Small Business, Enterprise and Employment Bill

Lord Popat Excerpts

Wednesday 11th March 2015 Lords Chamber

[Lord Stoneham of Droxford]

The zero-contracts did not come about—

[Lord Popat (Con)]

Order please. We are on Report. I am afraid that intervention is limited.

[Baroness Hollis of Heigham]

It is my fault, my Lords—I tempted the noble Lord and he could not resist. The point about zero-hours contracts and short hours is that they were seen largely as a middle-aged women’s problem, but there was some degree of protection. What has happened since the recession is that a third or perhaps a half of those under the age of 30 are cobbling together 30 or 35 hours’ work a week from splintered jobs, none of which, as far as we can see at the moment, would for many of them bring them into the national insurance system. That is the new dimension. It is the very dimension that the noble Lord, Lord Stoneham, mentioned in his speech on the previous amendment.

The noble Lord, Lord Newby, said that we should be introducing a new cliff edge for those below the JSA level who might be working only 12 hours a week. However, in this case, they would be better off on JSA, which they could still receive. The first £20, or the first £5 depending on their status, would be disregarded for these purposes. The rest of the hours would not be counted up until they hit JSA level, at which point the person would get JSA. That can already be done now. Therefore it is not true that there would be a cliff edge—it is not an adequate offer back. When people work 10, 12 or 14 hours, it is deducted off their JSA and if their JSA is higher, they keep it. The argument is invalid.

Secondly, the noble Lord, Lord Newby, says that many students will not need to be within the national insurance system since in later years they will go on to build their contributions. In that case there is no cost or problem to the Government at all. The problem now is that people only know at the end of their working lives whether they have got a sufficient contribution record. If you are poor and you have got missing years you are not able to fish your earlier years. If students are building up redundant ones they are no different from anyone who works for 40 years’ worth of stamp and only needs 35 to get into the national insurance system. What we are giving them is a measure of protection that they might not otherwise have. Therefore I do not see why the noble Lord, Lord Newby, is worried.

The noble Lord’s third and final point was that this affects only 50,000 people, as if 50,000 people do not really matter. There were something like 25,000 or 30,000 women who were partners or spouses of people in the armed services who lost national insurance when they accompanied their partner abroad. I made this point. His right honourable friend in the other place, Steve Webb, conceded and brought those partners— mostly women but not invariably so—into the NI system. They were only half the number we are talking about today, but he deemed that it was appropriate and desirable. Even though it was far more complex than what we are dealing with today, he did it. I hope we are not being told that 50,000 is too trivial to bother about in one area but that 20,000 is fine in another. That argument simply will not run.

Finally, as I have said, the Minister says that we are talking about only 50,000. I reckon that that is a gross underestimate. He is drawing on the ONS and the Labour Force Survey in which people self-report their status. The CIPD figures we talked about earlier drew instead on a survey of employers who had far more accurate information about the employment status of their staff.

As he will know, the forum we set up, of which I was fortunate enough to be a member, recently has had information which suggests that if you look at the P14s, which is what the employers submit to HMRC, as opposed to what the employees submit, it looks as though something like 130,000 people additionally may come into this situation, as well as another 30,000 or so who we do not know about because the employers are too small. Therefore, the figure clearly is more likely to be 200,000 based on more reliable information coming from the employers through P14s than the 50,000 figure that the noble Lord offered us, which is based on incomplete and inaccurate information or on people simply not fully understanding their legal status as far as their contract of employment may be concerned.

Those are the arguments of the noble Lord. I do not think that any of them is true. The cliff edge argument is not relevant; the number argument is not the case; and the question of students making it unnecessary does not matter because there will be no cost or complication for us.

As for having to wait for the results of the forum, I have tried to get that forum to discuss the policy options. The civil servants have been most helpful. The forum was explicitly told by the Minister’s right honourable friend Steve Webb that we were not to discuss policy but only to try to get some accurate numbers. That is fine but we could have discussed policy on the basis of this; that was prohibited and therefore we were not able to do so. I am afraid that he attributes to this forum greater powers, greater range, greater extensiveness and greater capacity to encourage change, which is an assumption that I would have liked to share with him, than his right honourable friend permitted.

I am sorry but I do not think that anything the Minister has said tonight takes us one step forward. He does not rebut a single argument that my noble friend Lady Drake and myself made. None the less, given the time, obviously I beg leave to withdraw the amendment.