Small Business, Enterprise and Employment Bill

Debate between Chuka Umunna and Stephen Mosley

Wednesday 16th July 2014 Commons Chamber

[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.

[Stephen Mosley (City of Chester) (Con)]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way shortly.

The Government’s answer is simply not good enough. Do they really think that, on its own, that will stop the exploitative use of such arrangements?

As well as ensuring that the terms and conditions of employees on zero-hours were made clearer and that they were free to work for other employers, we would give employees the right to demand regular contracts if they were, in practice, working regular hours for a certain period, with an automatic right to a fixed-hours contract after a year. We would also ensure that employees on zero-hours contracts were not obliged to make themselves available outside contracted hours, and that they had a right to compensation if shifts were cancelled at short notice. That is what the Government should be doing. If they did what we are proposing to do, they would be able to clamp down on these exploitative practices.

[Mr Umunna]

We, as a party, have made it very clear that we want to end the exploitative use of zero-hours contracts.

[Stephen Mosley]

Will the hon. Gentleman give way?

[Mr Umunna]

No. I must make a little progress, because otherwise the hon. Gentleman’s speaking time will be reduced to three and a half minutes, and he will blame me.

Let me now say something about takeovers, which I had absolutely no idea would feature in the Secretary of State’s speech. He made two announcements on the BBC’s “The Andrew Marr Show” over the weekend. First, he said that he wished to introduce measures that would ensure that commitments given by bidders for British companies had some teeth, and that a sanction could be applied if those commitments were reneged on. Secondly, he said he believed that the Government should have a backstop power to strengthen the existing public interest tests if that proved necessary.

I support the thrust of the Secretary of State’s proposal in relation to commitments given by bidders in takeover circumstances. As I said earlier, I suggested at the weekend that he should include such measures in the Bill. According to the legal advice that I have received, primary legislation would be required; simply amending the City code would be insufficient. I think that that is sensible, and I am happy to work on it with the Secretary of State in the context of this Bill.

As for the proposal to strengthen the public interest test, my own view—based on the legal advice that I have received—is that, if the Secretary of State wishes to change the current set of criteria, there will be no need for primary legislation. He has expressed concern—as did we, some months ago—about the need to protect our science and research and development bases in the national interest. Obviously, the way in which any provisions were crafted would be important—in particular, we would need to ensure that there was clearance from the European Commission—but, as I have already said on several occasions, we are happy to work with the Secretary of State on that.

I think that I have gone on for long enough. The Bill contains other measures—relating to company filing requirements, child care and schools, and education—with which we have no major issues, and the details of which we will examine in Committee.

This is not a terrible Bill but, to refer to what the Secretary of State has said about the Government’s economic policies before, it is all rather piecemeal. Given the challenges we face as a country—a country with huge potential—our constituents were entitled to expect a bit more from this Government in this Bill. The only way to get that is to change the Government and vote Labour next year.

Jobs and Work

Debate between Chuka Umunna and Stephen Mosley

Wednesday 11th June 2014 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move an amendment, at the end of the Question to add:

“but regret that the measures in the Gracious Speech fail to ensure that those who put in a hard day’s work get a decent reward for doing so, or cut the costs to the social security system resulting from the current record 5.2 million workers on low pay and the rising tide of insecurity at work; and call on your Government to bring forward measures setting the Low Pay Commission a five year target to raise the National Minimum Wage faster than average earnings while retaining the capacity to take account of shocks to the economy.”.

We are here to debate the Queen’s Speech, and in particular its impact on jobs and work. Ultimately, to create jobs and work so that someone can raise a family we need sustainable and balanced growth. We cannot legislate our way to sustainable and balanced growth, but a Queen’s Speech and the proposed legislation therein has a role to play. Essentially, today we are debating the economic policies of this Government.

[Stephen Mosley (City of Chester) (Con)]

Will the hon. Gentleman give way?

[Mr Umunna]

Just one moment. I will give way in a bit.

When I first arrived in this House—together with the hon. Member for City of Chester (Stephen Mosley), I think—I remember that all Government Members wanted to do was talk about the previous Government. This is now their fourth Queen’s Speech and fifth year in office, and it simply will not do to drone on about the last lot. They are in government; they have a record and we will hold them to account for it.

When this Government entered office the country was recovering from a recession that was caused by a global financial crash and precipitated by irresponsible behaviour in the banking sector. When they took office, a recovery was under way, unemployment was falling, growth was rising and stability was beginning to settle in. Those are the facts. However, the extreme fiscal consolidation that they attempted to embark on choked off growth for the best part of three years, causing the Business Secretary, the Work and Pensions Secretary and their ministerial colleagues to fail completely to meet their deficit reduction targets. That led to a huge amount of misery for the British people as unemployment soared beyond 2.5 million. Consequently, they borrowed more in three years than the last Labour Government did in 13—again, the facts.

During those three wasted years, the eurozone slumped almost as badly as Britain. Indeed, the Government frequently pointed to the impact of the crisis in the eurozone on our economy. Of course, that crisis hit our exports, and the Business Secretary, like others, referred to that and its impact in this House during previous Queen’s Speech debates. There are, however, a couple of important points. As the economist Lord Skidelsky put so well in his essay on this subject in March, we should have done so much better than the eurozone, given that we retain the pound and control of our exchange rate. The eurozone slump arose in part because European Finance Ministers were pursuing exactly the same kind of failed policies as the Business Secretary and his colleagues.

Things have thankfully moved on. I know the Prime Minister and Chancellor like to take the credit for the return to growth that we are seeing, but let us be clear: the fact that the recovery has kicked in is down to two things. First is the utter determination and hard work of our businesses and firms in weathering the storm, as well as their ingenuity and continuing capacity to innovate, and second is the hard work and compromises made by their employees.

So often we have sat in this House and had to listen to Government Members, week after week, smearing and denigrating our trade unions. I will be most surprised if we get through this debate without that happening again. The agreements that so many workplace convenors reached with firms and businesses in this country—taking pay cuts; accepting reduced hours—helped keep those firms afloat during these difficult times. That is why I am proud to be a member of the GMB and Unite.

We are certainly not out of the woods. The fact that the Bank of England still has the pedal on the floor with a 0.5% interest rate illustrates how fragile the economy still is, and how far the recovery has to go. More than three quarters of a million young people are still out of work. On average, people are still earning £1,600 a year less than they were when this Government came to office. In fact, just before I came into the Chamber, I was speaking to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) who told me that she has a 42% rate of poverty among the children in her constituency, so we still have a lot more to do.

The 2008-09 crash exposed long-standing, big structural problems in our economy that go back decades, admittedly under Governments of different persuasions, and have to be dealt with. This is in spite of the progress made by the previous Government and the stronger supply-side conditions we achieved. What we have now is an economy unbalanced by sector and region, short-termism in our corporate culture leading to low levels of business investment and low productivity, a dysfunctional finance system, and a stubborn and increasing trade deficit.

--- Later in debate ---

[Mr Umunna]

I will just make a little progress and I will give way in a bit.

As my right hon. Friend the Leader of the Opposition said last week, under this Government the shocking fact is that for the first time on record more people who are in poverty are now in work than ever before. The minimum wage is important. It is set with an eye to the impact on jobs, but we want employers to pay a living wage. Record numbers are currently paid less than the living wage—I have talked about the 22% in Dover, for example. It is estimated that we have 5.2 million people earning less than the living wage, which is costing the Treasury, at the very least, £750 million in tax credits and £370 million in means-tested benefits. We want to do all we can to ensure that anyone who puts in a hard day’s work gets a decent reward for doing so. That is why it is disappointing to see nothing, not just in this Queen’s Speech but in all four to date, to incentivise employers to pay a living wage.

[Stephen Mosley]

The proposals to increase the national minimum wage are welcome, but they are no use if the Government then increase taxes and take more money out of people’s pockets. Will the hon. Gentleman do what his leader failed to do last week and rule out any increases in national insurance contributions if Labour were to win the next election?

[Mr Umunna]

I note that 18.2% of employees in the hon. Gentleman’s constituency are paid less than the living wage. I hope he will be encouraging Ministers in his Government to adopt our proposals to incentivise people to pay it, so that he can reduce that percentage in his constituency.

As for the tax and spending policies of any Government in a future Parliament, these will be set out in a Budget at the time. One of the questions that the hon. Gentleman and others will have to answer is whether they envisage making further reductions in the top rate of tax, giving people earning millions of pounds an even bigger tax cut than they have already.

Zero-hours Contracts

Debate between Chuka Umunna and Stephen Mosley

Wednesday 16th October 2013 Commons Chamber

[Mr Umunna]

That was exactly the point I was just about to make. Of course, insecurity at work lowers a person’s standard of living and makes managing their family commitments impossible. As my hon. Friend says, insecurity is bad for business because insecure, poorly paid workers are less committed and less productive. It is also bad for the public finances, because if people are not getting the hours or earning a decent wage, that means less income tax and national insurance going to the Exchequer and more being paid out in credits, so everybody loses out.

[Stephen Mosley (City of Chester) (Con)]

A few weeks ago, I was talking to a constituent of mine on a zero-hours contract with the Co-operative group. Is the Co-operative group exploiting its workers?

[Mr Umunna]

I will come to that point very shortly.

Banking (Responsibility and Reform)

Debate between Chuka Umunna and Stephen Mosley

Tuesday 7th February 2012 Commons Chamber

[Mr Umunna]

I agree with my right hon. Friend. I know that that is something for which he has campaigned for a long time.

We all know the facts. From the middle of 2007, the losses sustained on securities backed by sub-prime mortgage assets led to a credit crunch. That credit crunch came about due to a loss of counterparty confidence and uncertainty about which financial institutions held toxic assets. Depressed asset prices and increased losses led to serious solvency issues in major banks here and in the United States.

In the US, Bear Stearns had to be rescued by J. P. Morgan, Lehman Brothers collapsed, and AIG was nationalised in 2008 by that well known socialist, the 43rd President of the United States, George Bush. Here, Northern Rock had already been nationalised by the Labour Government by 2008. Later that year, we put in place a £500 billion package of measures designed to recapitalise the banks. That included the special liquidity scheme and inter-bank lending guarantees. The Labour Government took stakes in two of our biggest banks so that, by the end of 2009, the Government held a stake in Lloyds of just over 40% and a stake in RBS that increased to more than 80%.

For all the criticism that is often heaped on my right hon. Friends the Members for Edinburgh South West (Mr Darling) and for Kircaldidy—sorry, for Kirkcaldy and Cowdenbeath (Mr Brown)—by Government Members, I believe that we owe a debt of gratitude to them both for the decisive action that they took to save the system from itself, to secure people’s savings and to ensure that the people we represent could continue to withdraw money from cash machines in the wall. The Opposition are proud of what they achieved.

As the Independent Commission on Banking stated:

“without the intervention of national authorities around the world—requiring taxpayers to incur significant direct costs and larger contingent liabilities—the consequences of the crisis would have been immeasurably worse.”

It is for that reason that this House has every right to take an interest in remuneration and reform in the banking sector. After all, our banks still benefit from an implicit taxpayer subsidy if they fail.

[Stephen Mosley (City of Chester) (Con)]

The Financial Services Authority blamed political pressure for the failure of RBS. Is the hon. Gentleman saying that the FSA is wrong?