Small Business, Enterprise and Employment Bill

Ian Murray Excerpts

Wednesday 19th November 2014 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I beg to move amendment 8, page 134, line 4, at end insert—

‘(6A) The Secretary of State shall provide an annual report to Parliament on the effectiveness of—

(a) enforcement of the national minimum wage;

(b) the level of the financial penalty for underpayment, including but not limited to its impact on compliance; and

(c) changes in provisions relating to the national minimum wage improving other measures of pay in the labour market.”

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 9, in clause 145, page 134, line 27, at end insert—

‘(3A) The Secretary of State shall make regulations containing provisions and measures enabling and facilitating the enforcement by workers of the rights conferred under this section. Those regulations shall be laid before each House of Parliament in draft before being made, subject to affirmative resolution procedure.”

Amendment 10, page 134, line 36, at end insert—

‘(1A) Regulations made under section 27B, subsection (1), shall include provisions—

(a) giving zero hours workers the right to be awarded financial compensation of amounts, and in circumstances, to be determined by the Secretary of State;

(b) giving employment tribunals powers to enforce their adjudications, including the award of any applicable compensation as referred to in section (1A)(a), or imposition of any applicable penalty, in cases involving zero hours workers; and

(c) imposing an obligation on an employer to offer a fixed hours contract when a worker has worked regular hours for a continuous period, or series of continuous periods, of employment, to be determined by the Secretary of State.”

Government amendments 61 to 64.

[Ian Murray]

It is worth reflecting on the debate yesterday. The Minister for Business and Enterprise, who is not in his place and was not in his place for most of the debate yesterday, said that we would take part 4, which deals with pubs, first yesterday because that was most important. By definition, it seems that the Government do not see the national minimum wage and zero-hours contracts as being important. The programme motion has restricted this debate and that on the important topic of insolvency to just two hours, which shows the Government’s view on these matters.

We have tabled the amendments in the same spirit as we did in Committee, to try to make the Bill a much better Bill than it was when it started its passage through the House. We hear from our constituents throughout the country concerns about pay and insecurity in the workplace. Part 11 is an opportunity missed by the Government to deal with the problems of national minimum wage enforcement and exploitative zero-hours contracts. They need to show that they are on the side of ordinary people who have had their wages cut by more than £1,600 per year since 2010, but again the Government have missed the opportunity to do so.

Fifteen years have passed since the introduction of the minimum wage and the Opposition will keeping saying, time and again, that it is one of the Labour Government’s proudest achievements, despite the significant opposition—I was going to say from the Government Benches, but there does not seem to be anybody on the Government Benches, so it would be unfair to level that charge at the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who supported the national minimum wage. This is another example of the pitfalls of writing one’s speech before one sees who turns up to the Chamber. I apologise for aiming my comments at the hon. Lady. The lack of support from her colleagues on the Conservative Benches this afternoon highlights the seriousness with which they take the issue of national minimum wage enforcement and zero-hours contracts. In the run-up to the May election, their constituents will reflect on the fact that they decided not to participate in today’s serious debate on amendments to part 11.

The introduction of the national minimum wage gave 1 million workers a significant pay rise, and now nearly 2 million workers benefit directly from the minimum wage. For women especially, who are most often susceptible to poor pay, the national minimum wage has had a significant impact for the better on their salaries, their pay and their working lives. It has not affected job retention, despite cries from the Government Benches—although there is no one there today—that it would cost 1 million jobs when it was introduced back in 1998.

However, the problem is that the minimum wage has become the maximum wage for far too many, and has fallen in real terms since 2010. That is why the Labour party is pledging to increase the national minimum wage to a minimum of £8 per hour and significantly to promote the living wage in partnership with employers. Amendment 8 would require the Secretary of State to provide an annual report to Parliament on three crucial aspects of the national minimum wage—first, its enforcement; secondly, the level of the financial payment for underpayment; and thirdly and crucially, the relationship between the national minimum wage and how it reflects pay in the wider labour market, particularly in interaction with the living wage. I shall deal with each of those aspects.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My hon. Friend makes some very good points, but does he not think that we restrict ourselves in our brave attempts to get a good standard of living for everyone in this country, and that the national minimum wage should be a national minimum wage plus? The plus should be a guarantee of skills training and much else that supports the minimum wage. I came into politics to provide the good life for the people in my constituency and the people of this country. I am sure my hon. Friend would agree.

[Ian Murray]

I am grateful for the intervention from my hon. Friend. Pay is a only a small element in the workplace, and skills, education and progression are key. As I said, the national minimum wage should be the very bottom, not the top, of people’s aspiration for pay in the workplace. My hon. Friend raises some important points for his constituents and those throughout the country.

I am delighted that the Minister for Business and Enterprise has now joined us. Without proper enforcement, the regulations will be rendered ineffective. Under this Government, enforcement of the national minimum wage has been poor. That is why we are asking the Secretary of State to produce an annual report on the effectiveness of enforcement overall.

The figures speak for themselves. Reports published earlier this year show that the number of national minimum wage compliance investigations has more than halved since 2010. The response to a parliamentary question tabled earlier this year revealed that the number of investigations had fallen from over 3,500 in 2010 to just under 1,700 by the end of 2013. In addition, the number of cases resulting from Her Majesty’s Revenue and Customs risk profiling or targeting enforcement action had fallen from 1,500 in 2010 to a mere 431 by the end of 2013.

On top of that, the naming and shaming policy, which the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire, announced four times—I am sure she is expecting me to say this—up until recently had been announced more times than it had been used. To be fair, I appreciate that there have been more instances of naming and shaming recently, but it shows why an annual report is necessary to ensure that the regulations are working, the deterrents are robust and all avenues are being explored to prevent exploitation of the national minimum wage.

The Opposition have also been clear that local authorities should be given the power to enforce the national minimum wage alongside HMRC. We know that joint working between HMRC and other enforcement agencies, such as local authorities, is sometimes weak, which limits opportunities to maximise resources across different Government bodies. Local authorities, by their nature, have good knowledge of local employers and already conduct significant enforcement activity through their responsibilities for licensing, planning, health and safety and environmental health inspections. In carrying out those duties, councils sometimes come across cases where they suspect national minimum wage violations, but they have no power to investigate them directly and can merely refer them to HMRC’s enforcement helpline.

Local authorities are perfectly placed to enforce the national minimum wage, given their knowledge on the ground. That move is supported by the report “Settle for Nothing Less: Enhancing National Minimum Wage Compliance and Enforcement”, published last year by the Centre for London, which recommended partially devolving enforcement to local authority level to sit alongside and complement the current central function. It would be interesting to hear whether the Minister has considered having local authorities take an active role in national minimum wage enforcement.

[Mr Sheerman]

My hon. Friend is making an excellent speech, but will he also mention local enterprise partnerships, which are becoming more mature and powerful at bringing a focus to matters? I have noticed recently that their links to small businesses, in particular, are better than those of some local authorities I know.

[Ian Murray]

My hon. Friend makes a good point. There are many agencies dealing directly with businesses, particularly small businesses, that could play a role in national minimum wage enforcement. Poor pay and enforcement should be a job for all of us, whether LEPs, local authorities, the national minimum wage enforcement section, Members of Parliament or whistleblowers. We need a drive towards ensuring that anyone who decides to flout the rules on the national minimum wage knows that there is an organisation out there that can report them and take action against them.

Amendment 8 would also require the Secretary of State to report on the level of financial penalty. Although an increase in the maximum fine to £20,000 per employee is welcome, we are disappointed that the Government did not follow Labour’s lead in Committee by increasing it to £50,000. By setting the penalty at £50,000, Ministers would send a clear message to rogue businesses that they run a real financial risk by not paying the minimum wage. It would also put the fine on a par with other fines, such as those for fly-tipping.

As the Minister might be aware, her colleague and party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), at the start of the year echoed Labour’s calls for a higher financial penalty, stating:

“A £50,000 fine for fly-tipping versus a £20,000 fine for exploiting a human being is just ludicrous. It tells you all you need to know how we, as a society, have our priorities wrong.”

I suggest that it is not society that has its priorities wrong in that regard, but the Government.

[Graham Jones (Hyndburn) (Lab)]

Would these changes have an impact on people working in the informal economy who are not paid the minimum wage?

[Ian Murray]

Absolutely. We see in the informal economy forced self-employment, bogus self-employment and people not being paid the national minimum wage. It is a big issue in relation to migrant workers and agency workers. It is a huge issue across not only the formal economy, but the informal economy. It is something we must stamp down on, because it undermines people’s wages and the ability to be paid properly. The crucial point is that it is also uncompetitive for business, because the businesses that do the right thing, pay proper wages and abide by all the legislation are undercut by those that do not, and we have to deal with that. These measures are both pro-business and pro-employee.

Finally, amendment 8 is also crucial to ensuring that the Government consider wider improvements in pay in our labour market—namely, the promotion of the living wage. Under this Government, the number of people paid less than the living wage has risen from 3.4 million to just under 5 million in just four years. That not only impacts on low-paid workers, their families and communities, but piles up costs for the country as more people in work have to rely on the social security system, with tax credits topping up their poverty pay.

Labour councils have led the way in paying their workers a living wage, even within tight budget constraints, and getting more workers in the private sector paid a living wage by using their procurement powers and encouraging the creation of local living wage zones. My local council, City of Edinburgh council, has been paying the living wage for some time now. Other organisations in the private sector are now seeing that paying the living wage is something they should be doing. I must declare an interest as a member of the board of Heart of Midlothian football club, which a few weeks ago took the historic decision to become the first football club in Scotland to pay the living wage to not only all its staff, but all its subcontractors.

[Mr Sheerman]

Before my hon. Friend moves on, may I commiserate with him about last night’s football result? On a serious point, I do not know what his local university is, but the university of Huddersfield, which is the biggest employer in my constituency, pays the living wage. If universities up and down the country could lead the way, that would have a powerful effect, especially if they pressed that on their supply chains.

[Ian Murray]

I appreciate what my hon. Friend says about what happens in his constituency. Public bodies could really take the lead in promoting the living wage. However, his initial comment about last night’s result means that I will have to demote him from being my hon. Friend to being the hon. Gentleman, but I will not hold it against him for too long.

The Labour party has a proper plan to encourage businesses to pay their employees the living wage. If this Government will not do this, the next Labour Government will launch a national campaign to agree “make work pay” contracts with British businesses, working in partnership with businesses to share in the benefits of the living wage and ensure that people are paid properly for a decent day’s work. The living wage is about bringing employers, employees, campaigners and communities together to build a stronger, fairer economy from the bottom up. The living wage improves the living standards of employees and benefits employers, too. They have found that paying the living wage can make good business sense, generating savings by boosting productivity and increasing staff morale.

I hope that the Government are minded to support amendment 8. It would be a step towards improving the enforcement of the national minimum wage and then improving pay for all working people. If Ministers do not, it will be up to Labour, the party that created the national minimum wage, to strengthen it for all the low-paid. Amendment 8 is about having a report from the Secretary of State to bring forward some of these issues and highlight them through Parliament so that we can ensure that the national minimum wage is being enforced properly, that the level of financial fines is appropriate and that the Government are doing everything they possibly can to promote additional wages through the living wage.

Amendments 9 and 10 to clause 145 relate to zero-hours contracts. The explosion in the use of zero-hours contracts is a trend that should concern Members right across the House. Although a small number of people find that type of contract suitable, too many are at the mercy of unscrupulous employers who exploit it. For many employees, zero-hours contracts present huge drawbacks in comparison with permanent, regular work. The increasing problem of underemployment and zero-hours contracts is highlighted by the recent reports from Her Majesty’s Revenue and Customs stating that income tax take has been flat over the past year despite the Government predicting a substantial increase. Do the Government not worry that they are creating the kind of economy where unemployment drops but there is no additional income tax take to the Treasury? We must use the opportunity of this Bill to prevent exploitative zero-hours contracts and do something about underemployment. It is not just me who is saying this. The Exchequer Secretary told the Bill Committee’s evidence session that it was the Treasury’s goal to have people on better contracts as it is better for tax receipts. I could not agree more.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend is no doubt aware that even the Treasury has admitted in statistical analysis that in the case of someone on a fixed-term contract of 20 hours as opposed to someone on a zero-hours contract with potentially 40 hours—although it will fluctuate over time—the person on the zero-hours contract pays more in national insurance contributions than a similar worker doing the same amount of hours annually. The Treasury estimated that they were about £300 a year worse off than a person on a fixed-term contract doing fewer hours.

[Ian Murray]

That is the way the tax system works. People are allocated their national insurance and tax thresholds on the basis of when they work on a monthly basis. It can be aggregated over the year only if they are in permanent employment through pay-as-you-earn and the national insurance contributions that are made. In Committee, we had the strange scenario of Government Back Benchers saying that it does not matter what the tax take is because the aggregate would be the same if 100,000 people were working on zero-hours contracts than if the same number of hours were being worked by those in permanent employment. That is primary school economics, because the analysis does not work.

The Government have to reflect on the fact that while unemployment is falling, and has fallen by a substantial amount over the past 12 months, tax take, including income tax take, is exactly the same as it was the year before. That means that people are not being paid properly for the work that they are doing, that they are under-employed, or that they are in part-time jobs or on zero-hours contracts. So while they may not be an unemployment statistic, they are certainly not contributing to the economy.

[Gordon Birtwistle (Burnley) (LD)]

Does the shadow Minister accept that the tax take is possibly down by a lot because of the increased allowances that people now get before they start paying tax? Surely the fact that people are not paying as much and keeping more of their salary would affect tax take.

[Ian Murray]

The hon. Gentleman misses the point. If he was in his place earlier—I have no reason to doubt that he was not; I just did not notice when he came in—he would have heard me say that HMRC had predicted a significant increase in tax take having already factored in the increase to £10,000 in the taxable allowance. Even taking that into account, it was projecting a significant increase in tax take, yet it has been flat. HMRC had accounted for the change in the personal allowance threshold and for the fact that unemployment is falling. Taking all those things into consideration, it projected that it should be getting substantially higher tax revenues, but it is not. That tells us something about the kind of employment market that this Government want to create.

[Mr Gregory Campbell (East Londonderry) (DUP)]

This Government have made much of increasing the personal allowance, as some of us advocated many years ago. Now we are at the point where the personal allowance level is not offering any tangible benefit to those who are on the national minimum wage and are in part-time employment, because they are at or below the level to which the personal allowance has been raised. A combination of factors is required rather than merely raising the allowance.

[Ian Murray]

There is a key balance in terms of raising the allowance. The poorest paid are not affected by any increases in the personal allowance, while everyone else benefits. There is a significant decrease in tax take from every taxpayer, but the lowest paid are not included in that.

[Graham Jones]

One of the pernicious elements of this situation is what we are starting to see in my constituency with agency work, whereby people on zero-hours contracts are being pushed into self-employment when they take hours through an agency. With reference to the tax take, there is some concern that this practice is pushing people into the informal economy and tax is not being paid at the full rate. It is also pernicious in terms of the hours that are offered to people and the insecurity of being in self-employment as opposed even to agency-paid employment.

[Ian Murray]

Absolutely. We are creeping into the wider problems with the employment market. There is a huge issue with bogus self-employment and a huge issue for the Treasury as regards the informal economy. That is why the shadow Work and Pensions Secretary, my hon. Friend the Member for Leeds West (Rachel Reeves), has said that, particularly with regard to the construction sector, we should deem people to be employed unless it can be proven otherwise.

[Graham Jones]

It is certainly an issue in the construction sector in my constituency, but it is now spreading into other sectors, including catering.

[Ian Murray]

It is most prevalent in the construction sector, but it affects other low-paid sectors as well. This goes back to the point I made in response to one of my hon. Friend’s previous interventions about good businesses being hit by the playing field not being level because of people undercutting wages and undermining their responsibilities to society in terms of paying the appropriate tax that they should be paying on the wages that they are generating.

So as not to be too uncharitable to the Minister, let me say that we welcome clause 145, which introduces an exclusivity ban into zero-hour contracts. However, as with yesterday’s pubs debate, the Government have been dragged kicking and screaming into doing anything at all about this issue. They have fallen far short of introducing measures that really tackle the exploitative use of these contracts. They are doing nothing to change the practices of companies that base their entire work force management strategy on zero-hours contracts. As my right hon. Friend the Leader of the Opposition said last week, zero-hours contracts have

“left too many people not knowing how they will make ends meet from one week to the next and unable to plan for the future. And this government won’t do anything to stop it. But we will.”

Our amendments attempt to build on the fact that the Government have tabled an amendment to the law, albeit a minor one, to stop exclusivity by suggesting that they take that one step further. Amendment 9 would require the Secretary of State to introduce regulations so that workers on zero-hours contracts can enforce their rights. It is completely ludicrous that we have been left in a situation where the Government have introduced legislation to ban exclusivity clauses in zero-hour contracts but have not put in any enforcement action so as to be able to remedy the problem. The Minister for Business and Enterprise was pressed repeatedly on this in Committee but could offer only the option of enforcement through the usual employment tribunal channel. Perhaps he should spend less time apologising to the Prime Minister and more time apologising to the millions of workers he is letting down through this clause.

[Guy Opperman (Hexham) (Con)]

Is that the best you can do?

[Ian Murray]

I haven’t finished yet—just you wait!

Let me go through why not being able to enforce these rights is a real problem. If, as the Minister suggested, people go through the normal employment tribunal channel, there would be a two-year qualification period for unfair dismissal. They would then have to go through compulsory early conciliation at ACAS. If that failed, they would have to pay a disproportionately high fee to enter the employment tribunal system. If they were found to have been wronged in the workplace, they could receive a compensatory award, but in up to 50% of cases those awards are no longer paid, and the chances of them getting their job back, or any job, would be much diminished.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

When I used to deal with what were then known as industrial tribunals, I understood that someone had to earn a certain wage before they could make any application to a tribunal. In those circumstances, how does someone on a zero-hours contract get into the position of being able to apply?

[Ian Murray]

That is part of the problem of enforcement, in that we do not know what mechanisms could be used for it. That is why we tabled the amendment to ask the Secretary of State to bring forward proper proposals for enforcing these rights. My hon. Friend is right. If an employer has offered someone a zero-hours contract containing an exclusivity clause, I suspect that most will have done so on a take-it-or-leave-it basis. Does that person then have the qualification period needed to enter the employment tribunal system? The answer is clearly no, because they have not worked for two years. Do they have the status of being a worker or an employee? The chances are that the courts would probably deem them not to be in employment at that stage. That is why it is important for the Government to come back with proposals on how they will prevent exclusivity clauses.

Sarah Veale from the Trades Union Congress said in one of the evidence sessions:

“It is actually quite extraordinary to have a breach of employment rights proposed in a Bill without any kind of penalty—or rather, without any compensation for the individual, because that is largely the way it works in employment law.”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 71, Q162.]

The Government need to be clear about how individuals can enforce the provision against exclusivity. We cannot just hope that employees who refuse to work exclusively for an employer will not subsequently be discriminated against in the workplace.

It is very easy to construct a scenario in which that might be the case, and I have already mentioned one to my hon. Friend. In future, if an employer offers a zero-hours contract with an exclusivity clause, the employee might be incredibly knowledgeable about employment rights, and say, “Under section 145 of the Small Business, Enterprise and Employment Public Act, an exclusivity clause is against the law.” However, the employer could turn round, and ask, “Well, what are you going to do about it? You can either take or refuse the job and the contract, but if you do not abide by its terms, we’ll zero you out,” meaning that the employee would not be offered any hours at all. The employer could in effect have exclusivity by threatening the employee with losing their employment altogether.

That is a very real issue for the economy. I am not talking about businesses or individuals that welcome the use of zero-hours contracts, but mainly about people at the lower end of the employment scale who need to be properly protected. We need to ensure that there is effectively no exclusivity and that people are not zeroed out.

We need the Government to make a proper proposal about how they will enforce the prevention of a practice that is against the law. If someone driving down the motorway at slightly over the speed limit is caught doing 75 or 77 mph in a 70 mph zone, they receive a ticking off and a fine, but if there were no need to pay the fine or if no fine were levied, where would be the deterrent against breaking the law? I shall be interested to hear the Minister’s response on that point.

Amendment 10 is about compensation. People often go to great expense to turn up at work: they arrange child care or pay train or bus fares, and that takes time to organise and costs money from their much-reduced resources. Having been told that they are needed for work, people sometimes get a text a couple of hours beforehand or on arriving at their workplace saying that they are not needed that day. In a modern workplace, that is completely and utterly unacceptable.

The CBI has recognised that point and has expressed its support for it. In its March 2014 zero-hours briefing, it stated:

“a ban on offering short notice for work…is not in the interests of the workers on zero hours contracts, whose interests are best served by always being offered work opportunities with the freedom to decline them. An intervention which creates a simple formula for compensation due to zero hours employees when a shift is cancelled at short notice—two hours’ pay for example—would be better targeted.”

I think that everyone in the House would agree that there should be some kind of compensation if people are unable to do their shift at short notice because the employer has changed the particular shift pattern.

The House needs to look seriously at this matter. It is quite clear that the vast majority of employers in this country are respected for looking after their employees as their business’s No. 1 asset. Many businesses that do the right thing spend an inordinate amount of time—I did when I ran my own small business—making sure that all employees get the hours they want and are contracted to do, so that they can gain the salary they are contracted to earn and can pay their rent or mortgage and maintain their standard of living.

Most reasonable people would say that it was unacceptable for such businesses to be undercut by companies that decide to take on a vast number of workers on zero-hours contracts without offering them regular hours and regular pay. That is why I think that the Government have really missed an opportunity by not going slightly further on zero-hours contracts.

I now move on to the right to fixed hours. My right hon. Friend the Leader of the Opposition said last week:

“We are going to change…the zero-zero economy…Under Labour, if you work regular hours you will have a legal right to a regular contract.”

Iain Birrell, a partner at Thompsons Solicitors, said in his evidence in Committee:

“The Chartered Institute of Personnel and Development research of last November noted that 83% of staff on zero-hours contracts have been engaged for longer than six months and 65% have been engaged for two years or more. We have a situation, then, in which 65% of staff on zero-hours contracts have been there for two years or more. That is not short-term need”.––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 27-28, Q54.]

We appreciate that there are situations in which employers require workers on a zero-hours basis. However, employers should be able to refuse an employee’s request not to be on a zero-hours contract only if they can demonstrate that their business needs cannot be met by any other form of flexible contract. For example, seasonal work may be a legitimate exemption. In the United Kingdom, someone who makes ice cream might require people on zero-hours contracts to deal with seasonal needs.

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[Ian Murray]

My hon. Friend makes an incredibly important point. As he will agree, the fact that unemployment is falling but tax take is flat tells us a little about employment in this country. On that basis, it is little wonder that the deficit is rising, not falling.

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Amendment 8 is unnecessary because it duplicates the existing reporting requirements. It is not just the final evidence from the Government to the Low Pay Commission that is published, as the interim evidence is published, too. On two occasions every year, there is a written ministerial statement publishing this significant evidence, and it contains the information that is desired in amendment 8.

[Ian Murray]

The Minister is always incredibly generous in giving way. She has explained how the reports go to the Low Pay Commission and are then reported back to this House, but our amendment asks that to be extended and to be linked to enforcement. It asks the Government to extend the living wage and to look at whether the financial penalties act as an effective deterrent. It thus goes much wider than the Low Pay Commission.

[Jo Swinson]

The evidence submitted in the reports is pretty comprehensive, so I think it does meet the requirements set out, particularly when combined with the assessment of the latest hourly earnings and the impact of the minimum wage and what it does to living standards and hourly earning. I think that the existing reporting requirements are adequate and that the amendment would bring about a duplication. I welcome the interest in the issue, however, and I welcome the fact that as well as those formal reporting requirements, we have had various debates—sometimes in Westminster Hall, sometimes here in the Chamber—on these issues. Furthermore, these topics are returned to frequently at BIS oral questions, and I expect that to happen tomorrow. It is right that we have these opportunities to discuss these issues because they are important.

Let me deal with some of the specifics that came up in the debate about enforcement of the national minimum wage. In particular, we heard the charge that the number of investigations had gone down and that this was some sign of failure, but I believe the picture is more nuanced than that. Since the national minimum wage was introduced and HMRC has been the enforcement body, that body has continually assessed how it undertakes enforcement activity and how it can be improved. It is true that the number of individual investigations has gone down, but that has been coupled with a much more efficient undertaking of investigations. In particular, HMRC often now has larger and more complex investigations as part of the risk assessment work being undertaken. Sometimes those cases take longer to complete, so there will be fewer overall cases. The number of people covered by each case, however, has been increasing.

In addition, when someone makes a complaint to HMRC about the national minimum wage, rather than just going in to investigate the particular worker, Joe Bloggs, and their circumstances, HMRC has the power to widen the investigation—not only to ensure that the anonymity of the complainant is preserved, but to recognise that if there are anomalies in one particular worker’s payment, it might well be the case for other workers within the organisation. It has the power to expand the investigation more widely. Although that has reduced the number of cases that have been completed, the number of workers helped and the amount of arrears recovered has increased, so that is a good thing.

The number of workers helped, for example, has risen between 2009-10 and 2013-14 by more than 17%. The average number of workers per case has nearly tripled, and the average amount of arrears per case has increased by 260%. I think that is a good news story on enforcement, particularly concerning the resources available for enforcement, about which the hon. Member for Sefton Central (Bill Esterson) was concerned. Some 144 officers have been involved in HMRC. As a result of the additional resource dedicated by BIS—the budget has increased by £1 million to £9.2 million—a further 26 individuals have just been hired. A team of 170 is now working to ensure that there is compliance with the enforcement of the national minimum wage. It is clear from the figures that that significant increase in resources has already been delivering, and it will continue to deliver.

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[Jo Swinson]

It certainly is a sign of a flexible employment market, which is good for the UK economy. It ensures that we are able to have a stronger economy and increased prosperity. As for whether a zero-hours contract is a good thing, that depends on individual circumstances. There are plenty of people for whom such contracts work well and plenty of people who are happy with them, but I entirely recognise that there are plenty of people who are not happy, and that there are employers who are not behaving as they should.

Some of those issues arose in the consultation on exclusivity, which is why we inserted the clauses that we are discussing. Other issues arose from it as well, and we agree that those too need to be addressed. The Opposition tabled amendments 9 and 10, and I welcome their contribution to the debate. We have argued that it is better to ensure that we can work with industry, sector by sector, in producing guidance on what constitutes responsible use of zero-hours contracts, so that employers are clearer about how they should be using them and employees can know what it is reasonable for them to expect.

[Ian Murray]

If the Minister thinks that there is no problem with zero-hours contracts, can she explain why the tax take from income is flat but unemployment has fallen by 500,000?

[Jo Swinson]

Various issues affect the tax take and employment, not least the amounts that people are earning, For instance, if people are working for fewer hours, they will pay less income tax, because there will be more people within the tax threshold. That said, we are proud of the fact that we have raised the threshold. I campaigned hard for that in the last Parliament, and I am delighted that we have delivered it.

The hon. Gentleman accused me of saying that there was no problem with zero-hours contracts. Of course we accept that there is a problem with them. That is why we have produced legislative proposals, which, despite the promises of the former Labour party leader Tony Blair, his party did not manage to do when it was in government.

Amendment 9 is intended to ensure that zero-hours contract workers have a route to redress to enforce the rights in clause 145. I recognise the serious point that the hon. Gentleman is making, but, as I reassured him in Committee, that is already possible through the order-making power in new section 27B. His amendment is therefore unnecessary.

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I hope, with those reassurances, that the hon. Member for Edinburgh South (Ian Murray) will withdraw his amendment and that the House will be happy to support Government amendments 61 to 64.

[Ian Murray]

I am grateful to the Minister for answering some of the questions but, on amendment 8, it is not clear that the Low Pay Commission has the remit to look at enforcement of the national minimum wage to ensure that that is working properly; to ensure that the financial penalties are a deterrent; and to ensure that there is a greater link with the living wage. Therefore, I would like to test the will of the House on amendment 8.

Question put, That the amendment be made.

--- Later in debate ---

[The Minister for Business and Enterprise (Matthew Hancock)]

I beg to move, That the Bill be now read the Third time.

I would like to start by thanking all hon. Members who have contributed to the scrutiny of the Bill, both in Committee and on Report. There has been considerable consensus and agreement on many of the measures, and I welcome the support from Members on both sides of the House for our doing everything we can to improve the environment for small businesses. It is a clear goal of this Government to make Britain the best place in the world to start and grow a business, and this Bill, the first of its kind, will make a significant contribution to that. Small businesses make a huge contribution to the UK, accounting for around half of UK jobs and a third of private sector turnover, and they are vital to our prosperity and to the UK economy.

The Bill strengthens and improves the way in which regulation is dealt with in government. We have introduced the one-in, one-out and the one-in, two-out approaches to regulatory management, and these have delivered over £1.5 billion of savings per year to businesses since January 2011. I am delighted that there has been support for enshrining the principles of transparent regulatory management in legislation through the regulatory reform measures.

The Bill makes significant inroads into improving the business environment for small businesses even further while also, crucially, providing new protections for the employees who lie at the heart of our recovery. For the first time, we have addressed the abuses of zero-hours contracts. Despite Labour’s promises going back 20 years, no action was taken. Now, however, we have passed legislation to address exclusivity in zero-hours contracts.

[Ian Murray]

Will the Minister tell the House how he can enforce the provisions on exclusivity clauses?

[Matthew Hancock]

Thanks to the Bill, exclusivity clauses will no longer be valid; they will be null and void. The Opposition promised to do this in opposition last time around, they did nothing about it for 13 years and now they witter on about impractical solutions, whereas this Government are interested in making changes that will improve the labour market. I am proud that we are doing this at the same time as increasing the number of jobs in this economy to record levels.