Amendment of the Law

Debate between Julie Elliott and Stephen Twigg

Monday 23rd March 2015 Commons Chamber

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

It is a pleasure to follow my hon. Friend the Member for Foyle (Mark Durkan), who spoke with characteristic passion on behalf of his constituents in Foyle and more broadly in Northern Ireland.

In his speech last week, the Chancellor of the Exchequer said that

“the north grew faster than the south”.—[Official Report, 18 March 2015; Vol. 594, c. 767.]

However, when we scratch beneath the surface, the Chancellor’s headline figures do not match the reality on the ground. In the region where my constituency is situated, the north-west, it is true to say that in a single year, 2012-13, the north-west was the fastest growing region in the country, and that is welcome, but if we look at the first three years of this Government, 2010 to 2013, the overall figures for the north-west show that we have grown more slowly than any region other than Northern Ireland. So yes, there is welcome news in that one year, but taking the three years as a whole, the picture is not quite the one that the Chancellor set out.

I welcome the fact that unemployment is down. In my constituency in Liverpool, the memories of jobless economic recoveries of the past are very real, especially the impact of the Thatcherite policies of the 1980s. Unemployment can leave a scar on communities that may last for generations. As we all know, the evidence shows that once people are out of work, it can be very hard for them to get back into it. In my constituency many people are managing to find work. Over the past year the claimant count is down by 28%. Work is a good thing, but the quality of jobs is surely critical as well. Once again, the story is more complicated than that set out by the Chancellor last week or the Secretary of State earlier this afternoon.

Too many of the jobs in Liverpool are insecure, low paid jobs. The growth in agency work lies behind a large part of the fall in unemployment in my constituency. Recently, I met two local people, one of them a constituent, who worked at a factory in Liverpool. They had worked there for several years. However, they are paid and technically employed not by the company that runs the factory, but by one of the biggest agencies and suppliers of contract labour. They do the same work as regular staff, but are paid £2 an hour less, and the supply of hours is sporadic and uncertain. Their holiday and sick pay entitlements are far worse, and scandalously, one of them told me that when he suffered an injury at work, the medical centre at the factory turned him away because technically he was not an employee. Surely such working arrangements are unfair and wrong.

[Julie Elliott (Sunderland Central) (Lab)]

However bad those contracts are, does my hon. Friend accept that the explosion of zero-hours contracts, which are even worse than agency contracts, has occurred under this Government because of the tightening of some regulations to try to stop the abuse of agency worker regulations?

[Stephen Twigg]

I am grateful to my hon. Friend, who is absolutely right to make that point as we seek to understand the reasons for that and find solutions. I will come to that next.

I pay tribute to the employment, enterprise and skills select committee of Liverpool city council and its chair, Councillor Barry Kushner, for undertaking painstaking research that shows the extent of this problem. Their work has revealed that there are currently about 6,500 vacancies in Liverpool, over half of which are agency jobs. The council has identified the Swedish derogation as a major cause of the increase in exploitation. This derogation allows for agencies to employ staff directly and the eventual engager—the employer—to treat workers less fairly than their directly employed workers. Without the derogation, the system would still allow for the use of agency workers, which can still be of real use in various sectors, but the engager would be obliged to give the agency workers the same rates of pay as their permanent staff after a 12-week period in employment. The two local people I met who have been working for years at the same factory, but are paid less than the colleagues they are working alongside, feel like second-class citizens. Reforming this area would make a real difference for them. That is why I am delighted that my hon. Friend the shadow Business Secretary has promised that a Labour Government would end the Swedish derogation for agency regulations—a change that cannot come soon enough.

Other long-term changes need to be made. To tackle the structural problems of a low-pay, low-skilled job market, we need to ensure that entrants to that market have the appropriate skills. As a country, we have failed for far too long in this respect. My right hon. Friend the Leader of the Opposition has talked about the “forgotten 50%”—the young people who do not get the opportunity to go to university. It is welcome that fewer young people are unemployed, but our youth unemployment rates are still significantly higher than those of countries such as Germany, Austria and Norway that have invested in high-quality technical, vocational and practical education that breaks down the barriers between different sorts of learning.

We need to strengthen devolution within England. That is why the Andrew Adonis review recommended an English devolution Act, a central plank of which would be to devolve powers and funding for skills, and commission 19-plus further education provision based on local decision making. On top of this, city and county authorities should have the power to commission the Work programme in order to get the long-term unemployed back to work. I pay tribute to Liverpool’s mayor, Joe Anderson, and to Liverpool city council for the extraordinary work they have done to promote apprenticeship and work opportunities for people of all ages, but particularly young people.