Insecure Work and the Gig Economy

Justin Madders Excerpts

Wednesday 20th June 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing this important debate and the powerful way in which she introduced the subject.

The world of work is evolving rapidly. The plethora of court cases and the growing uncertainty are a reflection not only of how technology is changing the employment relationship, but of how new and unscrupulous employers are seeing that as an opportunity to loosen the relationship further, usually to the detriment of the worker.

I, too, pay tribute to the GMB, which has pushed back against this wild west frontier approach, but it should not just be down to trade unions to try to make the best of 20th-century laws in the 21st century. Parliament should be setting out a new, comprehensive settlement to take us into the new world. We should do it in a way that ensures dignity, certainty and fairness for those who work in the gig economy. That is why it is completely unacceptable that, weak though it is, there has been no progress on the Taylor review a year after it reported.

I am talking about the 21st century, and I have to say that I was rather amused and disappointed by the comments made by the founder of Pimlico Plumbers.

[Mr Jim Cunningham]

The important thing is that we are now creating a new animal in our economy: the working poor. That is what people tend to miss, and it is happening as a result of the gig economy. We had an incident in Coventry a fortnight ago on a Saturday night between black cab drivers and Uber drivers, and it ended in a certain amount of violence. Surely, things cannot go on like this.

[Justin Madders]

I thank my hon. Friend for that intervention. Whole ways of working are being disrupted in ways that really are undermining the economy. I go back to the Pimlico Plumbers judgment, which found that someone who had worked for the company for six years was entitled to some basic workplace employment rights. The founder of Pimlico Plumbers said:

“We had five judges in the top court in the country and an opportunity to bring our employment law into the 21st century and unfortunately they missed the point.”

I have to say that he has rather missed the point, if he thinks that in the 21st century it is acceptable for someone to work at the same company for six years and not be entitled to any basic workplace protections. That sounds like something out of the 19th century, not the 21st.

I had rather more sympathy with him when he said:

“We can’t get our heads around this word ‘worker’ and what it means.”

I am sympathetic to that, because the truth is that the worker category has always been an unsatisfactory halfway house between employed and self-employed. If we leave aside the question of agency workers, there should be no halfway house—a person is either employed by someone or not. If we can offer a bold and clear legislative framework, with the presumption of employment if someone is carrying out the work personally, we can end the uncertainty and hopefully begin to end the exploitation that we see in the sector.

Those who advocate these new relationships often present them as providing a choice to those who work under them, but it is an utterly false choice. It is a choice that is no choice at all. A choice is ordering food from a menu or choosing to have gammon and deciding whether to have egg or pineapple with it. The choice here is whether someone accepts what is served up or does not eat at all. That is not a real choice. It is a business model and a culture that says people are as disposable as coffee cups. It says, “If we don’t have enough work, tough. If you fall ill, tough.” And, crucially, it says, “If you question our methods or challenge any of our payments, you should not expect to get any more work from us in the future.”

Without job security, people have no security. How can they plan for the future, look to buy a house, have a family, save for retirement or maybe even start their own business if the labour market is so cutthroat, insecure and parasitic that it takes everything that they have got just to keep their head above the water? I think we can do better than that. We need to enter a new world where people are valued as much as the product that they are producing. At the moment, we are in a world where exploitation is all. It has to come to an end.

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[Laura Pidcock]

It is absolutely nonsensical that the state should subsidise inordinate profits on the one hand and very poor pay on the other. The reality of modern work for millions of people, particularly in the north and in places such as North West Durham, is short-termism, insecurity, low pay and fear. Fixed-term contracts, enforced self-employment and agency work signal a move towards a more casualised and fragmented world of work. The use of zero-hours contracts increased rapidly in the wake of the financial crisis, increasing two and a half times between 2012 and 2016. The latest figures available show that that is not abating. We have had an increase from 1.4 million to 1.8 million in just six months.

When Conservative Members celebrate the flexibility—this has been mentioned many times—of zero-hours contracts, they have a romanticised vision of a student who perhaps wants summer work, but the reality is very different. One in three people on a zero-hours contract wants more hours.

[Justin Madders]

Will my hon. Friend give way?

[Laura Pidcock]

I have very little time; I am sorry.

A whole industry has exploded to formalise and professionalise insecurity at work, including through the use and abuse of new technology. It is absolutely right that we view that as the challenge of our generation. How we meet the challenges of technology replacing management structures with apps essentially being the employer is one of the most pressing issues. We need to take robust legislative action against that.

Despite the Government’s shameful resistance to protecting workers, we saw two landmark cases in the gig economy last week. First, a decision by the Supreme Court in favour of Gary Smith against Pimlico Plumbers, as has been mentioned, established that he was a worker and not self-employed. There must be an immediate end to exploitative employment practices. Last Friday, the Independent Workers Union of Great Britain won its right to pursue its case against Deliveroo, and I wish it luck.

I will end by saying that all the evidence shows that the best way to guarantee fair pay and protections at work is by strengthening the voices of workers through our trade unions—I am a member of Unite, so I register that interest—and by enabling the unions to organise and bargain collectively. That is why an incoming Labour Government would bring about a workplace rights revolution and create a new ministry of labour, which is not currently a Department, to give workers and trade unions long overdue rights and protections in law. We will of course repeal the shameless Trade Union Act 2016 and introduce new legislation to roll out sectoral collective bargaining.

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[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

As always, it is a great honour and pleasure to serve under your chairmanship, Mr McCabe.

It is also a great honour and pleasure to take part in what I think we all agree has been a very important, well-attended and very positive debate about the desire of Members from all parties in this House to protect the most vulnerable workers in our society. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing it and on the magnificent way in which she spoke up for workers in her constituency and across the country.

Employment rights and protections are important for this Government. In fact, the Government have made a commitment to seek to enhance rights and protections in the modern workplace. The gig economy and agency working offer great opportunities and new ways in which to participate in the labour market. For many people, they have transformed their opportunities to work when and how they want, and produced a flexible and dynamic way to work.

[Justin Madders]

Will the Minister give way?

[Andrew Griffiths]

I will give way just once; Members will understand that I am short on time.

[Justin Madders]

It is very generous of the Minister to give way. Obviously, we have heard a lot about flexibility, but if someone is reliant on these employers to give them work, does he think that the landlord will be flexible in getting the rent for that month?

Retail Sector

Justin Madders Excerpts

Wednesday 6th June 2018 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I will aim not to disappoint, Madam Deputy Speaker.

As the name of my constituency suggests, there are two main towns, Ellesmere Port and Neston, both of which have a retail offer that is dramatically less than it was five years ago. However, we still have over 6,000 people employed in the retail industry in the constituency. The reason for that is the very successful Cheshire Oaks centre within our bounds. It was an answer that the local authority came up with in response to the ravages of the 1980s, when we lost so much manufacturing industry and there was a real recognition that we needed to broaden our employment base. The leaders of the council, Fred Venables and Reg Chrimes, both saw this as an opportunity, and it has transformed our area to the extent that we get 9 million or 10 million visitors a year, many from overseas. It is an expanding area, and it would be remiss of me not to mention that that has created a lot of employment in the constituency.

At the same time, however, we have had real challenges in our towns of Ellesmere Port and Neston. They are different in many ways—they have different demographics, transport links and ownership issues—but both have suffered in recent years from the changes in the retail market that we have heard about today. Neston, in particular, has now lost all its banks. That has undoubtedly had an effect on the high street not just for customers, but for other businesses that use local banks. I must say that the banks that have shut down have paid only lip service to improving services. They have made some very bizarre suggestions about people going to banks in other towns to which there are no public transport connections, and they have since talked about shutting down those branches as well.

We have also had transport issues, with real cuts to public bus services in recent times, which makes it difficult for people to get into the town. One particular example is of a shop owner working in Neston who is really concerned about the future of his business because he will not be able to get there if the bus service running from Ellesmere Port to Neston is stopped.

There have been some positives. In the Brook Street area, virtually all the shops were empty, but an organisation called Brightlife, which is funded through the lottery, managed to get a number of charities and good causes into those shops and brought back a bit of life to the area, which has made a real difference. Particularly innovative was the idea of moving the Little Actors into the jobcentre, which was an impressive way of finding a new use for an old building. That is all temporary, however, because it is all based on lottery funding and is not a permanent solution.

In Ellesmere Port, we have a bigger challenge because it is a bigger area to deal with. A lot more retail units are in private ownership, and many of them are too large for what retailers are looking for now. A lot of the big names have gone, and they just have not been replaced. As the hon. Member for Mansfield (Ben Bradley) has said, we need to look at different ways to promote interest in town centre food and leisure and the night-time economy, but the question is: how do we do that? I am concerned that local authorities do not have the capacity they once had to meet those challenges. My local council is looking at the One Public Estate programme, which will bring together different parts of the public sector, which will hopefully consolidate some jobs in the town. However, in terms of ownership, capital and vision, we are some way behind on delivering a new town centre for the future, and the Government’s industrial strategy is lacking in that regard.

If we do not take much more seriously the regeneration of our town centres, the inequalities and imbalance between towns and cities over recent years will continue to accelerate, and the feeling that a lot of people in towns have of not being as important as other parts of the country will continue to solidify.

As has been said, online sales put pressure on the retail sector, and about 21,000 jobs have been lost in the sector already this year. I also think that automation plays a part in that. Personally, I will not use an automated checkout; I think that every time we do that, we push shop people’s jobs a little bit closer to the exit door. I have read that £3 billion a year is being lost to retailers through theft as a result of abuse of those machines, which makes me wonder about the incentive for companies to install them. They cost retailers money, result in job losses and frustrate a lot of consumers. On a number of occasions, I have seen people having to call an assistant to get the machines to work properly. Perhaps it is the fact that the machines cannot join trade unions that makes them so attractive to companies.

Of course, I accept that companies have to do something to streamline their costs, because it is not a level playing field, as we have heard. Online retailers seem to have considerable advantages, not just in the way in which they are able to treat their staff but in how the business rates system works. I agree with the Secretary of State that town centres are an essential part of our character and identity. It is really important that we recognise that and that retail is only a part of it.

Certainly I have shown my commitment to my town centre in Ellesmere Port by placing my office there. The building had not been used for many years, but we got a grant to regenerate it and it is a signal of intent. That also shows that we have to look beyond the traditional retail offer to get life back into our high street. It has been under threat for many years, for myriad reasons. Retailers need to be given a fighting chance, but we cannot ignore the direction of travel in which online sales are leading us. We certainly cannot place all our eggs in the retail basket, so we have to reimagine and revitalise the town centre by offering something different and new to encourage people into it, not just to buy things but to experience things and to get back that sense of community for which I think most people yearn. In order to do that, we need to give local authorities the capacity, resources and authority to deliver, because austerity has put the skids under what they can do.

UK Automotive Industry: Job Losses

Justin Madders Excerpts

Tuesday 22nd May 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on securing the debate. As we have heard from him and other hon. Members, the car industry is of strategic national importance. I am sure the Minister has heard that message loud and clear, so I will take the opportunity to focus on the issues facing the Vauxhall car plant in my constituency, which has lost nearly half its workforce in the past 12 months.

There is virtually no one in Ellesmere Port who does not have some connection with the plant. At its height, it employed about 12,000 people, but sadly, with recent job losses it employs only around a tenth of that number now. It is still a substantial number, however, and it does not take account of the many people employed in the supply chain and associated industries—or of the potential for much greater numbers if we were to increase from single-shift production again. The plant remains a big part of the local economy. Recent job losses there have meant our going against the national trend, with unemployment in the constituency shooting up in the past few months. Every job lost is of course an individual tragedy, but my job now, and the Government’s job, is to make sure that those jobs that remain are protected and built on, because they are exactly the sort of jobs I want to see as a central component of our future: highly skilled permanent jobs in the manufacture of something that is a source of national and local pride.

Whatever our feelings about history and the pride that the plant generates, we cannot expect sentimentality from the new owner, the PSA Group, which has consistently said that each plant will be judged on its efficiency. If there is truly a level playing field, I welcome that. As we have heard, there are many things that we can do with respect to business rates and energy costs, for example, that can help. I know that the Minister has had a quite long list of the things that we would like to happen. However, one factor may make the competition unfair altogether and render all the other good work that is done academic—and that is Brexit. We have a clear message that the current uncertainty is delaying investment decisions by the parent company. Some might say that that is a ready-made excuse not to invest; but I do not want us to be in the business of providing people with excuses. I want us to be in the business of providing people with jobs. It is important to recognise that the automotive sector is one of our most vulnerable sectors, and we need to do everything possible now, as a priority, to safeguard jobs and investment. A bespoke trade deal for the automotive sector should be considered. After all, if it has been looked at for other areas, why not this one?

Vauxhall Motors has enjoyed half a century of production in Ellesmere Port. If that is taken away, a huge chunk of our identity will go with it, but it does not have to be that way. As hon. Members have said, the Government have a big challenge ahead, but I believe there are solutions, and we have heard some of them. On behalf of everyone in the constituency, I express a sincere wish that between us we can all rise to that challenge.

Oral Answers to Questions

Justin Madders Excerpts

Tuesday 1st May 2018 Commons Chamber

[Daniel Zeichner (Cambridge) (Lab)]

4. What progress he has made on implementing the good work plan.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

5. What progress he has made on implementing the good work plan.

[Frank Field (Birkenhead) (Lab)]

24. What progress his Department has made on implementing the recommendations of the Taylor review of modern working practices.

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[Andrew Griffiths]

Matthew Taylor set out in the good work plan how we can further enhance the protections for workers such as Sheila. There is a huge amount of day-one protections, and we are looking at what we can do with flexible working and zero-hours contracts to give greater certainty and security to workers exactly like Sheila.

[Justin Madders]

The Government response to the Select Committee report on a modern employment framework stated:

“The Government wholeheartedly agrees that strong action should be taken against employers who repeatedly ignore both their responsibilities and the decisions of employment tribunals.”

Those are fine words, but if they are to be meaningful the Government must back them up with action and put in place rules to prevent or deter repeat offenders from bidding for public sector contracts; will they do that?

[Andrew Griffiths]

The Government recognise that unfortunately some employers continue to offend repeatedly in this way. We are looking at what further measures we can take in the work plan, and more widely in the work of the Department for Business, Energy and Industrial Strategy, to ensure that such repeat offenders are clamped down on.

Sainsbury and Asda Merger

Justin Madders Excerpts

Monday 30th April 2018 Commons Chamber

[Andrew Griffiths]

We have engaged with Sainsbury’s and Asda to urge them to speak to their staff, and we have also engaged very openly and honestly with the trade unions. We want to see proper and early engagement and consultation in this process to ensure that the workforce is protected, but the public assurances that both Sainsbury’s and Asda are giving at present are that all the stores, and all the jobs in the stores, will be protected.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

We know in takeovers and mergers of this nature that, as sure as night follows day, it is the workers who end up paying for the efficiency savings that have been set out. I have to say that, given the number of assurances the Minister has talked about today, I think attacks on terms and conditions are almost inevitable. When that happens in two years’ time, what will the Minister do?

[Andrew Griffiths]

The rules under which we operate in relation to mergers and takeovers were established in the Enterprise Act 2002 under a Labour Government. They have worked well and allowed businesses to grow, develop and merge to the benefit of both shareholders and the employers. The Department is, of course, closely following what is going on, but decisions in relation to this merger are for the CMA.

Vauxhall Factory, Ellesmere Port

Justin Madders Excerpts

Tuesday 20th March 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I beg to move,

That this House has considered the future of the Vauxhall factory in Ellesmere Port.

It is a pleasure to serve under your chairmanship, Mr Rosindell. When I am at home in my constituency, I get up to go to work and I head off in my Astra, of course. I go past many houses where Vauxhall employees and pensioners live, and many houses where the family and friends of people who work at Vauxhall live—and that is before I get to the end of my street. At the end of the street, I drive past a newsagent that relies on trade from Vauxhall employees, like many other local businesses. As hon. Members will understand from what I am saying, Ellesmere Port is synonymous with Vauxhall Motors.

The first Vauxhall Viva rolled off the production line in 1964. As the plant grew, so did the town. There is virtually nobody who lives in Ellesmere Port who does not have some connection with the plant. At its height, it employed around 12,000 people. Sadly, with recent job losses, the number is about a tenth of that today, but it is still substantial. We also have to take into account the fact that for every person employed at the plant, three other people are employed in the local economy. There is also the potential for greater numbers should we increase from single-shift production again in the future.

Vauxhall remains a big part of the local economy. We should build our future success on such jobs: highly skilled, permanent jobs that manufacture something of national and local pride. Vauxhall’s advertising material makes much of the significance of its being a UK manufacturer, but this is about more than being a UK manufacturer, or a key part of the local economy.

[John Spellar (Warley) (Lab)]

My hon. Friend is right to stress that Vauxhall is a UK manufacturer. Is it not absurd, and frankly disgraceful, that so many public bodies—including police forces—buy vehicles from abroad? Some use Astras, but many others buy from companies that do not even have a presence in the UK. Should we not take that issue on?

[Justin Madders]

My right hon. Friend is absolutely right. We have had debates about that before. He reminds me of the time when we talked about the police in France using Citroëns and Renaults; the police in Germany using Mercedes and BMWs; and the police in Spain using SEAT vehicles. As a nation and as an economy, we should do much more to take advantage of our procurement power.

[Ms Angela Eagle (Wallasey) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he recognise that my constituency contains Vauxhall workers as well? Their economic future is reliant on the Government’s decisions in the Brexit negotiations, particularly given that they have decided to leave the single market, which puts those jobs at risk.

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[Justin Madders]

My hon. Friend is absolutely right that the footprint is much wider than Ellesmere Port—it goes into north Wales, and hon. Friends from that part of the world are present. Brexit is key to the plant’s future, and I will go on to address that shortly.

It is not just about economic impact. The plant is a big part of the town’s local identity. From the 30 kids’ football teams that play under the name “Vauxhall’s”, to the sports and social club that has had huge investment in new 3G pitches and the kids at school who see working at the plant as part of their family tradition, it is a major part of our community, and we do not want to lose it.

The plant has regular fights for survival. Every five years or so, when the next model is being discussed, plants across Europe are effectively pitted against one another to bid for the next job. In the past, the productivity and co-operation of the local workforce, combined with the tremendous leadership of Unite the Union, of which I am a member, in its work with management, have put us in the best possible position to secure future work. That partnership is an exemplar of how to conduct employee relations for the benefit of everyone.

[Ian C. Lucas (Wrexham) (Lab)]

My hon. Friend is making a powerful case. Is that partnership of unions, employers and Government working together not the reason why the UK has been effective in beating off competition from mainland Europe to secure jobs in the past? That is what we need to do in the future.

[Justin Madders]

My hon. Friend is absolutely right. Initiatives such as the Automotive Council have seen the UK car industry go from strength to strength. As we know, however, every time a model comes up for renewal, it gets a little harder, the demands are greater and the workforce have to sacrifice a little more. It is a challenge we have always been equal to in the past, but the convergence of factors undoubtedly makes securing the next model our biggest challenge yet.

The latest edition of the Astra became European car of the year in 2016. It enjoyed great success, particularly in the sports tourer model, which led to 80% of the vehicles built in Ellesmere Port being exported to Europe. Despite that, in recent months, tastes have changed and there has been a dramatic slowdown in sales for that type of vehicle.

[Mike Amesbury (Weaver Vale) (Lab)]

Does my hon. Friend agree that our Vauxhall plants, including Ellesmere Port, are among the most productive in the PSA Group family?

[Justin Madders]

Yes, I would like to say that they are, but we are now being judged by a new benchmark. I will go into some detail about how things are being counted against the workforce’s excellent productivity.

The cuts in sales have led to cuts in the workforce, with 400 jobs going in October and another 250 earlier this year. In the past, a downturn has led to agreements between the unions and management about reduced hours to protect jobs, but the new owner, the PSA Group, has shown a different approach. That must act as a warning that we cannot expect any sentimentality from it, and that, as it has said consistently from the day it took over, plants will be judged on their efficiency.

History tells us that the local unions and management are well capable of meeting that challenge, but numerous factors are at play that will impede their ability to do that. It is our job—not just the job of the Opposition, but of the Government—to help them to overcome those obstacles in a highly competitive market.

Let us start with the big challenge: Brexit. Uncertainty across a sector can have a real impact on investment decisions. As we know, investment decisions in the automotive sector are traditionally made three to five years in advance, so decisions about investment in the post-Brexit world will begin to be made shortly.

In that respect, the timing could not be worse, as the current model in production in Ellesmere Port is due to be discontinued around the same time, in 2021. The chief executive of the PSA Group recently said:

“We cannot invest in a world of uncertainty.”

Some might say that is an excuse. Some might call it a distraction. I do not mind what it is called, as long as we do not ignore it.

After the Prime Minister’s Mansion House speech, the PSA Group and other manufacturers in the sector made similar points about the lack of the clarity, so I asked her to provide certainty by confirming that the trading arrangements in the automotive sector will be no less favourable than they are now. I am sorry to say that her answer did not give any clarity and there was certainly no unequivocal guarantee.

[Frank Field (Birkenhead) (Lab)]

Might I put on record what we have spoken about in private, that we should go to see the Secretary of State for Exiting the European Union and push for a sectional deal, particularly for Vauxhall and other companies producing cars and vans in this country? A second stage could be that we get unions and management in France and Germany to effectively lobby their Governments.

[Justin Madders]

My right hon. Friend is absolutely right to say that the sector is too important to be left on its own. It directly or indirectly employs around 800,000 people and generates almost 10% of the country’s manufacturing output. Half of all the UK’s car production is exported to the EU, and that figure goes up to between 70% and 80% for the Vauxhall plant in my constituency.

[Matt Western (Warwick and Leamington) (Lab)]

I concur with my right hon. Friend the Member for Birkenhead (Frank Field). Does my hon. Friend agree that the statement made by the CEO of the PSA Group, Carlos Tavares, is a canary in the mine? It is the first warning about Brexit and the serious impact it will have on our economy.

[Justin Madders]

That is certainly a huge concern locally. We do not want to get into a game of pointing fingers; we want action, certainty and investment in the plant, but it will be a challenge. A report by the Business, Energy and Industrial Strategy Committee recently concluded that

“leaving the EU without a deal would undoubtedly be hugely damaging to the UK automotive sector, more so than to other European countries… Overall, no-one has argued there are advantages to be gained from Brexit for the automotive industry for the foreseeable future.”

Now that we are leaving the EU, it is important to recognise that there is no upside for one of our most vulnerable and important sectors. We must do everything possible to safeguard jobs and investment, because history shows us that once manufacturing jobs are lost, they very rarely come back.

So far, the Government’s response has been denial. We need them to work tirelessly to reassure major international companies that their future competitiveness will not be fatally undermined by tariffs or regulatory divergence, and that they can invest with confidence. I want us to get into a position in which Brexit cannot be used as an excuse not to invest in UK manufacturing. A clear and unequivocal commitment to a customs union would help, so that the many parts that travel back and forth across the continent can do so without impediment and without the final product becoming uncompetitive. The Society of Motor Manufacturers and Traders has estimated that failure to properly cater for such issues in the negotiations could result in an increase of more than £1,500 in the average cost of a vehicle. What business can absorb that without a massive impact?

There is a school of thought that says that some sort of customs union will prevent us from striking up trade deals on our own, but as the BEIS Committee said, the reality is that there are no advantages for the automotive sector from Brexit. If asked to choose between preserving trade with up to 80% of existing customers or knowingly jeopardising existing trade in exchange for the chance of some new business with unspecified countries at an unspecified future time, I believe most people would go for the former and protect existing jobs.

All I have seen from Cabinet Ministers who have been pressed on the issue is bluffing, complacency and dangerous fantasies about a green and pleasant land. The automotive industry will survive and flourish only if we protect it now. I do not expect the Minister’s reply to provide the laser-like clarity that has been missing so far, so I will focus instead on matters that are wholly within the Government’s gift, that are not down to negotiations, that can make a real difference now, and that would still be key to securing the plant’s future even if a new model were announced tomorrow.

The first such matter is business rates, which can have a deterrent effect on investment and can mean that efficiencies have to be sought in alternative areas. Some 60% of the total property tax bill of the former Opel group came from the UK, even though the UK accounted for only 8% of the group’s total footprint. In Germany, significant rate reductions are provided to large companies that are intensive energy users.

[Alison McGovern (Wirral South) (Lab)]

rose—

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[Justin Madders]

My hon. Friend is absolutely right. The motor industry has been pressing on the business rates issue for several years, and it pressed again this year; I know that hon. Members with an interest in the subject have pressed on it, too. The case argues itself. An EY study has demonstrated that de-rating certain types of plant and machinery, not just in the automotive sector but across manufacturing, could stimulate additional investment of more than £8.7 billion and support an additional 33,000 jobs per annum. That is something we can do, and the argument for doing it is clear.

Let me give another example that relates to Brexit. If Vauxhall invested in solar panels on the site in the attempt to save on energy costs, it would attract a higher business rate. That does not seem in tune with much of what the Government are trying to achieve. Vauxhall has learned that its energy costs per MWh are twice those of plants in France. That has a massive impact on the competitiveness of the vehicles that it manufactures. I am grateful to the council and the local enterprise partnership for their work to address the issue by helping to source a local low-carbon supply for the plant. That will inevitably require some infrastructure investment, so I urge the Minister to keep in close contact with the LEP to ensure that everything possible is done to facilitate the proposal.

The final piece of the jigsaw is about taking a challenging part of the current set-up and reusing it to enhance the site’s overall viability. A good deal of land on site is surplus to requirements; as the number of people employed there has shrunk, so has the need for the land that the plant sits on. At the moment, only about a quarter of the Astra’s parts are sourced from the UK supply chain, and there has long been an ambition to increase that substantially. Given the uncertainties over future customs arrangements, the opportunity to utilise spare land to help local automotive suppliers to base themselves closer to the manufacturing site has many benefits. It will reduce transportation costs, improve productivity by providing more certainty about delivery, and benefit the wider community and environment by reducing lorry miles and thus emissions. Most of all, it will be a bulwark against a disadvantageous future customs arrangement.

[David Hanson (Delyn) (Lab)]

My hon. Friend will know that approximately 400 people from north Wales work at the plant. I urge him, along with the Minister, to contact the National Assembly for Wales. The Welsh Assembly Government, in co-operation with the UK Government, can help with infrastructure and with many of the issues that he raises.

[Justin Madders]

I thank my right hon. Friend for his intervention. He and I work with many other hon. Members in the all-party group on Mersey Dee North Wales. We recognise the symbiotic relationship in the north-west between Cheshire, Wirral and north Wales, and the interchange of people who move between those areas’ economies. I will certainly work with him and his Welsh Assembly colleagues on the matter.

Reshoring the supply chain is a clear element of the Government’s industrial strategy, although so far I have seen no financial or practical steps taken to deliver it. We need the Government to designate the area around the plant as a local enterprise zone to incentivise suppliers to relocate there. That would benefit the local supply chain, boost the local economy, provide more jobs and raise productivity. It would be a tremendous vote of confidence in the plant, so I urge the Minister to come back with a positive response as soon as possible. It would not only help Vauxhall, but help to improve the competitiveness of other motor manufacturers in the region.

The Vauxhall plants in Luton and in Ellesmere Port are among the most productive in the PSA family, and some of the most popular vehicles in the country are made there. We know that we are in a time of uncertainty and enormous challenge, but I do not see decline and closure as inevitable. We need to build on the positives. There can be no doubt that the ability to say that it supports British manufacturing boosts the company’s sales. Nor can there can be any doubt that the local management and workforce are committed to delivering the best. That commitment must be matched by the Government, ideally in the ways I have set out today, so that the owners are in no doubt that this is a community and a country that they want to invest in. When I go home, I want to be able to tell my friends and neighbours that Parliament is united and determined to give them all the backing they need to enjoy another half-century of production at Vauxhall Motors.

--- Later in debate ---

[Justin Madders]

rose—

[Richard Harrington]

I will not take the intervention, but only because of the time; under normal circumstances, I would be happy to take it. I do not want to annoy Mr Rosindell on this subject, and I am determined to do as much as I can. We as a Government are certainly determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing.

Our vision is of a UK that is a

“champion of free trade based on high standards”,

not on low standards, and we hope that global Britain will forge

“a bold and comprehensive economic partnership with our neighbours in the EU, and reaches out beyond to foster trade”,

which I hope will help Ellesmere Port.

The right hon. Member for Delyn (David Hanson) said that we should be involved with the Welsh Assembly and others; I am very happy to meet Welsh Assembly Members. I have heard very good reports about the local enterprise partnership and it seems a very sensible idea to work with it. I would be happy to include the Welsh Assembly within any discussions on this matter.

To conclude, we are absolutely committed to a successful Vauxhall, so that it remains and thrives in the UK, both at Ellesmere Port and at the company’s plant in Luton. We have made our strong commitment absolutely clear to the company and it has full access to the support available through our industrial strategy. We want Vauxhall to be successful and—

Oral Answers to Questions

Justin Madders Excerpts

Tuesday 13th March 2018 Commons Chamber

[Greg Clark]

When it comes to the new generation of automotive technology, the ambition of this Government is not outstripped by anyone. We are working very closely—hand in glove—with the industry, through the Automotive Council, to make sure that we are the best placed in the world not only to research the new technologies, but to manufacture them in this country.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

9. What financial support his Department makes available for manufacturers in the automotive sector.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The Government’s long-term partnership with the automotive industry is an exemplar of our industrial strategy. Only a fortnight ago, I went to Derbyshire to welcome Toyota’s decision to build the new Auris in Burnaston, helping to secure 3,000 jobs between Burnaston and Deeside in north Wales.

[Justin Madders]

I am sure that, while welcoming that investment, the Secretary of State will have been alarmed by the comments made by the chief executive of the PSA Group, which owns Vauxhall in my constituency, about the lack of certainty, with Brexit affecting investment decisions. Will the Secretary of State meet the PSA Group and me to give us confidence in terms of investment in the future of that plant?

[Greg Clark]

I regularly meet with chief executives of car companies, including Mr Tavares. It is very clear that we are determined, as the Prime Minister set out in her Mansion House speech, to make sure that this very important integrated supply chain is able to continue to operate. It is worth bearing in mind that since my team have been in the Department every single major new model decision has gone our way. I am determined to keep up that advocacy.

Hospitality Sector: Tipping

Justin Madders Excerpts

Wednesday 7th March 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my hon. Friend the Member for Bristol North West (Darren Jones) on securing the debate.

The hospitality sector has traditionally employed significant numbers of young people who, it is clear to me, are being taken advantage of by unscrupulous employers who use legal loopholes to maximise their profit at employees’ expense. The world of tipping is governed by custom and, as we know from visits abroad, it can differ from country to country. Even here in the UK, there is no definitive guide on when we should tip and how much we should add to the bill. In restaurants, of course, that is pretty straightforward, but what if there is already a service charge added to the bill? What about gastropubs? I do not want to come over like Alan Partridge, but it can be a little bit complicated at times.

There is one constant among all this etiquette, which is that people expect, when they give a tip to the waiter, that the waiter will get the tip exactly as it has been handed over. It should not be used as a way to subsidise employees’ pay, which is the situation we are in today. My hon. Friend eloquently set out what has been going on at Aqua Italia. I think that is a situation most customers would probably find objectionable if it were drawn to their attention. It unfairly penalises workers for events that are outside their control. They are effectively at the mercy of the customer, and of course the more the customer spends, the more they need to recover in tips.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I thank my hon. Friend for an eloquent speech. Students in my constituency got in touch with me about the practice whereby, when customers leave without paying, their tips and wages are docked for those customers. Surely businesses should be taking that on, not penalising workers who are already low paid?

[Justin Madders]

My hon. Friend is absolutely right. That practice is common in petrol stations as well, when people drive off without paying. It is not something that should be visited on the employees, some of the lowest-paid people in our country. It is not right or fair that they should be penalised for something that is entirely out of their control. There are other things the employee cannot control: what if the customer has a complaint about the food, which has been prepared by someone else, and does not leave a tip? What if they have had to wait a long time before being seated? They might be in a bad mood anyway and just not feel like giving a tip.

Those are all vagaries that can affect whether a tip is given at all, but they should not be used to undermine the lawfully agreed pay rate, potentially breaching minimum wage regulations. I accept, as my hon. Friend the Member for Bristol North West said, that it is quite difficult to reach a calculation and know whether the regulations have been breached, but it is certainly possible.

I have heard it said that some employees can end up paying more to their employer in tips than they actually earn in wages for their shift. Does that not tell us something about how this system is completely out of kilter? Conversely, if they do not receive enough tips, they can have money physically taken from them, possibly taking their pay below the minimum wage—albeit maybe not across the whole reference period, but certainly for that particular day—which could leave them out of pocket altogether.

There are other challenges like that, in the hospitality sector in particular. The practice of cancelling shifts at short notice can also lead to people being out of pocket. What kind of country do we live in if somebody can pay for their childcare and their transport to work, only to get to work to be told that they are not needed and can go straight back home again? That is not acceptable.

The blunt truth is that this and many other arrangements in some areas of the hospitality industry are just a scam. They are a device to increase profits at the expense of workers. That is part of a wider problem in that this sector and others seem to treat workers, especially young people, as a disposable commodity. This industry has always involved a fair amount of casual work, but there are companies out there that seem to predicate their business model on exploiting their staff. I believe this is part of a wider trend, which has crept into our economy over the last few years, that work is now insecure and exploitative, and it is not the cornerstone it once was to enable people to build their lives.

That culture has led to an explosion of zero-hours contracts: it says that anybody wanting to become a nurse has to pay £9,000 a year for the privilege of working on the ward and allows an employer to pay less than the minimum wage by calling a job an apprenticeship. It is a culture in which the only way to get into some roles is to take an unpaid internship, which can last for months and have no guarantee of a job at the end. It is a culture that classes more and more jobs as self-employed, thereby avoiding a range of employment rights. It is a culture in which mass redundancies are met with a shrug by those with the power to do something about it.

[Thangam Debbonaire (Bristol West) (Lab)]

My hon. Friend is eloquently explaining some of the ways in which risk is being transferred from the most powerful in the equation to the least powerful. Does he agree that those are all specific examples of how big employers—and sometimes, unfortunately, small employers—can use all sorts of different methods to transfer the risk away from themselves while keeping the rewards?

[Justin Madders]

A whole industry has built up over recent years that involves the chipping away of what were once long-established principles in this country—part of the social contract of our society. It is prevalent in sectors in which collective bargaining is not prevalent, so I say to anyone in this industry or any other to join a trade union, because unions are their best chance of getting protection in the workplace.

We need to end the destructive combination of weak employment rights, greedy bosses and a complicit Government who are leading us in a race to the bottom—a race that will leave us all the poorer. If reports that up to half of all jobs will be lost to automation in the next decade are correct, we need a complete change in the way the Government view work.

We will have to undertake a massive, state-sponsored exercise to reskill our workforce and to develop a culture in this country that says education and redeployment will run through people’s lives. Three, four or five career changes will be the norm; at the moment, we see three, four or five job changes each year. There is no permanence. The state and employers should invest in individuals throughout their adult lives, reward effort with stability and let people have the confidence that they are getting a fair day’s pay for a fair day’s work.

There are many other ways an employer can take money out of their employees’ pockets or get them to work for free: uniform costs, cutting breaks or even stopping pay when the restaurant or bar shuts and expecting staff to work an extra hour or two to clean the establishment. Those are all different ruses and different ways of exploiting people. Expectations are so low, especially among the young, that people do not expect to be treated any better. It is time we offered a better vision and a bit of hope, so that people do not see this way of working as inevitable. I believe we can do better.

--- Later in debate ---

[Andrew Griffiths]

I absolutely agree. I take that as the hon. Gentleman welcoming the doubling of the investment in the enforcement of the national minimum wage.

I know that everybody is keen to hear my response, but before I go on I will deal with one further point that the hon. Member for Ellesmere Port and Neston made, which was about unpaid interns. I absolutely agree that people being employed to do work under the auspices of unpaid internships is—let me be very clear—illegal. That is why in the past couple of months HMRC has written to firms that are advertising unpaid internships, reminding them of their obligations. This is no way to avoid paying the national minimum wage. If we find that firms are doing it, they will be prosecuted for non-payment of the national minimum wage.

[Justin Madders]

Does the Minister agree that as Members of Parliament it is up to us to set the standards and not to recruit people on unpaid internships ourselves?

[Andrew Griffiths]

I absolutely agree. That old phrase, “Physician, heal thyself” applies here. We should set the same standards ourselves. I would point out, Sir Roger, that I do not employ an unpaid intern.

The Government are clear that all workers should be paid fairly and at least the relevant national minimum wage. For those aged 25 and over, that is £7.50 per hour. I am pleased to say that the Government will increase that rate above inflation to £7.83 next month, which I am sure all hon. Members will welcome. In all, increases to the minimum wages will benefit more than 2 million workers. That is a well-earned pay rise for them from this Government. I thank all the businesses that have stepped up to the plate and are working hard to pay the national minimum wage. The Government respond robustly to employers that fail to pay their workers correctly. We have doubled our investment in enforcement, as I stated.

A worker aged 25 and above must be paid that £7.50 by their employer. All income earned through tips must be over and above that sum. Let me reassure the hon. Member for Glasgow North East (Mr Sweeney) that any income earned through tips must be over and above the national minimum wage. If any employee is not getting that, their employer is breaking the law. They should report it, and HMRC will take action to ensure that is enforced.

The hon. Member for Bristol North West raised restaurants charging a 3% table levy to their workers. That is a proportion of whatever sales are earned on the table that worker has served. It should not be seen as a route through the national minimum wage, because it is not.

It is my top priority to ensure that the lowest paid workers are fairly rewarded for their work and contribution to the economy. It simply is not right for employers to keep huge proportions of the tips earned by workers. Accordingly, in the past two years the Government have run a call for evidence, as we have heard, and a public consultation to examine this in greater depth. The exercise established a very clear principle that I think the House will agree with: a majority of stakeholders agree that tips belong to the worker. I would like to make it clear that this Government will act should there be clear, ongoing evidence. This debate has added to that ongoing evidence. The principle is that no employee should be abused in this way.

Carillion: TUPE

Justin Madders Excerpts

Wednesday 21st February 2018 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate my hon. Friend the Member for Wolverhampton South West (Eleanor Smith) on securing this extremely important debate. She clearly has a significant constituency interest in the matter, but as we have heard, such is the reach of Carillion that no part of the country is unaffected by its demise.

I will not repeat the stories of greed, arrogance and, probably, negligence that have led us to where we are today, except to say that it is a bitter irony that many of those culpable for the current state of affairs are the least affected by it. We know the company ramped up dividends, borrowed more and more money to effectively hand it over to shareholders, delayed payments to creditors and generally behaved as if there was no tomorrow, with no thought of the consequences of its actions.

[Stephen Kerr]

On that point, the hon. Gentleman did not mention—it is worth mentioning—the salaries and bonuses the directors were awarding each other, which should bear on our minds as we consider the wee people who the hon. Member for Strangford (Jim Shannon) described and who we should all be thinking about.

[Justin Madders]

Absolutely. This is a tale of a corporate system out of control. It sends a real message about how not to run a company responsibly. I hope that some concrete action will come to prevent these kind of scandals happening in the future. Comparing the pension deficit to the bonuses paid really brings home how unfairly and avariciously certain people have behaved in this case.

While it is hoped that, in the short term, there will be some protection for jobs—as we have heard today and as I will go on to explore, there are some questions about the precise arrangements—we must not forget those who work for subcontractors and those who have already been made redundant who need our support as well.

I am told that there is an issue with the liquidators providing termination numbers to redundant Carillion staff. Some of those staff have given a lifetime to the company but have been told by the liquidator that, until that number is issued, their claims for notice pay and redundancy pay cannot be processed. Those who have received those details have been told that they may have to wait up to six weeks for the Redundancy Payments Service to actually process the payments.

As we know from the universal credit discussions we have had in here in recent times, expecting people to wait six weeks for payment after losing their job is far too long, so I do not see why we should allow that situation to occur here. I hope that, when the Minister next speaks to the liquidator, he will raise these issues and ensure that those who have been made redundant are able to access their statutory entitlements as soon as possible. Will the Minister inform us what resources have been allocated to the Insolvency Service to ensure that those payments are processed as quickly as possible?

[Stephanie Peacock (Barnsley East) (Lab)]

I congratulate my hon. Friend the Member for Wolverhampton South West (Eleanor Smith) on securing this important debate. On apprenticeships, it is hugely important that apprentices are given alternative apprenticeships. However, in answer to a written question of mine, the Government said that apprentices who are not found an alternative apprenticeship will be paid after 31 January. Does my hon. Friend agree that clarity over how long they will be paid for is important, and that, when they are given a placement, a reasonable travel time is also crucial?

[Justin Madders]

I absolutely agree. While there has been some progress in finding apprenticeships for some of those who have lost theirs, there are still a huge number who have yet to be found one. We should not underestimate how important it is to get people trained in those skills that we will need in the economy in the future. I hope that more effort goes into that.

On the other companies in the supply chain and subcontractors, is the Minister able to tell us what analysis he has made of the number of companies in these sectors at risk of insolvency and the number of employees whose employment is in jeopardy as a knock-on effect of the liquidation? Has he done any analysis of the numbers affected who are perhaps working in another capacity on Carillion contracts—either through agency arrangements or zero-hours contracts? They are really little more than bystanders in this process and are powerless to do anything but accept their fate. I hope we are able to do something to assist those individuals.

As we know, when a particular function transfers, it is normally the case that staff are transferred over under the TUPE regulations. No one is suggesting for a minute that that is not a preferable situation to redundancy, but it seems that there are questions to be answered about the exact basis on which people will transfer over to their new employers. There should be no ambiguity from the Government on this. People’s existing contracts should be honoured in full. We should not have state-sponsored watering down of terms and conditions. The Government should not be a willing partner in the chipping away of employee rights.

[Jo Stevens]

Does my hon. Friend agree that this is an ideal opportunity for the Minister to confirm that TUPE, which obviously derives from the European Union’s acquired rights directive, will be maintained after Brexit, and that voluntary TUPE in these circumstances, to protect Carillion workers, could be offered as a commitment of that for the future?

[Justin Madders]

I certainly agree, and I would certainly like some clarity from the Government on a whole range of issues on the impact of Brexit. The acquired rights directive has been in place for some 30-plus years now. It is not perfect by any stretch of the imagination, but it is particularly important in situations like this.

Even if there is a full TUPE transfer, we should not pretend that it will be happily ever after. The reality is that, in the majority of occasions when people transfer over to their new employers, sooner or later that employer will look to change the terms and conditions. When they say they are changing terms and conditions, they mean they are watering them down. We have already heard from some of my hon. Friends that there is considerable anxiety about that. It is a practice that has to stop.

The Government should stipulate that any company running a contract providing public services should respect agreed terms and conditions and look to adhere to the highest standards possible that a responsible employer could adopt—proper rates of pay that provide a living wage, trade union recognition and collective bargaining rights and an occupational pension that is not paid into only when the employer feels like it but is there, as it should be, as part of deferred pay and as an essential part of the contract.

So TUPE applies a certain level of protection. It is far from perfect and often misunderstood, but, contrary to what many people think, it does not provide unlimited protection against changes to terms and conditions. It certainly has more than enough loopholes in it to allow a determined employer to ultimately do as it wishes. Because of the way in which our employment rights system works in this country, changing the terms and conditions of employees is easier to do than finding savings elsewhere. However, in these circumstances it is preferable to redundancy. Let us protect the jobs and get as many transferred as we can, but let us not for a second think that that is the end of the matter. Let us not perpetuate the merry-go-round of misery. Let us take the opportunity to say to whoever ends up running the contracts, “Please respect and protect the terms and conditions of the people who do the day-to-day work.”

The Prime Minister has said that the Government are a customer of Carillion, which is of course true, but we should be much more than a customer. We should be the champion of public services, the defender of the highest employment standards and an exemplar for the private sector of the kinds of companies that we want to see succeed in the country. Perhaps people thought Carillion was a success story at some point, but it was a success built on sand, on deception and on avarice. We should be and we can be much better than that.

Budget Resolutions

Justin Madders Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Three minutes to speak is not long, but it is about the same time as it normally takes a Tory Budget to unravel. I wish to focus first on the automotive sector. Ellesmere Port is home to Vauxhall Motors, and we had several requests for the Budget to improve the competitiveness of the plant, but I am sorry to say that none of them appears to have made it into the Budget. We have heard a lot of talk about how we are lagging behind in terms of productivity, and one of the asks I had was about changing the way that business rates operate and currently act as a disincentive to invest in certain types of plant and machinery.

On the housing announcements, expanding the ability of local authorities to borrow against housing revenue accounts is welcome, but it is far from clear who will be able to bid for that extra borrowing capacity, with it being apparently only available to areas with what are termed as “high affordability pressures”. I do not know of any local authority that does not have a significant waiting list, so rather than make councils jump through hoops, should not this facility be available to any council that thinks it can take on the extra borrowing?

The stamp duty offer for first-time buyers attracted a lot of attention on the day of the Budget, but its coverage was inversely proportionate to the impact it will actually have. As we know from the OBR, the concern is that it will do nothing more than increase upward pressure on house prices. Indeed, five years ago a stamp duty holiday for first-time buyers was abandoned by the coalition Government because it had been “ineffective”. We are already seeing developers take advantage—“You and Yours” reported yesterday that developers have pocketed the stamp duty savings where they had an agreement with purchasers to stand the cost of stamp duty.

Surely the best use of taxpayers’ money in housing is to increase supply. One way to increase supply would be to help all those people who have ended up with an unsellable house because they were duped into buying a leasehold property. Coming up with a scheme to release people from that trap might do much to increase housing supply, and it would also be the right thing to do.