Employment Opportunities Bill

David Hamilton Excerpts

Friday 17th June 2011 Commons Chamber

[Mr David Hamilton (Midlothian) (Lab)]

What would the hon. Gentleman say to the many employers in my area in small and micro companies who want to pay a fair wage, and indeed do so, if they were undercut by an unscrupulous employer down the road who did the same work? In the latter’s profit margins, one factor would be the lowest wage possible. What would he say to the good employer who wants to pay a fair wage because he knows his employees personally?

[Mr Chope]

That is happening in the real world anyway. Employers in the black economy do not pay tax or national insurance, or offer basic health and safety protection, but they compete with employers such as the ones to which the hon. Gentleman refers.

Let us consider my situation. In the House of Commons, I happen to employ a researcher/intern and pay them more than the national minimum wage, but I do not feel that I am at a competitive disadvantage compared with those colleagues who pay interns nothing or significantly less than the national minimum wage. If employers in the hon. Gentleman’s constituency have good quality employees and look after them well and reward them appropriately, all other things being equal, they can prosper in the marketplace. Currently, many jobs go to countries in the third world that do not have minimum wages or wages anything like as high as we have. However, if we are to provide good-quality jobs in this country, we need the freedom to allow people to compete, and we need to allow people the freedom to work and reach an arrangement with their employer, if they want to.

Let us imagine that one of the constituency firms to which the hon. Member for Midlothian (Mr Hamilton) referred was up against it, had had a big drop in its order book, was facing problems with the bank and all the rest of it. If these people were on the minimum wage and the employer went to them and said, “Look chaps, we’ve got this financial crisis in the company, so we need to come to an agreement whereby we all reduce our wages and salaries if we are to get through this crisis”, that would not be allowed to happen. How inflexible and absurd is that? I hope that the hon. Gentleman will consider this issue in a different light following this debate, and discuss these important issues with employers in his constituency and, more importantly perhaps, people in his constituency who are currently not working but willing to work for less than the minimum wage, if allowed to do so.

The right to work covers not only remuneration, but how many hours are worked. I will not go into this, but obviously there are considerable worries about restrictions on the ability to opt out of the 48-hour working week. That brings me on to clause 3, which incorporates the training wage into the Bill. I am sure that I speak for many colleagues in saying that I could fill my office with unpaid volunteers and interns. Large numbers of organisations now rely on getting young people into their workplaces for no remuneration at all, even when they have to work in London. That is grossly unfair, but one of the reasons it is happening is that there is no flexibility for such people to be paid something between zero and a national minimum wage. If a person is inexperienced and lacking in qualifications, they will obviously be at a disadvantage in the labour market compared with somebody who has got experience and better qualifications. We should be encouraging, facilitating, enabling these people to join the labour market, rather than acting to exclude them.

That is particularly the case for young people. Record and rising numbers of young people are out of work. There was a blip in the figures published this week, but the trend is unmistakable—the number of people between 18 and 24 who are out of work is rising exponentially. Figures for my constituency show that in the period up to May the number of under-24s out of work was rising, whereas the numbers for those in the older age groups were falling.

--- Later in debate ---

[Mr Bone]

For many years I lived close to the hon. Gentleman’s constituency. It is a very nice constituency, made up of fine, hard-working people; there are just not enough jobs there at the moment, and I take a different view from him on how they might be created.

I thought that I could add most to this debate by not talking from within the Westminster bubble. I spent many years before I came to this place as an employer. I employed hundreds of people in both the manufacturing industry, and the service and travel industries. What particularly attracts me to this Bill is clause 3, which deals with the training wage. One thing that has been a problem for both parties for many years is this idea that we must get more and more people going on to university, because that is the way forward and the way we must progress. However, there are many young people who do not want to go to university. They want to leave education as soon as possible, get a job, work hard and progress in a career.

In the 1990s, when I was running a travel company, I was known as the meanest boss in Britain, because I made some points at a party conference that were translated into the claim that I was paying people less than £1 an hour. That is the level of debate that really frustrates me. We are talking about the kind of young people who used to come into my office. They were really bright young people, but they just did not like school. They wanted to get out of school as soon as possible, they wanted a job, they wanted training and they wanted a career. At that time, the travel industry had a good scheme in place whereby people were taken on and paid a nationally agreed wage—at that time it was, I think, £30 a week, although we are going back to the 1990s. For part of the time that they were working, they received on-the-job training, but they also went away to be trained in a classroom, which was paid for by my professional body, which I subscribed to through fees.

What we finished up with after two years were young people with national vocational qualifications who knew everything about the travel industry first hand. Furthermore—I can say this now, but I could not say it then—those young people have progressed and are now in senior positions across the country. One of the people I employed went on to become a director of my company.

We seem to have forgotten those young people who are not necessarily wealthy and who do not want to go on to university, but who want proper training and a proper career. The problem is that, if I were an employer now, I could not take on such people without paying them the minimum wage. I could not then afford to give them on-the-job training or to let them go off to college. I would also not be able to afford to let them travel to America to see how the operation worked there, as I used to do. That is a real problem, but it is addressed totally by the Bill. I freely accept, however, that there are many things in the Bill that might need to be changed.

[Mr David Hamilton]

May I put the converse argument to the hon. Gentleman? He is making a good argument for his particular circumstances, but I also used to be the chief executive of a company. I employed people and training took place. In the 1980s, companies such as Wimpey had hundreds of apprentices. They were operating in competition with other companies, and they had to stop taking on apprentices because the cost factor for them was far greater than it was for their competitors. A line has to be drawn, so that the same conditions apply to all companies. Surely that is the fair way forward.

[Mr Bone]

I am sorry that I cannot comment on that situation; I can comment only on what I know about.

There is a problem at the moment in that we are not providing those young people who want employment but do not want to go on to university with the opportunities that they need. The Government have moved forward with the apprenticeships scheme and a training rate of £2.50 an hour, but that rate is limited to those on apprenticeships. I am talking about providing good quality training in the classroom and on the job, as well as allowing the person to earn some money. That is why I would like the Bill to move into Committee.

The hon. Member for Manchester Central (Tony Lloyd) made a good point about asylum seekers, with which I entirely agree. The Bill also contains provisions relating to that. He is an outstanding parliamentarian, and I hope that he will vote for the Bill and seek to amend it in Committee. That would get around the silly business of the official Opposition saying that the Tories want to abolish the minimum wage. That is not what the Bill is about. I recently visited the British Footwear Association in Northamptonshire. Its representatives told me that they had a real problem getting people to come into the industry because there was no method by which to attract them. Clause 3 of the Bill could address that problem.

My hon. Friend the Member for Northampton South (Mr Binley) is an employer of many people. There is a fundamental misunderstanding on the part of people who have never employed anyone. They do not understand that the most important thing for an employer is to look after their employees. They are the company and the family, and the employer must ensure that they are looked after. The minority who do not do so is very small. Any company that does not look after its employees will go bust. It has frustrated me for years in this place that I cannot say, “Look, it is just not like that out there. We look after our employees. We want them to do the best they can. Yes, they might start on a very low wage, but we want them to progress within the business and go on to jobs elsewhere.”

I shall tell the House about something that has really wound me up about this place. In the first five years I was here, I never employed an intern. Our budget was high enough to pay people to do all the work that we as Members of Parliament had to do. Our constituency postbags are now getting bigger and bigger, and when the constituencies get even larger, we will have more to do. Then the dear old Independent Parliamentary Standards Authority came along and cut the staffing budget, which meant that we had to make people redundant. This is wholly relevant to the Bill as it concerns the minimum wage and training. I have recently taken on an intern. Two people approached me who were first-class people with university degrees. By the way, if anyone is looking for a researcher, those two are still available; they are very good. The problem is that I cannot pay them anything less than the minimum wage, so they would have had to work for free.

The real scandal is that unless people’s families can afford to allow them to work for free in this place, they cannot come here. There will be equally well qualified and good people, some of whom have come out of university, who cannot afford to take an internship, making them worse off when it comes to getting a job in the future. That cannot be right, but clause 3 would allow those people to be paid at least something while they are working to become interns. As I say, that is the real scandal. As for IPSA, many good things can be said about it—[Interruption.] No, they cannot. I withdraw that remark, Mr Deputy Speaker, as I was clearly wrong. There are some good things about IPSA, but on this issue, they have got it totally wrong.

In conclusion, my hon. Friend the Member for Christchurch has done a great job in introducing this Bill. It has created cross-party interest and arguments within the parties. The excellent Minister intervened earlier to tell him that he should not hold his breath. I also recall my hon. Friend the Member for Christchurch saying that he was previously winded when the Government accepted his Bill. I think that the worst thing that could happen to someone would be if they were holding their breath and then got winded. I expect the Minister to welcome the Bill.