Zero-hours Contracts

Michael Fallon Excerpts

Wednesday 16th October 2013 Commons Chamber

[Mr Umunna]

I will give way shortly.

Secondly, what are the Government doing to the protections for working people in the workplace? They are watering them down left, right and centre. They have increased from one to two years the length of service required before someone can enforce their right not to be treated unfairly at work and they have introduced employment tribunal fees of £1,200. The Minister for Skills and Enterprise described that as a moderate charge, but for low-income workers it is the equivalent of several weeks’ pay. The Government have also reduced the consultation period for collective redundancy. I could go on.

Thirdly, what have the Government done on zero-hours contracts? They have done little, if anything at all. Has a full consultation and call for evidence been issued? No. To date, there has been none, despite promises at the Liberal Democrat conference by the Secretary of State to do so. Has the Office for National Statistics been asked to clarify how many of these contracts might be in use, given that research suggests there are far more than in the ONS estimates?

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

indicated assent.

[Mr Umunna]

I don’t think so, because Ministers keep quoting statistics from the ONS to me, despite its having conceded that there is a real risk that they do not reflect reality.

Have the Government devoted the same energy and time to protecting people from the exploitative use of these contracts as they have to implementing the recommendations of the Prime Minister’s employment law adviser, Adrian Beecroft, for watering down people’s rights at work? No, they have not.

--- Later in debate ---

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

May I thank the many Members who have spoken in this debate, which has been good natured? There have been a number of passionate speeches. Those who have contributed fall into two groups. There are clearly those who want to squeeze out flexible-hour contracts altogether: the hon. Members for Halifax (Mrs Riordan), for East Antrim (Sammy Wilson), for Sunderland Central (Julie Elliott), for Wigan (Lisa Nandy) and for Wansbeck (Ian Lavery). There are others who have taken a more nuanced approach. It was my hon. Friend the Member for Hexham (Guy Opperman) who said that we needed to be neither for nor against flexible-hours contracts, but that we needed to deal with the exploitation. The hon. Member for Newcastle-under-Lyme (Paul Farrelly) welcomed the consultation that we are planning, but asked, quite fairly, whether it would encompass the wider issues of shorter hours and agency working. I pay tribute to the hon. Member for Wirral South (Alison McGovern) for the work that she has done on this matter, and she said that she was willing to engage with the Government’s consultation. She has accepted that the sample that she has produced so far is relatively limited, but we are very happy to look at her work, and I welcome her offer to engage with the Government on it.

My hon. Friend the Member for Burnley (Gordon Birtwistle) made some strong points on the issue of exclusivity. I can absolutely give him the undertaking that that will be central to our consultation. He also made the point convincingly that we should not unduly restrict choice where that choice is being freely entered into.

My hon. Friend the Member for Mid Norfolk (George Freeman) spoke of the importance of retaining flexibility in the modern business environment and adduced powerful support for flexible-hour contracts from a range of business and personnel organisations. My hon. Friend the Member for Braintree (Mr Newmark) was the only Member who spoke in the debate to point to the latest employment and unemployment figures, and I am rather surprised that no Opposition Member today was able to recognise the continuing increase in the number of people working, whether in the north-east or the south-east. It is a shame that more Members did not give due credit for the increase in employment.

[Lisa Nandy]

I do not recognise anything of what the Minister has said so far. If he had listened to the debate, perhaps he would be in a better position to respond to some of the very important points made by my hon. Friends and by a few Members on the other side of the House.

[Michael Fallon]

I have been here throughout the debate and have listened to every speech since about a quarter to one this afternoon. I certainly listened to the hon. Lady’s speech, which was a very good one. I am simply pointing out the difference between those hon. Members who want to get rid of flexible-hours contracts altogether, and others who can see their value and want to preserve the choice so that those who are happy to choose them are able to do so.

My hon. Friend the Member for Dover (Charlie Elphicke) drew attention to the issue of eligibility for mortgages and rental tenancies for those who are on such contracts. It is important that we look at that aspect. The hon. Member for Edinburgh East (Sheila Gilmore) raised the issue of the application of flexible-hours contracts in the care industry, and spoke about the number of such services that have been contracted out. However, a great number of councils up and down the country, and not just subcontracted firms, are using flexible-hour contracts: Doncaster, Southwark and Liverpool, for example. The issue is not simply one for privatised contracted labour.

[Alison McGovern]

The Minister said that he was disappointed that no one had mentioned the unemployment figures. In fact, in an earlier intervention I drew attention to the relationship between zero-hours contracts and the under employment that they represent, and what is happening to the claimant count. Does the Minister feel that we need to investigate the issue, and does he feel that that under employment is serious and should be viewed alongside the falling claimant count?

[Michael Fallon]

I shall be happy to consider the hon. Lady’s point about under employment if she will recognise the considerable progress that the Government have made in increasing the total number of people in work since 2010.

Concerns have been expressed about the way in which these contracts work, which is why the Government have listened and decided to act. As my right hon. Friend the Secretary of State said, we will shortly launch a consultation and seek views on the issues that are causing concern—issues such as transparency in contracts and the availability of information, advice and guidance to ensure that individuals are aware of their rights and companies are aware of their obligations to provide, for instance, holiday pay, sick pay, redundancy pay and travelling time payments. As I said to my hon. Friend the Member for Burnley, we will also seek views on the issue of exclusivity in the employment contract.

However, while it is right to consider all those issues, we also need to ensure that the flexibility afforded by contracts of this kind to businesses and individuals is still available. A flexible and dynamic labour market is essential to facilitate growth in our economy, and to give businesses that want to expand the opportunity to do so.

As there is no single definition of a variable-hours contract, we must proceed with caution when considering the action that we might take to ensure that there are no unintended consequences. We must consider all the employment arrangements that could fall within the definition, such as work through agencies, which were mentioned by the hon. Member for Newcastle-under-Lyme. We must also ensure that we do not act in haste.

We cannot accept the motion, because it prejudges the consultation in calling for a ban, and calls for evidence that we have already begun to assemble. I should add, however, that some of my hon. Friends suggested that the last Labour Government had done nothing about this matter during their 13 years in office. That is not wholly true. On the contrary, the last Labour Government looked at the issue—and then did nothing. They published a White Paper entitled “Fairness at Work”, which discussed variable-hours contracts, and concluded:

“The Government wishes to retain the flexibility these contracts offer business”.

A couple of years after the White Paper, the then Business Secretary, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), said:

“The Government consider that zero hours contracts can contribute to the flexibility necessary for a modern labour market”.—[Official Report, 2 March 2000; Vol. 345, c. 344W.]

Unlike the last Labour Government, we will act. We will hold a full consultation. We will consider important issues such as restrictive exclusivity and the alleged lack of transparency.

Today we have heard Opposition Members express indignation about a flexibility that they themselves endorsed in government, and we have heard them speak of an alleged abuse about which they did nothing in government. No one wants people to be exploited; no one wants people to be tied to contracts that are unnecessarily restrictive, and in which there is no genuine transparency. This Government are acting, whereas the last Government failed to do so.

Question put.