Jo Swinson
Main Page: Jo Swinson (Liberal Democrat - East Dunbartonshire)Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
It is a pleasure to serve under your chairmanship, Ms Dorries, and to respond to what has been a lively and good debate. I congratulate the hon. Member for Sunderland Central (Julie Elliott) not only on securing it, but on putting the arguments in a straightforward but well researched way. Over a period certainly of months and quite possibly longer, she has been a real campaigner for and champion of these issues. It is a credit to her that she has persevered in raising them. I very much welcome the time and effort that she has already put into this issue and her bringing it to the House today to give us all the opportunity to discuss it and highlight some of the problems.
The turnout reflects the concern that many people feel about this issue. I will discuss later how the Government are looking at it, but such a debate can be incredibly helpful to bring forward Members’ contributions, which of course can feed into that information that the Government are collecting from other sources.
In basic terms, of course we understand that zero-hours contracts can work well for some people, giving them flexibility in the hours that they work. Equally, we are well aware that they do not provide the certainty that many people feel that they need. Those people need to know what they are going to earn, so that they can manage their finances and, indeed, their lives. Hon. Members have given many examples this afternoon, and the Department has received a number of letters that reflect some of the concerns. Hon. Members will also be aware of the media commentary and stories, some of which have been quoted today as well.
It is important to be clear: zero-hours contracts will suit some individuals, but not everyone. A range of problems has been raised today, such as people accepting a job under such a contract when it did not suit them because they felt that they did not have a choice.
Jo Swinson
I will give way, but I am keen to make progress, so that I can respond to the points raised in the debate; I hope that hon. Members will let me.
Andy Sawford
I thank the hon. Lady for being generous in giving way. Zero-hours contracts are welcomed by some only because they afford flexibility; it is the flexibility they want, not the zero-hours contract. We ought to make that distinction.
Jo Swinson
I take the hon. Gentleman’s point, but for some people that flexibility is very much tied to the zero-hours contract, because they can work a significant number of hours some weeks and perhaps not at all other weeks. I shall give examples of people who that arrangement might suit. I appreciate that there are different ways to achieve flexibility, but zero-hours contracts are one such way, and if used properly, they do not need to be a problem. The hon. Member for Sunderland Central mentioned flexibility being a one-way street, which is a good way to put it. If there is only a one-way street, that suggests that the contract is not equal on both sides. Genuine two-way flexibility can work very well for employees and employers.
I was touching on some of the problems and areas where zero-hours contracts do not work well. Perhaps an individual took on such a contract but, because they had other work commitments, such as a part-time job or other responsibilities, had to turn down work fairly regularly, which leads to them not being offered work because they were seen as inflexible. That situation is a two-way street not working as a two-way street, which is not right. The hon. Member for Wigan (Lisa Nandy) raised the case of a lady who had been told that if she did not work a particular set of hours, she would not get work in future. The hon. Lady mentioned the rather horrendous suggestion that the lady had to leave her children in a car park, and my heart goes out to someone in that situation. That scenario—an implied threat hanging over someone, if they do not take on particular work—is not right. On a zero-hours contract, the employee should be genuinely free to turn down work.
As has been mentioned, people rely on income to prove that they can take out a mortgage, for example, or to prove that they are able to make regular rental payments to rent a flat, so zero-hours contracts can be problematic, if people cannot prove that regular income. For those reasons, officials in the Department for Business, Innovation and Skills are looking into such contracts, to gather further information over the summer to better understand how they work and the issues involved. It is important that we establish what the problems are before we change policy.
Lots of figures have been mentioned today, particularly on the recent sharp increase in zero-hours contracts since 2004. Those figures are accurate, but it is important for context to point out that zero-hours contracts are not new. Hon. Members have talked about them today as if they are an evil invention of the current Government, but they have been around for many years. According to the graphs from the 2000 labour force survey, the overall number of people and the percentage of the work force using such contracts was slightly higher in 2000 than for the same quarter in 2012. I know Hansard does not allow graphs, but the graph shows that the use of zero-hours contracts was high in 2000, gradually reduced towards 2004 and has risen since then, with a couple of blips along the way where the graph is slightly spiky. That is the pattern, so, although the recent increase has brought some problems into sharp relief, these contracts are not a recent issue.
The Labour Government looked at zero-hours contracts. Their White Paper said:
“The Government wishes to retain the flexibility these contracts offer business and believes that the National Minimum Wage and Working Time Directive will provide important basic protections against some of the potential abuses.”
Some of those abuses have been outlined today, and I will shortly come to the points raised, but it is important to challenge the assumption that such contracts are always a bad thing. They can be helpful if an individual and an employer genuinely want to come to an agreement about a contract. For students, who might not be able to commit to a fixed work pattern due to their timetables, zero-hours contracts may be helpful in giving them good work experience. They can also be useful for semi-retired people who want to work occasionally, but not on a fixed weekly basis. Zero-hours contracts are useful in some situations, but it is important that they are not abused.
The Government want to ensure that people on jobseeker’s allowance are in no way forced to apply for zero-hours contracts. I want to stress that that is not happening. It is not the case. There is no sanctioning of benefit if people do not apply for such jobs, because decision officers at the Department for Work and Pensions cannot mandate claimants to apply for them. If jobseekers wish to take one, they are free to apply, but the decision-maker guidance sets out clearly that
“if a claimant refuses or fails to apply for or accept employment that is for less than 24 hours a week, the claimant will have good cause”,
if that is the reason for not applying.
I shall turn to some specific points that Members raised. We will obviously work alongside the DWP in the Government review, to address the eligibility for support issues. Universal credit should make it easier for people to get Government support based on the number of hours they work, without, for example, the cliff edge of 16 hours, but we need to work closely with other Departments on that. The hon. Members for North Tyneside (Mrs Glindon) and for Sunderland Central and for Edinburgh South (Ian Murray) raised the impact of zero-hours contracts on women. Resolution Foundation research shows that the use of such contracts is fairly evenly distributed between men and women: women have about 53% of the contracts and men have 47%, so the figures are perhaps not quite as skewed as suggested.
Jo Swinson
I am sorry, but I want to respond to the points raised.
The hon. Member for Sunderland Central mentioned living life on call. If an employee is on call at their place of work, they should be paid; the legislation is clear. Some of the cases raised today are breaches of legislation. I will come on to the pay and work rights helpline. The provisions in the working time regulations on breaks proportionate to the time spent working give some protection to workers. Although lunch breaks are not paid in zero-hours contracts, that does not mean that people should not get time to take a break at work, and the working time regulations set that out clearly.
Care workers not being paid for the time spent travelling between houses was raised. If care workers have wages deducted for that time or have to pay for photographs, uniforms and so on, they might be working for less than the minimum wage, particularly if they are not on a high wage. It obviously depends on the case. Employers of people who are very well paid may not be in breach of national minimum wage guidance and legislation, but where employers are in breach, I urge people to contact the pay and work rights helpline on 0800 917 2368 or search for “pay and work rights helpline” online. HMRC can enforce the legislation, and it takes breaches of national minimum wage guidance and legislation seriously. It is important that such cases are reported, because employers need to be taken to task if they are exploiting workers.
Four out of five people on zero-hours contracts are not looking for another job, which suggests that not everyone on such contracts is unhappy. There are clearly cases where that is the case, but the figures suggest that it is not true that people are trapped on the contracts. They can terminate the contract in the usual way. I agree with the hon. Member for Wigan that employers who abuse zero-hours contracts are likely to be poor employers, but “employers who abuse” is not the same as employers who use zero-hours contracts. There is a difference.
Various hon. Members mentioned a ban on zero-hours contracts. Although we need to look at the evidence, there are immediate challenges to that proposal. The hon. Member for Wigan mentioned small-hours contracts. If we ban zero-hours contracts, what would be the minimum—one hour, two hours, four hours, eight hours? If someone genuinely wanted to work for a small number of hours, should we stop them from being able to do so? When we look at the suggestion, it begins to unravel. It is useful to look at international examples, and the hon. Member for Corby (Andy Sawford) cited some.
Business, Innovation and Skills officials are speaking to a variety of stakeholders, including industry bodies that represent sectors where such contracts are used and trade unions, which, as was mentioned, have a lot of information, to examine the extent of the use and the abuse of zero-hours contracts. We will work with other Departments. There is no call for evidence at this stage, but we do not rule it out for the future. Research shows that doing our homework before issuing a call for evidence is useful. I welcome the interest the debate has sparked, and I am sure that we will return to the topic when we have the further information from the BIS fact-finding review.