David Nuttall
Main Page: David Nuttall (Conservative - Bury North)Employment Opportunities Bill
David Nuttall Excerpts
Mr Chope
If we have a national minimum wage, we should be able to opt out of it. If the hon. Gentleman is arguing that there should be not a national minimum wage but a regional minimum wage, that is a completely different proposition, and it would need a different Bill, but I suppose that my Bill might be amended to reflect his wishes, were that the wish of the House.
Mr David Nuttall (Bury North) (Con)
Is there not some confusion between the “national minimum wage” and what is described in London as the “London living wage”? That is something entirely different and, as I understand it, something set annually here in London, not by the Low Pay Commission.
Mr Chope
My hon. Friend is absolutely right, and I do not know, because I have not inquired, how many hon. Friends of the hon. Member for Manchester Central (Tony Lloyd) employ people as interns for well below what my hon. Friend and the Mayor of London would describe as the London living wage, but perhaps we will hear about that in due course.
I do not want this Bill to go forward without some focus on clause 1, because under current law we deny those foreigners seeking refugee status the right to work in this country.
Clause 2 deals with the problems that the current law restricts British citizens from selling their labour at a price of their own choosing; discriminates against those who are young, inexperienced or seeking on-the-job training; prevents people from agreeing to cut their wages to save their jobs; and imposes nationally uniform rules on the labour market, ignoring regional and local variations. All those shortcomings are tackled in the Bill, which effectively recognises the right to work.
The context for that can be found in article 23(1) of the universal declaration of human rights:
“Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.”
Article 6 of the international covenant on economic, social and cultural rights, to which the UK is a party, states:
“The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right.”
I think it will come as a shock to many Members to know that currently many people are not given the right to work enshrined in those important United Nations articles. The Bill is designed to address that problem.
To make it clear to the hon. Member for Manchester Central that I have read my own Bill, I have noticed that there is a typographical error in clause 1. As a consequence, it would enable only foreigners who are in detention to work, rather than the reverse, which was the intention. I put that firmly on the record and apologise to the House. I will address my remarks to clause 1 as it should be, rather than as it is.
Clause 1 refers directly to those unlucky enough to be seeking asylum in this country as a result of persecution, and obviously to their families. Why are we depriving people who are seeking asylum of the ability to earn money while in this country, so that they can make ends meet and not be wholly dependent on the state? The shock of seeking refugee status should not be exacerbated by the humiliation of not being able to take employment and contribute to the society that is acting as their host while their application is considered.
Mr Chope
My hon. Friend is absolutely right. It is certainly true that we would get less official employment, which goes back to the point made by my hon. Friend the Member for Northampton South (Mr Binley) on the black economy. If the minimum wage results in higher numbers of people in work, why are more than 1 million people working in the black economy below the minimum wage, as the Low Pay Commission assesses?
Mr Nuttall
So if we continued to increase the minimum wage, would we get rid of all unemployment? That seems to be the logic.
Tony Lloyd
Will the hon. Gentleman please be patient?
I shall begin by examining the Bill sequentially. I want to talk first about the part of it that I agree with. The hon. Member for Christchurch began his speech by talking about the impact of clause 1, and I had a lot of sympathy with what he said. We really ought to have a serious debate about this in the House, and I have urged the previous Government and this one to take the issue seriously. It makes no sense in a country such as ours to force into unemployment those asylum seekers who are willing to work and to make a contribution to their families, the wider community and the taxpayer. Sometimes, they are forced into worse than unemployment. As we know, the fact that we push asylum seekers into destitution is one of the drivers of prostitution and some types of crime. The hon. Member for Wellingborough (Mr Bone) made a valid point about women who are being trafficked into our society, and we ought to take that issue seriously.
Governments classically respond to the argument in favour of allowing asylum seekers to work by pointing out the danger of creating a magnet that will attract further waves of asylum seekers. The hon. Member for Christchurch was absolutely right to say, in response to the hon. Member for Shipley, that the problem with our asylum system is not that it operates as a magnet, but that we deal so slowly and incompetently with the processing of asylum cases. This was the case all through the years of the Labour Government, and, sadly, it is still the case now. We need rapid resolution of those cases.
Let us take the example of a woman who is legitimately claiming asylum because she has been forcibly trafficked from the far parts of eastern Europe, or wherever, and forced into prostitution in our society. She has no capacity to return home and genuinely fears for her life and for her family back home. We need to be able to say to that woman, “Yes, you are a genuine asylum seeker and you can play a constructive role in our society.” We also need to say to the illegitimate, bogus asylum seeker, “Please return quickly to where you came from.”
There is real merit in having this debate. Even though I disagree fundamentally with everything else in the Bill, I profoundly agree with the hon. Member for Christchurch that we need to have a debate on this subject. We need to debate not only what a civilised society ought to be, but what is practical and proper for our society. In fact, I would go further and suggest that there should be an expectation on legitimate asylum seekers to begin a process of finding work, because that shows commitment to the values and the ethos of our society. That would create a good two-way set of responsibilities, which relates to the proposal in clause 1. Alas, the rest of the Bill does not have the same merit as that first part.
It is always delightful to listen to the hon. Member for Christchurch. He always offers us an entertaining race around the now rather worn and old economics textbooks from the 1920s, the 1870s and the 1850s. Those books are now a little thumbed at the corners, but they are still interesting to read because they shed some light, not so much on the working of a real economy in the 19th century, and still less in the 21st, as on the thinking of those who suggest that the Bill is about freedom. It is not about freedom; it is about taking away social protection for vulnerable people in our society, and that is what we need to talk about.
That is the nub of the intellectual debate about the merits of free-market economics versus what the hon. Gentleman would call the crushing hand of state socialism. Were the minimum wage an example of the crushing hand of state socialism, some Labour Members might be a little happier with the direction of travel in our society’s support for the vulnerable and its recognition of the relationship between those in the most powerful economic positions and those at the bottom of that pile.
Mr Nuttall
I am pleased to hear the hon. Gentleman’s welcome for clause 1. Does he think that asylum seekers and others covered by the clause should have the right to work for less than the minimum wage if other people should not?
Tony Lloyd
No. If that is what the hon. Member for Christchurch is proposing, I have absolutely no sympathy with that view. The reason for having a floor is the ambition to prevent the undercutting of wage rates for individuals, whether they are born nationals, as the hon. Gentleman would have it, or asylum seekers. The suggestion that the hon. Member for Bury North (Mr Nuttall) has just made lacks merit because it would erode the whole concept of a minimum floor below which people ought not to be expected to fall.
I want to deal with the argument put forward by a number of Conservative Members that it is legitimate to do away with that floor. They have cited reasons of competitive pressure and the black economy, to which the hon. Member for Northampton South (Mr Binley) referred. Of course we know that the black economy exists and that it exerts a dangerous influence at the bottom end of the labour market, but we do not want to make it a model for how we deal with the whole economy. We should be seeking to get rid of the black economy, rather than institutionalising it by getting rid of social protection relating to wage rates.
That same black economy erodes health and safety standards at work. In my somewhat distant youth, I worked for companies that thought health and safety was an optional extra, and that put my life and those of other employees seriously at risk. The minimum wage and health and safety legislation all form part of the same debate, which we have had many times. I know that different views exist, but I believe in a proper floor below which people in a decent society should not be allowed to fall.
Mr David Nuttall (Bury North) (Con)
It is a great pleasure to follow my hon. Friend the Member for Wellingborough (Mr Bone) and I thank him for the sound comments he made; and I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on bringing the Bill before us. I am conscious that time is marching on and that other Members wish to speak before we hear from the Minister. I shall not, therefore, reiterate the sensible and sound arguments made in support of this Bill, which I, too, am proud to support. However, one or two points have not been mentioned, so it might be of benefit to everyone if I highlighted them.
First, let me say at the outset that my support is based on my desire to do all I can to help those people in my constituency—people in Bury, Tottington and Ramsbottom—who are unemployed. The latest figures from the Library on the number of people claiming jobseeker’s allowance in my constituency as of May 2011 show that 625 such claimants are aged 24 or under; 1,055 are between 25 and 49; and 280 are aged 50 and over—totalling 1,960, which is nearly 2,000 people. Those are the people I want to help.
The great benefit that would accrue if the Bill reached the statute book is that we could make the rights of those people a reality. I mean the basic human right contained, as my hon. Friend the Member for Christchurch said, in article 23(1) of the universal declaration of human rights—that everyone has the right to work. The minimum wage legislation, however, removed that right to work from certain people, who were told, “We are sorry, but you cannot do what you would like to do. We have decided for you. We have taken that right away from you. We will tell you whether or not you can choose to work.” That cannot be right.
My hon. Friend the Member for Wellingborough, who is no longer in the Chamber, did not make clear whether he was an employer at the time when the minimum wage was introduced, but I can tell the House that I was. I can speak about the effects of that legislation on the basis of first-hand experience. Credit should be given where it is due: we were given notice, and we knew what was coming down the line. The legislation had been enacted, and we knew that, in time, a national minimum wage would be introduced. So we started to plan, and to assess the likely impact on our business.
Members might assume that it would be a simple matter of having to increase the pay of anyone who was earning less than the minimum wage at the level at which it was introduced back in 1999, and of course that was the first thing that we, as employers, had to do. However, it had a knock-on effect. Ours was a small business employing perhaps 40 people, and the introduction of the minimum wage probably affected two or three of them, although I cannot recall the precise number. They were the office juniors—the staff members who were at the bottom of our pay scales. They might have been with us for only a few weeks or months.
Most of our staff were moved on, and those who started as office juniors knew that they would be able to work their way up and become junior typists, then secretaries, and eventually, perhaps, trainee legal executives. Other staff members, however, had already progressed within the business and were earning what had now become the minimum wage. As soon as the office juniors were moved up, we had to start moving everyone else up. I understand that the process is known as “pay leapfrogging”. All that happened was that everyone was moved up the ladder.
Mr Binley
Another facet of the minimum wage was that it increased at twice the rate of inflation, which had the effect of shoving all wages up. Does my hon. Friend agree that Ministers in the last Government—the present Opposition—worked on behalf of their paymasters, the unions, to achieve that very objective? One wonders where it would have ended in terms of Britain’s competitiveness.
Mr Nuttall
My hon. Friend has made a good point. That was part of the overall effect of the introduction of the national minimum wage, with which I was about to deal. Earlier speakers have said that many employees—especially those at the bottom of the pay scales—benefited from its introduction, but it is sometimes forgotten that, by implication, it must have had an inflationary effect on the economy. Nowadays we are constantly hearing that the increase in the VAT rate has, understandably, had an effect on the inflation figures. Similarly, given that the cost of employing people is the biggest single cost incurred by many businesses—especially in the service sector—the introduction of a national minimum wage is bound to have a serious and significant inflationary effect. Therefore, the overall effect of helping those at the very bottom of the pay scales is perhaps not as great as may sometimes be thought.
We have heard a lot about the arguments for, and logic behind, the national minimum wage, but I submit that they are, in fact, arguments for a national income guarantee, as there would be logic in saying every member of society should have a given minimum level of income. That is not what the national minimum wage does, however. It is entirely different, and therefore in most cases—there are exceptions, one of which I shall touch on shortly—the choice is between a life on benefit and a life in work.
Let us consider the following hypothetical situation. An entrepreneur wants to establish a new restaurant in my constituency. It is a large restaurant with a number of tables, and he wants to employ waiters and waitresses. The restaurant will be open full-time, and he calculates that he can pay a total of £53.37 per hour for his workers. It just so happens that that is nine times the current national minimum wage of £5.93. At present therefore, he would be able to employ nine members of staff. The entrepreneur places an advertisement in the press, and 10 people apply for the jobs—the true figure would probably be much higher, of course. They are all friends who went to school together or met at the local job centre. They are probably some of the 625 people to whom I have referred who are unemployed. They say to the entrepreneur, “This is great. This is just what we would like to do. It is an opportunity for a job. We would all like a job.” The entrepreneur replies, “I’m sorry, but under the current legislation I cannot employ all of you. The best I can do is employ nine of you.” Therefore, the 10th friend is left unemployed and living on benefits, whereas the other nine can get a job earning the minimum wage.
Under the Bill’s provisions however, they would be allowed to say, “Actually, we’ll help our friend out. We want to help our friend No. 10; we want him to have a job. We all voluntarily agree to that. We would still be far better off if we worked for, let’s say, £5.33 an hour, and then all 10 of us will be able to have a job. We’ll all be friends working together. That will be tremendous, and our poor 10th friend will not be left on their own.” Without this Bill’s provisions, the great irony of the existing situation is that the nine would be employed while the 10th could become self-employed and would be entitled to work for less than the minimum wage in any case. That is an anomaly in the current legislation.
Whenever the national minimum wage is discussed and arguments are put for and against it, people always talk about “big businesses” and “rogue employers”, but let us not forget that the national minimum wage applies to all employers, including charities and small organisations in the voluntary sector. They are all affected by the national minimum wage. The Bill is a contribution to the big society, because it would mean that small charities would be able to employ more people, not only the young, but perhaps older people, too—this is not just about people in the under-24 category. My figures show that in my constituency this might apply to 280 people over 50. These people might be able to afford to work for less, perhaps because they have bought their own home and paid off the mortgage, and they may wish to help a local charity. I am talking about self-sufficient people who are not claiming benefits and who want to work for a small local charity. As the law stands, they would not be able to do so. The Bill therefore contributes to another other theme of the big society—that of passing power over.
Mr Alan Campbell (Tynemouth) (Lab)
In those circumstances, could the person not volunteer for the charity? They would therefore not be “working” and would not be subject to the minimum wage legislation.
Mr Nuttall
Many charities employ people and also have volunteers; many small charities employ a certain number of people on a full-time basis and also have volunteers.
Mr Campbell
But is not the premise of the big society that people should volunteer? It is about encouraging people to volunteer, rather than about people seeking employment.
Mr Nuttall
The big society is about helping to enlarge the voluntary sector. [Hon. Members: “It is voluntary.”] Yes, but some voluntary organisations still employ people to run the volunteers.
The other aspect of the big society is the passing of power from the Government down to the individual. What better example could there be of the big society than for this Bill to become law and for this House to say to the individual, “We will give you back the right to decide for yourself whether or not you wish to work.” That would be the biggest move that this House could make towards helping the big society, as it would give individuals the right once more to decide for themselves whether they want to live a life on benefit or to work for a living. I commend the Bill to the House, and I look forward to hearing the rest of the contributions.