barometer”—which I think the Secretary of State mentioned earlier—32% of SME employers said that the state of the economy was the main obstacle to the success of their business, followed by issues such as cash flow, taxation and finance. Just 7% cited regulation as the main obstacle to their success.
Let me be absolutely clear: we on this side of the House will not countenance watering down the rights that every constituent of every Member of this House enjoys in the name of growth. I should also note that Conservative Members—nobody has made this comment today, but they have before—have been keen to present this as solely a union issue. It is not: it affects just about every working person in this country, regardless of whether they are a member of a trade union. While everyone else has been worrying about losing their job—thanks to the Government’s economic incompetence in my view—their rights at work have, frankly, been used as a political football in the Government, among Departments and between the two governing parties. That does nothing to dispel the overall impression of shambles that hangs over the Government. However, Minsters and those who have been briefing the media on their behalf should also reflect on the huge worry that such briefing on employment law is generating among those who work in our businesses, with all the talk of further liberalising our labour market, which is one of the most liberalised labour markets in the western world.
Banking (Responsibility and Reform)
Debate between Chuka Umunna and Richard Fuller(12 years, 6 months ago)
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Mr Umunna
Thank you, Mr Deputy Speaker.
I thank my hon. Friend for his contribution. The Walker review proposals are the start, not the end, of the reform needed, but my hon. Friend makes a strong point about the culture in the financial services sector. On the proposal to have an employee on the remuneration committee, would not the RBS board be in a stronger position if it could say, on matters of pay, that an employee representative had been involved in the decision making?
Richard Fuller (Bedford) (Con)
I am listening with great interest to the hon. Gentleman’s extended exposition on the failings of the previous Labour Government. It is nice to see him joined by so many for such an extended mea culpa. [Hon. Members: “Where’s the question?”] My question is this: does he think that the objectives of a company executive should be to maximise shareholder value for his business, to do the Government’s bidding or to do the bidding of a broader range of interests?
Mr Umunna
The hon. Gentleman asks a good question. Ultimately, of course, a director’s duty is to shareholders, but I take issue with those who suggest that the Labour Government did not introduce reforms, because we did introduce reforms, one of which was the Companies Act 2006, which changed the nature of company law so that other stakeholder interests could be accounted for. In some respects, though, shareholder interests are not necessarily completely separate from those of wider society. My strong view is that business and society are mutually dependent, and that goes for our banks as well. Banks rely on society to provide talent, skills and custom, and we rely on banks not only to perform a social utility function for individuals and businesses, but to provide growth and jobs. How does that relate to the hon. Gentleman’s point about shareholder value? If a bank fails its customers—as happened, for example, in the payment protection insurance scandal—that has a knock-on impact on reputation, which can ultimately have a knock-on impact on profit, which is against the shareholder interest.
Economic Growth and Employment
Debate between Chuka Umunna and Richard Fuller(12 years, 9 months ago)
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Mr Chuka Umunna (Streatham) (Lab)
I beg to move,
That this House notes with concern that UK economic growth is flatlining and was choked off well before the recent Eurozone crisis, that youth unemployment is now more than one million and that Government borrowing is therefore expected to be £46 billion higher than forecast over the Parliament; further notes with regret that the Government has failed to deliver a credible growth plan, is undermining critical industries in which the UK must compete, is failing to use strategically procurement and other tools to drive growth and innovation, and is holding back regional growth with its flagship projects mired in inertia and with most business still waiting for Regional Growth Fund money seven months after the recipients were announced; therefore calls on the Government to deliver a growth plan that provides an immediate boost to the economy to increase demand and growth, including a £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 more affordable homes; and further calls on the Government to bring forward long-term investment projects to get people back to work, to reverse the damaging VAT rise of January 2011 for a temporary period giving families a £450 boost and providing immediate help for the UK’s high streets, to provide a one-year cut in VAT to five per cent. on home improvements, repairs and maintenance to help home owners and small businesses, and to provide a one-year national insurance tax break for small firms to help them grow and create jobs.
In his Conservative party conference speech last October, the Chancellor said he would stick to his plan to cut faster than any other Chancellor in our history, regardless of the consequences, because, he said, it was necessary to put our economy on a sound footing. With reference to the Business Secretary he said:
“Together, Vince and I have started to open Britain for business.”
A year later, what do we find? The economy has grown by just 0.5% in the past 12 months. This compares with growth of 1.5% in the US over the same period and is significantly down from the 2.6% growth in the previous 12 months, thanks to the measures taken by the Labour Government. Have the Chancellor and the Business Secretary opened Britain for business? The figures tell a different story. The number of UK enterprises fell by 20,000 in the year to March 2011, with decreases in business numbers in every region except London and Scotland, and business confidence nose-dived following the announcement of the Chancellor’s spending review.
What effect is this having on the people of this country? More than 2.6 million people are out of work, the highest rate in 17 years. More than 1 million young people are now out of work, the highest since comparable records began in 1992. Let me be clear: these are not our statistics. They are those of the Office for National Statistics. They are the facts.
How have the Government responded to the facts? Last week, when we learned of the youth unemployment figures, the Prime Minister and the Chancellor were nowhere to be seen. Instead, the Minister with responsibility for employment took to the airwaves. He told us that the 1 million figure for youth unemployment was “a distraction.” The 1 million figure for youth unemployment is not a distraction. It is a disgrace. What a tragic waste of talent. He not only described the figure of 1 million as a distraction, but attempted to blame it on the eurozone crisis. Does he really think that the British people will fall for that?
In fairness to the Business Secretary, when the figures came out his unofficial spokesperson, the noble Lord Oakeshott, told The Guardian:
“It’s ridiculous to blame this rise in unemployment on the crisis in the eurozone. All economists know it’s a lagging indicator, so this is the result of what has been happening in our economy over the past year”.
I could not put it better myself. Despite that view, the Business Secretary remains resolutely wedded to the Government’s economic strategy, however disastrous it is turning out to be. He does so in the name of deficit reduction, yet the independent forecasts published last week show that the Government are projected to borrow, on average, more in each remaining year of this Parliament than we would have done under our more balanced deficit reduction plan. Those are neither the Opposition’s figures, nor those published by the Office for National Statistics; the summary of independent forecasts was published last week by the Government themselves. Of course, the Office for Budget Responsibility has already forecast borrowing to be £46 billion higher than previously thought. The evidence is clear: the Government’s strategy is not working because reducing borrowing requires growth, which they choked off by cutting spending and raising taxes too far and too fast, and long before the eurozone crisis.
Richard Fuller (Bedford) (Con)
I welcome the hon. Gentleman to his place on the Front Bench, which gives the Opposition the opportunity for a fresh start in putting forward their policies. He noted that according to later assessments the deficit will be higher than originally estimated, but does he accept that the key thing the Government got right was to set the tone for interest rates so that this country’s businesses can benefit from much lower interest rates than those in other countries, and would not the policies that his party proposes put that at risk?
Mr Umunna
With the greatest respect to the hon. Gentleman, the reason the Monetary Policy Committee has set our interest rates so low is that we are struggling to find growth in this country. Without growth, we will be unable to reduce our borrowing. Our not being in the eurozone is another reason we are able to adopt lower interest rates.
Richard Fuller (Bedford) (Con)
As this is a business debate, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
I start by congratulating the hon. Member for Streatham (Mr Umunna) on introducing this debate and on the thoughtful way in which he presented his case. As I said in an intervention, he offers an opportunity for a fresh approach. What a contrast this debate is to the one on the economy called by his colleague the shadow Chancellor a couple of weeks ago, which turned into an episode of “Romper Room”—some hon. Members are old enough to remember that—with childish comments being made left, right and centre. The hon. Member for Streatham presented a much more cogent case today, but that is the root of his problem. He is the fresh new hope, but unfortunately he is held back by sad and discredited ideas, the core policy of which, as the Prime Minister has said, has been reheated and resold at least eight times already.
I encourage the hon. Member for Streatham to be a little bolder in setting out his ideas. I know that he agrees—his speech lasted 31 minutes, but only in the 30th did he get round to talking about Labour’s so-called five-point plan. I ask him to spend more time developing his ideas, and not to be held back by the discredited Labour past.
Mr Umunna
Back-handed compliments aside, it is unfair of the hon. Gentleman to say that I did not talk about the different elements of the five-point plan. I remind him that I cited a list of the different business organisations that have called in different ways for parts of that plan to be implemented—from the Federation of Master Builders to the Federation of Small Businesses and the CBI.
Richard Fuller
I appreciate that, and I shall continue to listen intently to all the hon. Gentleman says.
The challenge that this country faces to restore growth is immense. It needs good ideas from both sides of the House and full commitment to the task. On that point, may I say gently to my right hon. Friend the Secretary of State, who is a noble individual and a good gentleman, that sometimes people feel that commitment may not be there 100% of the time from the Department, and that is a commitment to the role of the free market and business. It is as though we have at times a literary equivalent of Dr Cable and Mr Hyde. There is one part of the personality of the Secretary of State that embraces the idea of business and likes the approach of free markets, and then there is the other side of the personality that likes to hang out with a bunch of people on a camping holiday outside a well-known church musing on the merits of capitalism.