Zero-hours Contracts

John Redwood Excerpts

Wednesday 16th October 2013 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House notes the marked rise in the use of zero hours contracts with recent estimates that as many as a million employees are employed on them and that they are used in over a quarter of workplaces, contributing to growing insecurity for families across the UK; and therefore calls on the Government to initiate a full consultation and formal call for evidence on the use of zero hours contracts and on proposals to prevent abuses by employers of such contracts, for example, by stopping employees on zero hours contracts being required to work exclusively for one employer, stopping the use of contracts that require zero hour workers to be available on the off-chance they are needed but with no guarantee of work, banning the use of zero hours contracts where employees are in practice working regular hours and putting in place a code of practice on the use of zero hours contracts.

We are in the midst of the biggest living standards crisis in a generation, a crisis that is affecting every community in the country. We know that at its heart is the issue of pay. People are working harder than ever before but earning less: they have on average suffered a £1,500 pay cut since the Government came into office. We know that at the same time as wages have been falling, costs have been increasing, with prices rising faster than wages in 39 of the 40 months of this Government.

We also know that insecurity goes to the heart of this living standards crisis, too. Those in work now feel less secure and more pressurised at work than at any time in the past 20 years, according to the most recent UK skills and employment survey. The UK Commission for Employment and Skills, which co-funded the survey, says that what we have now is a climate of fear. Indeed, research shows that double the number of people feel insecure at work today compared with three years ago.

[Mr John Redwood (Wokingham) (Con)]

Does the hon. Gentleman not agree that the biggest collapse in living standards occurred from 2008 to 2010 under the Labour Government, when they bankrupted the country and drove people out of work? We are trying to recover from that position.

[Mr Umunna]

The right hon. Gentleman talks about us bankrupting the country. He knows, because I have heard him talk about this many times before, that the problems we had in 2008-09 found their gestation in the banking sector, which is ultimately where responsibility lies.

--- Later in debate ---

[Mr Umunna]

I think the right hon. Gentleman will agree that what Southwark is doing is a good thing. I note that he is agreeing with me.

The Office for National Statistics suggests that the numbers under the previous Government were around 140,000 across all sectors, although I acknowledge that the way it has collected those data has been somewhat faulty, in part because it relies heavily on people understanding what their contractual situation is. It is fair to say, however, that there has been a significant proliferation of zero-hours contracts over the past few years. The right hon. Gentleman talked about the care sector. The use of these contracts in that sector might have been a niche arrangement before, but it is certainly now becoming the rule. That is what we need to act on.

I do not believe that there is consensus on advocating an outright ban on these arrangements. There are people who want them, and there are employers who use them responsibly, but, as I said to the hon. Member for Beckenham (Bob Stewart), the key is to outlaw them where they are exploiting people. In doing that, we need to acknowledge the people who are doing the right thing as well as draw attention to those who are doing the wrong thing.

We should also acknowledge the need for this House to get its own house in order in respect of the use of zero-hours contracts. We know that there are people who look after us here and help us to do our jobs here who are engaged on those contracts. That is unacceptable. We should be setting an example. I know that this is being looked into at the moment, but we have not yet had a clear commitment from the House authorities not to use such contracts. I think that everyone would agree that we want to see their use in the House stamped out.

[Mr Redwood]

I want my constituents to have well paid, decent jobs, and I have a lot of sympathy with those who do not wish to see exploitative contracts. Will the shadow Secretary of State say a little more about how he would define an exploitative contract, and whether there is more we could do by way of leadership? He is an influential and talented man. Surely there is more that he could do with Labour councils and trade unions, just as those on the Government Benches can do more with the Government.

[Mr Umunna]

One of my colleagues has just said to me that being praised by the right hon. Gentleman will spell the end of my career. People will point to examples of Labour-controlled local authorities, but we do not care who is using these contracts. We simply do not want them to be used exploitatively, and I will explain how we can stop that happening.

--- Later in debate ---

[Vince Cable]

I am sure the hon. Gentleman has given a totally genuine example. I am not a lawyer, but there is at present a common law defence against exclusivity. I can see the practical problems of bringing a legal case against big companies, but none the less some legal protection exists. I accept that in many cases exclusivity may be highly undesirable, and in our consultation we will try to establish what concrete action, if any, we can take about it.

[Mr Redwood]

When the Secretary of State holds his consultation shortly, will he consult on the extent to which there is a problem and try to get a definition of it, or will he consult on possible remedies to the abuses he has identified?

[Vince Cable]

Such abuses are highly relevant, but people may come forward and explain, as I have done, that for certain contexts, groups of workers and sectors, such a contractual arrangement is necessary and positive and it would be unhelpful to take action. We have an open mind. We are not trying to close down the debate.