Small Business, Enterprise and Employment Bill

Lindsay Hoyle Excerpts

Wednesday 16th July 2014 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

Although it is welcome that those jobs have been created, will the Secretary of State accept that many of them are insecure and low paid? If people do not have money in their pockets because they are working on zero-hours contracts, that will have a negative impact on the long-term economic recovery of our country—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We do not need Back Benchers to join in at this stage. We are all right; I am sure the Secretary of State can handle it himself.

[Vince Cable]

Indeed, I believe that in the hon. Gentleman’s constituency unemployment has fallen by 46%, and he is gracious enough to have acknowledged that. We are in the first stage of the long-term recovery. There are, of course, issues around low pay and low productivity that will require investment, and that is where our long-term commitment to growth and industrial strategy is important. We want employment that is high-quality and secure, and all the evidence suggests that, compared with most parts of Europe, British employment in this recovery is more permanent and secure than elsewhere, although clearly there is more to be done.

That leads us to zero-hours contracts, which as far as we can establish apply to around 2% to 4% of jobs. The issue has aroused a great deal of concern because of its implication that many people are insecure in their work, and on the back of those concerns I initiated a call for evidence and a consultation on how we should deal with the problem. Two contrasting views came to light. There were indeed shocking examples of abuse, many of which are captured in the problem of exclusivity clauses that we have now committed to end. At the same time, it was clear that zero-hours contracts have a genuine positive role in the labour market and are appreciated by many individuals because of the opportunity they provide, as well as the advantages to employers. Indeed, recent research from the Chartered Institute of Personnel and Development, which has done much of the authoritative work in this field, contrasts satisfaction levels in zero-hours contracts with other work, and whether people are treated with respect by their senior management. It shows that zero-hours contracts are marginally better in both those criteria than other forms of employment.

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[Lorely Burt (Solihull) (LD)]

I have had a lot of involvement with companies that have suffered at the hands of such directors, who subsequently set up again, perhaps by using a pre-pack or some other way. The unsecured creditors are the people who suffer and they may have to absolve their company. One suggestion is that we should have a register to track the record of a company’s directors so that any company wishing to supply could look it up and see what is going on.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Twenty-four Members want to speak, but the Front Benchers have already taken 30 minutes and we have only just begun. We want to get everybody in. I am sure that interventions are helpful, but they may be holding up the end of the speech.

[Vince Cable]

I was trying to be helpful to Back Benchers by taking their points, Mr Deputy Speaker.

[Mr Deputy Speaker]

I do not mind the Secretary of State taking interventions, but he will understand that, if Back Benchers cannot get in, it will be because of the amount of time the Front Benchers have taken. He must choose which he prefers—interventions or Back-Bench speeches.

[Vince Cable]

That is a choice I would rather not have to make.

I entirely agree with my hon. Friend the Member for Solihull (Lorely Burt), who makes a useful point and we will reflect on its practicality. She also mentioned pre-packs. She will have noticed that there are measures in the Bill to deal with bad pre-packs. Of course, many of them provide satisfactory outcomes, but some do not. We are going to try to differentiate them in a more structured way.

The final issue in relation to transparency is the insolvency regime. We are going to introduce measures to give greater confidence to the regime when companies enter insolvency. We will remove administrative burdens, which I hope will save creditors substantial amounts of money. We are talking about having a less complex system of regulation. I think there are eight or nine separate regulatory bodies in the insolvency area, and there are issues regarding insolvency fees and fairness. It is a complex bit of legislation, but an important one.

Moving on to help for small business, I will start with an area that has preoccupied a lot of people in the House, namely pubs. There are 20,000 or so sole traders and small businesses that run tied pubs across England and Wales. In recent research, the Campaign for Real Ale found that 57% of tenants who are tied to large pub companies earn less than £10,000 a year, compared with just 25% of tenants who are free of tie, and 80% of them earn less than £15,000 a year. In other words, a very large number are taking home less than the minimum wage. Through the Bill, we want to address the imbalance in bargaining power between pub companies and their tied tenants, to ensure they are treated fairly by their pub-owning companies.

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I warn Members that the time limit is now down to five minutes.

I now have to announce the result of the deferred Division on the question relating to the draft Gangmasters (Licensing Authority) Regulations 2014. The Ayes were 294 and the Noes were 200, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

[Mr Deputy Speaker]

I call the right hon. Chuka Umunna.