Damian Hinds
Main Page: Damian Hinds (Conservative - East Hampshire)Department Debates - View all Damian Hinds's debates with the Department for Business and Trade
(1 month ago)
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Chris Bryant
No, no—but making a snide remark has not recommended the hon. Gentleman to me any further, I have to say.
A seasonal job may be the first route out of NEETdom. That is why we built flexibility into the Employment Rights Act 2025 to address issues of seasonal demand. Not all seasonal work is done on a zero hours or similar basis, but, where it is, there are provisions in the legislation to allow those guaranteed hours to be part of a fixed or limited-term contract where appropriate.
Let me be clear that the right to guaranteed hours does not force companies to make seasonal workers permanent; it gives workers the right to choose certainty and stability in their contracts where they want it, which will help them to budget and plan their lives. That is the right thing to do. It ensures that workers are fairly treated and affords employers the flexibilities that they need, while giving around 2.7 million workers a pay rise thanks to increases in the national living wage and the national minimum wage. I should add that the Department is running a consultation on some of the finer details of our zero-hours policies before they come into effect, and I encourage businesses to share their views with us so that these reforms work in practice, not just on paper.
Chris Bryant
Oh, I have hours yet—and I still have to give way to the hon. Member for Angus and Perthshire Glens—but of course I will give way to the right hon. Gentleman.
Damian Hinds
The Minister said that he would not move the amendment in the name of the Prime Minister. I do not think that is unheard of, but I am curious to understand why, having put down such an amendment, the Government would not move it. There are three main things here, and the Minister has talked about two of them: the Employment Rights Act and apprenticeships. The third main thing seems to be about planned changes for business rates. In not moving the amendment, is the Minister saying that the Government do not stick by what they said previously about upcoming changes to business rates on pubs?
Damian Hinds (East Hampshire) (Con)
We have 109,000 more young people out of work, the youth unemployment rate is at 16%, and our ratio between youth unemployment and overall unemployment is now at European levels. Why do we care about youth unemployment? There are two reasons: first, it is a matter of what is right and of justice for young people; and secondly, if someone is unemployed when they are a young adult, the scarring effect on their career and earnings can stay with them for five, 10 or 20 years into the future.
It is definitely true that the labour market has softened a lot. I hear in East Hampshire that this has not been about mass layoffs; it has been overwhelmingly about not taking people on in the first place, or not increasing the amount of work hours for people already employed. That is especially true for those marginal employment decisions—Saturday jobs, seasonal work, and, the title of today’s debate, summer jobs.
The number of apprenticeships is about to rise dramatically, but that is because the Government have reduced the minimum specification and length of time for an apprenticeship, and every time that is done, the number goes up hugely. But I worry that, like for like, apprenticeships in key sectors employing lots of school leavers—I hear this about hairdressing, for example, in East Hampshire, as I am sure other Members also do—are already falling. Business owners in my constituency are reluctant to expand because of the risk, and are not maxing out on business opportunities where they are fluctuating or seasonal. The phrase “pub-closing time” has become meaningless, because pubs are closing earlier and earlier, all at different times, and in some cases not opening for days.
I spoke about the scarring effect of being unemployed as a young adult. There is also a big downside and cost to not being able to get early paid work experience opportunities before becoming a full-time employee. To be fair, the Saturday job, and part-time employment for under 18s in particular, has been in long-term decline. That is partly to do with the decline of paper rounds and milk rounds. There has also been a decline in Saturday work in retail, some of which is about an increasing nervousness—often an ill-placed, unnecessary nervousness—on the part of employers around their responsibilities when hiring young people. Whatever the different mix of reasons, the numbers have come down over time.
That decline has now accelerated for two reasons. First, I am afraid that whenever the economy takes a hit, it is always young people who feel it first, which is because of the “last in, first out” approach to employment and people not being taken on in the first place. Secondly, it has become relatively costlier and riskier to take on those young people, because of direct employment costs and the Employment Rights Act 2025.
All of us in the Chamber are Members of Parliament; we have done reasonably well in our lives. Most of us, before we came here, had successful careers of one type or another. How many colleagues in this place had their first paid employment for 37.5 hours a week, full-time, reliably throughout the whole year? I certainly did not. My first job was a zero-hours contract—we just did not call it that then. In fact, it was not quite a zero-hours contract because there was no actual contract. There was no guaranteed work; it fluctuated week to week, and night to night, washing dishes in a local restaurant, but that is where I learnt some of those crucial skills. They now call them soft skills, but there is nothing soft about them; they are hard.
That job is where I learnt about taking criticism; about turning up again the next day; about turning up when I was tired or feeling not that great; about looking the customer in the eye; and about how, if I kept coming back day after day, week after week, at the end of the week they gave me money. That is an important life lesson.
A high proportion of people with zero-hours contracts are young, and a high proportion are students or people with another job. But one of the biggest employers of people on zero-hours contracts is the national health service, because NHS bank staff work in that way. The contracts can work for young people. In my constituency, I know plenty of young people who have two zero-hours contract jobs: one at home, where they are during the holidays; and one where they are studying during term time. I do not see why that does not work perfectly well for both employer and employee.
Sir Iain Duncan Smith
I have always thought that a zero-hours contract was a terrible name for what is actually flexible hours. There was always an ideological opposition to it, but in practice over two thirds of those who were on the contracts—adults as well, often with caring responsibilities—loved the idea of being able to work when they could but not having to do so when they could not manage it. That is the kind of flexibility that is necessary in an economy. It was loved by people in Europe, who wanted to do the same but never got around to it.
Damian Hinds
My right hon. Friend is right. I have spent an inordinate amount of time studying zero-hours contracts, partly because the previous leader of the Labour party, the right hon. Member for Islington North (Jeremy Corbyn), used to bring them up at Prime Minister’s questions every week, and gave the impression that half the country was on a zero-hours contract and was getting no work whatsoever. In fact, it turned out that less than 3% had their main job as a zero-hours contract, so far from them working zero hours—[Interruption.] Yes, look it up.
Several hon. Members rose—
Sean Woodcock
The right hon. Gentleman is right. I had a zero-hours contract as a student and it worked for me because, crucially, I was able to say, “No, I can’t come in today.” Surely he understands that there is a difference between that situation and when often huge companies—but not only huge companies—say, “You have a zero-hours contract and that is it, there is no alternative, but you are expected to come in for these hours.” Does he not understand that zero-hours contracts can be exploited? It is not about getting rid of zero-hours contracts that work for individual students.
Damian Hinds
Of course the hon. Member is right. Nobody wants exploitative zero-hours contracts. Quite often when the Opposition talk about zero-hours contracts, the Government think that the work exploitative automatically gets inserted into the phrase. That is why we stopped exclusivity clauses in zero-hours contracts way back when we were in government. Nobody should be exploited, but that does not mean that there cannot be a job that works for the employer and employee and gives flexibility in the economy.
Jayne Kirkham
The right hon. Gentleman is being generous. Of course there are zero-hours contracts that work for some people and not for others. For example, if it is the choice of the employee, then it is fair enough, but if someone’s work is cancelled when they are on their way in, that is not fair. The 2025 Act still allows people who are employed to say, “No, I do not want those average hours. I am happy to work on a zero-hours contract.” That optionality is still there.
Damian Hinds
Good employers, who want to keep their employees, do not do stupid things that upset their employees. Good employers will always want to keep good people in order to build their business.
Dr Scott Arthur (Edinburgh South West) (Lab)
Will the right hon. Member give way on that point?
Damian Hinds
I had better not. Although, it always brightens my life to hear from the hon. Gentleman, so I will give way.
Dr Arthur
I thank the right hon. Gentleman, who has been taking a lot of interventions. Does he acknowledge that we are here to think about those not-so-good employers, not just the good ones? That is what the Employment Rights Act is about. At the weekend I met an employer who had minor concerns about what it was going to mean for him, but he said that, by and large, he was already doing a lot of this stuff. It is not about the good employers; it is about the not-so-good ones.
Damian Hinds
The hon. Gentleman is right, of course. I do not think anybody in the House of Commons would argue that there should be no employment or workplace regulation at all. [Interruption.] Well—actually, I do not think anybody does, genuinely. I certainly do not. I welcome very many of the rights that have come over the years. However, it would be totally ignorant to suggest that new inflexibilities and rigidities can be brought into the labour market without their having an effect on unemployment. Whenever there is an effect on unemployment, there is always a magnified effect on youth unemployment, and we want to ensure that young people can get into and stay in jobs.
I want to speak briefly about the costs of employment. This is much harder to talk about, because whenever anybody talks about the realities of equalising pay between younger people and slightly older adults—not that people do so very often—they can be vilified easily for being heartless, uncaring, discriminatory—you name it. However, sometimes being in this place as a politician and a representative and having the best interests of our constituents at heart means having to say difficult things. This difficult thing is something that I think most people here know—including, actually, most Labour MPs—but it is difficult to say.
Let me take a little bit of the heat and politics out of it by talking about a hypothetical situation. This is not the situation that we actually have today, because we have differential national insurance contributions by age. Imagine a situation where an employer has a job vacancy and they have two applicants who in all other respects are the same, but one is 30 years old and one is 18. Who is the employer going to employ at exactly the same wage, with all other things being equal? They are, of course, going to employ the person with experience—the person with both work experience and life experience, who has just been doing it a little longer, working with teams, dealing with colleagues and dealing with customers.
I use that hypothetical situation just to establish the principle that wages do have an effect, and that is why the Low Pay Commission—[Interruption.] The Minister can screw up his face again if he wishes.
Damian Hinds
Well, I will help him with that. That principle is why, back in 1999—under a Labour Government, as he will recall—when the original minimum wage came in, the Low Pay Commission specified that there should be a different rate for young people. That was for two reasons. The first reason was because of the work experience effect: there is a difference in how employers view people with a few years’ work experience and others without that experience, and if those rates were exactly the same, youth unemployment would inevitably rise. The second reason was to recognise that very many of those younger workers are in some form of education or training at the same time. We all want people to be properly rewarded for the work they do. The best thing is to be well rewarded in a job, but the worst thing of all is not to have a hope of getting into a job that is well rewarded.
We have talked a bit about the national living wage. Of course, we all want the national living wage to keep going up. That is why we brought it in, by the way, in 2015, with the explicit intention that it would keep rising until it was further up the income distribution. However, we do have to acknowledge the reality. As I say, I think that most people present know that there is a difference by age and that it is there for a reason.
Jayne Kirkham
It is still the case that there is that differential, is it not? There is still about a £2 difference between under-21s and over-21s, so it is not actually having the impact that the right hon. Gentleman suggests it should. If there is still that differential, why is there that problem at the moment, when employers are not paying national insurance contributions for under-21s either? Considering that the differential still exists, why does the problem exist?
Damian Hinds
I genuinely do not know quite how to respond to that. The differential has come down. It is due to come down further—it is due to be eliminated. There will still be the difference in national insurance contributions. Nobody is at this time envisaging there being no difference in employment costs at all. The reason that I used a hypothetical case and established that principle was to demonstrate why there is a wage effect on youth unemployment.
I was going to talk about the overnight visitor levy, on which I have strong views—I think it will be bad for our local economies, bad for international inbound tourism and bad for places that rely on domestic tourism and seaside towns in particular—but in the interests of time, Madam Deputy Speaker, I will not.
I will just end by saying that I would have thought that the Labour party would like to break away from that cliché—the fact that every Labour Government ever to exist have left office with unemployment higher than when they came in. If I was a Labour Member, I would want to say, “With our enormous majority, and perhaps with the new Prime Minister we are about to have, this could be our chance to break away from that, so that nobody can ever say that to us again. We are, after all, Labour—we are supposed to be the party of work. Let us devote all our energies to maximising employment, and particularly to maximising the opportunities for young people coming into the labour market.” It is not too late for them to take that approach.
I just want to add something that we have not really talked about today—in fact, something we hardly ever talk about—in the context of these changes. We need to consider the number of people who will be forced into self-employment as a result of the changes in the Employment Rights Act. I strongly encourage the Government to change course.
Several hon. Members rose—
Douglas Lumsden (Aberdeen South) (Con)
We have heard lots of people describe their summer jobs, and I will do so too. When I was a student, I enjoyed a summer job. I was working as a postman in my constituency, delivering letters and leaflets to homes up and down Aberdeen—and what do you know, Madam Deputy Speaker? Thirty-five years later, I am still delivering leaflets and letters across the city of Aberdeen. That job was vital to me, because it gave me the resource that I needed—the money that I could spend through the rest of the year—as it is for so many people.
What has changed in the intervening years is that our city now finds itself under attack from not one, but two Governments—the enterprise-crippling national insurance increase from the Labour party and the double whammy of business rate increases and banditry from the First Minister in Holyrood. The First Minister is clearly content in hoarding business rates in Edinburgh to fund his independence obsession and his other failed projects.
That is before we even talk about the barons of Aberdeen city council, which is run by an SNP-Lib Dem coalition of malaise. It will be of no surprise to this House that all it wants to do is tax, tax, tax. That is clear because of the massive 7% tourism tax levied by the council on hotel stays. That is the highest in Scotland—more than Glasgow or Edinburgh. As a result, hotels are sitting empty, with the council content to punish vendors and visitors alike.
Damian Hinds
As the Government look to introduce this hated so-called overnight visitor levy in England—[Interruption.] I believe they are. Labour Members always say, “Don’t worry, it’s not very much money. It will all be hypothecated. It will have no effect on the inbound tourism industry.” Perhaps some of them might look at the example of my hon. Friend’s home city of Aberdeen and consider what could happen.
Douglas Lumsden
Lessons must definitely be learnt from what has happened in Scotland, because we are seeing a big impact.
Why would someone start a business in Aberdeen now? New businesses have to factor in rent, business rates, insurance, energy costs and waste charges, and that is before they even get to national insurance or staff costs. There is a huge cost to doing business, and it is no wonder that our high streets are struggling. My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) made an important point about business owners, because often they decide not to take a salary, or to take very little. We have heard about zero-hours contracts, but that does not apply to them, and neither does the minimum wage. Often they are going without in order to pay all their costs.
We have organisations that are trying to make a difference. Our Union Street in Aberdeen, for example, does a great job of providing businesses with incentives and provides start-up grants for new businesses, but it is a private organisation. It should be the council, city council and Governments that are doing more to help industry.
Summer jobs are critical for the hospitality sector. I think of the beachfront in my constituency, where we are fortunate to have two whole days of summer every year. It is so important that those businesses have the flexibility to employ part-time, seasonal workers. Across the city there are so many great businesses that benefit from seasonal workers. I think about Codona’s, a funfair at the beach, which employs hundreds of people, but it is most busy during the summer period. That is also the case for cafés in places such as Duthie park, bustling when the weather is good. They need that flexibility. Recently we have been fortunate to have a huge expansion at Aberdeen harbour, under the stellar leadership of Bob Sanguinetti. That means that cruise ships can now visit Aberdeen and Aberdeenshire. That is a tremendous asset, but it is seasonal and we need to ensure that our hospitality sector is resourced to cope with the demand.
We need to support our hospitality sector, but the SNP and Labour Governments have been woeful at doing that. We have seen job taxes, business rates, bureaucracy and red tape, and all that is hindering our industry, harming our jobs, causing businesses to fail and impacting young people the most. The Government need to think again, allow our hospitality industry to thrive and support our motion today.
Blair McDougall
Where the workers that the hon. Member describes feel that way, they will not have to change their contracts. We are talking about the people who work for the same employer as their main job, week after week, without any certainty of income. The right hon. Member for East Hampshire (Damian Hinds) said that only 3% of workers rely on a zero-hours contract as their main job. That is one in 25 workers. [Interruption.] In his constituency, there are 60,000 people of working age, meaning that hundreds of people in his constituency do not have the right to regular hours.
Blair McDougall
I will take the right hon. Member’s intervention. Maybe he can say why he thinks those hundreds of workers in his constituency should not have the right to full-time employment.
Damian Hinds
I can tell the Minister that 3% is a relatively small percentage of 100%, and many of those people are students. The Labour party used to speak about zero-hours contracts as if they were taking over the entire economy, but that is simply not true—they are a perfectly legitimate form of employment that works for some people. I described the situation of my constituents who have one zero-hours contract at their term-time address and another at their home address. What is wrong with that? If it works for the employer and for the employee, why is Labour so against that flexibility?
Blair McDougall
Those people will still be able to have those contracts under the legislation, but we are talking about potentially hundreds of people in the right hon. Member’s constituency—that was his formulation—who rely on zero-hours contracts as their main form of employment, with no certainty of income from month to month. That cannot go on in this country; it is fundamentally unfair.
Several Conservative Members mentioned business rates, which the Government take incredibly seriously. The Conservative party began the revaluation without any plans whatsoever for any transitional support or relief for the people affected by it; Labour introduced a support package worth £4.3 billion to protect ratepayers from seeing large overnight bill increases because of that revaluation. As my hon. Friend the Member for Rhondda and Ogmore (Chris Bryant) said, over half of ratepayers will see no bill increases this year, and 23% will see their bills go down. Plenty of arguments could be made about whether we have gone far enough and how far our continued reforms of business rates should continue, and my colleagues in the Treasury will do that, but for members of a party that had no plans for any relief whatsoever to be saying now that they will spend £4 billion on abolishing those rates altogether, without saying where it will come from, is frankly ridiculous.
My hon. Friend the Member for Mid Derbyshire (Jonathan Davies) mentioned the great British savings this summer, and made a very fair request for those in the Treasury, as they look at the overall impact of that, to look at the impact on individual young people as well.
Many Opposition Members rightly raised the impact of increased national insurance contributions. As I have said before from the Dispatch Box, we recognise that that was a big ask of business, but what it did was say to the international money markets that we were a serious country again. That has been seen in lower mortgages, and in lower borrowing rates for businesses. I understand the genuine concern expressed by Opposition Members about the impact on youth employment, but I would say that it is at best a partial explanation, given that employers of workers under the age of 21 and those employing young apprentices do not pay national insurance.
The hon. Members for South West Hertfordshire (Mr Mohindra) and for Meriden and Solihull East (Saqib Bhatti) and the right hon. Member for Chingford and Woodford Green suggested that whenever a Government add to existing business costs, we should think about the cumulative impact rather than viewing it in isolation, and that is an entirely fair argument. Every time we ask something of businesses, that gives us in government a further incentive and, indeed, responsibility to do more to remove costs from them. That is precisely why, through the £2.5 billion youth guarantee package, businesses are being given a £3,000 incentive to employ 18 to 24-year-olds who are at risk of long-term unemployment, a £2,000 incentive to hire foundational apprentices, a further £2,000 to hire apprentices aged between 16 and 24, and fully funded costs for 16 to 24-year-old apprentices. That, of course, is on top of all the other work that we are doing to reduce the costs on business.